Corruption causes poverty in mineral-abundant countries

Published: 25/05/2011 05:00



VietNamNet Bridge – At the 9th regular anti-corruption dialogue with foreign donors in Hanoi on May 25, attendants pointed out that because of corruption in mining, richness in minerals does not become advantage for Vietnam’s development.

The dialogue, which focused on mining and management of minerals in Vietnam, was held prior to the mid-year Meeting of Consultative Group for Vietnam, to be held in the central province of Ha Tinh from June 8-10.

Representatives from ministries, sectors, organizations, localities, foreign embassies, international organizations and non-governmental organizations discussed the risks and realities of corruption, and recommended measures to fight corruption in the management of natural resources and the mining sector.

Representatives of the Ministry of Natural Resources and Environment, Ministry of Industry and Trade and the Government Inspectorate, emphasized that loopholes in institution, state management and supervision have led to corruption in mining.

Notably, the ask-give mechanism is still applied in mining licensing, which is believed to facilitate corruption. Trinh Xuan Ben, vice chief of the Ministry of Natural Resources and Environment’s Geology and Mineral Department, said that a company has to ask for 26 seals to be able to begin mining activities.

Behind the number of 26 seals are signs of corruption at almost all agencies. Some mining firms have to wait for over 950 days to have their report on environmental impacts approved. Some others have to wait for over 700 days to get approval of the mining reserve. On average, mining firms have to pay “tip” of VND110 million ($5100) to get this approval. Particularly, some have to pay up to VND1.2 billion ($51,000).

The above statistics come from a survey of the Government Inspectorate. The survey also revealed the problems in management decentralization between the central and local governments in controlling mines.

There is a fact that local government split mines grant more licenses. Most of mining projects surveyed by the Government Inspectorate have areas of less than 10 hectares.

According to Trinh Xuan Ben, since the amended Law on Mineral took effect in 2006, which permits local governments to grant mining licenses, provinces granted 4,000 mining licenses from 2006 to 2009, ten times over the number of licenses granted by the central government.

He also showed a fact that mining license transferring benefits many miners, but the state doesn’t benefit from that.

However, former Deputy Minister of Natural Resources and Environment, Dang Hung Vo said that the opinions of representatives from other ministries and agencies about corruption in mining are not very correct, and these opinions are similar to corruption in land management.

According to Vo, corruption in land management is only similar to corruption in mining in terms of licensing and land allocation to projects. Others are different. He analyzed:

The first difference is the supervision of mined mineral outputs. The output of mined minerals is always kept secret by miners. As the state cannot control this, it loses tax revenues from mining activities.

“Corruption comes from the collusion between state managers and mining firms reporting lower mining outputs,” Vo said.

The second thing is mining firms are “bilking the environment and the community”, Vo said, adding that miners don’t re-pay the environment what they take when they do mining. Vietnam doesn’t have the law that force miners to pay compensation for the community and those who suffer losses from mining.

According to Vo, this is corruption. If state agencies don’t do their management task well, especially in assessing and approving reports on the impacts of mining projects on the environment and society, the corruption money would be huge.

Vo said that these are three characteristics of corruption in mining, which should be addressed in Vietnam’s law and regulations.

Meanwhile international experts warned that if Vietnam can’t control corruption in mining, hunger and poverty will still increase though Vietnam is rich in minerals.

1.5 billion people in the world live in the countries which are rich in natural resources, but they earn less than $2 a day. This phenomenon is called “the curse of minerals” or “the paradox of well-offness”, which is mainly caused by corruption, said Swedish Ambassador to Vietnam Staffan Herstrom.

The Ambassador said that the consequences of corruption in mining may be seen in coal mining. High losses in coal mining will make Vietnam, which is rich in coal, to have to import coal in 2012.

International donors suggested that Vietnam should enhance the transparency and the responsibility of explanation in mining management as the key to solve corruption. Specifically, transparency must be in managing revenue from mining, in mining licensing and auction. Officials and businesses that commit corruption must be responsible to explain their acts.

Participants suggested that the role of supervision by the community and local people should be encouraged, to fight corruption in land management and mining and a master plan for the mining sector must also ensure hygiene and safety for workers.

Deputy Minister of Industry and Trade, Nguyen Duc Tho said it was necessary to accelerate dissemination on the fight against corruption and examine legal documents and policies relating to mining and mineral processing industries, for adjustments to avoid corruption-weak spots and ensure management effectiveness.

He said that managers should complete policies and boost cooperation with relevant agencies to inspect activities of mining and mineral processing, and promptly deal with violations.

Government Inspector General, Tran Van Truyen praised participants’ opinions, describing them as important contributions to complete State management policies, and boost responsibilities of sectors and agencies at all levels in preventing corruption in important fields of the development process in Vietnam.

Truyen took the occasion to announce that the Vietnamese Government had approved the UK Embassy as a sponsor and coordinator of cooperative activities and dialogues on anti-corruption with Vietnam after the 9 th dialogue.

Thuy Chung

Provide by Vietnam Travel

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