Colombia’s Experience Tackling Subnational Corruption in the Hydrocarbon Sector

Corruption poses a significant structural challenge in Colombia, costing the country nearly 50 billion Colombian pesos annually, affecting public finances, the full enjoyment of citizens' rights, undermining trust in institutions, and calling into question the legitimacy of the state. Part of this corruption issue happens in the extractive sector, which is significant for the national economy. This problem is particularly pronounced in the extractive sector according to official figures, a sector that represents about 5 percent of the national GDP and around 50 percent of exports, in addition to being a source of significant resources for territorial entities where mining and hydrocarbon projects are located.

NRGI’s 2021 Natural Resource Governance Index highlighted various areas with that can lead to different actors and decision-makers engaging in corrupt acts in the sector, despite Colombia’s high rating in managing its non-renewable natural resources. These include the disclosure of information related to the state oil and gas company, beneficial ownership, the granting of mining titles, and environmental licenses, among other issues.

The project focused on the experience of one department at the subnational level, recognizing that most decisions related to the exploration and production of minerals and hydrocarbons in Colombia are concentrated at the central level. This hinders full and meaningful engagement of departmental and municipal administrations, as well as the communities where oil and gas exploration and production projects are developed, in decisions regarding the governance of these resources, despite local citizens directly experiencing the impacts of decisions made.

A year after the completion of the project, we believe that lessons from the project can contribute to the implementation and adaptation of the guide across various countries at different scales. These key lessons include:

1. Build understanding among key stakeholders

During the execution of the project at the local level, it became clear that different actors involved in the value chain of the extractive sector have different levels of understanding of the issues. It is therefore crucial to ensure access to and understanding by all actors in the extractives value chain, with particular efforts directed at representatives of communities and civil society.

2. Build trust among key stakeholders

Through the project's development, the importance of building trust among different actors involved in the various stages of the guide's implementation became evident. This requires time, commitment, and engagement from all parties involved. Given this, the project took place over a longer period than six months to maintain a permanent and open dialogue among different actors to discuss findings, progress, challenges, and opportunities, all with the aim of identifying as many corruption risks as possible and ways to address them.

3. Involve a significant number of participants from different sectors

The active and continuous participation of diverse representatives from the relevant sectors is crucial. This includes government, operating companies, communities, unions, goods and services providers. A broad range of perspectives helps identify corruption risks and opportunities to address them that go unnoticed in small and highly technical working groups.

4. Provide information in clear and understandable language

Using clear and easy to understand language to communicate progress, findings, and improvement opportunities throughout the different stages of guide implementation is essential. This not only allows a deep understanding of the topics but also maintains the interest of the parties in remaining in the process.

5. Disseminate the action plan widely to engage actors in its implementation

Once the action plan is completed and approved by the parties involved in the process, it is important to carry out a dissemination campaign. Using different media at different levels ensures the action plan is adopted by as many institutions and parties as possible, in addition to exerting pressure for its implementation.

As a result of the process, we have discussed the action plan with civil society organizations, representatives of the oil industry, and the government. The consensus reached underscores the country's need to tackle corruption in the extractives sector at different levels—national, regional and local. This collective effort aims to harness the resources that this sector generates for the development of territories and in view of the energy transition process.

However, we faced challenges advancing implementation of the plan. The national context and the current government's focus on moving away from fossil fuels may have reduced the space to prioritize anticorruption work. We are currently making arrangements with the new local authorities, elected on 29 October, to present the action plan and encourage a call to the national government for its implementation.

Between 2021 and 2022, Crudo Transparente developed an anticorruption action plan for the hydrocarbons sector in Colombia based on the corruption diagnostic tool developed by the Natural Resource Governance Institute (NRGI), focusing specifically on the oil-producing region Casanare. This work was made possible with the financial support of Leveraging Transparency to Reduce Corruption (LTRC), a global initiative of the Brookings Institute and Result For Development, that seeks to disseminate effective practices to reduce corruption throughout the natural resource value chain.