By Michael Odei Erdiaw-Kwasie, Research and Policy Coordinator. This post originally appeared in Goxi
Globally, the extractive sector can be a source of livelihood for local people, supports regional development, and helps to boost national economies.
However, the sector does have serious institutional and behavioural weaknesses. It is the poorest people, living in the mining areas, who are particularly vulnerable when the mining sector and their governments fail them.
A number of organisations have grown in recent years to tackle corruption at every stage of the mining value chain. Because the risk of corruption is particularly high at the very start of the value chain – indeed the OECD has found a quarter of all corruption cases in the oil, gas and mining sectors occurred at the licensing stage  – Transparency International has also turned our spotlight on this process that can be so problematic.
In 2016, Transparency International (TI) launched the Mining for Sustainable Development (M4SD) programme to enhance transparency and accountability in government processes to award mining sector licences, permits and contracts.
Working with 20 of our TI peers in some of the world’s most resource-rich countries, we are building a robust evidence base that highlights the weaknesses in each country’s mining awards system, but also examples of good practice. We are talking with governments, industry, civil society and communities to identify, assess and tackle corruption risks and collaboratively build a process that is more transparent, accountable and democratic.
One crucial tool we have developed to help us conduct this complex and multi-stakeholder research is the Mining Awards Corruption Risk Assessment (MACRA) Tool (see the factsheet here.) This tool provides a step-by-step guide to help pinpoint where, why and how severely the mining licensing process is vulnerable to corruption. The tool has been tested in over 20 countries as diverse as Zimbabwe, Peru and Australia and endorsed by a wide range of prominent extractive industry and governance experts. The results showed that corruption risks exist in mining approval regimes of countries across the globe, irrespective of the country’s stage of economic development, political context or the size and maturity of their mining sectors .
Inspired by the successful application of the tool across 20 countries, TI has launched a new round of assessment that expands the tool’s application. In this assessment, we aim to apply the tool in five new countries: Kyrgyzstan, Ghana, Madagascar, Argentina and Mexico.
With our local Transparency International colleagues, we will soon be able to pinpoint the corruption risks present in the mining awards process of these countries and work collaboratively to fix the weaknesses in their own systems.
For a step-by-step introduction to the tool, see our factsheet here.