Open Government and Transparency in Mexico’s Extractive Industries
The Extractive Industries Transparency Initiative (EITI) is an international initiative that seeks to increase transparency in relation to the payments made to hydrocarbon and mining companies, as well as the income that governments receive from taxes and royalties from these companies. The Initiative’s importance lies not only in making the flows of cash between extractive industries and the government more transparent, but also in its process of collective governance which recognizes the relevance of the private sector and civil society in improving the management of natural resources. This aligns with the principles of open government, which promote a new model of development based on inclusive institutions.
This new model of development also requires collaboration between different international initiatives. In this connection, the case of Open Government Partnership (OGP) and of the EITI is an example of the importance of Goal 17 of the 2030 Agenda for Sustainable Development, which aims to revitalize global partnership. The synergy between these two initiatives is significant: the president of the Secretariat of the EITI is a member of the OGP’s Openness in Natural Resources Working Group, which is co-chaired by Mexico and Indonesia, and many countries have committed to improve their processes related to the EITI through their national action plans with OGP.
Mexico is currently engaged in a process of adherence in order to join the EITI. This process was established as Commitment 26 of Mexico’s National Action Plan for 2013-2015 in the OGP framework. Its aim is for the country’s mineral and petroleum resources to contribute to national development through the application at the national level of the transparency and accountability standard of this international initiative.
For this reason, Mexico is participating in the 7th EITI Global Conference in Lima, Peru on 24-25 February. This meeting will permit Mexico to reaffirm its commitment to the adoption of the EITI standard, to learn about other countries’ experiences in order to enrich its own national process, and to describe the steps that it has taken to join this international initiative.
In this respect, during January 2015, the Mexican government stated in public and unequivocal terms its firm intention to implement the EITI standard through a joint declaration within the framework of the U.S.-Mexico High Level Economic Dialogue (HLED). Today, this commitment was reiterated at the HLED meeting in Mexico City.
As a result, Mexico has initiated the work to create the Multi-Participant National Group charged with the implementation of this standard. On 15 June 2015, the Federal Government formed an inter-departmental group composed of the secretaries responsible for hydrocarbons, mining, and the income from taxes and royalties from these industries. I had the honor of being named leader of this group, in which I am joined by my colleagues Dr. Miguel Messmacher Linartas, Undersecretary of Finance and Public Credit, and Mr. Mario Alfonso Cantú Suárez, Director General of Mining for the Secretariat of Economy, as well as their collaborators.
The following organizations were invited to join the Multi-Participant National Group: 1) Petróleos Mexicanos (PEMEX), a state-owned enterprise, for its importance in the petroleum industry of the country, 2) the Association of Hydrocarbon Companies, which includes the principal companies of the hydrocarbon sector, and 3) the Mining Chamber of Mexico, which represents approximately 90% of mineral production in the country.
Civil society organizations have also been involved in a broad, plural and inclusive process of consultation, which has allowed them to determine the nature of the participation and representation of civil society in the Group. The organizations coordinating this effort are Fundar – Center for Research and Analysis, PODER – Project on Organizing, Development, Education, and Research, and Transparencia Mexicana. In addition, the Instituto Mexicano para la Competitividad supports certain projects as technical advisor.
Country-wide studies will soon be published on the EITI standard for the hydrocarbon and mining industries. These studies allow us to identify our challenges and opportunities for implementing the standard. Attached to this text can be found a document with a number of the most relevant recommendations of these studies.
The foundational principle of the EITI is that a country’s wealth in natural resources should contribute to its development and the quality of life of its inhabitants. The implementation of the EITI standard will bring about greater transparency and accountability in the management of income from the extraction of petroleum, natural gas, and minerals. It will provide timely, context-specific, and socially-useful information, which will encourage sustainable development in Mexico.