The potential for corruption is great in the extractive industries

Oct 10, 2017 Letters

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Dear Editor,
For quite some time, there has been constant public discourse and accusations (founded or unfounded) about bribery and other corrupt practices taking place at some of the entities that make up the Public Sector. It would be safe to point out that corruption is a problem all over the world and not only at the Public Sector level but at the Private Sector, the International Inter-Governmental Organisation, the International Development Organisation and the Non-Governmental Organisation levels.
Research has shown that the following Industries rank very high on the Corruption Indexes as per the United Nations Classification.
Extractive re Mining, Oil and Gas; Construction re Infrastructure Projects that are awarded via a bidding process or single sourced; Transportation and Storage re at the enforcement level; Information and Communication re Suppression of or access to; information is money and acting on non public information. In this general statement, I would like to highlight by a brief rough note item#1, because of its current status in our country re The Extractive Industry; the industry covers mining (Gold, Diamonds and other Minerals ) and the drilling etc. for the winning of Oil and Gas.
It is a historical and current perception that because of the nature of the business, it lends itself to corruption; companies (local and International) search for valuable deposits all over the world; and they then set out getting the permits from various Governments and Officials at the National, Regional and Local levels to explore and develop the deposits or blocks, the officials at the various levels can make the getting of the deposits or blocks more or less difficult, research has shown that whenever it becomes difficult to obtain the permission, a number of companies (Local and International) seeking to obtain the permission may choose to pay Bribes in order to access the deposits or blocks; there is also a feeling that the bribes paid would turn out to be only a small fraction of the expected profits and hence it makes economic sense to do it.
Please note that the opportunity to pay bribes also presents itself at the activity of extraction. In addition to the discourse and accusations about bribery and other corrupt practices, there is a very strong feeling in some quarters (Local and International) that there are significant gaps in the management of corruption risks (bribery/ corruption, etc.) and this situation has existed at the Public Sector and other levels because there is a lack at most entities of an Anti-Bribery / Anti-Corruption Policy (AB/AC) and its companion, an Anti-Corruption Compliance Programme (AACP).
In any well regulated society, it is a generally accepted principle that the Policy Makers, the Board of Directors and the Senior Management of the entity are responsible for the design of an Anti-Bribery / Anti-Corruption (AB/AC) Policy and its companion, an Anti-Corruption Compliance Programme (ACCP) and for conveying a very strong message that corruption will not be tolerated.
There are a number of entities that make up the Public Sector, a great percentage of these entities provides valued ($) services to companies, etc (Local and International) that operate in those industries that rank very high on the corruption indexes and in order to give these entities a chance to put in place systems to manage its corruption risks, I would like to suggest that the Policy Makers, the Board of Directors and the Senior Managers set about to consider and do the following.
1. The design and implementation of an Anti-Bribery / Anti-Corruption Policy (AB/AC) which should outline acceptable and non- acceptable behaviour and it shall be based upon the requirements of our Local Laws ( Integrity Commission Act ; Fiscal Management and Accountability Act ; the Audit Act and the Criminal Law Enforcement Act ) ; The USA Foreign Corrupt Practices Act ( FCPA ) ; The UK Bribery Act 2010 ( UKBA ); The Organization for Economic Co- Operation and Development (OECD ) “ Good practice guidance on internal controls, ethics and compliance “and Canada’s Corruption and Foreign Public Officials Act ( CFPOA ). The Laws emanating from (FCPA, UKBA, OECD and CFPOA) are extensively used by organisations (Government and Non Governmental) throughout the world as standards for the development of their Anti-Bribery / Anti-Corruption Policies (AB/AC) and
2. Design and put in place an Anti-Corruption Compliance Programme (ACCP); in order for this to be done, one should evaluate the corruption risks of the entity, this is essential because an effective compliance programme should be tailored to the entity’s specific activities and risks associated with those activities; to evaluate the corruption risks a corruption risk assessment should be undertaken; the identification and analysis of risks through a risk assessment activity adds both efficiency and creditability to an organisations programme in addition it is felt that if it is done professionally and properly that the findings could be used to allocate scarce resources to the most urgent risks; the guidance for designing the Anti-Corruption Compliance Programme (ACCP ) should come from the corruption risks assessment and the broader Anti-Bribery /Anti-Corruption Policy (AB/AC).
The compliance programme should be part of the entity’s overall internal control system, the internal control system should cover accounting procedures; transactions review and approval; controls around bank accounts; approval of vendors ,tendering ,evaluation and awards; procurement and the payment process; there should also be increased focus and scrutiny on the high corruption risks areas (Divisions, Departments and Sections).
The internal control system should include a mechanism for employees and the public to report actual or suspected misconduct or violations of the Anti-Bribery/ Anti-Corruption Policy (AB/AC); this should be done on a confidential basis without fear of retaliation. These reports should be handled appropriately and should include formal written standard statements; they should be lodged into a reporting system, assigned, investigated ,closed and reported to the head of the entity, the Policy Makers and the Board of Directors re ( Whistle Blowing System/ Whistle Blowing Laws). Another letter will follow.
Dunstan Barrow.
AA; MBA (Hons), BSc (Hons)

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