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  • Mining Alert No. 7 - New Mining Public Policy in Ecuador
Martes, 11 Junio 2019 12:18

Mining Alert No. 7 - New Mining Public Policy in Ecuador

The Ministry of Energy and Non-Renewable Natural Resources published the updated Mining Public Policy dated May 15, 2019, which has 6 themes: economic development; environmental and social sustainability; investigation and development; management and administration; regulation, control and combat against illegal mining; and, law and regulations. Each theme has strategic objectives (the theme of environmental and social sustainability has 2 strategic objectives), and each of them has a public policy. Additionally, each theme has 4 effective interventions (except for the themes of (i) regulation, control and combat against illegal mining and (ii) regulations, which have 2 effective interventions).

The strategic objective of the economic development theme is to "position the mining sector as an important industry of the national economy", with its public policy to "increase and diversify the production of the mining sector, encouraging long-term domestic and foreign private investment, generator of employment [...] ". Of its 4 effective interventions, the most relevant are:

  • Implementation and optimization of fiscal incentive mechanisms to promote mining investments in the country, such as tax refunds, guarantee contracts and tax stability.
  • Establishment of standard contracts between the State and mining companies for negotiation and drafting of a contract that contain a minimum of necessary or appropriate provisions, framed in the principles of legality, equity, balance and care of the environment.
  • Creation of mining clusters through articulation between mining and related industries (mining inputs, metalworking, metal processing and smelting).

The theme of environmental and social sustainability has 2 strategic objectives: (1) adoption of good environmental practices and occupational safety and (2) harmonization of the relationships between mining stakeholders, promoting the development of the areas of influence, with their respective public policies: (a) promotion of the use of natural mineral resources and (b) strengthen the community bond and the social responsibility of those who carry out mining activities. Of its 4 effective interventions, the most relevant are:

  • Strengthening of community relations, particularly the spaces in which the actors (companies and communities) can reach an agreement for the development of sustainable mining projects in accordance with social and environmental development. It includes optimizing the process of prior consultation.
  • Guarantee the right to free, prior and informed consultation and other spaces for dialogue, through its definition, including verification of the presence of peoples, nationalities, communes and communities to whom it applies, as well as other spaces for dialogue and participation.
  • Design and implementation of incentive mechanisms for regional and local governments in mining regions for use royalty resources.

The strategic objective of the research and development theme is to strengthen geological, mining and metallurgical research, with its public policy to "promote research, innovation, technology transfer, and entrepreneurship for the development of the mining sector." Of its 4 effective interventions, the most relevant are:

  • Promotion of mining innovation through competitive funds, direct subsidies or tax incentives that increase innovation of mining companies.
  • Definition of the ideal zones to carry out mining activities based on the following criteria: social, environmental, water (water sources declared of public interest and areas of water importance), productive, economic, technical, safety and risk.
  • Update of the categorization of mining activities based on a review of technical aspects (exploitation designs, production volumes, associated infrastructures, tax requirements) for all mining regimes.

The theme of management and administration has as a strategic objective to articulate the functions and competencies of the public institutions involved in the mining sector, with its public policy to promote an articulated, timely and efficient public administration. Of its 4 effective interventions, the most relevant are:

  • Simplification of procedures and reduction of delays for a natural or legal person to obtain mining titles for exploration, exploitation or benefit and its operation.
  • Reorganization of the mining cadastre through a verification of the mining areas that have been graphed, based on mining titles in force or in process of being obtained and the implementation of operational assurances for a transparent management of information.

The theme of regulation, control and fight against illegal mining has as a strategic objective to strengthen the structure of administration, regulation and control of the State, through the application of audit processes, and monitoring of mining activities, with its public policy to improve the capacity of administration, regulation and control of the State over mining activities, including control of illegal mining. Of its 2 effective interventions, the most relevant are:

  • Control of illegal mining.
  • Control of the traceability of the ore that is processed.

The law and regulations theme has as its strategic objective to promote a solid regulatory framework for the development of the mining industry, through the review, analysis and proposals of a mining regulation to promote rule of law in the sector, with its public policy to improve the mining industry’s regulatory framework to enable its development. Of its 2 effective interventions, the most relevant are:

  • Training of judicial officials in coordination with the council of the judiciary.
  • Review and proposal of adjustments to the regulatory framework.

For more information contact us:

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