Looking Ahead - Mining and the Environment: From Ore to Metal - page 855

corrupt practice. An important inl uence for mining companies is the Extractive Industry
Transparency Initiative (EITI) programmes, currently undergoing further endorsement
by governments and international agencies, such as the World Bank.
Mining companies operating internationally are in a difi cult position with regard to
the issue of corruption. Short of a pre-emptive decision not to operate in a given context
in the i rst place, it is very difi cult to cut across locally normative values and behaviour
in a specii c country or cultural context where low-level corruption is a normal part com-
munity and government practice. There are also difi culties with western dei nitions of
corruption, which sometimes fail to recognize the culturally specii c legitimacy of local
practices (e.g. speed-up or facilitation money; normalized remunerative practices for pub-
lic servants, which consequently do not constitute bribes). Another example is the com-
mon practice in many developing countries to pay honorariums or travel allowances to the
members of governmental review committees (e.g. the review committee of an environ-
mental impact assessment). While common practice, and often underpinned by published
directives of local or national government authorities in the host country, such payments
may conl ict with the FCPA; they are also easily perceived as 'bribery' by the inexperi-
enced and naive observer.
The changing pitch for mining companies is that they will have to accommodate
increasingly stringent safeguards and developments in anti-corruption techniques,
although the companies themselves may have no such tendencies. In future, mining
companies can expect to have to absorb costs associated with new corporate governance
requirements relating to various aspects of international business, including obtaining
environmental approvals, for example:
●

Mining companies operating
internationally are in a diffi cult
position with regard to the issue
of corruption.

International policing and tests for determining bribery and kick-back payments;

●

Due diligence and additional documentation for all overseas payments and currency
transactions;

●

Guarding against corporation reputation risk outcomes due to unanticipated prosecu-
tions and legal challenges;

●

Retaining greater detail of all royalty payments as governments agree to report and
publish royalties and other moneys paid by mining companies;

●

Increased disclosure requirements by the companies themselves, particularly payments
to governments and ofi cials, and

●

Increased pressure on international tax haven countries to co-operate with interna-
tional policing agencies as part of new global initiatives to trace and allow restitution of
plundered assets by corrupt governments and dictatorships, i nancial assets and path-
ways for global terrorist organizations, etc.

The unpalatable truth for all international business including mining is that coming
enforcement procedures in this arena will probably involve effective national investigative
agencies, including arms of the police forces, intelligence agencies and tax ofi ces. Already,
corporations are held as liable for corrupt practices overseas with which they may become
unintendedly involved, including the risk of being judged as complicit. As an example of
the challenge, 'facilitation payments' to speed up normal government approvals processes
(a normal practice in many countries) has been legitimized under international law, but
the requirement is that specii c records of such payments must be held for seven years.
Given the massive complexity of international mining operations, this one requirement
alone will create a signii cant extra burden of internal reporting and record keeping. This
example, however, also illustrates the best defence against the perception of corruption:
transparency and openness. The second line of defence is to have well-documented and
well-communicated procedures in place that deal with the issue.

Corporations are held as liable
for corrupt practices overseas
with which they may become
unintendedly involved, including
the risk of being judged as
complicit.