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 rights. By 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 licence, rights 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
Beneficial Ownership Guide
This guide is for CSOs wanting to understand and win support for beneficial ownership and integrity screening in their country. It provides detailed information and guides users to develop and present convincing, evidence-based recommendations.
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.
Beneficial Ownership Guide
Who are the real owners of the companies applying for extractive rights? How concerning is their corruption and integrity track record? What are their political connections? These are the questions that governments need to look into when deciding whether a company is suitable to hold rights to explore and extract the country’s natural resources.
This guide is for civil society organisations wanting to understand and win support for beneficial ownership (BO) and integrity screening in their country. The guide provides detailed information and guides users to develop and present convincing, evidence-based recommendations.
Case studies
When the owners and beneficiaries of entities applying for a mining right are hidden behind opaque corporate structures, it is difficult to conduct adequate due diligence or verify statements about the character and compliance track record of the licence applicant. It also makes it challenging to detect if there are conflicts of interests involving government officials or their associates. This creates significant corruption risks.
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.
Read more to learn about developments in these countries.