Lack of policies in mining lost to corruption: ACC
Much of the mining sector is embroiled in corruption owing to inefficient implementation of regulations and policies as well as dubious practices.
The mining industry is a growing business in the country with an increasing trend of contribution to Gross National Income over the years.
The 2015 report of the Anti- corruption Commission ( ACC) highlights problems such as concentration of benefits from mining in the hands of a few and the lack of equity and transparency in the allocation of mining resources.
ACC interviewed a total of 207 respondents comprising mining representatives, mining inspectors, dzongkhag land lease committee members, local leaders and local community representatives.
The Royal Audit Authority ( RAA) report 2014 on the sector estimates that the average loss was Nu. 134 million per year. Further, using the contribution by mining industry to Gross Domestic Product ( GDP), the loss of GDP over the five years ( 2008- 2012) was estimated at Nu. 670.81 million.
The ACC study also identified several factors that could have made the sector vulnerable to corruption which include, among others, the presence of multiple monitoring agencies which led to miscommunication and delayed decision making, weak DGM power and monitoring, unclear procedures, short lease period and weak data mining.
The report states that if Bhutan had the same level of control of corruption as the USA, the SEM predicts an increase in the contribution of the Mining and Quarrying sector of Nu. 56.5 million per year.
The mining research titled “Improving business Environment: The case of Mining Industry in Bhutan” was aimed at illustrating corruption in the mining industry using cases, evaluate cases and consequences of corruption, and provide recommendations to promote Business Environment in Bhutan, leading to reduction of potential corruption.
According to the report, the main recommendations from the study include, among others, the need to improve the business environment in the mining industry, to draw up a Mining Strategic Development Plan, establishment of an independent mining regulatory authority for periodic monitoring, establishment of a system for periodical revision and realization of royalty, mineral rent, license fees and surface rent; and strengthen effective community involvement through public construction and putting in place appropriate guidelines for Corporate Social Responsibility Strategy and Actions.
A team of researchers from Gedu College of Business Studies under the Royal University of Bhutan, Department of Geology and Mines, Royal Institute of Management, and ACC conducted the study over a period of nine months.