Transparency Builds Confidence Among Latin American Stakeholders in Extractive Industries

Throughout Latin America, there has been widespread tension relating to the extractive industries over the last decade.  Protests in Peru have led to large mining investment delays, while Guatemala continues to struggle with conflict in its mining regions.  This tension between companies and communities often arises when local people feel that they are not benefiting fairly from profits as natural resources are extracted from their ancestral lands.  Companies, on the other hand, even if they work assiduously to meet environmental and social regulations, are frustrated when this seems to not be enough.  

The Extractive Industries Transparency Initiative (EITI) is run in each implementing country by a multi-stakeholder group (MSG) that gathers representatives from industry, civil society and government to make revenue payment information transparent.  Just having these different groups together at the table is an achievement in many countries where entrenched disputes have often blocked direct communication between companies and civil society.  Communication and relationship building is a key part of the EITI, which brings together diverse stakeholders to decrease these tensions.

“EITI improves trust and communication between civil society, government and the private sector to overcome conflict that has existed for many, many years.  In addition, it favors poverty reduction and human development of the population” said Dr. Roberto Herrera Caceres, High Representative and National Coordinator of EITI Honduras.

In November 2013, representatives of countries across Latin America gathered in Bogotá to discuss progress by EITI to date, as well as implementation of the new Standard. The meeting, held in Bogotá because Colombia’s government recently decided to implement EITI, focused on lessons learned from EITI experience, along with a two-day workshop for EITI implementing countries in the region. Representatives from the EITI implementing countries of Peru, Guatemala, Trinidad and Tobago and Honduras gained insights into applying the new Standard. 

The new Standard for EITI was approved in May 2013. It entails tougher transparency requirements and more exhaustive reporting.   Similar workshops on implementation of the new Standard were held in Kazakhstan, Cote d´Ivoire and Indonesia in 2013, with over 125 representatives trained from EITI implementing countries. 

The first EITI compliant country in Latin America, Peru, showcased its experience at the Bogotá conference. Fernando Castillo Torres, of the country’s Ministry of Energy and Mines, said increased revenue transparency has improved relationships.  “EITI has helped generate greater trust with the population,” he said. “They now understand the amount of resources being generated and how they are reaching the population.”

Countries from throughout the region that are interested in implementing EITI attended the conference, ranging from Mexico, to Dominican Republic, Chile and Guyana, among others.   Representatives from diverse sectors in each country listened to the presentations to learn how EITI implementation might benefit their own country.

In addition to developing countries, the EITI conference also attracted representatives from some G8 countries interested in implementing EITI, which is a new development in a historically non-OECD program that was initially heavily focused on Africa.  Traditionally, EITI has been a tool for countries that lacked a transparency framework, or struggled with corruption.  But now developed countries also recognize the benefits of EITI as a confidence building mechanism that demonstrates commitment to transparency.  Both the United States and United Kingdom attended the conference, and discussed their efforts to implement EITI and become EITI compliant.  Their participation reinforced the determination of developing countries in attendance to pursue EITI.

Gisela Granado, a policy analyst with the Trinidad & Tobago EITI Secretariat said that “a lot of citizens view the EITI as a bad boys club (due to its anti-corruption focus) but with countries such as the U.S. and the U.K. participating that perception is now changing.”

Confidence building emerged from the discussions as a key factor in EITI success and outcomes.  Delegates agreed that when groups worked together to develop a definition for EITI the result was, “EITI es confianza.”  (EITI is trust.)

 “By building trust among stakeholders from government, private sector and civil society, tense relations can be eased and conflict possibly averted,” said Javier Aguilar of the World Bank Group.  “Improved relations will facilitate the development potential of extractive industries to help reduce poverty and boost shared prosperity.”