Corruption & Environmental Degradation Client Briefing May 3, 2006 Jessica Dillon, Karma Ekmekji, Annie Feighery, Rachael Garrett, Matt Gray, Taki Johnson, Suzanne Jones, Thomas Legge, J.P. Leous, Arezou Raeisghasem, Karen Reilly Advisor: Professor Sara Tjossem A project for: Transparency International

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: Infrastructure Dams 10

11 Sectors: Renewables Logging Poaching 11

12 Sectors: Non-renewables Mining Oil Extraction

13 Social and Economic Welfare Environmental wellbeing Political Factors Economic Factors Social Factors Geography and Resource Base Environmental Governance Corruption Feedback 13

14 Social and Economic Welfare Environmental wellbeing Political Factors Economic Factors Social Factors Geography and Resource Base Environmental Governance 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 Ecuador 1) 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: Columbia University logo: Transparency international logo: Logging: myrtle%2520creek%2520pix/&h=681&w=1006&sz=164&tbnid=Tdzr05ZFJ2YULM:&tbnh=100&tbnw=149&hl=en&start=2&prev=/image s%3Fq%3Dlogging%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DG Dams: Mining: Oil pond: Axis of Oil: Global Corruption Report: Title Page and questions slide: Case Study: Oil Case Study: Logging Case Study: Dams english.epochtimes.com