Ecuador's Performance on the Resource Governance Index
Ecuador received a "partial" score of 58, ranking 18th out of 58 countries. Poor performance on the Enabling Environment component contrasted with a much higher Institutional & Legal Setting score.
(out of 58)
(out of 100)
|19||Institutional & Legal Setting||70|
|19||Safeguards & Quality Controls||65|
Institutional & Legal Setting (Rank: 19th/58, Score: 70/100) learn more
Ecuador earned a "satisfactory" score of 70. A strong legislative framework and clear revenue collection policies were balanced by gaps in the disclosure of environmental impact assessments and the lack of key budget figures.
Under the newly revised Hydrocarbon Law, extractive rights are granted through a bidding process in which the national oil companies are given priority. Foreign companies sign service contracts, giving the government the oil they produce in exchange for a fixed fee per barrel. Under this system, the government keeps windfall profits but is vulnerable to fluctuations in oil prices.
The Internal Revenues Agency collects taxes from oil companies. Other payments are collected by the Finance Ministry or by state-owned companies. Oil revenues are deposited in the Central Bank.
The Organic Law of Transparency and Access to Public Information includes provisions specific to the extractive sector and guarantees access to industry information.
Reporting Practices (Rank: 16th/58, Score: 64/100) learn more
Ecuador publishes only limited data on most aspects of the extractive sector and received a "partial" score of 64.
The Hydrocarbons Secretariat provides comprehensive information before the bidding process begins and the details of winning bids, but does not publish full contracts or key fiscal terms, such as tax rates. Recent contracts can be found on the website of the Non-Renewable Resources Ministry, and past production sharing contracts are available online from Petroecuador, a national oil company.
The Finance Ministry publishes information on oil prices, export values, royalty-like payments, and company income taxes. The Non-Renewable Resources Ministry published 2009 figures on production volumes, prices, export values, investments, and operating companies. The Hydrocarbons Secretariat issues annual figures for production volumes, prices, exports, company-by-company production, and production stream values. The Central Bank publishes monthly data on oil production and exports. No agency produces information on oil reserves, subsidies, special taxes, or fees.
Safeguards & Quality Controls (Rank: 19th/58, Score: 65/100) learn more
Ecuador's "partial" score of 65 reflects a lack of comprehensive oversight of the extractive sector and insufficient audit requirements.
National law limits the discretion of licensing authorities, though certain provisions allow state-owned oil companies to enter into operating agreements with companies not selected through a competitive process. Licensing decisions can be appealed, but are not reviewed by the legislature.
The Comptroller General audits state accounts and reports annually to the National Assembly. However, lawmakers' scrutiny of oil revenues is not rigorous and audit reports are not publicly available.
Enabling Environment (Rank: 36th/58, Score: 28/100) learn more
Ecuador scored particularly poorly on measurements of the rule of law, leading to a "failing" score of 28.
State-Owned Companies (Rank: 19th/45, Score: 62/100) learn more
Petroecuador and Petroamazonas manage all aspects of the oil industry. Petroecuador is active in both the upstream and downstream sectors, while Petroamazonas operates just one field. The government is considering merging the companies. Both publish detailed reports on operations and payments to the state as required by the Transparency and Access to Information Law. The companies are audited, but audit reports are not made public.
Subnational Transfers (Rank: 5th/30, Score: 92/100) learn more
Oil revenues are distributed through transfers to decentralized autonomous governments, deposits to the Ecodevelopment Fund for the Amazon region, or as "labor participation" payments for local workers. The Ecodevelopment Fund channels 1 percent of oil export revenues from the Amazon region back to local governments, which must use the money for investment. Labor participation funds must be invested in social or developmental projects.
The Finance Ministry publishes the rules for revenue transfers, but it does not include revenue-sharing formulas. The ministry provides data on the transfers, as do local governments.
INSTITUTIONAL & LEGAL SETTING
SAFEGUARDS & QUALITY CONTROLS
To explore all data and compare country scores, use the RGI Data Tool.
Key Economic Indicators
|GDP (constant 2011 international $ billion)||20.3||41.8||65.9|
|GDP per capita, PPP (constant 2005 international $)||5,381||6,510||7,655|
|Oil and gas revenues (% total government revenue)||24||..|
|Extractive exports (% total exports)||50||59||58|
|Sources: Oil and gas revenue as share of total government revenue from the Economist Intelligence Unit and the International Monetary Fund. All other data form the World Bank.|