Global Financial Integrity

GFI header image

An Analysis of Colombia’s National Development Plan


Strengthening Efforts to Combat Environmental Crime and Illicit Financial Flows 

Colombia’s National Development Plan (Plan Nacional de Desarrollo, PND) is a key policy document, establishing a national strategy for the next four years of the presidential administration. The PND is enshrined in the country’s constitution, as well as in Law 152 of 1994. Each presidential administration develops its own PND, led by the National Planning Department (Departamento Nacional de Planeación, DNP). The plan is subsequently debated by Congress, civil society and unions, during which process it may undergo changes. The final version of the PND is approved by the Congress of the Republic. 

The Petro-Márquez administration has recent shared their initial PND, “Colombia, potencia mundial de la vida,” which reflects the policy priorities of the administration. It was developed with the participation of thousands of people nationwide, who, through the Binding Regional Dialogues, contributed their ideas and proposals for national and regional development in Colombia. The PND is now undergoing debate in the Third and Fourth Commissions of the Senate and House and will be approved by Congress in May. Once approved, the plan will be implemented by government institutions throughout the presidential term.  

The PND includes a base programmatic document, el Plan Plurianual de Inversiones, as well as modifications to existing laws. It is tremendously important to ongoing efforts to combat narcotics, financial and environmental crimes, as well as corruption. It should be noted that the fight against corruption was one of President Gustavo Petro’s key campaign promises.  

In this context, GFI has analyzed the PND to better understand its approach to combating illicit financial flows and environmental crimes, two topics of special interest to our work. 

A Focus on Environmental Protection and the Green Energy Transition

Unsurprisingly, the initial PND document is heavily focused on territorial planning around basic resources such as water, as well as environmental protection and the green energy transition. The current administration ran on these issues as part of their policy platform, so a strong focus was to be expected. 

However, the PND’s efforts to combat illegal deforestation appear to be quite conservative. The PND proposes reducing illegal deforestation by just 20%, a far cry from the more ambitious goals set by the Climate Action Law. Effectively combating this environmental crime is key to achieving Total Peace, and the Administration should make it a policy priority. 

Specifically, the PND’s strategy to combat illegal deforestation consists of continued governance and conservation efforts to protect ecosystems most vulnerable to deforestation, as well as collaborative partnerships with local communities. It also consists of strengthening Other Effective Conservation Measures (Otras Medidas Efectivas de Conservación, OMEC), and expanding conservation management of protected lands that are part of the National System of Protected Areas (Sistema Nacional de Áreas Protegidas, SINAP).

Thanks to the advocacy efforts of civil society, the PND also includes text that mentions dismantling criminal structures involved in illegal deforestation. However, the plan fails to go further in terms of defining a strategy or establishing a budget. 

Moreover, the PND does not specifically mention the role of the Financial Intelligence and Analysis Unit (Unidad de Inteligencia y Análisis Financiero, UIAF) in following the money and identifying those who are really behind illegal deforestation and other environmental crimes. In many instances, environmental crimes are accompanied by the movement of illicit financial flows, as well as money laundering, corruption, trade misinvoicing, and illicit trade.

As a means to address environmental crimes, the PND proposes creating a National Council to Combat Deforestation (Consejo Nacional de Lucha contra la Deforestación). The proposed Council would be comprised of the heads of different ministries, and would address environmental restoration, conservation, and root causes of illegal deforestation.

However, the proposed Council fails to include agencies such as the UIAF and the Tax and Customs Authority (Dirección de Impuestos y Aduanas Nacionales, DIAN). These agencies play a key role in addressing environmental crimes, since effective environmental crime investigations must go beyond apprehending those committing the crimes in rural areas, to identifying those individuals who are organizing and financing the activities. Effective efforts must also include strengthening controls and permits for timber transportation and exportation. 

Our work has shown that corporate structures are frequently used to carry out these sorts of crimes, especially in later stages of the supply chain. Another common method involves the use of frontmen, who launder the proceeds of deforestation and other activities associated with it, such as extensive cattle ranching and land grabbing. 

Another concern is that the Council does not create a space for communities directly affected to participate. Allowing local communities a seat at the table would be important to ensuring support for deforestation control strategies, especially since these communities are often victims of external criminal groups.

Beneficial Ownership, a Priority for the PND?

The key to identifying the real masterminds behind environmental crimes lies in utilizing the information contained in Colombia’s new beneficial ownership registry (Registro Único de Beneficiarios Finales, RUB). Unfortunately, only seven government institutions dedicated primarily to investigation, supervision and prosecution have access to the information contained in the registry. In fact, none of  the ministries that form part of the proposed National Council to Combat Deforestation have access to this information. This further highlights the importance of ensuring that institutions such as the UIAF or the DIAN form a part of the council. 

Currently, the DIAN is the government agency responsible for administering the RUB and ensuring that those required to report beneficial ownership information actually do so. It is the responsibility of other agencies such as the UIAF, among others, to monitor, supervise, and analyze the information that is collected as part of larger, ongoing efforts to combat crimes including corruption, money laundering, and drug trafficking. 

Unfortunately, the PND does not make any mention of the beneficial ownership registry. It does not even propose strengthening anti corruption efforts in this regard. Therefore, the Colombian Congress should consider incorporating into the PND measures that strengthen the beneficial ownership registry and expand access to relevant government agencies. This can be explicitly mentioned in the article regarding the creation of the National Council to Fight Deforestation, strengthening the role of the UIAF and the DIAN, and defining clear lines of articulation at the transnational level with other entities in charge of monitoring these crimes. Deforestation, as well as many other environmental crimes, is a problem that affects various jurisdictions, therefore the solutions must be transnational in nature.

Payments for Environmental Services and the Carbon-Offsetting Market: Links to Illicit Financial Flows? 

Colombia ratified through the Paris Agreement an ambitious goal to reduce its greenhouse gas emissions by 51 percent by the year 2030. To meet this commitment, the country has developed a series of measures to mitigate emissions, not only from the public sector, but also from the private sector.

One of these measures is the purchase of carbon credits by individuals or, frequently, companies, to offset their emissions and earn tax credits. The carbon offset credits provide economic support, paid for by companies, to local stakeholders that conserve large swaths of forests or other ecosystems that capture carbon. Traditionally, it is Indigenous, Afro-Colombian or Raizal communities that have inhabited these territories.

One of the policy commitments of the current administration, and reflected in the PND, is the creation of a National Registry for the Reduction of Emissions and Removal of Greenhouse Gases (Registro Nacional de Reducción de las Emisiones y Remoción de Gases de Efecto Invernadero). Through the registry, the Government could begin to regulate the purchase and sale of these carbon offset credits. This is an important move, especially in light of the most recent corruption cases related to the sale of these bonds in some communities, as well as reported irregularities in the payments and sizes of the contributions.

This is another instance in which it would be important to identify the beneficial ownership of legal entities and other corporate structures. However, some analysts have argued that this would not be fully effective because it would not help identify possible illicit financial flows associated with the economic activity or resources with which these bonds are acquired. 

As we have seen time and time again, in the absence of corporate transparency measures, companies can be used to facilitate financial crimes and illicit financial flows. The results of the upcoming  congressional debates surrounding the PNC remain to be seen. Much is resting on the Government’s final strategy on transparency, the fight against environmental crimes and the achievement of Total Peace.