E&Y warns of increasing corruption in mining

Production and Markets

Publishing Date: 15 Sep 2010 3:32pm GMT
Author: Mining Journal

Financial services provider Ernst & Young has warned that the mining sector has become more susceptible to bribery and corruption following the global financial crisis.

In a new report, 'Fraud and corruption in mining and metals', the firm said that increased level of activity following the financial crisis is being undertaken with “slimmed-down control environments” leading to greater fraud risk.

The emergence of high-profile cases involving Rio Tinto and BHP Billiton has raised awareness of corruption in the mining sector, and E&Y added that: “The mining and metals sector has received significant bad press over alleged fraud and corruption in the sector.”

Legislators are, however, increasingly looking at ways to punish fraudulent behaviour.

The new Bribery Act being introduced in the UK in April next year will include a law that will penalise companies for failing to prevent bribery and will cover business-to-business as well as industry-government incidents.

The new Dodd-Frank Financial Reform Act in the US also indicates a move against corruption, as it includes the requirement that all explorers, developers and producers of oil, natural gas and minerals to include in their annual report the details of any payments made to governments.