Preventing Corruption in Mining
TI Australia Position Paper
To reduce the risk and incidence of corruption in the mining sector in Australia and internationally, by improving:
- transparency of decision-making about granting of mining exploration and extraction licences in Australia
- public and stakeholder access to mining revenue information, including where companies are based and where they operate, and
public disclosure of the payment and application of mining revenues, as a vital control on the ability of individuals, companies and governments to engage in corruption.
In too many resource-rich countries, mining fails to contribute to equitable and sustainable economic and social development, due to especially high risks of corruption. Effective governance and corruption control are key to successfully ensuring that a country can sustainably benefit from the extraction of its natural resources.Â Progress has also been made in the establishment and/or improvement of governance and accountability policies and practices in the mining sector, including:
- revenue and contract transparency are on the rise;
- there are encouraging efforts by governments to improve regulatory frameworks and the creation of voluntary frameworks;
- disclosure listing rules are on the increase; and
- enforcement of foreign bribery laws is being strengthened.
However, a lack of transparency and accountability continues to pose a significant challenge for the mining sector, with wider consequences.
Within the mining value chain, transparency in the award of permits, licences and contracts is particularly critical. Processes tainted by corruption and cronyism in the allocation of exploration permits and mining licenses can seriously affect society as a whole. Transparent contractual agreements between governments and mining companies, along with early involvement of civil society and local and indigenous communities, are key to the success of any mining venture as a contributor to development.
Australia has directly experienced serious political corruption in the granting of mining licences â€“ such as revealed by the NSW Independent Commission Against Corruption, which recommended prosecutions for misconduct in public office (now underway) against former senior State politicians and the relevant Minister for favouritism in the granting of coal licences.
As well as not being immune from corruption itself, Australia is home to many companies working internationally in mining exploration or operations, including in developing countries. As communities everywhere demand greater integrity from governments and companies, and a greater commitment to corruption-free practice, Australia and Australian-based stakeholders have an opportunity to become a global leader in anti-corruption efforts in mining…
For TI Australiaâ€™s full statement of the problem and what Australian governments, business and other stakeholders need to do about it, download our position paper.
Position Paper 4 â€“ January 2016