Typology of Risks, Mitigation Measures and Incentives
One case of transnational corruption out of five occurs in the extractive sector according
to the 2014 OECD Foreign Bribery Report. In this area, corruption has become increasingly
complex and sophisticated affecting each stage of the extractive value chain with
potential huge revenue losses for the public coffers. This report is intended to help
policy makers, law enforcement officials and stakeholders strengthen prevention efforts
at both the public and private levels, through improved understanding and enhanced
awareness of corruption risk and mechanisms. It will help better tailoring responses
to evolving corruption patterns and effectively countering adaptive strategies. The
report also offers options to put a cost on corruption to make it less attractive
at both the public and private levels.
Published on August 18, 2016Also available in: Korean
Taking a one-dimensional approach to combatting corruption in extractives is unlikely
to achieve results. Both the supply and demand for corruption need to be tackled,
domestically and internationally, with granularity and differentiation across the
broad range of private and public actors.
Recommended mitigation measures and incentives addressed to home and host governments
and extractive companies will incentivise a voluntary change in behaviour, by making
corruption more costly and helping to make it less attractive for public and private
Closing the gap between theory and practice calls for building an alliance of home
and host governments using the typology as a standard diagnostic framework to assess
risk and implementing recommended mitigation measures and incentives across the value
chain, and through a peer review process.
Work Stream 4 – Detecting Corruption Risks in Extractives
Under Work Stream 4, to the Policy Dialogue led to the development of a the report Corruption in the Extractive Value Chain: Typology of Risks, Mitigation Measures and Incentives. The Typology was released in April 2016 to provide a toolkit for identifying, assessing and proactively managing corruption risks across the extractives value chain. This includes the process from deciding to extract and the awarding of rights down through revenue collection, management and spending. Not only are risks identified and mapped, but concrete, appropriate and complementary responses are also set out, which can be tailored to fit home and host country governments and extractive companies, raising the incentives to effectively tackle those risks. The complex and specific corruption challenges related to the extraction and trade of natural resources and the management of its associated revenue flows are a source of growing concern across developing, emerging and developed countries. The Typology covers a broad spectrum of inter-connected policy areas, including licencing, procurement, tax issues and public financial management.
The Typology will serve as a standard diagnostic framework for demand-driven assessment of corruption risk in resource-rich countries to provide practical recommendations on preventing and fighting corruption in such a high risk sector.
Adapt the Typology to be used as a benchmarking tool by stakeholders or integrated into existing methodological tools to carry out sector-specific integrity scans or peer-reviews, such as the African Peer Review Mechanisms.
This work is intended to contribute to the 2030 Agenda for Sustainable Development and other international processes, including on-going efforts by the G-20 Anti-Corruption Working Group to prevent and address corruption in high-risk areas.
Timeline for developing the Typology
17-18 Nov. 2014
3rd Meeting of the Policy Dialogue - OECD, Paris
Participants agreed to develop a Typology on Corruption Risks in Extractives with Mitigation Measures and Incentives.
Jan. - May 2015
1st phase - Series of conference calls with Members of the Multi-Stakeholder Group to produce a first draft of the Typology focusing on identifying conducts at risk and associated corruption schemes (“what”); the parties involved, their roles and interactions (“who”); vehicles and mechanisms commonly used (“how”); as well as the specific factors increasing exposure to corruption risks.
29-30 June 2015
4th Meeting of the Policy Dialogue - OECD, Paris
Presentation and discussion of the zero draft of the Typology.
July - Dec 2015
Series of conference calls with Members of the Multi-Stakeholder Group to produce an advanced draft complementing corruption risks identified in the first phase with corresponding mitigation measures and incentives understood as measures that could induce voluntary change in behaviour, by putting a cost on corruption and help make it less attractive.
Consultations with OECD bodies and the G20 Anti-Corruption Working Group to finalise the draft
2-3-4 Dec 2015
5th Meeting of the Policy Dialogue – OECD, Paris
Final comments on the Typology by participants in the Policy Dialogue.
Jan – March 2016
Finalisation of the Typology
20 April 2016
Launch of the Typology at the OECD Integrity Forum
Dissemination, uptake by stakeholders and piloting of the Typology in selected countries
The Typology will be adapted to be used as a benchmark tool by stakeholders and integrated into existing methodological tools to carry out sector-specific integrity scans or peer-reviews, such as the African Peer Review Mechanisms.