TI Chapters tackling corruption in mining


13 May 2020

Transparency International’s Accountable Mining program is a global network of TI Chapters, working around the world to identify and address the risk of corruption in the mining sector. In these interviews, our colleagues from Kenya, Australia and Mongolia talk about what their focus is, and what they’re doing to solve the problem.

Kenya: A multi-stakeholder coalition for community benefit

Interview with Harriet Wachira, Project Coordinator, Transparency International Kenya

What is the problem?

Let me tell you about our efforts in the county of Kwale in the south coast of Kenya.

Mining takes place in and around areas occupied by women and men from different tribes with varied traditions, beliefs and cultures. Over 40 community-based organisations are active in the region.

Our research showed that community understanding of the licensing process and environmental impact assessment was low. When communities don’t understand the process, they can’t monitor how decisions are being made and are easily excluded from participating because they’re not aware of their rights.

This makes it easier for government officials, companies and local elites to get away with corruption – abusing their power to benefit themselves. Corrupt licences and dodgy deals with community leaders directly affect the lives of women, men and children in the communities near the new mine.

Who gets the right to mine and under what conditions? What are the risks that corruption might occur in a process that is often complex and opaque? This short video, with our colleagues from Transparency International offices in Kenya and Mongolia, provides a snapshot of their work preventing corruption in the mining sector.

What are you doing?

The negotiation of the Kwale Community Development Agreement between Base Titanium and the local communities was an important moment to improve community understanding and ensure community members could meaningfully participate and truly benefit from the agreement.

TI Kenya convened a series of forums bringing together local organisations, Base Titanium and relevant government officials. Participants identified key topics of concern and formed permanent working groups to address them.

We also set up a taskforce comprising religious leaders and impartial civil society groups to build consensus among the local organisations so they could participate more effectively in the working groups and have their voice heard by the company and government.

Any progress so far?

Senior officials in the Ministry of Mines have recognised the success of this model to build relationships and facilitate dialogue. Working with the local organisations will help us reach the men and women in communities to empower them with information so they can be strong advocates on the issues that affect them.

Australia: Strengthening business integrity with junior miners

Interview with Stephanie Ng, Acting Project Coordinator, Transparency International Australia

Stephanie Ng, working for Transparency International Australia, joined global colleagues earlier this year to share ideas, discuss strategies and plan for another year of action to prevent and stop corruption.

What’s the problem?

Mining companies are critical players in the fight against corruption. We need companies to play their part by refusing to engage in corruption. Companies need to call out bad behaviour and champion business integrity in the mining industry.

Australian companies are particularly prominent in the global mining sector. There are over 650 mining companies listed on the Australian stock exchange with projects in over 100 countries. We also need to add the many unlisted companies operating abroad.

What are you doing?

TI Australia engages with companies in various ways, for example through our regular multi-stakeholder roundtable discussions.

We’re also working with small and junior companies. These companies are often the most exposed to corruption risks, but least involved in initiatives to strengthen business integrity. So we’re partnering with industry associations to help junior mining companies to understand the risks and consequences of corruption and provide practical resources so that they can put in place policies and procedures to minimise and manage corruption risks in their projects.

Mongolia: Policy inputs for beneficial ownership due diligence

Interview with Munkhjargal Enkhbaatar, Project Coordinator, Transparency International Mongolia

What’s the problem?

When we assessed the licensing process in 2017, we found that shell companies and speculators were easily able to obtain mining licences.

This is because Mongolia – like many countries – does not do background checks, proper due diligence on companies applying for licences or their real beneficial owners.

Without knowing who is really behind the company, governments can end up granting rights to applicants with a history of corruption or to entities that will not carry out the mining activities responsibly. Opaque corporate structures can also be used to hide political connections and conflicts of interest.

In Mongolia many companies apply for licences, never intending to mine, but rather to sell the licence for profit – without any real government oversight.

What are you doing?

 Mongolia is a member of the Extractive Industries Transparency Initiative. This means our country has made a commitment to require all extractives companies to disclose their real beneficial owners.

Disclosure is important, but it’s only the first step: government officials need to use the beneficial ownership information as part of due diligence to determine if a company is suitable to be granted a licence.

Working with other civil society organisations, we set up an inter-departmental Beneficial Ownership Advisory Group to discuss the potential roles and contributions of the participating government agencies and departments. This group included the Ministry of Mining, state taxation, licence registration and inspection office representatives.

With our civil society partners, we also studied the laws and licensing protocols to identify what changes the government would need to make to effectively screen the beneficial owners of licence applicants.

What progress have you made?

 In late 2019, we co-hosted a meeting with the Anti-Corruption Agency where we briefed a range of government agencies and departments on our recommendations and international best practice.

As a member of the official working group on Mongolia’s new Extractive Industry Transparency Law, we look forward to making useful inputs based on our recommendations to strengthen beneficial ownership and integrity due diligence in Mongolia’s licensing process.

These interviews and videos were created in collaboration with the U4 Anti-Corruption Resource Centre.