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Corruption in the Mining Sector: Preliminary Overview 411
Two out of the four people who completed this section of the survey
believed that this type of corruption was common or fairly common.
The FEACC is currently dealing with a specific case of falsification of
gold quality, as box 9.1 explains.
Risk rating: low to medium
The actual risk in Ethiopia of corruption in relation to falsification of
quality at federal license level is considered to be low to medium.
Recommendations to mitigate risks
Falsification of quality will normally require a fraudulent certificate of
quality to be issued by the relevant testing laboratory or a fake certificate
to be issued. Controls therefore need to be in place to ensure that, as far
as possible:
• the sample being tested is from the correct batch;
• the testers in the laboratories are well trained and honest; and
• additional random tests are undertaken to cross-check the accuracy of
the testing system.
Box 9.1
Falsification of Quality: Corruption Investigation by the
FEACC
The FEACC Annual Performance Report for 2008 states as follows:
“The budget year also saw a huge scandal at the National Bank of Ethiopia
(NBE). It was dubbed by many as ‘the huge scandal of the year.’ Here is the trick.
The NBE is by law entrusted with procuring and reserving gold. Some businessmen,
who were allowed to supply gold to the NBE, supplied many kilograms of
gilded iron, instead of gold. Some employees of the Bank, business people, managers
and other government employees were allegedly involved in this disastrous
and disgracing scandal. The government lost nearly 16 million USD to this particular
gold scam. The FEACC is spearheading the investigations and prosecutions
of the above cases. Dozens of suspects have already been arrested and the cases
are in due process of law. As to the restraining of properties obtained through
corruption in connection with the above cases, nearly 4.6 million USD and 81 kg
of gold, among others, was restrained on court order.”
Source: FEACC 2008.