4 October 2017: Unearthing Corruption Risks in Mining Approvals in Australia

Australia is a mining giant of a nation, with governance systems in place that many countries across Africa and the Asia Pacific seek to copy.

Transparency International Australia (TIA) is leading a global program (Mining for Sustainable Development – M4SD) across 20 countries, including Australia, to identify and assess corruption vulnerabilities in the mining approval process.

Today TIA releases its report: Corruption Risks: Mining Approvals in Australia.  The report identifies vulnerabilities in both the Western Australia and Queensland approvals process that could enable corruption to occur.

“Understanding corruption risks in the mining approvals process is vital to ensuring mining contributes to sustainable development, and shared benefits”, said Serena Lillywhite, CEO of Transparency International Australia.

“If corruption risks are identified, and acted upon, before mining activities get underway, better outcomes for impacted communities, the natural environment and all citizens, could be achieved”, said Lillywhite.

Elements of transparency and accountability in the approvals regime for exploration licenses, and mining leases, do exist in WA and QLD, but there are weaknesses in the system that could enable corruption to occur.

The TIA research has identified the following corruption risks in WA and QLD:

  • Inadequate due diligence into the character and integrity of applicants for approvals, including investigation into who the real and beneficial owner of the company is
  • No requirement to declare the company’s track record and compliance with laws outside of Australia
  • Discretionary powers for some senior government officials
  • Industry / external influence and the associated risks of state and policy capture
  • Inadequate regulation of donations and lobbyists and ‘movement of staff’ between government and industry
  • Limited transparency of the content of State Agreements until enacted, and between Native Title parties and mining companies
  • Inadequate independent verification of Environmental Impact scientific modelling

Inadequate due diligence investigation into the character and integrity of an applicant company and its principals was assessed as a high corruption risk for mining leases in Western Australia and Queensland.

“Without adequate due diligence – even basic research into the track record of mining applicants -there is a high risk that permits will be awarded to companies with a history of non-compliance or corruption, including in their operations in other countries.”

The TIA research identified a high potential for industry influence and state and policy capture in the awarding of mining approvals. “Greater regulation of political donations, lobbyists and the movement of staff between government and industry, would help reduce risks that could enable corruption to occur. The ‘revolving doors’ and ‘culture of mateship’ could enable inappropriate influence to occur in the approval of State Agreements in Western Australia, and Coordinated Projects in Queensland”, said Lillywhite.

The mining industry has disclosed donations of $16.6 million to major political parties over the last ten years (2006-07 to 2015-16). As of September 2016, of 538 lobbyists registered by the Depart­ment of the Prime Minister and Cabinet, 191 are former government representa­tives. Industry associations are not required to register as lobbyists.

Large infrastructure projects, such as the Adani Carmichael mine, were assessed as having a high number of aggregated and compounded risks, which heightens the likelihood for corruption to occur – and Australia’s reputation as a mature mining jurisdiction to be eroded.

 

For further information please contact:

Serena Lillywhite, CEO, TIA

0403 436 896

serenalillywhite@transparency.org.au