Relevant Corporate Responsibility Issues

Progress on environmental recovery

Ecopetrol S.A. continues to execute the environmental recovery activities established due to the contingency in the Lisama 158 well in March 2018, by deploying the actions described in the Environmental Recovery Plan (PRA, for its Spanish acronym). This plan incorporated the management measures set forth in the Comprehensive Environmental Management Plan for the Seas, the recommendations made by the Alexander von Humboldt Institute (IAvH), the guidelines generated by the UN, and the advice of partner expert consultants, as well as the company Geotecnologia, and Universidad Industrial de Santander - UIS.

The PRA contemplates the biotic, abiotic, and social components, as illustrated below:

Source: HSE Vice Presidency 

The following actions were implemented as part of the comprehensive management of biodiversity for the ecosystem recovery of the area: 

Source: HSE Vice Presidency

Below are some of the most relevant advances in the execution of the PRA:

Source: HSE Vice Presidency

Source: HSE Vice Presidency

These activities are subject to monitoring and control by Environmental Authorities such as ANLA, with the participation of the Autonomous Corporation of Santander (CAS), and municipal environmental secretariats (Barrancabermeja and San Vicente de Chucurí) generating reports on a quarterly basis. The thirteenth quarterly activity progress report was presented in December 2021, with an 87% progress.

Monitoring results

The results allow us to conclude that the water bodies of the Lisama gorge and Caño La Muerte report normal concentrations within the limits stipulated in Decree 1076 of 2015. The parameters slightly in excess are related to the influence of anthropic factors developed within and alongside the banks of the monitored water bodies, the discharges of domestic wastewater, the presence of solid waste, and other actions.

Based on the results of the nine (9) vegetation monitoring activities conducted in the Shaft category and the verification by expert forest pathologists and dendrologists, Ecopetrol S.A. observes that these specimens are growing and developing naturally.

The reincorporation actions in the PRA as an assisted process have been successful, and the predominant vegetation cover is offering better resources for the habitats of the species.

No evidence of deterioration was found during the execution of the first two sampling campaigns associated with the Biodiversity Monitoring Program, but on the contrary, there was evidence of an environmental recovery process, at site-scale, for indicators related to the structure of the vegetation and a stable environment, at landscape-scale, especially for indicators related to the composition of the fish community.

Leptotila verreauxi

Apteronotus milesi recorded in caño La Muerte

Social Progress

In support of the strategy for advancing environmental recovery, engagement sessions were held in 2021 with communities, authorities, and institutions, such as tripartite dialogue spaces and systematic meetings with artisanal fishermen. This, to establish a two-way communication with stakeholders, and present the progress of the PRA, as well as the complementary actions undertaken with the communities of influence.

Similarly, by means of the communications strategy, concerns associated with this contingency and the implementation of the PRA were clarified via Facebook and the audiovisual magazine, La Voz de Lizama, which was broadcasted on social media and the local television channel, Enlace TV. Progress was made in communications with the publication of audiovisual pieces, graphic posts, loudspeaker announcements, contests, and live broadcasts on the Profe Aguas official page on Facebook.

In 2021, engagement sessions were held with communities, authorities, and institutions, including the spaces for tripartite dialogue and the systematic meetings with artisanal fishermen. In this way, Ecopetrol establishes a two-way communication with stakeholders to present the advances of the Lisama 158 PRA and the complementary actions deployed with the communities of influence.

As part of compliance with the PRA, SENA offered training programs in "body-to-body aquatic rescue," and Universidad del Magdalena in "how to capture information from fishing." Training sessions were also conducted on ecological issues by professionals from the regional social and environmental team.

The progress made on social investment projects includes locative improvement and in-kind donations works in the Yacaranda, La Unión, Guarumo, and Meseta de San Rafael educational institutions in Barrancabermeja. Also, improvement works and in-kind donations in the Pedral community center, the La Lucha village school, the Puente Sogamoso sports arena, and the Puerto Cayumba community center and multi-sports court in Puerto Wilches. In addition, Ecopetrol delivered the improvement works and in- kind donations in the Lizama II school in San Vicente de Chucurí, the rural gasification project of La Fortuna in Barrancabermeja, and the fishing monitoring contract in the lower part of the Sogamoso River implemented by the APETRAS fishermen's association. Progress was also made in the execution of rural gasification projects in La Lizama in San Vicente de Chucurí, and the project for the rehabilitation of riparian corridors in Puerto Wilches.

As part of the complementary actions undertaken, we provided support to the diocese of Barrancabermeja in the celebration of the patronal festival of San Francisco de Asís, with the organization of the first fair in the parish community and sharing knowledge seeds, and flavors. In this event, we handed out trees to be planted by the community, provided technical support with the presence of a forestry engineer in the environmental pedagogical workshop, and set up a stand to present the progress of the PRA during the event.

Furthermore, we held the “Huertas Caseras – Sembrando con Amor” volunteer activity, with help of Fundación Grupo Ecopetrol, allowing the expansion of home gardens to ensure food security for the fishing families in the El Llanito township, and maintaining healthy lifestyle habits with a balanced family basket.

Finally, the Company contributed to the striped catfish bans in the region by handing out fliers and conducting an outreach campaign. Support was also given to the follow-up visits conducted by the ANLA, which served to monitor compliance with the requirements set forth in the PRA framework. Thus, benefitting 2,000 people in the rural areas of the municipalities of San Vicente de Chucurí, Puerto Wilches, and the district of Barrancabermeja.

Since Ecopetrol's engagement in the dialogue roundtable established by the National Government with the U'wa people[1] in 2017, communication between Ecopetrol and Asou'wa has strengthened through intercultural workspaces designed to foster trust and mutual understanding. In these spaces, Ecopetrol has had the opportunity to better understand the U'wa people and the participants have been able to hear and solve their doubts about Ecopetrol's activities.

In 2018, an engagement plan was initiated between Ecopetrol (Regional Environment Management - Vice Presidency of Sustainable Development) and Asou'wa (Association that brings together the 17 communities of the U'wa United Reservation in Santander, Norte de Santander, and Boyacá) to build a joint vision of the territory, based on three (3) pillars: direct and permanent dialogue, mutual understanding, and fostering trust. The plan has turned confrontation and resistance into a willingness to establish dialogue, reach mutual understanding, and exchange knowledge. In addition, the engagement plan focuses on deepening strategies for the protection of the environment and determining how the impacts deriving from the evolution of extractive activities can be avoided or mitigated.

The "Building the Territory’s Joint Vision" strategy, which is part of the Engagement plan, allowed mutual understanding between the community and the Company strengthening mutual trust. To this end, knowledge exchange activities were conducted with an intercultural approach to understand why there are needs and concerns regarding the survival of the U'wa People despite industrial activities. 

In 2021, agreements were reached for some community benefit projects associated with food security and health for the U'wa people, as well as the improvement of ancestral roads for better and safer mobility for the community in their reservation. Finally, progress was made in an agreement with the Government of Boyacá in order to build the "Thought Center". In terms of developing infrastructure to provide meeting spaces for the communities, a project was structured in 2021 for the construction of the Intercultural Thought Center of the U'wa Indigenous community in the municipality of Cubará (Boyacá), with the Company signing a partnership agreement for construction, which will benefit more than 7,500 people. After several years of estrangement, there is now stable and permanent communication with Asou'wa.

Asou'wa and Ecopetrol workspace for intercultural recognition.

Ecopetrol currently has a permit to discharge treated produced water associated with the production activities of Campo Castilla into the Guayuriba River, in the municipality of Acacías, in the Department of Meta.

On December 14, 2020, the Cormacarena Environmental Authority imposed a preventive measure to suspend discharge due to apparent contamination in the water source, in accordance with the visits made by the Authority in the months of March and October of that year, and also due to an alleged breach of the provisions of follow-up writ PS-GJ.1.2.64.20.0329 of 2020[1]. Ecopetrol submitted several requests to the environmental authority to lift the measure, arguing that the discharge conditions fully complied with the provisions of Resolution 631 of 2015 and local regulations on Water Quality Objectives. An action plan was similarly presented to improve the water conditions of the river, including short, medium, and long-term actions to mitigate the natural clogging of the river, accelerate dilution, and improve the quality of the discharge. This action plan was approved by the environmental authority.

Considering above, Cormacarena ordered the provisional lifting of the preventive measure on June 11, 2021, subjecting it an effectiveness verification of the actions initiated by Ecopetrol. On November 24, 2021, the Company requested the permanent lifting of the preventive measure given its compliance with the parameters set forth in current national and local regulations.

It is worth pointing out that, due to the situations that gave rise to the preventive measure, Cormacarena initiated a sanctioning process on February 11, 2021, and, on December 17, 2021, a statement of objections was issued against Ecopetrol, which was notified on January 6, 2022. As a result of this process, a sanction could be applied against Ecopetrol.

Ecopetrol continues to comply with the actions recommended in administrative acts by the environmental authority and continues to submit periodic reports on the execution of deblinding activities[2]41 at the point of discharge, reports on the piping process in the Guayuriba River, and progress reports on the medium and long-term actions proposed in the discharge system improvement plan.

As part of its commitment to Human Rights, Ecopetrol S.A. has established relations with entities that are part of Colombia’s Comprehensive System of Truth, Justice, Reparation, and Non-Repetition (SIVJRNR, by its Spanish acronym), as is the case of The Truth Commission (CEV, by its Spanish acronym), created by means of Legislative Act 01 of 2017 "…which establishes transitional provisions in the Constitution for terminating armed conflict and building stable and lasting peace, as well as other provisions."

Ecopetrol has taken actions to continue engaging with State entities in specific mandates associated with the respect and promotion of human rights. Similarly, to keep its commitment to contribute to peace in the country, the Company has undertaken actions towards this objective, by engaging entities such as the High Presidential Council for Human Rights and Ecopetrl Group’s contribution to the “Public Works for Taxes” state initiative.

Ecopetrol has particularly engaged with the CEV, an extrajudicial entity part of the SIVJRNR, as follows:

• Providing timely response to information requests;
• Participating in different public forums such as the Dialogues for Non-Repetition and the meetings on "Dialogues, Business, and Truth;"
• Entering into inter-administrative cooperation agreements to assign a company official responsible for fulfilling the objectives and duties of the CEV, among others.

Furthermore, in order to contribute to the objectives of the CEV, a first report was prepared by Ecopetrol under the title of "Ecopetrol in Magdalena Medio: Corporate narrative on the impacts of armed conflict on the Company’s operations,” which was officially submitted to the CEV at a meeting led by Ecopetrol’s CEO, Felipe Bayón, and Father Francisco de Roux, President of the CEV, on August 12, 2021.

The Cartagena Refinery expansion and modernization project (the Project) has been audited and inspected by the Office of the Inspector General of the Nation and the Office of the Comptroller General of the Republic of Colombia, and criminal proceedings are currently underway. All proceedings are filed against former Cartagena Refinery or contractor employees. None of the proceedings are filed or have been filed against the Cartagena Refinery or Ecopetrol, neither in Colombia nor in the United States or any other country.

The administrative authorities (Office of the inspector and Office of the Comptroller) have issued their ruling by means of several decisions. The events under investigation, which the control entities have already ruled on, correspond to the following:

• Increased budget for project execution by means of the five (5) exchange controls in relation to the initial budget.
• Late commissioning of the refinery.
• Subscription and implementation of billing procedures.
• Structuring and implementation of the incentives plan.

None of these investigations is related to charges or crimes of corruption, bribery, or fraud.

Office of the Inspector pronouncements

The Office of the Inspector General shelved three (3) investigations against former employees of the Cartagena Refinery and former members of the Board of Directors of Ecopetrol, concluding that their conduct was not irregular, since the additions to the project budget were necessary. The cost estimate and schedule submitted by the contractor were shown to be inaccurate and underestimated.

For the Office of the Inspector General, the change controls responded to erroneous budget projections by the contractor, which made it impossible to continue with the execution of the work if the increase of the initial budget was not authorized, and it was also the most convenient solution to continue with the Project.

The Office of the Inspector General concluded that there was clarity in the structuring, implementation, and results process of the incentives plan, and the milestones for payment were also met.

Office of the Comptroller pronouncements

The Comptroller General of the Republic, under fiscal responsibility process PRF-005-2017, decided, since 2018, to shelve and disassociate all parties involved (former directors, former employees, contractors, Ecopetrol insurers) in the approval of change controls 1 and 5 for not constituting property damage, and all former members of the Board of Directors of Ecopetrol in change controls 2, 3, and 4, by considering that they made timely decisions to ensure the financing of the project, and that they acted with diligence and prudence within the framework of their duties.

By means of the ruling of April 26, 2021, confirmed by the same Office of the Comptroller General on July 6 of the same year, five (5) former employees of the Cartagena Refinery, seven (7) former members of the Board of Directors, four (4) contractors, and three (3) insurance companies were found accountable for fiscal responsibilities. However, their conduct is not related to acts of corruption, bribery, or fraud.

For the Office of the Comptroller General, the fiscal damage caused in the Project was the result of the decisions that led to the loss of value of the largest investments, by approving the additions of CAPEX resources in excess of the levels consistent with the remuneration of the capital contributed to the Project, at its opportunity cost in change controls 2 and 3.

The Office of the Comptroller General considered the fiscal damage to be the sum of each addition to the project’s CAPEX that affected profitability and the value proposal, represented in the impact on the net present value (NPV) and the internal rate of return (IRR) of the project.

This is an administrative decision, and its legality has not been reviewed by a judge of the Republic. The parties found to be fiscally accountable could file an administrative claim by means the legal actions provided for in the Colombian legal system.

In relation to the late commissioning of the refinery, the Office of the Comptroller General shelved the proceeding on February 3, 2022, as it found no proven damage or detriment to public property, among other reasons, caused by the forced delay of the project schedule due to adverse channeling of the asset. This was due to the winter wave and labor abnormalities arising during execution. On March 1, 2022, the Fiscal and Sanctioning Decision Chamber of the Comptroller confirmed the filing order.

Criminal proceedings

The criminal proceedings underway associated with the Project do not involve any current Cartagena Refinery or Ecopetrol employees, and these two societies have been recognized as victims. Additionally, none of the crimes under investigation is related to bribery or fraud.

A first instance conviction was handed down against two (2) former legal representatives of the Cartagena Refinery, which may be the subject of legal resources, for which to date there is no final criminal conviction for the facts investigated.