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In Colombia, royalties from extractive industries represent a significant source of income. In the extractives sector, royalties refer to “payments made to the government to compensate it for the right to extract (and purchase) a non-renewable natural resource.” (NRGI) Between 2012 and 2019, royalties provided US$ 17.7 billion for public investment in sectors including infrastructure, education, science and technology, water and sanitation, and housing.
Colombia has taken steps to publish information on these resources through data efforts such as Mapa Regalias (royalties map), EITI (Extractive Industries Transparency Initiative) reports and data visualization, and a number of other platforms showing the distribution of resources to national agencies and regional and municipal authorities (i.e., Mapa Inversiones and SICODIS). Yet, there are many questions that citizens still find hard to answer using this information:
- Are the royalties received a good deal for the country?
- Are payments from companies contributing to local development?
- Are royalties received by subnational governments being spent effectively?
In 2019, Transparency and Accountability Initiative (TAI) teamed up with International Finance Corporation’s (IFC) Disclosure to Development (D2D) program and Global Integrity to assess gaps and challenges in the publication and use of royalties data in Colombia, and to surface potential solutions to tackle them. We focused specifically on mining royalties, given the strong ties to local economic development. During the assessment, we carried out a review of data sources, focus-group discussions, and interviews with national and subnational stakeholders and key government officials in Bogotá and Medellín.
What are the main challenges?
Some of the key challenges we found in data disclosure and use in the mining sector include the following:
- A complex royalties system that makes it challenging to link companies’ royalty payments with local development projects and results.
- Mismatch between information published and what data is needed by local civil society organizations (CSOs), activists, community leaders, and decision-makers, including the lack of information published as open data.
- The large proportion of small-scale and informal mining, which—due in part to challenges to formalization—leads to lower royalty payments and limits government capacity to develop and disclose a full picture of the mining sector.
- Data management in the mining sector, which is not centralized and relies on systems and procedures that are not interoperable. This leads to concerns regarding the quality, timeliness, and accuracy of the data.
- Inequalities and power asymmetries in the governance of natural resources and the distribution of benefits across levels of government, as well as the ever-present threat of corruption and the role of armed groups in illegal mining and their influence over local politics and security.
These challenges limit citizen engagement and erode the trust of citizens in the value of royalties for local development. As a result, access to and use of royalties information often are not a priority for communities and the organizations working to support them, particularly where conflict, corruption, and threat of violence dominate decision making.
Opportunities to support country-level use of data for accountability
Our assessment identified several opportunities through which TAI and Global Integrity might support CSOs working to promote data disclosure and use:
- Research and advocacy around current royalty reform: Supporting dialogue and action backed up by data and rigorous academic research on how to improve the current royalties system.
- Transparency support for artisanal / small-scale miners: Supporting efforts to bring artisanal miners’ perspectives, contributions, and impacts into the current dialogue on extractives led by EITI.
- Data-driven journalism at national and regional levels: Strengthening efforts to support regional and local media coverage of mining that is evidence-based rather than sentiment based, as well as to use data to enrich public debate on these issues.
- Data use to advocate for the allocation of a fair share of resources for minority groups: Supporting organizations working to defend the rights of, and improve development results for, Afro-Colombian and indigenous communities. This is especially relevant given current conversations on reform of the royalties system.
- Prioritization and oversight of royalties projects: Supporting community groups’ use of data at the national level to demand participation in the design of projects and accountability for the proper execution of those projects at the municipal level.
What’s next?
In September 2019, the findings of the assessment were presented for discussion and validation across government, civil society, academia, media, indigenous leaders, digital entrepreneurs, and industry in Bogotá and Medellín. These findings will be published as part of a final IFC assessment report later this all.
In an effort to identify practical solutions from these findings and opportunities, TAI is engaging its donor members to test ways to boost uptake of extractives data and spark greater collaboration among public, private, and nongovernmental actors in this space. Please look out for our follow-up post about this next week.
This exploration is part of a broader effort to understand how data can translate into accountability and inform the work of accountability funders, their grantees, and the design of future projects. Currently, TAI and Global Integrity also are working with Public Private Development Center (PPDC) and Human and Environmental Development Agenda (HEDA) to do this in Nigeria.
