Mining approval processes at risk of corruption: report

Mining industry approval and infrastructure project processes in Western Australia and Queensland have been cited as susceptible to corruption, according to a new report by Transparency International Australia program, Mining for Sustainable Development (M4SD).

The program used the Mining Awards Corruption Risk Assessment (MACRA) tool — created by a Transparency International expert to build a methodology for the identification of mining corruption risks across 20 countries — as part of its research into corruption risks faced by the mining industry in Australia’s two largest mineral producing states.

The report, titled ‘Corruption Risks: Mining Approvals in Australia’, focused on various issues faced by the WA and Queensland mining industries.

For WA, the report focused on exploration licences, state and native title agreements and mining leases, while the Queensland research investigated the affects of state and commonwealth law on leasing and environmental approvals.

The TIA, supported nationally in the first phase of its reports by the BHP Billiton Foundation and globally by the Australian Department of Foreign Affairs and Trade, found that inadequate checks into the suitability of mining approval applicants was a key risk factor with regards to the stunting of benefits and sustainable development within the industry.

“Without adequate due diligence—even basic research into the track record of mining applicants—there is a risk that permits will be awarded to companies with a history of noncompliance or corruption, including in their operations in other countries,” TIA chief executive officer Serena Lillywhite said.

In WA, research showed that the approvals system had a high level of transparency and accountability, though ministerial discretion was identified as a local weakness, raising concerns of industry influence.

Large mining infrastructure project approvals were also found to have lower transparency and accountability than lease approvals.

In Queensland, two medium-level risks were assessed — a risk of external influence (citing the discretion afforded to the Coordinator-General), and inadequate verification of environmental impact statements, with beleaguered Indian mining company Adani being used as a case study.

The lack of transparency of native title agreements, and native title party representatives not representing community interests during negotiations with mining companies, were found to represent a very high risk and high risk factor respectively.