2023-09-25 15:41:51
Following a study sponsored by the college of civil society representatives within the steering committee of the Extractive Industries Transparency Initiative (EITI) with funding from the Natural Resource Governance Institute (NRGI), the NGO Publish What You Pay ( PWYP-Guinea) diagnosed corruption in the mining sector in Guinea.
In this 26-page report published in August 2023, the NGO presents the conclusions of an “in-depth diagnosis” in 3 areas of intervention. Namely: granting of licenses and contracts (granting of research permits), collection of revenue (sale of state production) and management of revenue (subnational transfers).
The result made it possible to identify 12 forms of corruption. Regarding the awarding of licenses and contracts, the analysis identified 4 forms of corruption considered to be of concern. These are: Collusion and favoritism in the granting of recently withdrawn mining titles, Payment to accelerate the process of granting mining titles, Payment of bribes for a favorable opinion from review committees and Granting of mining titles to mining company policies connected in experience in the sector.
Granting of licenses and contracts
In Guinea, the management of mining titles is governed by three legal documents, underlines the report. These are: The 2011 Mining Code amended in 2013, Decree D/2014/012/PRG/SGG of January 17, 2014 relating to the management of mining authorizations and titles, Order A/2016/5002/MMG/SGG of September 1, 2016 relating to new cadastral procedure. They make it the Center for Mining Promotion and Development (CPDM), a one-stop shop serving as an interface between investors and the administration in charge of the examination and preparation of application files for the granting of mining titles. The Technical Committee for Mining Titles (CTTM) and the National Mining Commission (CNM) are responsible for: examining the files and issuing an opinion. The approval decision rests with the Minister of Mines or the President of the Republic (Head of State), as the case may be. The analysis of this procedure made it possible to identify four (4) forms of corruption considered worrying: (i) Collusion and Favoritism in the granting of recently withdrawn mining titles; (ii) Payment to accelerate the process of granting mining titles; (iii)Payment of bribes to obtain a favorable opinion from review committees; (iv) Granting of mining titles to politically connected companies with no experience in the sector.
Collusion and favoritism in the granting of recently withdrawn mining titles
Recently, the transitional authorities took measures to clean up the mining cadastre by withdrawing obsolete titles and mining titles whose owners have failed to fulfill their obligations. Publish What You Pay reveals that some executives involved in the process are abusing their power to help companies obtain recently withdrawn mining titles, in exchange for bribes. “This corrupt practice is highlighted by a reconciliation between the dates of withdrawal of mining titles and their subsequent granting to another company,” demonstrates the NGO.
Payment to accelerate the process of granting mining titles
The report notes that it also happens that applicants for mining titles pay bribes to administration agents in order to speed up the process. Given the slowness in processing files of this kind, the cadastral procedure not indicating a time limit for processing files, certain State agents thus take advantage of the “impatience and frustration of applicants” to request in return payments. “Thus, companies that pay bribes receive preferential treatment and obtain mining licenses faster than those that do not pay bribes.”
Paying bribes to obtain a favorable opinion from review committees
The study demonstrates that this form of corruption involves the payment of bribes by applicants for mining titles to members of the technical committee for mining titles (CTTM) and/or the national mining commission in order to obtain an opinion. favorable during the examination of files. In certain cases, members of these committees demand the payment of bribes to validate a file. This form of corruption is most prevalent during the awarding and renewal of operating permits and mining concessions. As an example, the document refers to the 2018 EITI report which mentions the renewal of a company’s concession agreement for a period of 15 years which derogates from article 18 of the mining code, which provides that an agreement is only renewable for 10 years, giving rise to the payment of a bonus of 5 million USD. Research has proven that this amount agreed in the agreement was not mentioned anywhere among the payment categories indicated by the mining code.
Granting of mining titles to mining companies with no experience
PWYP points out that it regularly happens that companies with connections to political actors obtain mining titles even though they often do not have previous experience in the mining sector. This form of corruption was noted in the case of a French start-up with no experience in the mining sector and which, through senior Guinean and French executives, obtained the right to exploit in 2017 for fifteen years. , a 148 km2 deposit in the Boké region. This matter is now the subject of a preliminary investigation opened by the national financial prosecutor’s office in France and several personalities linked to the start-up were recently interviewed by police officers from the central anti-corruption office (OCLCIFF).
Revenue collection
Several State entities, through various taxes and fees levied at different stages, collect mining revenues particularly from the exploitation of bauxite.
This diagnosis focused on the forms of corruption linked to the tax audit carried out by the Directorate General of Taxes (DGI) which, recently, issued several tax adjustment notifications following tax audits carried out on companies operating in the bauxite mining. This highlights the importance of tax audit in the collection of tax revenue thus highlighting the risks of corruption that can arise in this process. The study highlights the maneuvers of certain companies to avoid correctly paying taxes due in Guinea. “These fraudulent practices aim to artificially reduce tax obligations and deprive the State of legitimate financial resources,” she underlines.
Corruption in the mining sector is not unique to Guinea. Overall, Africa loses the equivalent of around GBP 88.6 billion in illicit capital flight each year, according to the United Nations.
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