LIMA, June 28, 2012. - Peru became compliant with the EITI standard, consolidating its proven leadership in fiscal transparency with respect to the country’s extractive sector. Peruvian President Ollanta Humala received the distinction from EITI Chairperson Clare Short.
“The highland and Amazon regions of Peru depend heavily on extractive industries; nevertheless, those places remain underdeveloped. This problem must be addressed,” said Peruvian President Ollanta Humala.
Over 200 participants heard the president’s opening speech at the EITI conference, which was entitled “Open Government and Transparency in Extractive Industries in Latin America and the Caribbean.” The Government of Peru, the World Bank, the Inter-American Development Bank and the EITI co-sponsored the event.
Peru’s EITI ensures that citizens can see how much the government is receiving from companies that extract the country’s natural resources. Peru became compliant with the EITI standard earlier this year, the first Latin American country to do so. Worldwide, 35 countries are currently implementing the EITI, as are 60 of the world’s largest oil, gas and mining companies. The World Bank unit responsible for the oil, gas and mining sectors administers a multiple-donor trust fund to provide technical and financial assistance to countries to implement the EITI principles of revenue accountability and transparency and support capacity building of civil society.
“The World Bank supports this global initiative because it is convinced that extractive industries can and should play an important role in promoting increased social inclusion with sustainable growth through job creation, increased tax revenue and better public services,” said Susan Goldmark, World Bank Country Director for Bolivia, Ecuador, Chile, Peru and Venezuela.
Ministers of state and representatives of 15 Latin American countries attended the event, including those of Guatemala and Trinidad and Tobago, which are already implementing the EITI. Colombia has also made significant advances in the implementation process.
The latest Peruvian EITI showed that the government received over US$ 5 billion in 2010, about six times as much as in 2004, when Peru started disclosing the figures. More than 60 percent of the revenue came from the mining sector; however, the government also received over US$ 1 billion from gas and oil exploitation. Across Latin America, revenue from extractive sectors has increased 20 times over the past decade.
The conference was followed by the meeting of the EITI Board on June 27 and 28.
The EITI was designed as a framework for collaboration and a space for exchange of critical information to promote dialogue among all segments of society. The EITI is a process that strengthens governance in areas where extractive industries are developed. This is crucial because these areas have a significant risk for conflict, environmental stress and corruption.
Some 3.5 billion people live in countries rich in oil, gas and minerals. Many of these countries face major challenges for strengthening governance, reducing poverty and corruption and preventing potentially violent conflicts associated with extractive industries.
In these environments, extractive industries, communities, local and national governments must work together to address these issues. All parties come to the table with high expectations.
EITI Peru follows international guidelines of tripartite participation. To this end, Supreme Decree No. 028-2011-EM established the Multi-stakeholder Standing Committee for Transparency in Extractive Industries, with the voluntary participation of civil society, government and industry representatives.
In Peru, committee members include the ministers of Energy and Mines and of Economics and Finance; civil society representatives such as Grupo Propuesta Ciudadana, CooperAccción: Acción Solidaria para el Desarrollo, Centro de Estudios Regionales Andinos Bartolomé de las Casas, the Pontificia Universidad Católica del Perú and Universidad del Pacífico; and industry representatives, including the National Mining, Oil and Energy Society, Southern Peru Copper Corporation, Antamina Mining, Repsol Exploración Perú and the Hunt Oil Company of Peru.