Behind the Schemes: Anticorruption Gaps in Mining Sector Certifications

Report
7 November 2024

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Key messages

Decisionmakers are increasingly looking to certification schemes to provide information on the sustainability of mining operations, yet these schemes have significant room for improvement regarding how they address corruption in their standards.
The report assesses the content of the performance standards used by the Aluminium Stewardship Initiative (ASI), the International Council on Mining and Metals (ICMM), the Initiative for Responsible Mining Assurance (IRMA), The Copper Mark, and Towards Sustainable Mining (TSM).
Schemes address some topics, such as revenue and payments and anticorruption procedures, relatively well; this may reflect the extent to which legislation and regulations address these topics. Schemes’ standards less frequently covered other issues, such as beneficial ownership and allegations of corruption. Many schemes, and the mining companies that use them, are missing an opportunity to assess the implementation of corporate-level anticorruption policies in mine-site assessments.
The quality of certification schemes’ governance and assurance processes is essential to their effectiveness, yet many fall short of best practice. This undermines their credibility. Key governance challenges include the unbalanced representation of different interests within schemes and the risk of conflicts of interest in the auditing process.
Decisionmakers risk becoming overreliant on certification schemes as indicators of responsible business conduct, which may be facilitated in part by industry influence over policymaking processes. Certification schemes are not a replacement for ongoing, robust due diligence into the environmental, social, and governance impacts of mining operations, including corruption, and the design and enforcement of robust regulatory frameworks.
In a shifting standards landscape where there are efforts to both consolidate and review existing certification schemes, and a moment where the risk of corruption is heightened by growing demand for transition minerals, governments, mining companies, and certification schemes themselves must do more to address the topic of corruption. To do so effectively, they should focus their attention on solutions that will have the most impact in addressing this issue.

Governments worldwide are paying more attention to the role of minerals in the renewable technologies needed to transition away from fossil fuels. To meet growing demand for these minerals, policy-makers are largely relying upon the mining industry, which has a notorious track record for harm. Mining companies have abused communities and workers, polluted water sources, and perpetrated or been complicit in widespread corruption. While the energy transition may present an economic opportunity for some mineral-rich countries, past mining booms have often failed to deliver on their development promise, and many citizens are justifiably questioning whether the costs of mining outweigh the benefits.

Faced with these concerns, some policy-makers and investors are setting out conditions regarding the environmental, social and governance sustainability of mining projects they are willing to support. Mining companies use voluntary standards and certification schemes, also known as third-party assurance and accreditation schemes, to demonstrate that they meet a certain level of performance regarding environmental and social protections and overall governance. Operators of certification schemes do this by assessing the performance of companies against sustainability criteria set out in a voluntary standard. These standards, often developed, led, and governed by industry actors, vary significantly and can be subject to concerns regarding the transparency, governance and rigor of their processes.

In this report we seek to address the gap surrounding anticorruption approaches to mining sector certification schemes by answering the following questions:

How well do certification schemes in the mining sector require companies to demonstrate anticorruption good practice?
What governance challenges are posed by the use or structure of certification schemes.

To do so, we have developed assessment criteria outlining anticorruption best practice, conducted desk-based research and engaged with representatives from certification schemes, multilateral bodies, civil society and academia. Each question will be addressed in the following sections of this report. This research builds on the existing work of the Natural Resource Governance Institute (NRGI) to strengthen both regulatory and voluntary approaches to transparency and accountability in the mining sector, including our work to ensure that information gathered through certification processes is more accessible and useful to local communities and civil society in Latin America.