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

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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.

Transparency International’s new 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…The goal of this work is to have 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.

Source:  transparency

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