UPDATE TO THE MINING PUBLIC POLICY 2019-2030
Through Ministerial Agreement No. 28, dated May 22, 2019, the Ministry of Energy and Non-Renewable Natural Resources issued the Update to the Mining Public Policy, which has been in effect since 2016. This proposal was drafted with contributions from the Inter-American Development Bank (IADB).
The prepared document has 6 strategic concepts, for which the respective public policy has been set out with certain guidelines and effective interventions by the State. A brief summary is presented hereunder:
CONCEPT 1 – ECONOMIC DEVELOPMENT: Looks to position mining as a relevant economic sector in the country, by increasing and diversifying the production, allowing for national and foreign long-term private investments. In order to reach this goal, the following effective interventions have been taken into consideration:
- Tax incentives that attract investments, such as tax refunds, tax guarantee and stability contracts, and permits for investments made in border zones.
- National and international forums that allow for establishing international cooperation conventions and agreements.
- Business and contract models between the State and concessionaires, which contain the minimum provisions necessary.
- Articulation for the mining sector with related industries (mining supplies, metalworking, metal processing and smelting); and, the establishment of small-scale mining company territorial concentrations.
CONCEPT 2 – ENVIRONMENTAL AND SOCIAL SUSTAINABILITY: The goals of this concept are: i) promote the adoption of good environmental and safety practices; and, ii) coordinate the relations between mining stakeholders, by strengthening community relations and social responsibility of the concessionaires, and reinforce the governing levels through dialogue. In order to reach this goal, the following effective interventions have been taken into consideration:
- Remediation of environmental liabilities caused by abandoned or inactive mining operations, including incentives, such as works for taxes. Additionally, this requires trusts, and financial bonds and guarantees to cover any potential environmental damage.
- Help regarding environmental regulations, including the provision of information, workshops and assistance for small-scale and artisanal miners.
- Incentives for compliance with labor regulations.
- Channels of communication regarding the benefits of mining.
- Definition and performance of the free and informed prior consultation procedure, including the verification of the presence of villages, nations, communes and communities, in accordance with the juridical framework.
- Articulation of State actions to provide basic services in the areas of influence, covering the needs of the communities, reducing the identified gaps, and obtaining the social license for mining investments.
- Incentives for local governments of the areas of influence to use the resources arising from mining royalties.
CONCEPT 3 – RESEARCH AND DEVELOPMENT: Looks to foster research, innovation, transfer of technology and entrepreneurship in the mining sector, through lines of international cooperation and association between the public, productive and educational sectors. As a result, formation, training and education of skilled and certified workers in the country is expected to be strengthened. In order to reach this goal, the following effective interventions have been taken into consideration:
- Grant funds, direct subsidies, direct public provision of research services and tax incentives for large- and medium-scale mining companies, public research institutes, universities and research centers.
- Adoption of technology and knowledge to support productivity and the growth of small-scale mining.
- Revision of technical aspects (exploitation designs, production volumes, associated infrastructure, tax requirements, among others) for all regimens.
- Creation of the Geological Information Bank of Ecuador.
CONCEPT 4 – MANAGEMENT AND ADMINISTRATION: The goal of this concept is to articulate the functions and authorities of the public institutions involved in the mining sector, through intra- and inter-sectorial coordination, transparency, and access to public information. In order to reach this goal, the following effective interventions have been taken into consideration:
- Reduction of processes to obtain mining rights and for authorization of operations. Additionally, centralized means (exclusive portals), and multi-sectorial and inter-governmental information systems will be fostered.
- Reduction of processes required to legalize small-scale and artisanal activities.
- Verification of mining areas mapped and implementation of operational security measures for transparent handling of information.
CONCEPT 5 – REGULATION, CONTROL AND COMBATING ILLEGAL MINING: : Looks to strengthen State regulation and control through audit, fiscalization and monitoring processes of mining activities. Additionally, it promotes the prevention, combat and sanctioning of illegal mining. In order to reach this goal, the following effective interventions have been taken into consideration:
- Identification, prioritization, performance and evaluation of actions geared toward eradicating illegal mining, defining clear attributes for each one of the entities that make up the Special Illegal Mining Control Commission (CECMI).
- Use of technology in smelting plants, ports and border zones to control the traceability of minerals being processed and exported, as well as to verify compliance with tax standards.
CONCEPT 6 – STANDARD: The goal of this concept is to promote improvements to legal standards, allowing for juridical security, while fostering mining development according to the requirements of the sector. In order to reach this goal, the following effective interventions have been taken into consideration:
- Coordination with the Judiciary Council to train judges and attorney generals regarding mining legal framework.
- Revision of what is indicated in the strategic concepts to identify and propose reforms that reduce the critical bottlenecks in the management model of the sector.
Finally, it is worth mentioning that, within 180 days of the publication of the aforementioned document, the update to the National Mining Development Plan is expected