NRGI, CSOs Raise Red Flags

– Over possible corruption vulnerabilities in critical minerals industry

Story: Isaac AIDOO, Accra

IN a bid to address corruption risks in Ghana’s emerging transition minerals industry, the Natural Resources Governance Institute (NRGI), in collaboration with various civil society organizations (CSOs), has raised red flags that indicate possible corruption vulnerabilities in the sector.

As Ghana gears up to exploit its resources in transition minerals like lithium, graphite, and bauxite, stakeholders are urging both the current and future governments to remain vigilant against potential exploitative practices that could undermine the country’s economic and environmental interests.

At a training programme hosted by NRGI aimed at empowering key players within the extractive industry with the knowledge to detect and combat corruption in transition minerals, Senior Africa Programme Officer at NRGI, Mr. Denis Gyeyir, emphasized the importance of strengthening Ghana’s mining policies and frameworks to align with international standards and minimize corruption risks.

Corruption red flags in transition minerals sector

NRGI introduced a framework of “red flags,” specific indicators of corruption that pose significant threats to the integrity and transparency of the transition minerals industry.

Licensing and contract risks: Unqualified companies securing awards
NRGI notes a potential risk in cases where the government awards licenses or contracts to companies that lack the technical capacity or resources to operate effectively.

This could result in ineffective resource management, loss of revenue, and long-term environmental harm. “Awarding contracts to unqualified companies sets a dangerous precedent, weakening the sector’s credibility,” Gyeyir stated.

Controversial or criminal backgrounds among awardees
NRGI highlights concerns when companies with histories of criminality or controversy compete for, or win, significant contracts. Awarding resources to such entities risks reputational damage and potential operational setbacks.
According to Gyeyir, “Transparency in vetting processes is key to avoiding partnerships with companies that could harm Ghana’s global standing and environmental commitments.”

Political influence and conflicts of Interest with Politically Exposed Persons (PEPs)
Companies owned by politically exposed persons (PEPs) or those in which PEPs have vested interests pose a significant corruption risk, according to NRGI’s report. Such affiliations can lead to biased awarding of contracts, hinder competition, and increase opportunities for political interference. “The political ties in licensing and contract awards must be transparent to avoid conflicts of interest that undermine governance,” noted Gyeyir.

Improper gifts and favouritism
Another red flag involves companies seeking contracts or licenses by offering gifts, payments, or other favours to influential individuals. This can skew decision-making processes, allowing corrupt practices to seep into governance.
“Stakeholders need to prioritize meritocracy, not favouritism, in awards,” Gyeyir advised, citing NRGI’s stance on a fair selection process.

Election influence and financial contributions from companies
A notable area of concern raised by NRGI involves companies using financial contributions or influence to sway election outcomes, often in exchange for favorable treatment in the awarding of licenses or contracts.
“We’ve seen the implications when companies financially support campaigns and then expect preferential treatment—this needs to be monitored closely,” Gyeyir stressed.

Use of intermediaries for unfair advantage
Companies leveraging intermediaries to secure favourable outcomes in award processes pose hidden corruption risks. The use of “middlemen” to lobby for contracts bypasses direct accountability and often conceals unfair practices.
According to NRGI, “Transparent processes should eliminate the need for intermediaries, especially in sectors as strategic as transition minerals.”

Government intervention favouring particular companies
The red flag list includes instances where government officials directly intervene in the awarding process to benefit specific companies. Such interventions are often politically motivated and undermine the fairness and transparency of the licensing process. “The awarding of contracts should be based on objective evaluation, not influenced by political or personal interests,” Gyeyir commented.

Non-compliance with awarding guidelines

Bypassing established guidelines and regulatory frameworks in the awarding process raises significant corruption concerns, according to NRGI. When rules are ignored, it increases the likelihood of favouritism and corrupt practices going unpunished.
“Awarding contracts outside established protocols puts the sector at serious risk of malpractice,” Gyeyir added.

Environmental and Social Obligations Ignored with Impunity
The report also warns that some companies fail to meet environmental and social obligations, with little or no consequences from the government. This neglect can lead to ecological degradation and long-term harm to local communities.
“Environmental accountability is non-negotiable,” Gyeyir emphasized. “We cannot allow companies to disregard these obligations and escape without repercussions.”

Transitioning with integrity: A call to action

NRGI’s training session underscored the need for Ghana to incorporate these red flags into policy revisions, aligning local regulations with global best practices. Mr. Gyeyir called on both current and future administrations to strengthen the integrity of award processes, prevent undue political influence, and ensure adherence to environmental standards.

“We must foster a culture of accountability,” Gyeyir asserted. “With global demand for transition minerals projected to rise, it’s crucial for Ghana to establish a governance framework that prevents corruption and supports sustainable development.”

Ensuring community benefits and long-term sustainability

NRGI also advocated for community ownership and development agreements to ensure that local communities derive tangible benefits from mining activities. The organization pointed to international examples, such as Sierra Leone’s community development agreements, as models that could be adapted for Ghana.

These agreements ensure that communities have stakes in the mining operations on their lands and share in the profits, facilitating local economic development.

In closing, Mr. Gyeyir called for greater collaboration across government, industry, and civil society to build a resilient transition minerals industry in Ghana that respects both ethical standards and the environment.

“Ghana must position itself as a model for transparency in transition minerals,” he stated. “We have an opportunity to create a sustainable sector that benefits all citizens—not just a privileged few.”

Need to review mining policy

 NRGI emphasized the importance of revising the country’s 2014 mining policy to include provisions specific to transition minerals, which were not adequately covered in previous policies. Transition minerals are critical to global green initiatives, and Ghana’s policies must align with international environmental and governance standards to attract responsible investment and uphold the country’s long-term interests. As global demand for transition minerals escalates, Ghana’s ability to manage corruption risks will be a determining factor in its success. NRGI and CSOs are hopeful that by flagging these risks, they can help create a corruption-resistant environment that serves the national interest and preserves the nation’s natural resources for future generations.