Mining Specifics

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Transparency and Accountability

Policy, Legal and Contractual Framework

Sector Organization and Institutions

Fiscal Design and Administration

Revenue Management and Distribution

Sustainable Development

Case study: Argentina 

flag argentina

The importance of transparency through accountability and good governance is becoming more relevant in the Extractive Industry sector.

Specifically, in the mining industry which involves large capital investments in a resource-rich country through all the lifecycle of a mining project (including reconnaissance, exploration and exploitation stages). Mining revenues (through taxes, royalties and other multiplier effects) signify a great contribution to overall level of Gross Domestic Product of many resource-rich countries. In this context, the way host governments manage these mineral revenues should be as efficient and transparent as possible. Therefore, this situation highlights the importance of transparency by promoting accountability and proper check and balances control. This could be achieved through good governance and policies and by adopting and implementing international standards initiatives within the policy and legal framework of the country.

As a case study, Argentina faces many challenging gaps when considering transparency within the public sector. After 12 years under the same line of government, Argentina elected a new President in 2015. However, the new government faces significant challenges and one of the critical ones is reducing and ultimately eliminate corruption in the public sector. Transparency will certainly limit the opportunities for misuse of power and corruption, while accountability can ensure that those in charge of managing public resources are held accountable and responsible for those actions or inactions.

The latest 2015 Transparency International´s Corruption Perceptions Index shows that Argentina ranks 107 out of 168 countries, behind its neighbouring countries Uruguay, Chile and Brazil. When considering the legal and policy framework, Argentina is one of only four countries in Latin America that still does not have a national law that guarantees access to public information. Hence, the new government should enact and implement laws and regulations to improve and encourage transparency through accountability in the public sector. Consequently, it should first be addressed in a general perspective in order to then extend its scope of application to the Extractive Industry (EI) sector.

Perhaps one of the most obvious countries that Argentina could usefully seek to emulate by Argentina is the case of Peru. In 2012, the country was the first Latin American country to be declared compliant with the standard of the Extractive Industries Transparency Initiative (EITI). This demonstrated the capability of Latin American resource-rich countries to improve in terms of transparency and good governance in the EI sector. Notwithstanding some recent improvements, Argentina has a long way to go to meet the new (2015) government’s stated primary objective: “be implacable with corruption”.

Author: Agostina Martinez Carelli

 

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