One case of transnational corruption out of five occurs in the extractive sector according to the 2014 OECD Foreign Bribery Report. In this area, corruption has become increasingly complex and sophisticated affecting each stage of the extractive value chain with potential huge revenue losses for the public coffers.
This report is intended to help policy makers, law enforcement officials and stakeholders strengthen prevention efforts at both the public and private levels, through improved understanding and enhanced awareness of corruption risk and mechanisms. It will help better tailoring responses to evolving corruption patterns and effectively countering adaptive strategies. The report also offers options to put a cost on corruption to make it less attractive at both the public and private levels.
Corruption in the Extractive Value Chain: Typology of Risks, Mitigation Measures and Incentives
Taking a one-dimensional approach to combatting corruption in extractives is unlikely to achieve results. Both the supply and demand for corruption need to be tackled, domestically and internationally, with granularity and differentiation across the broad range of private and public actors.
Recommended mitigation measures and incentives addressed to home and host governments and extractive companies will incentivise a voluntary change in behaviour, by making corruption more costly and helping to make it less attractive for public and private actors alike.
Closing the gap between theory and practice calls for building an alliance of home and host governments using the typology as a standard diagnostic framework to assess risk and implementing recommended mitigation measures and incentives across the value chain, and through a peer review process.