{"id":20691,"date":"2014-10-20T05:21:56","date_gmt":"2014-10-20T03:21:56","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=20691"},"modified":"2014-10-20T05:22:26","modified_gmt":"2014-10-20T03:22:26","slug":"20691","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/20691\/","title":{"rendered":"Coal Corrupts, Extractive Industries Corrupt Absolutely"},"content":{"rendered":"

Mariana Lu writes about coal and corruption:\u00a0 Juan Pablo Perez Alfonso, one of the founders of OPEC, once compared the world\u2019s fossil-fuel use to \u201cdrowning in the devil\u2019s excrement.\u201d There is certainly plenty of evidence supporting his prediction that the fossil-fuel industry, with its powerful corrupting influence, will \u201cbring us ruin.\u201d Indeed, coal-related corruption stories are breaking worldwide, shining a light on the murky space between \u201cillegal\u201d and \u201cimproper\u201d where the extractive industries work.<\/em><\/p>\n

Last year, in the Australian state of New South Wales, the Independent Commission Against Corruption investigated former Labor ministers Eddie Obeid and Ian Macdonald for conspiring to defraud the state over the issuance of multi-million-dollar licenses for coal exploration and mining. Today, the ICAC is conducting an even more far-reaching and complex investigation into a number of figures from the Australian Labor Party and the Liberal\/Nationals Coalition, including for favoring the interests of Australian Water Holdings, a major infrastructure company.<\/p>\n

Last month, India\u2019s Supreme Court found that all 218 coal-mining licenses allocated by the government in 1993-2009 had been granted in an \u201cillegal and arbitrary\u201d manner.\u00a0 Indonesia is set to revoke the contracts of 17 coal producers that failed to pay government royalties. And, since the beginning of this year, the country\u2019s corruption commission has been focusing on the extractive industry, including the state officials who facilitate mining companies\u2019 illegal activities.<\/p>\n

Likewise, China\u2019s ongoing anti-corruption drive \u2013 the largest in its modern history \u2013 has begun to focus on the coal industry. Last month, two Communist Party officials from the coal-rich Shanxi province were charged with corruption and abuse of power, signaling that Shanxi may well move to the forefront of President Xi Jinping\u2019s quest to eliminate entrenched corruption in the Party\u2019s ranks.<\/p>\n

Where the coal industry operates, bribery and venality are likely to be rampant. But this does not have to be the case. In order to reduce \u2013 if not eliminate \u2013 such corruption, several fundamental weaknesses in the regulation of how mining contracts are allocated must be addressed.<\/em><\/p>\n

For starters, instead of conducting fair and transparent open-tender processes, governments often empower their ministers to decide which companies are allocated lucrative fossil-fuel exploration and extraction contracts, and conflicts of interest are not disclosed. Indeed, there is an unguarded revolving door between politics and the extractive industry, and political donations are allowed. Finally, though states are responsible for regulation, they also receive royalties and levies for the sale of their resources, which tends to weaken regulators\u2019 effectiveness.<\/p>\n

The key to addressing all of these problems is, of course, greater transparency. Resource-rich countries, such as Equatorial Guinea and Sudan, tend to perform worse economically and experience more violent conflict than their resource-poor counterparts \u2013 a phenomenon famously dubbed the \u201cresource curse.\u201d<\/p>\n

Corruption plays a major role in this curse. Natural-resource wealth insulates leaders from accountability, while offering them the prospect of significant personal financial gain at the expense of the rest of the country.<\/p>\n

Economies that depend on natural-resource exports are vulnerable to sharp price fluctuations, making government revenues and foreign-exchange supplies unreliable. For private investors, this makes involvement in these countries prohibitively risky.<\/p>\n

If a country like Australia, with its robust civil society and strong democracy, is struggling with widespread graft among high-level government officials, no country is safe from the corrupting influence of the extractive industries. Worse, as is so often the case, those who suffer the most from the extractive industry\u2019s opaque and unfair activities \u2013 not to mention the selfish actions of corrupt officials \u2013 are those who can least afford it.<\/p>\n

\"Coal<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Mariana Lu writes about coal and corruption:\u00a0 Juan Pablo Perez Alfonso, one of the founders of OPEC, once compared the world\u2019s fossil-fuel use to \u201cdrowning in the devil\u2019s excrement.\u201d There is certainly plenty of evidence supporting his prediction that the … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":22,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[22,13,18],"tags":[],"class_list":["post-20691","post","type-post","status-publish","format-standard","hentry","category-corruption","category-finance","category-news-blog"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t