Experts Weigh In on Bribery and Corruption in the Mining Industry at PDAC
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(Kitco News)--Mining executives focused on the risks of bribery and corruption in their industry this week and determined that while there is no quick fix to the problem they need to keep it in the limelight.
Their discussions were held at PDAC2012, the annual Prospectors and Developers Association of Canada, which was held March 4 – 7 in Toronto. It was sponsored by Export Development Canada (EDC), Canada's export credit agency.
All speakers admitted that there is no quick fix to curbing and eventually ending bribery and corruption within the mining industry but each spent time focusing on points that could systematically limit illegal activity.
Making it a more compliant friendly industry was a common theme during the session. PanelistGordon Drayton of the Royal Canadian Mounted Police said it's an issue he is very concerned about. "Not many companies have or are aware of any compliance programs," he said.
"What you really want to do is create an anti-corruption environment and promote compliance, not only with employees, but right through your supply chain," said John Noyes, director of corporate security at Goldcorp Inc. (TSX:G)(NYSE:GG).
A common idea that was reiterated by the speakers during the session was that compliance goes hand in hand with transparency. If companies remain transparent and show that there are no questionable deals between parties, there would be less reason to suspect any illicit activity, Drayton said.
"A common excuse is it's too expensive to have a compliance program," said Drayton. "It's too expensive not to have one. Compliance, when you look at it, is not that difficult, it's called transparency."
An example Drayton provided was suggesting that if a government approves a mining project but the government says they want something in return for the project approval, an arena for example, he recommends that everything be included in the contract. Keeping it all on the table is what's important, he said.
While it sounds simple enough, monitoring companies in different countries can be difficult. Dr.Anthony Hodge, president of the International Council on Mining and Metals (ICMM), said that working with other countries is a big part in helping curtail bribery and corruption.
"We've been in contact with the research department of the UN. We would like to initiate a major review of this topic to establish how significant it is to design an action plan so that internationally, we can deal with it cooperatively amongst nations," said Hodge during the session.
In December 2005, a step was taken towards information exchange among countries when the United Nations Convention against Corruption legislation (UNCAC) went into effect. UNCAC currently has 159 signatories.
"This allowed the police to open up and have mutual legal assistance requests that can be made in each of those countries that have signed on," said Drayton. "If I have to get documents from other nations, information from other nations, I don't have to have another separate, mutual legal tree with that country."
Heavy Fines
According to Signi Schneider, chief corporate social responsibility (CSR) advisor for the EDC, another approach to restricting bribery and corruption in mining is to impose heavy fines and even jail time.
"I think as soon as we start seeing more prosecutions, more fines and even jail time, we'll see Canadian companies taking it really seriously," said Schneider during the session.
Schneider believes it is in mining companies' best interest to operate with transparency as they are not in the type of industry where moving to a less monitored country is possible.
"It's an opportunity for the mining sector to get it right because they're really exposed by the nature of the work that they do, they go after what's in the ground, it's not movable," she said. "If a situation gets really bad, they can't just pick and leave so they need to make sure that they've got respectful relationships from the start."
Editor’s Note: Click Here For More PDAC 2012 Coverage.
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