Globally, the extractive sector is usually 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.
In recent times, a number of organisations have started tackling gaps that arise at every stage of the mining value chain, corruption being no exception to the myriad of challenges. The OECD in 2016 found a quarter of all corruption cases in the oil, gas and mining sectors occurred at the licensing stage - it is in the light of the above that Transparency International turned its spotlight on the approval process.
In 2016, Transparency International (TI) launched Accountable Mining to enhance transparency and accountability in government processes to award mining sector licences, permits and contracts. Working with 20 TI Chapters in some of the world’s most resource-rich countries, TI built a robust evidence base that highlighted the weaknesses in each country’s mining awards system as well as examples of good practice. TI chapters are engaging 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.
From the foregoing, the Mining Awards Corruption Risk Assessment (MACRA) Tool was developed by TI to help conduct this complex and multi-stakeholder research. The 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 was tested in twenty (20) countries and endorsed by a wide range of prominent extractive industry and governance experts.
Inspired by the successful application of the MACRA tool across 20 countries, TI in 2018 launched a new round of assessment that expanded the MACRA tool’s application to five (5) new countries: Argentina, Ghana, Mexico, Kyrgyzstan and Madagascar.
In March 2020, GII published the “Corruption Risk Assessment Report on Mineral Licensing in Ghana” as part of Transparency International’s Accountable Mining Programme (AMP). The aim of this study was to identify the systemic, regulatory and institutional vulnerabilities to corruption in awarding mining and mining-related licences, permits and contracts and to assess the specific corruption risks created by these vulnerabilities. Based on analysis of data, the study identified over 18 vulnerabilities and prioritised six (6) corruption risk factors that needed action. The prioritization was guided by a criteria provided by the MACRA tool and comprises urgency of the risk, its impact and feasibility. The six prioritized risks to corruption are:
- What is the risk that lack of community consultation creates opportunities for applicants and Cadastral Officials to abuse community rights and engage in non-compliance and corrupt practices?
- What is the risk that face-to-face processing of applications is expensive and time consuming and will create opportunities for corruption?
- What is the risk of Parliament’s inability to ratify signed agreements between the government and the applicant?
- What is the risk that details of areas that have been licensed for reconnaissance, prospecting and lease are not fully and publicly disclosed?
- What is the risk that notices about the gold mining licensing applications are given in languages and channels that are not accessible by women and men directly affected by the mining project?
- What is the risk that there are no laid down procedures for the prevention and management of conflict of interest, involving public officials and politicians in the mining license application process?
In this regard, the AMP is adopting the multi-stakeholder approach to addressing the identified corruption risks identified in the Corruption Risk Assessment Report. This project will contribute to the existing efforts at enhancing transparency and accountability in the mining sector with a focus on the approval process.