“It’s the Devil’s excrement” – Where fossil fuels lurk, corruption creeps

When it comes to resource extraction and the political process  the issue is a global one. Have a look at some of the recent coal-ruption stories that have been breaking all around the world.

Australia

In the state of New South Wales, an independent corruption inquiry has revealed questionable dealings between the founder of the Australian coal mining giant Whitehaven Coal, the owner of the Maules Creek mine and the state government. The sheer volume of political figures involved in a trail of political donations resulted in Australia’s national broadcaster, the ABC, publishing its own infographic. The federal senator for the Greens Party in Australia has called for a national commission against corruption, citing as a case study that the approval process for Whitehaven Mine at Maules Creek was corrupt from the beginning.

Boggabri Coal Mine in Leard State Forest in Australia. 09/04/2013 © Abram Powell / Greenpeace

India

The ‘Coalgate’ corruption scandal finally culminated in the Supreme Court of India ruling the cancellation of almost all coal allocations made since 1993. The previous practice of selective allocation was deemed illegal and arbitrary by the court. In it’s judgement order, the Supreme Court of India said: “It is expected that the Government will not deal with the natural resources that belong to the country as if they belong to a few individuals who can fritter them away at their sweet will.”

Hot Air Balloon over Forest in India. 01/11/2012 © Karan Vaid / GreenpeaceGreenpeace balloon flies over forests in Mahaan in Singrauli, located in the central Indian state of Madhya Pradesh.

Indonesia

Indonesian Energy and Mineral Resource Minister has recently been named as a suspect in a graft case. The investigations showed the misuse of funds amounting to about $840,000.

Coal Mining Expansion in Indonesia. 11/22/2012 © Kemal Jufri / GreenpeaceA worker on a break looks over an open-pit coal mine concession in Makroman, East Kalimantan, Indonesian Borneo.

China

The ongoing anti-corruption investigation in China has revealed strong ties between state officials and the coal industry. Gao Qinrong, a former journalist from the Chinese coal-rich province of Shanxi – where two senior government officials have recently been charged with corruption offences – has said of the province: “It has coal; the coal brought money; that brought corruption.”

Open-Cast Coal Mine in Inner Mongolia. 06/11/2012 © Lu Guang / GreenpeaceThe Shengli open-cast coal mine in Xilinhot, Inner Mongolia, encroaches on the grassland.

US

Since January 1990, a US federal agency has been leasing coal tracts in auctions that have only one bidder, and accepted bids at rock bottom prices. The agency systematically undervalued the worth of the coal reserves it was leasing, and often failed to consider future market conditions, such as the potential for exports, when it approved sale prices.

Decker Powder River Coal Mine. 08/07/2014 © Greenpeace / Tim AubryA shovel digging up a coal seam at the Decker Coal Mine in Montana, US.

Together, these stories reveal the persistent corruptive power of the coal industry, with some very real casualties. Across the world, corruption has tainted the environmental protection regulatory system, fundamentally weakening the community’s power to dissent, and making a mockery of democratic processes.

The cost of bribery and corruption

Early this year the European Union published their very first report on graft, and found that corruption costs Europe $120 billion euros a year.

But corruption brought on by the extractive industry is nothing new in economic history. It has been characteristic of the resource export based economies over all.

Local authorities responsible for regulating mining licenses often suffer from an inherent conflict of interest, driven by a desire to obtain mining royalties and revenues, and sometimes by personal opportunism.

And foreign mining companies without local ties to the community have little incentive to treat the natural resources respectably and sustainably, creating ecological and social crises through their operations.

In this way, coal is akin to its dark brother, oil, which has been termed ‘the devil’s excrement’ by the Founder of the Organisation of the Petroleum Exporting Countries (OPEC). As Chinese journalist Gao Qinrong poignantly commented, coal brings in money, money brings in corruption.

Where fossil fuels lurk, corruption creeps.

Marina Lou is the legal advisor on financial market regulations for Greenpeace International, stationed at Greenpeace Australia.

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