Colombia Issues Guidelines to Soften Resistance to Oil Projects

Colombia launched a book of guidelines for oil companies on Wednesday aimed at addressing growing resistance by local communities to extractive industry projects, now one of the sector's biggest obstacles to investment and raising production.

Colombia's biggest oil producer, state-run Ecopetrol has said problems with communities near its projects were serious enough to affect second- and third-quarter earnings. The company's shares have tumbled about 30 percent this year.

The 150-page guide advises companies on how to consult with communities before entering new areas of Latin America's fourth biggest oil producer and best practices in creation of employment, human rights and management of social conflicts.

"It is quite instructive on social issues and the participation of local labor. When people see this (implemented) there will be greater acceptance," of oil projects, Mines and Energy Minister Tomas Gonzalez told reporters at the launch.

Resistance to oil and mining projects has risen in part due to a 2011 law change that cut royalties paid to communities living nearby and over failure to communicate well with locals whose expectations over new jobs and benefits are usually high.

Colombia's oil production reached 1.15 million barrels per day in 2012 but has slipped to just below 1 million bpd so far this year while the Andean nation has failed to boost reserves significantly despite billions of dollars in foreign investment.

Mostly peaceful protests against the arrival of oil companies in rural communities have been increasingly frequent in the last couple of years, sometimes slowing companies' investment plans and exploration of new areas.

The non-binding guide was drawn up on the initiative of the National Hydrocarbons Agency (ANH) by Colombian institute Icontec in liaison with around 100 public and private companies and organizations.

(Reporting by Peter Murphy; Editing by David Gregorio)