WASHINGTON, (CMC) – A new study by the Inter American Development Bank (IDB) suggests that Latin American and Caribbean nations can provide more effective management and reduce the risks of corruption by improving the transparency of their natural resource industries through high quality and well-managed information.

The study covers a wide range of challenges and opportunities along the chain of production of extractive industries – oil, gas and minerals- from the issuance of licences to revenue management.

The study highlights the case of Maparegalias in Colombia as an innovative use of georeferencing technology to publish information on royalties and investments on the Web. In other positive examples, Perú and Trinidad and Tobago are already meeting the requirements of the Extrative Transparency Initiative, which demands high standards of transparency of information.

The region has an abundant wealth of natural resources that contribute to the economic and social development of its people.

Latin America is the world’s top producer of metals and its second biggest oil producer. Extractive industries represent 40 per cent of the region’s exports and are one of the principal sources of state revenues in countries that are rich in natural resources.

Activities in this sector also have generated significant problems, however, such as corruption and social and environmental concerns, often fuelling a sense of unease among citizens.

“After a decade of unprecedented prices for raw materials, there has been no solution to the debate on how to capture the value of extractive industries in the most effective and sustainable form and to the benefit of all citizens,” said Juan Cruz Vieyra, who edited the publication and an IDB expert on the modernisation of government.

“The extractive sector should take advantage of the institutional crises taking place throughout the region to strengthen its own framework for governance,” said Malaika Masson, co-editor and an IDB specialist on energy.

“It is an urgent task, because the good times generated by natural resources may be coming to an end.”

The study entitled “Transparent Governance in an Age of Abundance: Experiences from the Extracticve Industries in Latin America and the Caribbean” was presented during the Regional Policy Dialogue on Open Government that ended in Paraguay on Thursday.

The report explores initiatives for overcoming the so-called “resource curse” or “paradox of plenty”. Positive experiences in countries such as Australia, Chile and Norway show that with adequate management the extractive sector can contribute to development through improved infrastructure, financing of basic services and technological innovation.

The cases of various countries included in the book share the conclusion that transparency is key not only to preventing corruption but also to improving the efficiency of social spending. They show the challenges and lessons learned from innovative initiatives in which the governments worked with the private sector and civil society to make data available in a trusted and timely manner and in a digital format.

The report also shows the importance, in moving effectively toward an improved management of the extractive sector, of political will, the benefits of using transparency as a tool of public policy and the need to remain up to date on the application of international standards, comparative frameworks and key legislation for the sector such as the Dodd-Frank law in the United States and the European Union directives on transparency in extractive industries.