Stephanie Zimmerling, MASc Mining Engineering // Feb 16, 2015
I have spent the past few weeks understanding and reporting on EITI in Peru. While familiar with the country’s dominance in the extractive industry, primarily in copper and gold, I was not familiarly with the decentralized nature of revenue distribution. Peru’s extractive industry revenue framework is built around the ‘canon minero’ and the distribution of mining royalties. These systems emphasize the decentralization in Peru and has put an increasing demand on regional governments. Since joining the EITI in 2004, civil society has criticized the reporting procedure for being irrelevant as it did not discuss wealth distribution at a regional level. Peru has already engaged in multiple sub-national reporting pilot projects.
Prior to the involvement of EITI, the International Finance Corporation (IFC) and the Canadian International Development Agency (CIDA) launched the MIM Peru Project (Improving Municipal Invest). The aim of the project is to address some of the issues present at a local level with regards to the canon fund allocation and to promote greater social accountability. The projects focuses on raising awareness about the importance of investments made with the canon funds and to encourage the expression of public opinion. Each of the projects work in collaboration with civil society organizations. The MIM project provided the information required by the organizations to enable the undertaking of a systematic monitoring of royalty transfers and municipal investment. The involvement of civil society organizations also allowed for more effective dissemination of information to citizens with the intent of promoting open dialogue between government authorities and the public concerning royalty investment. The projects have been successful and behavioural changes are present among communities.
Peru has also been at the forefront of EITI sub-national reporting. The Cajamarca region of Peru has been participating in a sub-national pilot project. The EITI has reflected upon the successes and struggles on these pilot projects as a means of informing the transition to sub-national reporting. Although subnational reporting makes sense in a decentralized nation like Peru, the ease of implementation may be significantly more difficult in centralized countries. The EITI has acknowledged that there are several constraints to overcome to implement subnational EITI successfully. Challenges include constraints of local capacity, legal uncertainty, access to funding, logistics and lack of infrastructure, political issues such as lack of political support, and a lack of engagement with local and civil society organizations. The approaches used by countries will vary in nature and need to be flexible and adaptive.