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Corruption in the Mining Sector: Preliminary Overview 397
These results suggest that corruption is occurring, although not
throughout the licensing function. The continued and improved implementation
of anticorruption action is therefore imperative, particularly as
the mining sector grows in size and wealth.
The territorial overlap between MOM’s responsibilities to issue federal
licenses and the regional and city licensing authorities’ responsibility to
issue regional and city licenses was seen as causing a specific corruption
risk. So, for example, if an applicant applies to MOM for a federal license,
the ministry will check its own records to ensure that no federal license
has been issued for that area. It then needs to check with the relevant
regional or city licensing authority to ensure that it has not already issued
a license for that area. A corrupt official at the regional or city licensing
authority could therefore be alerted to the interest in that area and could
alert a business person with whom the official has connections. The business
person could quickly apply for a license over the same area. The
official could then grant it and notify MOM that the area is already taken.
The mining company will then have to purchase the license from the business
person. The introduction of the new computer system (previously
mentioned in the licensing process section) will help reduce this risk.
Some areas were specifically identified as needing improvement. All
officials interviewed complained of a significant shortage of staff in their
departments to deal with both the complex issues and the increasing
number of license applications. They also expressed the view that more
training would help staff to deal with the many complex issues. They
believed that the mining companies normally had better resources and
expertise than the government. This disparity in resources and expertise
can lead a mining company to try to corrupt government officials. In
addition, there are no detailed health and safety or environmental guidelines
to assist officials and mining companies to know what conditions
should be applied to a license. This makes it more likely that health and
safety and environmental controls proposed by mining companies may
not be up to international standards or that an official may corruptly
abuse discretion in approving a health and safety or environmental management
plan.
Risk rating: Low 5
Although the potential risk in license issuance is high, the actual risk in
Ethiopia at the federal licensing level is considered to be low because of
the generally good federal procedures in Ethiopia and the apparently
effective implementation of these procedures.