Corruption plagues mine industry

Jul 30th at 23:05

30-07-2012 23:05:09+07:00

Transparency and accountability in the extractive industry needs to be enhanced to increase efficiency before the country exhausts its oil, gas and mineral reserves.

Although Viet Nam has a fairly good legislation system with the promulgation of the Petroleum Law 2008 and Mineral Law 2010 regulating the operation of the extractive industry, there still exists a lack of transparency in mineral management and exploitation.

"That lack of transparency has resulted in the low economic efficiency of the sector, serious social and environmental impacts and unequal benefit sharing," said Dau Anh Tuan from the Viet Nam Chamber of Commerce and Industry.

Tuan added that corruption in the sector was also of concern because the publication of payments and accounts remained limited in Viet Nam.

An expert said that enterprises did not know how the money they paid to the Government was used and local residents suffered from social or environmental impacts, while local authorities were suspected of using the money for other purposes.

According to Le Minh Kha, director of the Phuoc Son Gold Company in central Quang Nam Province, his company contributed VND544 billion (US$26million) to the national budget from 2005 to June 2012. The company also invested over $3.5 million in waste treatment and decontamination.

However, local people were unaware of the environmental measures that the company had taken, and reacted negatively by disrupting operations.

A recent survey by the Consultancy on Development Institute revealed that bribery and commissions were common in the extractive industry, causing losses to the State revenue.

Join the initiative

Many experts called for the participation of Viet Nam in the implementation of the extractive industries transparency initiative.

The basis of the initiative is that companies disclose payments and the Government discloses receipt of payments to ensure transparency. According to Tuan, most interviewed enterprises said it was necessary to implement the initiative in Viet Nam.

Participating in the initiative would bring a lot of benefits, Tuan said.

"Mineral resources would be used more efficiently, corruption minimised, informal costs reduced and revenue to the budget increased."

Tuan added that it would also build citizens trust in the Government along with investors trust to attract foreign capital to the mining sector.

According to Kha, the lack of human and capital resources was a challenge to the participation of Viet Nam in the implementation of the initiative. An Indonesian expert said that it took about six years for Indonesia to see the benefits of the initiative.

The initiative was introduced at the World Summit for Sustainable Development in Johannesburg in 2012 with the hope of enhancing transparency and accountability in extractive industries. Currently, 35 countries all over the world have implemented the initiative.

There are more than 2,100 extraction companies in Viet Nam.

Viet Nam has already implemented two other transparency initiatives: the Construction Sector Transparency Initiative and the Integrity and Transparency in Business Initiative for Viet Nam.