Sector Programme
    Extractives and Development
    Mining vehicles

    Fields of Activity Anti-Corruption

    Corruption risks extend along entire mineral value chains in the extractive sector, from bribery in the acquisition of licences to the misappropriation of public funds. The impacts are severe.

    Corruption does not only reduce trust in public institutions, but also distorts competition, reduces government revenues and undermines development-oriented budget allocation. Corruption is thus a cross-societal concern.

    The factors that make the extractive sector so vulnerable to corruption are manifold, including the remoteness of mining operations, complex contractual arrangements and limited competition, coupled with high expected revenues and weak oversight institutions. While worldwide one in five cases of transnational bribery can be linked to the extractive sector according to the OECD, it is anticipated that the growing global demand and competition for access to natural resources will further exacerbate corruption risks in the sector.

    Sector Programme Commitment

    Against this background, global initiatives such as the Extractive Industries Transparency Initiative (EITI) aim to increase financial transparency and accountability of public revenues from the extractive sector in the fight against corruption. Embedding transparency in the modus operandi of companies and government institutions is therefore an integral step. In 2020 the EITI made anti-corruption a strategic priority for the next three years.

    Preventing and combating corruption is a core objective of German development policy. Together with NRGI (External link), the Sector Programme “Extractives and Development” developed an anti-corruption tool, which supports EITI countries in identifying and addressing corruption risks in their oil, gas and mining industries. Supplementary information on the anti-corruption tool such as the annexes and other language versions (French, Spanish) can be found on the NRGI website (External link).

    Good Governance
    Engineers at an open pit mine in Peru

    Extractive Industries Transparency Initiative (EITI)

    The Extractive Industries Transparency Initiative (EITI) advocates for greater financial transparency and accountability of public revenues in the extractive sector. Read here how the Extractives and Development Sector Programme is involved.

    Good Governance
    Gold

    Illicit Financial Flows

    Combating illicit financial flows is an important concern of German development cooperation. The adoption of the EU Conflict Minerals Regulation will give new impetus to the issue of illicit financial flows in the extractive sector.

    Good Governance
    PLANTA DE FUNDICION DODE RUN - Kopie

    Tax Compliance in the Extractive Sector

    An effective tax framework – strengthened through tax policy reforms and rigorous tax audits – is a critical prerequisite for exploiting the full tax potential of a country. In order to enhance domestic resource mobilization in partner countries, Germany supports the capacity building of tax authorities to identify tax risks and to investigate suspected cases of aggressive tax avoidance and tax evasion.

    Responsible Supply Chains
    ASM-Arbeiter in Sierra Leone

    Artisanal and Small-Scale Mining

    It is estimated that more than 100 million people are dependent on artisanal and small-scale mining. This makes ASM a major economic sector and an important source of income. At the same time, ASM is associated with various social and environmental risks.