Media Release: Australia dragging its feet on tackling money-laundering

25 October 2018

Recent reports indicate the Australian Government will not introduce much-awaited laws to tackle money-laundering, but instead introduce technical tweaks to current legislation. As the Government reviews the Anti-Money Laundering and Counter-Terrorism Financing Act, Transparency International Australia urges Parliamentarians to take a strong stance against laundered money and illicit flows.

 

Serena Lillywhite, CEO of Transparency International Australia said, ‘Transparency International’s global research, Doors Wide Open, found Australia to be one of the most attractive destination for dirty money, especially through the property market.

 

‘While Australia regulates its major money-laundering and terrorism financing channels, such as banking, remittance and gaming; non-financial businesses and professions, such as real estate agents, lawyers and accountants, are still not subject to anti-money laundering/counter-terrorist financing requirements.

 

‘Investment in Australian property is an easy and convenient way to hide hundreds of millions of dollars from criminal investigators, tax authorities or others tracking criminal behaviour and the proceeds of crime.’

 

To turn off the tap on these illicit flows, the Government needs to

 

  • Include non-financial businesses – such as real-estate agents, lawyers and accountants, to comply with the Anti-Money Laundering and Counter-Terrorism Financing Act.
  • Establish a public register of Beneficial Ownership, including trusts, to ensure real estate agents, lawyers and conveyancers, as well as accountants undertake Customer Due Diligence to discover the ultimate beneficiaries, and submit Suspicious Transactions Reports to AUSTRAC.
  • Improve the working relationships between different actors involved in anti-money laundering to better share important information as money flows between countries of origin, transit countries, and destination countries.
  • Banks and other financial institutions must treat Politically Exposed Persons (individuals who hold a prominent public function) as high-risk and apply enhanced due diligence.
  • When facilitators fail to meet their obligations, authorities should impose appropriate sanctions, from fines and de-licensing of companies to prosecution of individuals.

 

Serena Lillywhite said, ‘money-laundering is a global problem. Every nation needs to play its part in closing the loopholes that allow criminals to enrich themselves at the expense of the community.’

 

The ease with which dirty money is laundered in the Australian property market was recently highlighted at the world’s leading anti-corruption conference, the International Anti-Corruption Conference in Copenhagen (October 22-24).

 

‘As a go-to destination for dirty money, Australia must play its role in turning off the tap of illicit flows, often the proceeds of crime and corruption.

 

‘Money-laundering has a direct impact on people in both poor and wealthy countries. These illicit funds hinder economic growth and help perpetuate conflict around the world. They often end up invested in Western property markets and luxury goods.’

 

TIA’s national conference in April 2019 will put this issue once again on the agenda. A key conference theme will explore money laundering through the Australian property market.

Media Release: Transparency International Australia welcomes new Chair

15 October 2018

 

Transparency International Australia welcomes Fiona McLeod SC as the new Board Chair.

 

‘I warmly welcome Fiona to the leadership of our Board. We are grateful to have her extensive experience in, and lifelong commitment to, promoting justice, accountability and transparency,’ said Transparency International Australia CEO, Serena Lillywhite.

 

‘I am delighted to have been chosen to Chair of the Board of Transparency International Australia,’ said Fiona McLeod.

 

‘It is an honour to work for such an important organisation dedicated to tackling corruption and promoting good governance.

 

‘By improving transparency and strengthening accountability, we tackle the root causes of many of the social, political and environmental challenges confronting the world today.

 

‘I look forward to supporting Transparency International Australia as it goes from strength to strength.’

 

Fiona McLeod SC is the Co-Chair of the Open Government Forum and Chair of the Accountability Round Table.

She is a Past President of the Law Council of Australia and the Australian Bar Association; she was Chair of the Victorian Bar and President of Australian Women Lawyers.

Ms McLeod has been recognised with numerous awards for excellence and leadership, for her work in supporting diversity and equality, the advancement of women and her work in pro bono and human rights matters including human trafficking.

Ms McLeod was inducted onto the Victorian Honour Roll for Women in 2014 and is a recipient of numerous professional awards including the prestigious inaugural Commonwealth Government Anti-Slavery Australia Freedom Award for her work representing victims of human trafficking, raising awareness and contributing to law reform and policy on this issue.

Media release: Growing body of evidence demonstrates need for a federal anti-corruption and integrity agency.

24 September 2018

 

Transparency International Australia welcomes the Grattan Institute’s latest report, Who’s in the room? Access and influence in Australian politics.

 

‘There is a growing body of evidence that our political system is too exposed to corruption risk and integrity failings.’ said Serena Lillywhite, CEO of Transparency International Australia.

 

‘The Grattan Institute’s report reinforces the calls we have long made: we need an independent federal anti-corruption and integrity agency with the powers to investigate, including breaches of the federal Code of Conduct, and greater checks and balances against unfair influence.

 

‘The Grattan Institute report builds on our research that found the majority of Australians responding to the Global Corruption Barometer survey had either seen, or suspected, politicians or government officials favouring businesses or powerful individuals in return for political donations or support.

 

‘Our research found people working for government, our public servants, have even higher concerns about undue influence driving policy and government decision- making.

 

‘Transparency International’s research into the mining approvals process in Queensland and Western Australia also confirmed corruption risks from inappropriate and unregulated political influence.

 

‘Lobbying, the revolving door between government and industry and a culture of mateship that facilitates deals between friends, all leave the approvals processes around mining licenses and related infrastructure vulnerable to corruption.

 

‘We welcome the Grattan Institute’s calls for greater transparency and accountability, particularly a federal anti-corruption agency.’

 

Media contact: Alex Lamb alex.lamb@transparency.org.au 0466 976 602

New Discussion Paper: A National Integrity Commission – Options for Australia

On 21 August 2018 Griffith University researchers published a new discussion paper, A National Integrity Commission – Options for Australia at the National Integrity Systems Symposium in Canberra.

TI Australia is a lead partner in the Australian Research Council project – Strengthening Australia’s National Integrity Systems – Priorities for Reform, and this Options Paper provides new evidence that significant reform of our national integrity framework is needed.

TI Australia has long called for the establishment of a comprehensive, broad based anti-corruption agency at a federal level – with the scope, investigative and coercive powers necessary to combat bribery and corruption and to build an integrity framework, and to both prevent and detect the ‘grey areas’ of misconduct and integrity breaches at a national level.

This Options Paper provides some real solutions to real problems – problems that have been addressed by community response to the Global Corruption Barometer Survey.

The Options Paper provides the evidence to support the creation of a new federal anti-corruption and integrity framework, based on an assessment of the strengths and weaknesses of the existing framework, and community
awareness, perception, and views on how well corruption is being addressed at all levels of government.

Read TIA CEO Serena Lillywhite’s full response to the options paper in her speech delivered at the National Integrity Systems Symposium on 21 August.

The full A National Integrity Commission – Options for Australia paper is available for download on Griffith University website, where you can also find a summary version.

Media Release: Rising Corruption Concern Drives Support for Federal Integrity Body

20 August 2018

Global Corruption Barometer Survey Results

‘Rising Corruption Concern Drives Support for Federal Integrity Body’

Australians’ trust in government has continued to slide, driven by growing concerns about corruption at the federal level, according to a special Global Corruption Barometer survey conducted by Griffith University and Transparency International Australia.

The results also show strong support for creation of a new federal anti-corruption body, with two-thirds (67%) supporting the idea, especially in Victoria, NSW and South Australia – with those ‘strongly supporting’ the idea outstripping those who strongly oppose it by 4 to 1.

Combined with Griffith University’s Australian Constitutional Values Survey, the in-person telephone poll of 2,218 adults, conducted in May-June, provides the first measure since 2012 of the growing impact of corruption on citizens’ trust and confidence in government. The survey shows:

  • Trust & confidence in all levels of government fell in the last year, to 46% for federal and state levels and 51% for local government nationally
  • Continued low levels of experienced bribery (less than 2%), but high concerns about officials or politicians using their position to benefit themselves or family (62%) or favouring businesses and individuals in return for political donations or support (56%)
  • A 9 point increase since 2016 in perceptions that federal members of parliament are corrupt (85% at least ‘some’ corrupt, 18% ‘most/all’ corrupt) – placing them on par with state parliamentarians and worse than local officials.

Project leader Professor A J Brown, of Griffith University’s Centre for Governance & Public Policy, said the results provide both a warning and an opportunity for Australian governments.

“We now see a stronger correlation between trust and action against corruption.”

“Well over a third of citizens’ total trust and confidence is now explained by whether they feel the government is doing a ‘good job in fighting corruption’ (37% at the federal level, 25% state).

“Continued slippage in the perceived integrity of federal officials clearly has a disproportionate effect on overall trust and confidence, nationwide.”

Federal anti-corruption agency support

The survey is the first to test support for a federal anti-corruption body by also presenting respondents with a counter proposition – but still records strong support across the community, especially among respondents who have ever worked for the federal government itself.

Two-thirds of Australians (67%) support the idea, with most of these (43%) expressing strong support, against only 10% expressing strong opposition.

Respondents were also told: “Other people say a new agency isn’t needed because existing bodies like the Australian Federal Police are already adequate to deal with federal corruption”, before being asked to express a view.

Support is slightly higher among women (70%) than men (65%), and among citizens of Victoria (73%), NSW (69%) and South Australia (68%), and lower among those over the age of 65 (60%) but otherwise spread broadly across the community including all education levels.

Among the 1,011 respondents who had worked in government, the 245 respondents who had ever worked in the federal government recorded the highest level of strong support for a new federal agency – 54% against the national average of 42%.

The same group were marginally less likely than other respondents to rate corruption in government as a big or very big problem (50% against the national average of 57%), but were:

  • the least likely to say that the “task of fighting corruption” was currently being handled well at the federal level (35% against the national average of 48%)
  • more likely than other respondents to have witnessed or suspected an official or politician of making a decision in favour of a business or individual who gave them political donations or support in the last 12 months (68% against national average of 56%)

Undue influence a major concern

Serena Lillywhite, CEO of Transparency International Australia, said the results “firmly show that the risk of undue influence and decisions that benefit business and powerful individuals is real, and driving increasing corruption concerns”.

“For 56% of respondents – equating to over 10.2 million Australians – to say they had personally witnessed or suspected favouritism by a politician or official in exchange for donations or support is nothing less than shocking.”

“This snapshot also shows the case for a strong, comprehensive federal anti-corruption agency is well understood by those within government, not just based on the fears of outsiders.”

“Improved transparency and strengthened oversight of government decision making, including the regulation of lobbyists, is also long overdue,” Ms Lillywhite concluded.

New options paper to be released – Canberra symposium 21st August

The Corruption Barometer results coincide with Australia’s Public Integrity Institutions: Strengths, Weaknesses, Gaps, being held in Canberra on Tuesday 21 August. A major new paper, A National Integrity Commission: Options for Australia, will be released at the symposium.

The survey and symposium form part of the Australian Research Council project Strengthening Australia’s national integrity system: priorities for reform, led by Griffith University and Transparency International Australia, conducting Australia’s second National Integrity System Assessment.

FOR MORE INFORMATION:

See the full media and data release here.

Professor A J Brown, Griffith University – 0414 782 331
Serena Lillywhite, TI Australia – 0403 436 896

End.

 

CBA’s Historic $700M Fine Highlights the Need to Include Money Laundering in the Scope of Banking Royal Commission

On 4 June 2018 CBA reached a settlement with AUSTRAC, agreeing to pay a fine of $700 million plus legal costs over serious and systemic failures to report suspicious deposits, transfers and accounts. CBA admitted to the late filing of 53,506 reports of transactions of $10,000 or more through its “intelligent deposit machines” (IDMs).

 

Watch Transparency International Australia’s CEO Serena Lillywhite comment on the case in ABC News:

Video: ABC News Channel

 

In her interview, Serena Lillywhite says that although the fine falls far short of the theoretical maximum penalty (nearing one trillion dollars), it is the largest ever civil penalty in Australian corporate history and thus sends a strong signal to the banking sector.

 

While it is encouraging that CBA has admitted that it has breached the Anti-Money Laundering and Counter-Terrorist Financing Laws, this case shows that it is still way too easy to launder money in Australia. IDMs (ATMs that instead of giving out withdrawals take in deposits) are not the only weak point in the Australian system – Transparency International’s report Doors Wide Open shows that the Australian real estate market is vulnerable to money laundering through anonymous property purchases.

 

The immense scale of the CBA case and its impact on the public trust in the financial sector highlights an omission in the scope of the Banking Royal Commission – it does not currently cover money laundering. Transparency International Australia recommends extending the scope of the Commission to cover this critical aspect of Australia’s financial integrity system.

 

TIA CEO discussed the CBA case on the World Today, along with Austrac CEO Nicole Rose, and Professor Jason Sharman from Cambridge University. The broadcast is available on the ABC website and below.

 

Media Release: Corruption Perceptions Index (CPI) 2017 shows Australia falls again in Corruption Perceptions Index scores

Australia, 22 February 2018 – The Corruption Perceptions Index released today by Transparency International shows that Australia has fallen again in the CPI score.

Despite attempts to combat corruption around the world, the majority of countries are moving too slowly in their efforts – including Australia, who has continued to slide.

While Australia’s ranking has not changed – 13th for three years running – and it may appear we are holding ground, our CPI score has notably decreased over the last six years.

In 2012, Australia scored 85 out of 100. Today, in the latest CPI, Australia has slipped 8 points, receiving a score of 77, and remains outside the top 10 countries. Australia scored 79 in 2016.

“This suggests a loss of trust in the Australian public sector and the perception, at best, that corruption has gotten worse, in only a few short years”, said Serena Lillywhite, CEO of Transparency International Australia.

The Index, which ranks 180 countries and territories by their perceived levels of public sector corruption according to experts and business leaders, uses a scale of 0 to 100, where 100 is the cleanest, and 0 is the most corrupt.

In the 2017 CPI, several countries significantly improved their CPI score, such as Côte d’Ivoire, Sénégal and the United Kingdom, while several countries declined, including Syria, Yemen and Australia.

The CPI scores and ranks the perception of corruption on a number of corrupt behaviours in the public sector from bribery to the diversion of public funds. It also looks at the mechanisms available to prevent corruption, such as the government’s ability to enforce integrity mechanisms, access to information and the legal protection for whistleblowers, journalists and investigators.

“It’s hardly surprising Australia’s corruption perception score continues to fall, the integrity score card has taken a battering”, said Serena Lillywhite.

“The misuse of travel allowances; inadequate regulation of foreign political donations; conflicts of interest in planning approvals; revolving doors; a culture of mateship; and inappropriate industry-lobbying in large scale projects, such as mining, and the misuse of power by leading politicians – have no doubt had an impact”, she said.

Within the Asia Pacific region, where the regional average score is 44.39, New Zealand, scored 89, and now ranks number one in the world on the CPI. Close neighbours, Singapore, scored 84, with Indonesia scoring 37 and PNG scoring 29.

In comparison to Australia’s declining score, the UK, over the last six years, has improved its score from 74 to 82.

Most African countries scored well below 50. Australia is the largest miner on the continent, with 140 ASX companies alone operating in 34 countries across Africa.

“This should have alarm bells ringing for Australian miners, and underscores the importance of Transparency International Australia’s work to combat corruption in mining approvals”, said Lillywhite.

The 2017 CPI results indicate that more needs to be done to strengthen Australia’s national integrity system.

“Australia’s failure to improve its position on the CPI suggests a failure to address with sufficient urgency a range of serious public-sector issues. These include money-laundering, whistleblowing, political donations and the effectiveness of our integrity systems. The Government has simply not faced up to the need to have in place an independent anti-corruption agency at a national level”, said Anthony Whealy QC, Chair of Transparency International Australia.

Australia’s failure to advance up the rankings – and in fact its further decline in the scoring in the Corruption Perceptions Index highlights the need for urgent collective action. Corruption, or even the appearance of corruption, has no place in the Australian public sector.

END

Download the report.

Contact:

Alexia Skok, Communications and Advocacy Coordinator, alexia.skok@transparency.org.au

Serena Lillywhite, CEO, serenalillywhite@transparency.org.au, phone: 0403 436 896 (Melbourne)

About the Corruption Perceptions Index

Since its inception in 1995, the Corruption Perceptions Index, Transparency International’s flagship publication, is the leading global indicator of public sector corruption. The CPI offers an annual snapshot of the relative degree of corruption by ranking countries from all over the globe. For more information, visit the Transparency International website.

Note to Media: Transparency International Australia and Griffith University are conducting a National Integrity System Assessment to help identify integrity gaps and propose solutions. See the National Integrity Systems Assessment page.

http://transparency.org.au/tia/wp-content/uploads/2018/02/CPI-2017-global-map-1-800x400.jpg

Media Release: A Federal Integrity and Anti-Corruption Commission on the Horizon

30 January 2018

‘A Federal Integrity and Anti-Corruption Commission on the Horizon’

Transparency International Australia welcomes the pledge today by the Hon Bill Shorten MP, that Labor will establish a federal anti-corruption body if it wins the next election.

Transparency International Australia, is part of a global coalition to fight corruption and promote transparency, integrity and accountability at all levels and across all sectors of society, including in government. This work has included years of campaigning to strengthen Australia’s integrity systems, and repeated calls, to all political parties, to establish a federal ant-corruption agency.

“With growing public distrust of government, and most Australians holding a view there is corruption in federal politics, a well-resourced independent National Integrity Commission to promote integrity and accountability, and to prevent, investigate and expose corruption, is a matter of urgency and has overwhelming public support”, said Transparency International Australia CEO, Serena Lillywhite.

“Australia needs a well-designed, broad-based federal anti-corruption agency, as part of an enhanced multi-agency strategy, to ensure a comprehensive approach to corruption risks beyond the criminal investigation system, and to support stronger parliamentary integrity”, she said.

“Effective institutions to prevent, detect, expose and remedy official corruption are vital at all levels of government.  The absence of an overarching agency of this type at a federal level is a stark deficiency in the eyes of the community”, said Lillywhite.

Transparency International Australia has made clear its view that a federal anti-corruption agency needs to possess the wide range of coercive and investigative powers commonly found in state agencies, including public hearings in proper situations to assist inquiry effectiveness and public interest, essential to the effective operation of an anti-corruption agency.

“Anti-corruption agencies must have the power to make such public findings and recommendations, to ensure that Governments act to remedy corruption, in circumstances where powerful interests may have previously prevented this from occurring, or the Government itself is implicated”, said Anthony Whealy, QC, Chair of Transparency International Australia.

“Mechanisms and resources need to be in place to ensure that when corruption problems are identified, appropriate sanctions or remedies are actually implemented, and in a timely and visible way. For criminal matters, the Commission should be empowered to make findings of fact, and to be referred to a well-resourced and specialized unit within the DPP, for consideration for prosecution”, he said.

The issue of ‘revolving doors’ and ‘conflict of interest’ can no longer be ignored in Australia.

In 2017, Transparency International Australia undertook research into the mining approvals process in Australia. The report, Corruption Risks: Mining Approvals in Australia has identified a high potential for industry influence and state and policy capture in the awarding of mining approvals and related infrastructure projects.

“Greater regulation of political donations, lobbyists and the movement of staff between government and industry, would help reduce risks that can enable corruption to occur. ‘Revolving doors’ and a ‘culture of mateship’ are undermining our national integrity systems and could be tackled by a federal integrity and anti-corruption agency”, said Lillywhite.

A commitment to establish a such an agency is welcome, but as always, the devil is in the detail.

Transparency International Australia and Griffith University’s National Integrity Systems Assessment, will provide the rigorous evidence base to illuminate a detailed design for a federal integrity and anti-corruption agency. At the end of the day, the independence, resources, and investigative powers of such an agency, will be its make or break.

For further information please contact:

Serena Lillywhite, CEO, Transparency International Australia

0403 436 896

serenalillywhite@transparency.org.au

See Transparency International Australia’s work with Griffith University on the National Integrity Systems Assessment

End.

 

Media Release: Corruption risks and ways to combat them in the mining approval process assessed in 18 countries

FR ES

5 December – Transparency International is launching a new report based on research in 18 resource-rich countries from Australia to Zimbabwe that identifies systemic corruption risks in mining licencing and permitting processes and highlights what can be done to help prevent corruption infiltrating licencing processes.

Combatting corruption in mining approvals: assessing the risks in 18 resource-rich countries, is the first in depth study to look at the very start of the mining process, when decisions are made about whether, where, and under what circumstances mining is permitted. It is based on research carried out by Transparency International in a diverse range of countries involving stakeholders from civil society, multilateral organisations, the mining industry and governments.

The results show that corruption risks exist in mining approvals regimes of countries across the globe, irrespective of the country’s stage of economic development, political context, geographic region, or the size and maturity of their mining sectors.

“Natural resources are too often vulnerable to corruption. We see this across the world as citizens are denied the wealth that is part of their natural heritage. We want all parties – citizens, governments and mining companies – to be able to undertake sustainable development that benefits everyone. The goal of this work is to lead to a greater understanding of corruption risks in the mining approvals process so that corruption can be countered at the very start of the process,” said Delia Ferreira Rubio, chair, Transparency International.

The report is published by Transparency International’s Mining for Sustainable Development Programme (M4SD) led by Transparency International Australia. It is based on research carried out by Transparency International national chapters in Armenia, Australia, Cambodia, Canada, Chile, Colombia, Democratic Republic of the Congo, Guatemala, Indonesia, Kenya, Liberia, Mongolia, Peru, Papua New Guinea, Sierra Leone, South Africa, Zambia and Zimbabwe.

“By understanding the corruption risks faced in diverse jurisdictions, we are in a better position than ever to work towards ensuring mining contributes to sustainable development.Transparency International Australia will continue to lead this initiative, engaging with our extensive network of stakeholders to drive the change that is so very needed,” said Serena Lillywhite, Chief Executive Officer, Transparency International Australia.

The report is based around a series of questions that help identify where and how an approvals regime is vulnerable to corruption. The answers to these questions target the underlying causes of corruption and inform key players on how to take effective preventative action before corruption occurs.

The report serves as a useful guide to lawmakers and regulators, companies and civil society organisations – regardless of their location – to assess and enhance the transparency, accountability and integrity of the mining approvals regime in their own countries. It can be used as a foundation for these different groups to identify priority areas of work at national and jurisdictional level, and take action to prevent corruption from occurring.

The research identified 140 distinct types of corruption risks and more than 750 stakeholders from a range of sectors were involved. A further 250 individuals participated in validation and review of the risk assessments.

This multi-country study used the Mining Awards Corruption Risk Assessment (MACRA) Tool, specially developed for Transparency International. With a list of common corruption risks, this tool shows users how to identify and assess the underlying causes of corruption that need to be addressed to safeguard the lawful, compliant and ethical awarding of mining sector licences, permits and contracts. Following extensive user testing, Transparency International is releasing an updated version of the MACRA Tool alongside the report.

Note to editors

M4SD is a global thematic network initiative, implemented by Transparency International Australia and supported by the Transparency International Secretariat. The programme is funded in Phase I by the BHP Billiton Foundation and the Australian Government through the Department of Foreign Affairs and Trade (DFAT).The next phase of M4SD will see national chapters develop and implement action plans to prevent the corruption risks identified in this research.

Contacts:
Julius Hinks (Berlin)
E: press@transparency.org
T: +49 30 34 38 20 666

Alexia Skok (Melbourne)
E: mining@transparency.org
T: +61 422 433 162

Unearthing corruption risks in mining approvals

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From resource-rich West Africans nations, to the mining giants of the Pacific and North America, every time a government signs a deal to allow mining of its natural resources there are corruption risks – no matter where that country is.

These risks in mining approvals processes – decisions about when, where and under what circumstances mining can occur – can result in environmentally unsound and socially destructive mining projects being approved. They can lead to politicians or government officials taking advantage of their position to profit from their interests in the sector and local communities being excluded from decision-making processes that could cause them to lose their homes.

In 2016, for example, a grand jury in Liberia indicted top government officials on charges of bribery for conspiring to amend key laws to enable a London-listed company, Sable Mining SBLM.L, to get rights to one of the world’s richest iron ore deposits – the Wologozi Mountain Range.[1]

Leaked documents alleged that over US$950,000 was used to pay off top government officials and their relatives.[2]

On the other side of the world in the coal-rich Australian state of New South Wales, a former Mining Minister and a current government minister were charged with corruption in a 2015 case involving mining licences that involved complex and opaque company structures set up during the mining approvals process.[3]

Transparency International’s new Mining for Sustainable Development Programme (M4SD) report, Combatting corruption in mining approvals: assessing the risks in 18 resource-rich countries examines what makes mining approvals vulnerable to corruption and what roles governments, the mining industry, and communities can play in preventing corruption from occurring.

“Natural resources are too often vulnerable to corruption. We see this across the world as citizens are denied the wealth that is part of their natural heritage. We want all parties – citizens, governments and mining companies – to be able to undertake sustainable development that benefits everyone. The goal of this work is to lead to a greater understanding of corruption risks in the mining approvals process so that corruption can be countered at the very start of the process,” – Delia Ferreira Rubio, chair, Transparency International

Based on research carried out in 18 countries and drawing insight from more than 750 stakeholders from a range of sectors – plus a further 250 individuals who participated in validation and review of the risk assessments – the new report is the first of its kind to drill so deeply into mining approvals across such a broad range of countries.

Presenting a truly global picture of risks in mining approvals processes, the examples in the report are drawn from a broad range of contexts: major mining economies such as Australia, Canada and South Africa; emerging mining economies such as Cambodia and Kenya; and 11 members of the Extractive Industries Transparency Initiative (EITI).

These are a few examples of where and why corruption can occur:

Political and administrative

  • There is poor transparency around political donations and lobbying by industry
  • Controls on revolving doors between industry and government are weak

Land allocation

  • The process and criteria for opening land to mining is not clear or transparent
  • Land rights are poorly protected and not properly registered

Mining licence applications and approvals

  • Due diligence on licence applicants is inadequate
  • Decision-making criteria are unclear or decisions are vulnerable to ministerial interference

Environmental and social impact assessments (ESIAs)

  • Verification of impact assessments is inadequate
  • Criteria for environmental approval decisions are not clear or transparent

Community consultation

  • Information about the project or its potential impacts is not accessible to community members
  • Consultation only occurs with local elites

What needs to be done to combat corruption

Transparency International has framed six questions to help identify where and how an approvals regime is vulnerable to corruption. The answers to these questions can help target the underlying causes of corruption, informing key players on how to take effective preventative action before corruption occurs.

Change starts by answering these questions:

  1. Who benefits from mining approval decisions?
  2. How ethical and fair is the process for opening land to mining?
  3. How fair and transparent is the licencing process?
  4. Who gets the right to mine?
  5. How accountable are companies for their environmental and social impacts?
  6. How meaningful is community consultation?

Government, industry and civil society in any country can use these questions – and real country examples highlighted in the report – as a starting point for understanding corruption risks in their own context and to guide them in building corruption-free mining approvals regimes.

The assessing of these corruption risks is only the beginning, real change will come with the addressing of these corruption risks.

Access the full report, Combatting corruption in mining approvals: Assessing the risks in 18 resource-rich countries.

Countries involved in the research: Armenia, Australia, Cambodia, Canada, Chile, Colombia, Democratic Republic of the Congo, Guatemala, Indonesia, Kenya, Liberia, Mongolia, Peru, Papua New Guinea, Sierra Leone, South Africa, Zambia, and Zimbabwe.

This work has been funded by the BHP Billiton Foundation and the Australian Government through the Department of Foreign Affairs and Trade (DFAT).

[1] J. Harding Giahyue, “Liberia grand jury indicts Sable Mining, officials for bribery”, Reuters (web), 26 May 2016.
[2] Global Witness, “The Deceivers” (web). Available at: www.globalwitness.org/thedeceivers. Accessed 14 August 2017.
[3] U. Malone, “Eddie Obeid, Moses Obeid and Ian MacDonald committed to stand trial on conspiracy charges,” ABC News (web), 30 May 2017.