Creating Value for Colombia and Ecuador
Gran Tierra contributes to local, regional and national economic development in Colombia in many ways, including through taxes, royalties, jobs, local procurement of supplies and services, social investments, training and education programs and voluntary social and environmental programs.
In South America, the regions where energy resources are concentrated are often the most in need of sustained economic development. In addition to developing oil resources responsibly, Gran Tierra creates opportunities for employment, education, entrepreneurship and self-reliance.
In Colombia, the Company’s social efforts are aligned with government priorities of entrepreneurship and gender equity and are conducted under a framework of regionalization. This strategy ensures that the Company is not only building social and economic value in the areas where it operates, but also helping fortify the entire region to maximize the impact and sustainability of its investments.
The below projects show how GTE’s strategic investments are focused on creating opportunities and generating income and how this work is developing our neighbours, their businesses and is changing lives in the regions where we work.
Tax Revenues Directly Developing Local Territories
Works for Taxes (WFT) is a program created by the Colombian government that allows GTE to use up to 50% of its income tax contributions to directly develop and implement local projects that improve livelihoods, support economic development and help stabilize territories most affected by poverty and the previous armed conflict. WFT is also an important component of Colombia’s Territorially Focused Development Programs (PDETs) following the 2016 peace agreement signed between the FARC-EP guerrilla movement and the Colombian government. The PDETs are a vital tool for rural development and lasting territorial peace that empowers local communities to decide how funds should be invested in their territories.
Through WFT, Gran Tierra Energy is developing four projects targeting improvements of road infrastructure, education and housing in the Putumayo municipalities which experience high rates of poverty and food insecurity. Total investment for the first four projects will be over COP $10 billion. In 2020, GTE provided kitchen equipment including refrigerators, freezers and ovens as well as tables and chairs for 152 school cafeterias through the WFT program. These projects will benefit over 12,000 students and teachers, supporting increased food security for local students, as the participating schools will now have the ability to store and prepare nutritious food, keeping students in school longer.
Putting Local Businesses First
GTE continues to increase opportunities for local contractors and suppliers through a strategy focusing on putting local companies first to meet its needs for goods and services, only expanding its search beyond the locality if no qualified providers are available. This also provides the companies access to programs administered in partnership with regional Chambers of Commerce to strengthen their skills and increase their capabilities.
|LOCATION||LOCAL COMPANIES HIRED||PURCHASES OF LOCAL GOODS AND SERVICES (COP)|
|Middle Magdalena Valley||71||$63 Billion|
GTE’s successful Key Partners program has evolved from a simple award given to the best performing vendors into an integrated, multi-stage program with five components. This program has led to tremendous growth in the capabilities, capacity and competitiveness of vendors in the areas where the company operates.
Components of Key Partners:
- Developing close, beneficial relationships with existing and potential vendors through continuous contact with dedicated company staff. This ensures ongoing dialogue and alignment between vendor and company.
- Dedicated high-value training offered to managers and owners of vendor companies delivered in partnership with regional Chambers of Commerce.
- Supply Chain standards that ensure GTE’s contractors are also sourcing from local suppliers.
- Performance evaluations that measure, recognize and reward 4 outstanding vendors. Facilitating relationships between contractors and local suppliers to foster a growing ecosystem of opportunities for area businesses.
Members of the Key Partners program are expected to:
- Offer high quality goods and services
- Submit competitive proposals, both in price and quality, when invited to bid
- Be a collaborative partner with the goal of ensuring that GTE operations are carried out safely and accurately
- Respect corporate decisions made by GTE or its contractors
- Understand and apply GTE’s human rights and anti-corruption policies in their business practices
- Participate in activities developed by GTE aimed at strengthening business skills
In 2020, Gran Tierra Energy, in partnership with Créame Incubadora de Empresas and Scotiabank, created the Emprender+ program, formally known as Emprender Paga. Emprender+ aims to promote the economic empowerment of local communities in the Putumayo, Cauca Valley and Middle Magdalena Valley near Gran Tierra’s operations. Emprender+ provides tools to strengthen local entrepreneurs’ ventures in a sustainable way.
Originally designed for 100 participants, the program was tripled to 350 after receiving over 1,500 applications in 2021. Free online training sessions were created for the additional participants who were unable to join the full program.
Emprender+ selected 70 participants who gained access to additional support and seed capital. Also, as a result of their participation, the Putumayo graduates from the national program were able to access the Productive Entrepreneurships for Peace (EMPROPAZ) program, which is focused on developing microbusinesses and fostering financial inclusion for entrepreneurs.
“I don’t know how to read or write, but I know business, numbers and shoes. Emprender+ taught me how to better organize and analyse my business. I hope that someday I can help other entrepreneurs open their own businesses.” REUBÈN GUITIÈRREZ
“People often simply throw their used cooking oil away which can pollute the water and soil. We wanted to do something that would make a difference, environmentally, socially and healthwise, and that’s where the idea for this business came from. The people at Emprender+ really took me by the hand and dedicated their time to help me understand all the factors that go into the business which was a big reason for our success.” HEIDY QUIROGA
“When we started with Emprender+ we actually restructured our business model based on a diagnosis that helps us understand and strengthen our weaknesses. When you are an entrepreneur, not only are you motivated by the economic side, but also the social side. We love providing jobs and business opportunities for farmers to earn a living away from illicit crops.” ZORAIDA NARVAEZ & ROSMIRA NARVAEZ
Agroemprende Cacao – Creating Markets for Local Farmers
After more than 50 years of conflict between the Colombian government and guerrilla forces ended in 2016, creating new, legal economic opportunities was essential to maintaining the peace effort. The cacao industry was identified as a significant opportunity because it offers a legal alternative to the many farmers who grow illicit coca.
Colombia produces a particularly fine grade of cacao (the seeds from which chocolate is made), which is in short supply in world markets.
The Agroemprende Cacao (Agroemprende) project started in April 2019 and is a unique regional initiative undertaken in the Putumayo department in partnership with Gran Tierra Energy, Ecopetrol and the Canadian Embassy in Colombia and implemented by the International Development Cooperation Society (SOCODEVI). GTE has committed over USD$5 million through 2025 to the initiative which supports cacao-growing family enterprises with equipment, seedlings, materials and training.
Agroemprende aims to improve the economic and living conditions of rural families through the production and promotion of cocoa, including through the expansion of the regional cocoa market chain. Ultimately, this project focuses on creating markets of scale for local farmers and will help them get their products to market.
Agroemprende does this through the development of three key areas of the market chain.
- The first area is through the strengthening of local farmer cooperative associations, known in Colombia as “local associative enterprises”, in five Putumayo municipalities. These ground-based producer associations will come together to pool their production and will aggregate purchases, storage, and distribution taking advantage of volume discounts and utilizing other economies of scale.
- Second, farmer associations are connected to new collection and purchasing points that are managed by producer associations. These collection centres are located strategically among member farms to receive dried cocoa beans from association members and neighbouring cocoa producers. The centres will not only collect the dried cocoa beans, they will also buy the dried beans directly from the farmers and then sell the gathered volumes to large scale buyers and local markets – replacing the role of intermediaries, who usually profit significantly more than the farmers themselves.
- Finally, the Agroemprende program will create one large regional cooperative association that gathers and represents local farmer associations. The regional cooperative association increases access to markets and competitiveness for local farmers. Cocoa crops are negotiated at a larger economy of scale and will have competitive access to national markets.
- 400 families will be directly supported through Agroemprende.
- In 2021, 291 families participated, and over 45,000kg of cacao was produced and commercialized.
- Beneficiaries are from Puerto Asís, Puerto Caicedo, Mocoa, Villagarzón and Puerto Guzmán.
- Beneficiaries will also see improved economic opportunities through the establishment of agro-environmental practices, climate-smart agriculture, agroforestry systems, and the implementation of new innovative technologies.
- The Agroemprende initiative has a specific focus on the empowerment and resilience of women in the cocoa business by developing and strengthening their technical capabilities. It also facilitates female access to land tenure so that they can become direct beneficiaries of existing and upcoming programs.
“GTE has been a strategic ally to the government of Putumayo in its efforts to support our producers. Successful projects like AgroEmprende are important models that help us attract additional public-private initiatives. The Company’s efforts to develop local infrastructure like roads is connected with its entrepreneurial and agricultural projects, which taken together are very important in territories where development is lagging.”HILIANA TORO, Secretary of Agricultural Development and Environment, Governor’s Office, Putumayo Department
Carmen, a farmer in La Vereda Naranjito, a small town between Villagarzón and Puerto Asís, is a single mother. Carmen lives with her kids, aged 16 and 26, both of whom help her on their farm.
“Cacao is the most productive crop for me as it is year-round and offers the benefit of having a ready market. I can sell all of my production as soon as it is ready, which is not the case for my other crops. Since it’s working so well, a number of people in Naranjito have asked me how they too can get into the program.”
Cesar, pictured with his wife, is a farmer in Puerto Rosario, who maintains a 15-hectare farm about 20 kilometres outside of Puerto Guzmán.
“Cacao is not new for us, but with this training we can significantly increase our yields and income, making cacao a perfect crop for us. In our region coca cultivation has disappeared by at least 80%; much of that is because it has been replaced with crops like cacao. If we can finish the job here and then replicate it across the country, the lives of thousands of people could be changed.”
Supporting the Peace Process
At the same time that Gran Tierra is helping local farmers, the company is supporting the government’s peace process in towns and villages by creating opportunities for demobilized former guerrillas to earn money as they begin to establish productive lives within mainstream Colombian society. One way is by supporting the production of cacao saplings for area farmers who are transitioning to legal crops instead of illegal coca.
Gran Tierra built four irrigated nurseries for the production of cacao plants in Puerto Asís in Putumayo and La Uribe in Meta. Ex-guerrillas are trained to ensure they have technical proficiency working with this new crop. The main role of each nursery is to be a fixed asset that can produce thousands of plants each year, including as many as 160,000 young plantlets. The plants are then cultivated, fortified and delivered to area farmers participating in the program. Technical support and additional training are provided by FEDECACAO, the national association for the cacao industry.
“We were skeptical in the beginning, but GTE has remained present, supportive and fulfilled its commitments 100%. We now have fantastic infrastructure to implement the program as well as ongoing technical support and materials, so the program has been a success so far.” JESUS ANTONIO MARTINEZ, Representative of Agropal, an agricultural community association
“I was a victim of the conflict and was displaced from location to location without finding a shelter. This program has really changed my situation. This is a very good project because for many people who have grown illegal crops, this is a legal crop that can provide a good alternative.” HILARIO TORRES, Farmer, Puerto Asís