Policy Dialogue on Natural Resource-based Development (PD-NR)

Domestic resource mobilisation


Corruption in extractives

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.

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 sophisticated, affecting each stage of the value chain with potential huge revenue losses for the public coffers.

Corruption in the extractive sector

Corruption in the Extractive Value Chain: Typology of Risks, Mitigation Measures and Incentives

The Typology of Corruption Risks, Mitigation Measures and Incentives in the Extractive Value Chain was released in April 2016 to provide a toolkit for identifying, assessing and proactively managing corruption risks across the extractive 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 Typology covers a broad spectrum of inter-connected policy areas, including licensing, procurement, tax issues and public financial management.

The Typology can 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.


Tackling BEPS in Mining

Co-organisers: OECD Centre for Tax Policy and Administration, and the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF)

Addressing base erosion and profit shifting (BEPS) is a high-priority issue for many developing countries raising revenue from mining sectors.

Reflecting the global commitment to counter practices resulting in the erosion of the domestic tax base, the OECD and the Inter-Governmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) have worked together to tackle twelve priority issues related to BEPS in mining. The objectives are to build a common knowledge base, improve understanding across governments and industry, and provide responses to those practices. These include excessive interest deductions; the design and use of tax incentives for mining investment; mineral product pricing for products with opaque markets; strengthening mineral testing and verification practices.

Limiting the Impact of Excessive Interest Deductions on Revenue

Tax systems that provide income tax deductions for interest without making any similar provision for equity create an incentive for the use of debt. While this is true of all industries, this note examines the particular base erosion risks from the use of debt by mining multinational enterprises. It responds to a concern of many developing countries that multinational enterprises use debt “excessively” in mineral-producing countries as a mechanism to shift profits abroad.





Monitoring the Value of Exports: Policy Options for Governments

This practice note aims to increase policy-makers’ knowledge of the process of determining the value of exported minerals. The focus is on determining the value (or quality) of mineral exports, not the quantity. While companies may underestimate both, verifying the value of minerals is more complex and requires greater technical expertise.





Tax Incentives in Mining: Minimising Risks to Revenue

This practice note looks at tax incentives in the mining sector. For many developing countries, receipts from mining are a major source of revenue. The central task for policy-makers, therefore, is to design fiscal regimes for the mining industry that raise sufficient revenue, while providing adequate inducement to invest.





Back to the Policy Dialogue on Natural Resource-based Development (PD-NR) homepage


Related Documents