Guatemala’s Implementation of the Extractive Industries Transparency Initiative (EITI) Standard: An Evaluation

Overview

The report provides an assessment of Guatemala’s compliance with the EITI Standard, which requires countries to disclose information on extractive industries’ revenues and expenditures.

Key Findings

Revenue Disclosure

• The 2014-2015 EITI Report was published in January 2017, meeting the required timeframe.
• However, not all revenue streams were considered, and only Perenco was selected to report on its contributions among the four oil-producing companies.

Revenue Allocation

• The report explains the distribution of revenues to the National Budget, but lacks reference to a revenue classification system or international data standards. This is considered satisfactory.

Subnational Transfers

• The report does not clearly explain subnational transfers, and even the role and scope of FONPETROL are presented in a confusing manner.
• Revenue sharing formulas explaining subnational transfers amounts are included in publicly accessible laws, but not in the report.

Socio-economic Contribution

• Mandatory social expenditures are not mandated by law, according to stakeholders, but this is not confirmed in the report.
• A list of voluntary contributions from mining companies is disclosed, but these payments’ materiality was not discussed and therefore amounts not reconciled.

Outcomes and Impact

• The MSG does not seem to be involved in producing Annual Progress Reports (APR), which are mostly done by the Secretariat.
• The APR 2016 makes no reference to the recommendations suggested by the IA in the latest EITI Report, and it mentions recommendations from previous reports that have not been implemented.

Conclusion

Overall, the report concludes that Guatemala’s implementation of the EITI Standard is insufficient, with significant gaps in revenue disclosure, subnational transfers, socio-economic contribution, and outcomes and impact.