One solution won't end corruption, but many could
With US$1.5 trillion estimated to be paid in bribes by businesses and individuals each year, transparency and oversight in beneficial ownership and public procurement play a critical role in the fight against corruption in the extractives sector.
There are hundreds of billions of dollars paid in the form of taxes and royalties from the extractives sector to host governments around the world. Still there are over a billion people in resource rich countries living in poverty. Are there solutions to ensure that the citizens of those countries are the primary benefactors of their natural resource wealth?
This was one of the questions Fiona Avery, BHP Foundation’s Natural Resource Program Director, addressed at the National Integrity Summit 2023 hosted by Transparency International Australia last week.
Fiona’s answer was clear: there are innovative organizations developing and implementing solutions to tackle corruption in the extractives sector, influencing change at a systemic level to ensure that citizens of resource-rich countries are the ultimate owners and primary benefactors of their natural resource wealth.
The work of these organizations is more critical than ever with the climate crisis accelerating the energy transition and creating additional corruption risks as governments respond and spend at scale and speed.
“At BHP Foundation we partner with organizations working on enhancing governance and reduce corruption across the value chain,” said Fiona. “Our program looks at inclusive consultation and consent practices; enhanced access and utility to data for citizens; open, transparent and equitable public procurement; and beneficial ownership transparency.”
Transparency and robust oversight in action
Enabling citizens to have access to information is at the heart of BHP Foundation’s global Natural Resource Governance Program. The projects we support run by Open Contracting Partnership, Extractive Industries Transparency Initiative (EITI) and Open Ownership are examples of how building platforms of collaboration between international institutions, governments, civil society and business to share information could improve natural resource governance.
Open Contracting Partnership, is tackling the issue of public contracting, the number one corruption risk for governments globally.
The transformational impact on value for money, competition and anticorruption reforms of open contracting is evidenced around the world where reforms have exposed corruption, saved billions of taxpayer dollars and increased efficiency and diversity of suppliers.
Opening Extractives programme, jointly developed by the Extractive Industries Transparency Initiative (EITI) and Open Ownership aims to transform the availability and use of beneficial ownership information for effective governance in the extractive sector.
Opening Extractives currently works with 11 governments including Ghana, Mongolia, Nigeria, the Philippines and Zambia. It is playing an increasingly critical role in proving how beneficial ownership transparency – disclosing who ultimately controls and benefits from a company – is important at every step of the value chain, from the licensing stage through to the payment of taxes and royalties through to government procurement processes.
“Strong anti-corruption measures are needed at every stage of the value chain,” said Fiona. “These ultimately enable governments and citizens to maximize the human development outcomes derived from their natural resource wealth. This ensures the hundreds of billions of dollars generated from natural resources are rightly channelled into health, education, infrastructure, and other essential services which can improve the lives of hundreds of millions of people.”
Open Contracting Partnership, Extractive Industries Transparency Initiative (EITI), Open Ownership and Opening Extractives are supported by the BHP Foundation Natural Resource Governance program, a collaboration between international institutions, governments, civil society and business working across the natural resource value chain to enhance governance, reduce corruption and enable people to have agency and voice in decisions affecting them. Learn more.