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Helen Clark on fighting corruption in the extractive sector

On International Anti-corruption Day, the EITI Board Chair urges stakeholders to redouble the fight against corruption in the extractive sector.

Since 2003, International Anti-Corruption Day has served as a powerful reminder of the need to maintain the fight against corruption. Corruption in the extractive sector has undermined livelihoods, fuelled inequality, and jeopardised a sustainable future. Efforts must continue to root out corruption in the sector to ensure that it serves the needs of all citizens, and not just of a privileged few.

Efforts must continue to root out corruption in the sector to ensure that it serves the needs of all citizens, and not just of a privileged few.

Combatting corruption requires constant vigilance and collaboration from all stakeholders. The EITI has made strides on improving transparency in the complex extractives sector. Recent corruption cases have demonstrated the potential for – and the presence of – corrupt dealings in every stage of the value chain, from pre-project approvals to the sale of final product. The amounts involved can be staggering, as illustrated in a 2022 bribery case which brought to light payments of over USD 100 million to third-party intermediaries.

Corruption undermines livelihoods and fair distribution of benefits

Set against the sums which can be involved in corruption, the benefits that accrue to those living alongside operations are likely to be very meagre, and may well fuel conflict and mistrust. Corrupt activity brings the sector into disrepute, and undermines its potential for benefit to a country’s development.

Corruption in the extractive sector has undermined livelihoods, fuelled inequality, and jeopardised a sustainable future.

In the artisanal and small-scale mining sector – the second largest contributor to income in rural areas in Africa, corruption also reduces the fair distribution of benefits. This sector’s contribution to illegal financial flows has been comprehensively documented.

A sector in transition: New opportunities, new risks

The energy transition is driving unprecedented activity in supply chains for critical minerals, but this surge also amplifies governance risks. In Nigeria, for example, recent arrests over illegal lithium mining operations reveal how the race for energy transition minerals is vulnerable to criminal activities. The rapid scaling of the renewables sector also creates fresh opportunities for corruption. This has been highlighted in research from the Basel Institute on Governance.

The energy transition is driving unprecedented activity in supply chains for critical minerals, but this surge also amplifies governance risks.

For producer countries to reap the benefit of critical minerals development and attract much-needed investment, close attention to anti-corruption measures in sectors such as lithium, cobalt, and nickel is needed, as well as collaboration to mitigate corruption risks with business partners in the renewables sector.

The oil and gas sector must also remain vigilant against corruption pressures, especially as patterns of demand for oil and gas shift, and where the role of state-owned enterprises in the sector may become more prominent. This highlights the importance of transparency in the sector, to ensure that state participation is not accompanied by a growth in corrupt practices and leads to real benefits for citizens in countries hosting resources. 

Civil society: A cornerstone of accountability

Civil society plays a key role in fighting corruption, yet in many areas civic space is under threat. Among the factors that constrain civil society action, an increase in global political polarisation may increasingly hamper accountability efforts. Robust legal frameworks are necessary to protect civil society, and it is concerning to read that these may be under threat in key regions. 

Civil society plays a key role in fighting corruption.

Amid such challenging conditions, it is important to acknowledge where progress has been made. The European Union’s 2024 Anti-Money Laundering (AML) package was a significant step forward in granting NGOs, journalists, and academics access to beneficial ownership information, and addressing issues highlighted in the 2022 European Court of Justice (ECJ) ruling. In the context of the EITI, the Government of Norway’s newly launched beneficial ownership register is a leading example of a pragmatic approach to disclosure, balancing public accountability and privacy concerns.

A call to action

Together with partners, the EITI has spent more than two decades working to fight corruption and to develop data and tools to empower stakeholders in their efforts. This year, as we consider the theme of International Anti-corruption Day, and how we can "shape integrity tomorrow", I urge all participants in EITI processes to redouble their efforts.

The 2023 EITI Standard calls for publication of multiple data points relevant to addressing corruption. Recently updated guidance supports multi-stakeholder groups in moving forward on this strategic priority for the EITI. As EITI multi-stakeholder groups undertake their planning for year ahead, they should consider how their data can be relevant to identifying corruption, and whether they are able to improve the way in which anti-corruption actors can access published data.

Many EITI countries are progressing with publishing contracts and building registers of beneficial owners. EITI member companies are expected to publish anti-corruption policies and several are tightening their due diligence procedures to prevent fraud and corruption in their operations. Likewise, civil society groups are intensifying their efforts to expose corruption and hold perpetrators to account.

I urge governments, companies, and civil society to act decisively and collaboratively, supporting the efforts of EITI multi-stakeholder groups and fully leveraging the EITI framework to promote transparency and accountability.

I urge governments, companies, and civil society to act decisively and collaboratively, supporting the efforts of EITI multi-stakeholder groups and fully leveraging the EITI framework to promote transparency and accountability.

Corruption in the extractive sector is a global challenge with far-reaching consequences for communities, economies, and the environment. Together, we can ensure that extractive sector governance is a leader in transparency and the fight against corruption.

    Theme(s)
    Anti-corruption
    Photo attribution
    Photo by Helen Klisser During