Firms struggle to combat corruption

Mining Journal attended our debate on managing corruption risks in the extractives sector.

Miners are beefing up their compliance departments to cope with a plethora of new anti-corruption laws from the US, UK and EU.

But many firms say it’s a struggle to comply with rules designed to root out bribery and malpractice in developing countries such as the Democratic Republic of the Congo (DRC) and Guinea.

At a business ethics seminar at the House Lords, compliance officers at resources groups said Britain’s 2010 Anti-Bribery Act  raised particular concern.

One controversial area of the act was linked to so-called facilitation payments, fees paid to officials to ensure the speedy delivery of goods and services.

“These payments are a cultural tradition in some places,” said one speaker. Another said the only way to combat facilitation payments was to refer the issue to a very senior level in a host country, “ in order to put the case… a lot of this is about winning hearts and minds.”

The seminar also heard about the growing need to undertake due diligence on third party contractors. “In many countries where miners operate there is no Companies House to check and see if the president’s son is on the board. So it can be very hard to cover yourself,” said one delegate.

Another speaker said companies “should be seen” to have taken steps to comply with requirements, and then choose firms on the basis of quality of service and price. “Compliance is about more than ticking boxes,” he said.

Leo Martin, director of business ethics advisers at GoodCorporation, says: “Companies need to go into these challenging parts of the world with their eyes wide open; ignorance of corrupt practices is no longer an excuse or an acceptable defence.”

November 12 2013