Corruption &Environmental Degradation

Client BriefingMay 3, 2006

Jessica Dillon, Karma Ekmekji, Annie Feighery, Rachael Garrett, Matt Gray, Taki Johnson, Suzanne Jones, Thomas Legge, J.P. Leous, Arezou

Raeisghasem, Karen ReillyAdvisor: Professor Sara Tjossem

A project for:Transparen

cy Internation

al

2

Overview

• Our project• Environmental governance• Sector analysis• Conclusions• Recommendations

3

• Politics• Public contracting• Private contracting• International conventions• Access to information• Aid and corruption• Education• Health

Introduction

Environment

For over a decade TI has been a leader in combating corruption and promoting good governance in:

4

Corruption Defined

“Corruption is the misuse of entrusted power for private gain”

– Transparency International

5

Costs of Corruption

• Obstructs democracy• Inhibits development• Leads to apathy and distrust• Degrades the environment

6

Our Project

1. How does environmental corruption occur?

2. What are the costs of environmental corruption?

3. What are the areas for intervention?

7

Methodology

• Looked globally & by sector

• Reviewed existing studies on corruption, good governance, and conservation

• Researched cases through media and social justice organizations

• Conducted face-to-face and phone interviews

8

Global Hotspots and Corruption

Low CPI score = High Perceived Corruption

9

Tropical Andes

Guinean Forests

Sundaland

Caucasus

Mountains of Southwest China

Hotspots Analyzed in this Report

10

Sectors: InfrastructureDams

10

11

Sectors: Renewables

Logging

Poaching

11

12

Sectors: Non-renewables

Mining

Oil Extraction

13Social and Economic Welfare

Environmental

wellbeing

Political Factors

Economic Factors

Social Factors

Geography and Resource Base

Environmental Governance

Corruptio

n

Corruption

Feedback

13

14Social and Economic Welfare

Environmental

wellbeing

Political Factors

Economic Factors

Social Factors

Geography and Resource Base

Environmental Governance

Corruptio

n

Corruption

Feedback

14

15

Findings: Infrastructure

How corruption occurs:– Project design– Disbursement of funds

Costs of corruption:– Misallocation of funds– Ecological damage – Displacement

Areas of intervention:– Transparency in project development

16

Case Study: Pubugou Dam in China

1) How corruption occurred:

•Chinese industries

•Local officials

•Misappropriation of funds

2) Costs of corruption:

•Substandard living conditions

•Environmental degradation

3) Interventions:

•Improving disclosure

•Facilitating public appeal process

17

Findings: Renewables

How corruption occurs:– Weak enforcement of regulations – Demand for illegal products in export

markets

Costs of corruption:– Floods, landslides, and forest fires– Species loss

Areas of intervention:– Community action– Local watch groups– Certification

18

Case Study: Logging in Cameroon

1) How corruption occurred:

•International logging companies

•Concessions

•Unsustainable logging practices

2) Costs of corruption:

•Increased road building

•Forest degradation

•Species loss

3) Interventions:

•Code of conduct

•Certification of timber

•Technical assistance to government 18

19

Findings: Non-Renewables

How corruption occurs:– Concessions and contracting– Large discretionary cash flows– Weak enforcement of regulations

Costs of corruption:– Pollution and species loss– Human health impacts

Areas of intervention:– Extractive Industries Transparency

Initiative

20

Case Study: Oil in Ecuador1) How corruption occurred:

•Chevron-Texaco

•Ecuadorian judiciary

•Illegal dumping

•Cover-up of impacts

•Inadequate compensation

2) Costs of corruption:

•Pollution

•Cancer and birth defects

3) Interventions:

•Increase media exposure

•Facilitate public appeal process 20

21

General Findings

1. Environmental corruption is prevalent where:

– Economic development is low– Democratic traditions are weak– Governance structures are weak

2. Monopolies create opportunities for corruption

3. International demand drives corruption

4. Countries dependent on natural resource extraction experience high levels of corruption

22

Policy Recommendations

1. Prioritize preventative over reactive advocacy

2. Expand TI’s existing information network

3. Expand education, TI’s seventh global priority, to include the environment

4. Establish collaboration with conservation and environmental organizations

23

Summary

1. How does environmental corruption occur?– Project planning, contracting, legislation,

enforcement, and bribery

2. What are the costs of environmental corruption?– Pollution, species loss, displacement, and human

health impacts

24

Summary

3. What are the areas for intervention?– Local empowerment– Public access to important

information

These linkages indicate that the environment should be the subject of a future Global Corruption Report.

– Development of uncomplicated and unambiguous rules

25

Questions?

26

Areas for Further Research

• Internet publications of environmental disclosure documents

• Corporate self-regulation and self-monitoring

• Utilization of geospatial technologies

27

Credits• Template mining:

http://eesc.orst.edu/salmon/images/mining.jpg• Columbia University logo:

http://www-unix.mcs.anl.gov• Transparency international logo:

http://www.emins.org • Logging:

http://www.landscouncil.org/fwatch/pre-myrtle%2520creek%2520pix/&h=681&w=1006&sz=164&tbnid=Tdzr05ZFJ2YULM:&tbnh=100&tbnw=149&hl=en&start=2&prev=/images%3Fq%3Dlogging%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DG

• Dams: http://www.hamptonhillps.org.uk/exhibition/2004/dams.jpg

• Mining:http://www.hdprint.co.uk/ftp/Colorado/331%20-%20Old%20mining%20facility.jpg• Oil pond:http://www.rainforestweb.org/images/cat/texacopond-big.jpg• Axis of Oil: http://earthhopenetwork.net/bush%20art/bush_axis_of_oil.jpg• Global Corruption Report: http://www.beheard.com/beheard/images/items/0745323960.jpg• Title Page and questions slide:http://www.chevrontoxico.com/• Case Study: Oilhttp://www.michiganpetroleum.com/texaco.jpghttp://www.alpineascents.com/graphics/flags/ecuador-flag.gif• Case Study: Logging

http://www.forestmonitor.org/reports/solddownriver/cameroon.htm• Case Study: Dams

www.eng.ucalgary.caenglish.epochtimes.com