The Business Year Special Report
PUBLIC ADMINISTRATION & REGULATION
Ecuador is creating a sustainable and responsible future for itself through its extractive sectors.
Ecuador is creating a sustainable and responsible future for itself through its extractive sectors
The development of the extractive sector depends on agreements with social groups. How can the announced Pacto Social Energético (Social Energy Agreement) achieve this goal?
The Social Energy Agreement seeks to implement actions that go hand in hand with the national government’s policies to strengthen the sector, endorse positive changes, respect established principles, gain transparency, prioritize national interests, and open more spaces to attract new investment. By doing this, companies will positively see Ecuador as an investment destination, incentivize institutional efficiency, and show the human face of the sector with activities that are completely sustainable and inclusive, while benefiting the most vulnerable areas of Ecuador. The actions will be implemented across the board through spaces for dialogue that we are creating to generate consensus among all the related sectors.
What steps are being taken to create clarity and legal certainty in the mining sector?
We have conducted a number of policies. First, we launched a national plan for the mining sector that establishes a forecast for 2030 and is aligned with the UN’s Sustainable Development Goals. This tool will have plans, programs, and projects that have to meet on the axis of the public mining policy. One of the goals is to improve the investment climate and the legal certainty of the mining companies. We expect to have the plan ready in 1Q2020. Second, we have a new regulation to hold public consultations. This new regulation will ensure a participative process for consultations and provide information on the activities of extractive industries in the territories of the ancestral people. Third, we are updating the mining regulation in line with the current needs of the industry and prioritizing areas like obtaining the authorization for plants. In addition, this regulation envisions the approval of the design, construction, and operations of trail deposits. These regulations will regulate mining operations and will provide more clarity about the administrative process and the control of operations.
How can the ministry optimize its cooperation with other government entities to boost the mining sector?
The government works with different institutions, such as the Ministry of Environment, the Secretariat of Water, and the Agency of Regulation and Control of Mining (ARCOM) to attend to the needs of the industry, particularly in relation to the environmental regulation of water required to develop the mining project. This work has provided good results. As an example, we were able to regulate the drilling and exploration periods that companies require to speed up their investments. We have also created a new regulation on the process to obtain a certification regarding a project’s possible effect on water reserves. However, the largest concern that the industry has in terms of hydric resources is the time that it currently takes to obtain the certificate, which eventually delays the planning of the project, reduces investment and employment, and generates uncertainty.
Launched Ecuador’s Public Mining Policy 2019-2030
Aims to improve the investment climate and legal certainty for mining companies
Can we expect a mining round in 2020? What lies in store for 2020 for the ministry?
In January 2018, the government closed the mining cadastre. The government, with the support of multilateral institutions, has worked to strengthen the administration of the mining cadastre. The objective of this project is to identify eventual situations, administer solutions, and suggest processes to award the mining concessions based on good international practices. The process will conclude in 2020, and once we have the conclusions and recommendations for the project, we will decide on whether to open the cadastre and approve new auctions. For the ministry in general, we seek a steady increase in production of natural resources, institutional efficiency, and the Energy Social Agreement with the goal of improving the work that we are carrying out in the electric, hydrocarbon, and mining sectors. With these goals, we will continue developing the country’s natural resources in a responsible and sustainable way. We want to optimize our resources and be open to new investments with technical and economical solvency according to the constitution. ✖