Presentation

Following the tradition of previous years, the Colombian Petroleum Association, as the representative of the sector's companies, presents the Social Management Report in which the main contributions of the industry to the social development of communities during 2016 are disclosed. For this version of the report, information from 34 companies dedicated to exploration, production, and transportation of hydrocarbons was included, which represent 97.1% of national activity.

Thanks to this information, the report contains accurate and reliable data that account for local hiring levels, resources allocated for the development of social projects, the purchase of local goods and services, and the development of road infrastructure. In fact, as the reports have recorded the behavior of these indicators over the last seven years of sector activity, the information included below allows for traceability that enables comparisons of the behavior of these variables over the last five years.

In general terms, since 2012, companies have generated an average of 115,000 jobs per year, of which 70.1% are occupied by local labor from the areas of operation. This is important under the understanding that local job creation is one of the main engines driving local economies. Regarding social investment, companies have invested 1.26 trillion for the development of projects focused mainly on productive development, education, community strengthening, and institutional strengthening, among others.

However, despite these contributions, the industry faces significant challenges. On one hand, due to the decrease in resources, it is necessary to seek to leverage efforts from other sectors of the economy, public entities, bilateral and multilateral organizations, as well as to make use of the different instruments and mechanisms that the National Government has made available to promote social development within the framework of the implementation of the Peace Agreements.

On the other hand, it is necessary to think about the development of social projects that transcend the boundaries of the areas of influence, in order to generate ventures that have a greater impact and benefit both the communities adjacent to the operations and other areas of the region, thus expanding the impact, sustainability, and positive perception of the benefits that the sector brings to the country.

In a line similar to the amounts of social investment, since 2012 the industry has made investments of more than 1.31 trillion for the construction and maintenance of road infrastructure, which has promoted the development and connectivity of rural areas with municipal capitals and municipalities with neighboring regions; that is, roads have been opened to seek the connectivity of Colombians.

In addition to these contributions, companies have made purchases of goods and services for more than 1.1 trillion, of which 53.5 billion have been made locally. In fact, making more than 50.1% of purchases in the regions is not only the result of local engagement that companies undertake for the development of their operations but also the result of the work that has been done to strengthen local suppliers through training and qualification programs. In fact, one of the main contributions of the sector is the increase in regional competitiveness and the installed capacity that it is leaving in the territories, which can be used by other economic sectors.

Now, when reviewing the specific results of 2016, a decrease in the different indicators of social management that this report has been analyzing is evident. This dynamic is mainly due to the fall in international oil prices, which reached historic lows in the last ten years, generating a reduction in the investment amounts of companies and sector activities. 

Although 2016 was marked by the consequences derived from the continuous decline in crude oil prices, which represented challenges for the sector and the country and a decrease in activities, companies made significant efforts to maintain local hiring levels, fulfill the commitments of social investment acquired, generate relevant investment in the regions, and open spaces for engagement with stakeholders.

Specifically, during 2016, more than 78,000 people were employed, of which 67.1% is skilled labor and the remaining 33.1% is unskilled labor, with the latter being entirely hired locally in compliance with the regulations issued by the Ministry of Labor for labor management in the sector.

Regarding social investment, projects were financed for nearly $147 billion, which were focused on education, housing, and support for productive projects. As in previous years, the largest proportion of the investment comes from voluntary or leveraged contributions as part of social responsibility, corporate citizenship, or sustainability policies. In addition to these amounts, there is the investment in road infrastructure, which was $104 billion for the construction and adaptation of roads, mainly in tertiary and secondary roads. Regarding the amount of purchases of goods and services, this was around $13 billion, between national and local purchases.

Hand in hand with these contributions and relationship-building spaces, the hydrocarbon industry is established as a strategic ally for the development of the country and the regions. While companies do not replace the State, they have become key players not only to drive progress but also to strengthen the institutional framework and competitiveness of the municipalities and departments where activities are carried out.

Despite the above, manifestations of rejection of the industry's presence have increased. In some cases, especially in regions where there are still no sector operations, there is little information about the positive impacts, a situation that is also detected in some areas with a traditional presence of exploration and production activities. This last point is particularly concerning and requires greater effort from the industry and companies to respond in a timely, transparent, and truthful manner to the concerns, requirements, worries, and requests of the communities. It also demands a greater institutional presence to address the various questions that exist around the industry.

Precisely to promote transparency and access to truthful information about the industry, this Report not only publishes the main contributions made by the sector but also highlights how this industry contributes to the country's development.

[prefix_member style=»8″ photo=»images/personajes/Francisco-José-Lloreda-avatar.jpg» name=»Francisco José Lloreda Mera» role=»Executive President of the Colombian Petroleum Association»]