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The Environmental Impact of Corruption

By Quin Pau

At ISLP, we acknowledge the importance of natural resource extraction as an economic activity to promote development. However, we believe that it needs to be done in a responsible and sustainable manner, in line with the Sustainable Development Goals (SDGs). Corruption, if left unchallenged, can be detrimental towards the environment and threaten our natural resources. Hence, it is necessary for us to consider the dangers of corruption and the importance of proper natural resource management. This piece will examine how corruption can impact the environment in various stages, starting from the initial decision to develop natural resources, to the procurement process, and finally the implementation of a project.

Building upon the successes of the Millennium Development Goals, the 2030 Agenda for Sustainable Development focuses on strengthening the three dimensions of sustainable development: economic, social, and environmental. It is encouraging that the environment has been recognised as a crucial aspect for sustainable development. However, progress in this dimension has been minimal. In March 2019, the UN found that only 23% of the 93 environment-related SDGs recorded “good progress.” More alarmingly, however, is that an overwhelming 77% of indicators could not be assessed due to insufficient data, and that they are likely facing a negative trend as they receive less attention in terms of policy interventions and investment in monitoring.1 Based on research and common knowledge, it is likely that one contributing factor is environmental corruption. Another study concluded that the more affected a country is by corruption, the weaker its environmental performance.2 Therefore, it can be inferred that corruption adversely affects environmental performance, which in turn poses a significant barrier to achieving the SDGs.

Environmental corruption can take various forms: whether it’s petty bribery of local officials who turn a blind eye to corrupt practices, or funding multibillion-dollar “white elephant” projects as a conduit for channeling money into the bank accounts of corrupt individuals,3 ultimately they undermine the vast amount of work done to preserve our environment and promote a better standard of living globally. To make things worse, the impact of corruption has knock-on effects, and oftentimes, the full extent of these effects are not accurately reflected by the amount of money derived from acts of corruption. Remedial actions such as asset recovery cannot restore the loss of health, natural resources and biodiversity. For example, it has been found that roughly 10 percent of investments in the water sector is lost to corruption,4 meaning that around 785 million people lack access to safe drinking water globally.5 The negative health effects of poor sanitation has been well-documented: the transmission of diseases such as cholera, dysentery, hepatitis A, combined with the loss of educational opportunities and perpetuation of poverty for millions of people can be traced back to the 10 percent lost.

Another illustration can be found in illicit trade. In Madagascar, where more than 80 percent of the existing flora and fauna are unique to the island, traders are making millions smuggling rosewood to China. As a result of the mass deforestation, 80 percent of lemurs native to the island have disappeared. Interestingly, the profits are then used to fund the vanilla trade. Hence, the concern is that blocking the accounts of these traders would inadvertently halt the vanilla trade, and with the intermingling of funds, it is difficult to identify whether the money comes from vanilla or rosewood. This shows the deep-rooted and pervasive nature of corruption, and the difficulties in halting it.

LEGISLATION AND ENFORCEMENT

One of the more obvious solutions to tackling environmental corruption is the presence of a robust legislative framework. Corruption thrives in the absence of laws and their enforcement. Hence, strong environmental laws are necessary to protect a country’s natural resources from exploitation. Through our network of dedicated pro bono lawyers, ISLP has successfully provided legislative drafting assistance to lawmakers in developing countries. For example, ISLP has provided legislative analysis to a coalition of Ugandan CSOs on three draft natural resource management bills and assessed their environmental safeguards.6

In the same vein, there needs to be greater political will in the fight against corruption, Environmental laws on their own might not be sufficient for the protection of the environment if there is no mechanism to enforce it; a global assessment of environmental rule of law found that, despite the burgeoning of environmental law and policies globally, the lack of implementation and enforcement of these laws render them useless, no matter how well-drafted they are.7

TO DEVELOP OR TO NOT DEVELOP?

The decision to develop the natural resources in a country should be a well-thought-out one, with the wellbeing of its citizens as a key consideration. The economic benefit derived from such activities should be used for the development of the state, and possibly to compensate communities that might be affected.

At the outset, there needs to be proper research conducted into the impact of development, be it environmental, economic, or social. Then, the existing legislative framework should be reviewed to assess whether it provides sufficient protection. Finally, once a decision has been made, the administration needs to ensure that the rights of stakeholders are respected, such as in cases involving indigenous and community land rights. It undermines human rights when politicians make ill-considered decisions to allow foreign corporations to develop natural resources, especially when these decisions are motivated by personal gain. In 2013, Global Witness posed as foreign investors and secretly filmed conversations that strongly hinted at the abuse of power by an influential Malaysian politician who sold indigenous land and forests in Borneo while pocketing the profits generated.8

Currently, ISLP is providing strategic litigation support to an NGO and indigenous communities stripped of their land rights to challenge fraudulent leases granted by the Papua New Guinean government to Malaysian logging companies. In addition, ISLP has developed litigation and negotiated settlement strategies to hold illegal foreign corporate sand miners accountable under Kenyan environmental regulations with excellent young lawyers from the Civic Enlightenment Network, and provided training on broader approaches to protecting communities from rapid infrastructure development.

TRANSPARENCY IN PROCUREMENT PROCESS

Procurement is another area where environmental corruption can often be found. Opaque decision-making processes make it difficult to prove that corruption has taken place. This is problematic because if companies are selected not by merit but by their “generosity,” there is a risk that they might not be the most suitable for the project as they are not properly considering the environment in their planning. By buying their way into contracts, these companies might try to cut costs by cutting corners and disregard the consequences of their actions in the process.

An example of this is Odebrecht, a Brazilian engineering and construction giant whose name has now become synonymous with corruption. Odebrecht executives have confessed to bribing politicians in exchange for contracts, including those for oil and gas exploration in various parts of the world.9 This scandal illustrates how country leaders in Latin America facilitated major acts of corruption, without considering environmental safeguards, in exchange for financial gain. Presently, ISLP is working to seek compensation for victims of corruption by Odebrecht.

In the extractives industry, there have been efforts to promote accountability and financial transparency in the management of natural resources. The Publish What You Pay (PWYP) campaign requires international extractive companies to publicly disclose payments to governments in extractive contracts. With Natural Resource Management being one of our focus areas, ISLP has advised PWYP on the practical implementation of the Transparency and Accountability Directives.

CORPORATE RESPONSIBILITY IN IMPLEMENTATION PROCESS

Finally, at the implementation stage, companies have an obligation to respect local laws and communities. They should take pragmatic steps to ensure that minimal harm is incurred, and that communities are compensated fairly where necessary.

Ever since crude oil was discovered in Nigeria more than 60 years ago, oil has been Nigeria’s primary source of GDP. However, this blessing has come with its fair share of problems. Decades of oil spills along the Niger Delta amounting to 21.7 million litres, the equivalent of nine Olympic pools,10 have affected the lives of local communities in drastic ways. Marine life was destroyed, people’s livelihoods and health were negatively affected. Moreover, a study has shown that babies in Nigeria are twice as likely not to live past their first month if their mothers were  living  near  an  oil  spill  before their pregnancy.11 Things  are  made  complicated when companies refuse to own up to their actions and provide false narratives in an attempt to snuff out the truth.12 Evidently, these short-term gains are causing long-term harm that affect future generations – generations that have been robbed of the opportunity to raise their voices.

To conclude, the multifaceted nature of corruption in the environmental sector is destructive, but they can be overcome with concerted efforts at different stages. First, countries should establish a strong legal framework and enforcement mechanism to safeguard environmental standards. Second, the administration should carefully consider the decision to develop natural resources in a country, and the decision should be done with due respect to stakeholders. Third, the procurement process should be conducted in a fair and transparent manner. Finally, corporates need to be responsible and strive to minimise harm in the implementation process. ISLP has access to expert lawyers who can provide legal assistance in the aforementioned areas to support just, accountable and inclusive development. Natural resources can be a blessing or a curse – ultimately, it is the management of these resources that will determine the impact of the development of nations.



1. Mead, L. (2019, March 28). UNEP Report Finds “Good Progress” on 23% of Environment-related SDG Indicators.

SDG Knowledge Hub. Retrieved from

https://sdg.iisd.org/news/unep-report-finds-good-progress-on-23-of-environment-related-sdg-indicators/.

2. Transparency International Secretariat. (n.d.) “Strongest correlation” between corruption and poor environmental performance, study shows. Transparency International. Retrieved from https://www.transparency.org/news/pressrelease/strongest_correlation_between_corruption_and_poor_environmenta l_performance.

3. Chayes, S. (2017, June 16). A Hidden Cost of Corruption: Environmental Devastation. The Washington Post.

Retrieved from

https://www.washingtonpost.com/outlook/a-hidden-cost-of-corruption-environmental-devastation/2017/06/16/03f93c1 e-52b8-11e7-b064-828ba60fbb98_story.html?utm_term=.e1dbdad83b5d.

4. Transparency International. (2016, March 21). World Water Day: Corruption in the water sector’s costly impact. Retrieved from https://www.transparency.org/news/feature/world_water_day_corruption_in_the_water_sectors_costly_impact.

5. World Health Organization. (June 14, 2019). Drinking-water. Retrieved from https://www.who.int/news-room/fact-sheets/detail/drinking-water.

6. Sharife, K. and Maintikely, E. (August 17, 2018). The Fate of Madagascar’s Endangered Rosewoods. OCCRP. Retrieved from https://www.occrp.org/en/investigations/8480-the-fate-of-madagascar-s-endangered-rosewoods.

7. Environmental rights and governance. (2019, January 24). Dramatic growth in laws to protect environment, but widespread failure to enforce, finds report. UN Environment. Retrieved from

https://www.unenvironment.org/news-and-stories/press-release/dramatic-growth-laws-protect-environment-widesprea d-failure-enforce.

8. Global Witness. (March 19, 2013). Inside Malaysia’s Shadow State. Retrieved from https://www.globalwitness.org/en/campaigns/forests/inside-malaysias-shadow-state/.

9. Gallas, D. (April 17, 2019). Brazil’s Odebrecht corruption scandal explained. BBC News. Retrieved from https://www.bbc.co.uk/news/business-39194395.

10. Amnesty International. (March 2018). Niger Delta Negligence. Retrieved from https://www.amnesty.org/en/latest/news/2018/03/niger-delta-oil-spills-decoders/.

11. Hodal, K. (November 6, 2017). ‘Absolutely shocking’: Niger Delta oil spills linked with infant deaths. The Guardian.

Retrieved from

https://www.theguardian.com/global-development/2017/nov/06/niger-delta-oil-spills-linked-infant-deaths.

12. Al Jazeera. (November 3, 2015). Shell accused of lying over Nigeria oil spill clean-up. Retrieved from https://www.aljazeera.com/news/africa/2015/11/shell-accused-lying-nigeria-oil-spill-clean-151103160941729.html

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