ACCOUNTABLE MINING

Beneficial ownership

Who benefits from mining rights?

Governments can keep corruption out of the mining sector by doing integrity checks on companies that apply for mining rightsBy looking into their past conduct and who will really benefit from the mine – the beneficial owners – governments can decide if the company should be allowed to do business.

The mineral resources of a country are precious. The people of mineral-rich countries deserve to know that their governments are awarding mining rights to companies that are responsible operators and committed to integrity. 

But when governments don’t ask questions about the people who own, control or benefit from the company applying for a mining licencerights to the country’s resources can end up in the hands of companies with a history of corruption or companies that are backed by individuals with a conflict of interest due to their political connections. 

 

Feature

Our blog series

Our blog series features developments in four countries where TI chapters are actively working to have their governments introduce rigorous beneficial ownership and integrity due diligence as part of the licensing process.

Mining

What needs to happen

When deciding whether to grant mining rights, governments need to do integrity due diligence (background checks) on the company to check that they will be an appropriate and responsible operator and to detect conflicts of interests involving government officials and their associates.  

More and more countries are embracing public beneficial ownership transparency. To be effective in the fight against corruption, governments need to use this information as part of integrity screening of licence applicants. 

Beneficial ownership and integrity screening can also help governments to evaluate the risk of tax evasion and other illicit financial flows by the prospective licence-holder. 

Read our factsheet for practical guidance for governments.  

Our key findings

Our corruption risk assessment of more than 20 resource-rich countries revealed that a lack of due diligence on licence applicants and inadequate government mechanisms to prevent, detect and manage conflicts of interest in the licensing authority were a major source of corruption risk. 

Despite making some progress on beneficial ownership transparency, most countries fall far short of leading practice for integrity screening of mining companies, putting people, the environment and the economy in jeopardy. 

Key publications

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