General royalty system recipient of resources for the extraction of non-renewable resources

The percentage of territorial investment will remain at 34%, for regional impact projects, taking into account the criteria of population, poverty and unemployment, and resources for science, technology and innovation will be increased from 9.5% to 10%

With reference to the Legislative Act pending in the Congress of the Republic, the producing regions will go from receiving 11% to 25% of the total budget of the General System of Royalties (SGR), of which 20% will go to departments and municipalities where non-renewable resource extraction activities are carried out.

The percentage of territorial investment will remain at 34%, for regional impact projects, taking into account the criteria of population, poverty and unemployment, and resources for science, technology and innovation will be increased from 9.5% to 10%. Specifically, thanks to this constitutional reform, which goes to conciliation of the Senate and the House of Representatives, the poorest municipalities will go from receiving 10.7% to 15% of total royalties with criteria of unsatisfied basic needs and population.


Redistribution seems to be a good announcement, however, there was a sharp decrease in state savings, which went from 22.5% to 4.5%. In this sense it is important that a state policy is generated, which allows sufficient resources to be maintained to meet the needs during times of low oil prices.
Currently, the recovery of the biannual amount of the royalty budget is due to high oil prices, which were registered in international markets last year, with a Brent reference that marked levels above $ 80. But the volatility of prices is known to everyone, and eventually the budget of this line could be affected.

On the other hand, there is also concern about the lack of management by the Collegiate Bodies of Administration and Decision (Ocad). These must be rethought, since they have not functioned as efficient entities managing resources. Proof of this is that, in the biennium 2017 – 2018, more than 6 billion pesos remained unimplemented. It is important that the Government can have greater control over the Ocad, to avoid sources of corruption in the bidding processes, white elephants and the non-execution of resources. According to a report by the Comptroller, from 2012 to 2016, 40.8 billion of budget left 10.7 billion left unimplemented, this shows the slow Ocad in approving investment projects.

In addition, so that communities can see the benefit that royalties can bring, it is important to redesign these entities, which includes pedagogical work towards the regions, so that they carry out an adequate formulation and support of the projects, also receiving strategic guidance. of investments.
The communities have been victims of corruption when executing royalties, since the existence of resources does not mean that they are allocated as established by law. The case of La Guajira is one of the most notable: the department has received more of $ 2 billion in royalty resources over a decade and continues to present severe shortcomings in covering basic needs.

It is necessary that the regional, local and community authorities are motivated to defend the activities of the oil and mining industry, and have a sense of belonging to these projects, so it is essential to approve this Legislative Act.

Carlos Alberto Leal Niño

Chairman of the Acipet Board of Directors

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