ANH issues new regulation for contracting of oil and gas blocks - International Law Office

On May 4 2012 the National Hydrocarbons Agency (ANH) issued Accord 4, which establishes both the criteria for the award of oil and gas areas in Colombia and the new regulation on contract negotiation, execution and performance (including provisions on the surveillance and follow-up of contracts).(1)

Chapter One (general rules and principles) of the new regulation presents the following 13 principles(2) that must guide all oil and gas contract-related activities:

• Equal treatment – apart from Article 13 of the Constitution, which includes the equal treatment principle, the regulation states that there will be no discrimination among proponents or contractors.
• Morality – always act pursuant to applicable laws, avoid conflicts of interest and aim for the efficient and timely compliance with the ANH's regulation.
• Economy – use public funds sparingly and manage them efficiently.
• Expeditiousness – handle all procedures in due time, avoiding unjustified delays and unnecessary procedures.
• Transparency – contract procedures to be carried out under the terms of the regulation.
• Responsibility – pursuant to Article 119 of Law 1474/2011 (anti-corruption statute), where public funds are adversely affected, both the corresponding state agency and the contractor will be jointly and severally liable.
• Due process – this principle is included in Article 29 of the Constitution, but the regulation emphasises that it must always be present in all procedures, particularly in those imposing sanctions or fines.
• Objective selection – where there is a bidding process involving several proponents, qualification and evaluation mechanisms will be objective and without special considerations for any party or interest.
• Impartiality – the ANH must always act impartially and without any subjective considerations.
• Publicity – except for confidential information, all acts issued and files handled by the ANH will be public and subject to consultation.
• Contradiction – all proponents, contractors and parties evidencing a legitimate interest may contradict the ANH's acts in the time and within the legal mechanisms established for that purpose.
• Legality and quality – best industry practices must be applied to all activities, making sure that all goods and services adhere to such practices. This principle emphasises the prevention, detection, investigation and penalisation of any criminal conduct, including those related to the financing of terrorism and money laundering.
• Planning – all contractual procedures carried out by the ANH must first be studied, planned and evaluated to determine their objective, scope and feasibility.

The last provision of Chapter One, Article 4, includes the list of definitions that will be used throughout the regulation. These definitions will be examined in subsequent updates.

For further information on this topic please contact Gabriela Mancero Bucheli at Peña Mancero by telephone (+57 (1) 640 1355) or email (gabrielam@pmabogados.co).

Endnotes

(1) Articles 1 and 2.

(2) Article 3.