TNRC Blog - What shapes anti-corruption success and failure in renewable resource sectors?

What shapes anti-corruption success and failure in renewable resource sectors?

June 2023 | TNRC Blog Post

David Aled Williams, Principal Adviser, U4-CMI

In recent years, increasing policy attention, investment, and civil society action has been dedicated to tackling corruption's impact on the environment. As donors and members of the conservation community work to strengthen their efforts to address this impact, TNRC’s new evidence research approach was designed to answer the following research question: “What factors condition anti-corruption success and failure in renewable resource sectors?” The U4 research team adopted mixed methods with a varied investigator design, with three teams focused on three different country cases. The overall approach to these cases was rooted in the field of political ecology.

To answer the research question, research teams conducted over 300 in-field interviews, plus participant observation and surveys. Secondary data came from a systematic literature review, reviews of official documents, and environmental change data. The three cases chosen for in-depth study were: (i) a multi-sector case of community-led natural resource management in northern Madagascar; (ii) the case of community forestry reforms to tackle illegal logging and associated corruption in the Peruvian Amazon; and (iii) a case considering the use of e-payments in Vietnam’s forest sector. Briefs on those country cases can be found here.

In addition to findings specific to the three cases, we identified four overarching takeaways about what shapes anti-corruption success and failure in renewable resource sectors:

1. Addressing corruption is typically a secondary objective for aid-funded resource governance projects, resulting in limited bandwidth for analyzing and addressing it. Projects aiming to improve resource governance, or reduce illegality in resource use, sometimes include a secondary objective to reduce associated corruption. This is an understandable response on the part of project designers and implementors to the sensitivities of in-country anti-corruption work, especially when high-value resource commodities whose production is linked to criminal activity and/or political-economic elites are involved. Indeed, our research revealed that project implementers tended to be acutely concerned by, and aware of, how corruption potentially affected outcomes. At the same time, we encountered examples of unsound assumptions about how corruption operated that could confound project objectives. In Peru, for example, the approaches taken did not seem to account for the capture of provincial institutions by special interest groups, and how this might undermine project goals. A clearer focus on corruption from the outset would help teams identify the ways corruption could interfere with activities, as well as compromise goals, and design projects to more effectively respond to those threats.

2. Struggles over who benefits from resources are at the heart of environmental corruption cases and resolving these contestations should be central to responses. Our cases emphasized that powerful state authorities, particularly in provinces, tend to be captured by special economic interests, with some of this involving criminality and corruption. Authorities appear, in many instances, to be more accountable to these special interests than to the broader public interest. Yet, paradoxically, the assent and support of such authorities is often needed for aid-funded projects to proceed. In such instances, external actors (such as NGOs and donors) face acute dilemmas as to whom to cooperate with, and how. A crucial condition for anti-corruption success and failure in renewable resource sectors is therefore how well external actors understand their partners’ motivations, and how skilled project partners are in navigating highly politicized conditions where domestic accountability functions are minimal.

3. Interventions should be capable of grappling with the real politics of resource governance and environmental corruption. Resolving politics at the heart of environmental corruption appears vital, yet the interventions we studied adopted a primarily technical lens when approaching corruption problems, rather than a political one. At the same time, highly politicized debates around resource governance, as well as concrete actions (e.g., social movements and protests) continued during project implementation. It appeared to the research teams that the inadequacy of both state policies and aid projects in grappling with the real politics of resource governance and environmental corruption helped fuel, at least in part, despondency and/or alternate approaches on the part of concerned populations and groups.

4. Renewable resource corruption challenges go beyond specific countries and require regional and global action beyond discrete, timebound projects. Commerce in, and financing of, renewable resource commodities is global in scope, and regional and global markets make timber and other resource commodities immensely valuable. Interest in capturing as much of this value as possible, at various points of extended supply chains, drove many of the corrupt and criminal behaviors across the cases we studied. Targeting resource corruption through in-country, timebound, aid-funded projects thus faces inherent limitations if these interventions are not coupled with strategies to address regional and global resource governance dilemmas. Although there are several initiatives now working in this direction (e.g., on addressing illicit financial flows), our findings still point to a mismatch between the scale of the corruption challenge (across both space and time) and the scale of the response across globalized resource sectors. An example is the extended timescales some corrupt actors operate with.

Based on these findings, a number of anti-corruption good practices and recommendations emerge:

• Further strengthen corruption risk analysis and management approaches in conservation: Conservation interventions and projects face multiple corruption challenges. Corruption linked to political struggles over who benefits from natural resources in specific places must be properly understood if it is to be tackled. Conservation organizations and their donors must continue to train, consider the latest evidence and debates, as well as use the best available risk analysis and management methodologies for targeting corruption.
• Promote and facilitate donor coordination at the global, regional, and country levels on environmental corruption: Donors active in renewable resource sector initiatives could do more to coordinate across initiatives and projects at the global, regional, and country level. Our evidence points to a degree of competition and silos among, for example, bilateral donors, where important anti-corruption matters could fall in-between responsibilities. Although anti-corruption donor coordination groups sometimes exist in-country, in some cases they can be driven by fleeting interest that waxes and wanes as individual staff and policy priorities come and go.
• Further engage with and support civil society and journalists working on environmental corruption: Conservation organizations primarily engaged in implementing resource governance interventions and projects in specific geographies are now reaching out to, and collaborating with, civil society organizations and journalists on tackling environmental corruption. For example, WWF have launched a new practitioners’ forum with Transparency International, TRAFFIC, and the Basel Institute on Governance. This is a positive development that could help further ground understanding of the environmental corruption challenges that conservation organizations face in the places they work. Yet silos remain. Further cross-fertilization of knowledge and approaches among these types of organizations is likely to be beneficial for both constituencies.
• Safeguard young and Indigenous human rights defenders calling out environmental corruption: The main burden of tackling corruption should not fall on vulnerable members of society, yet our findings point to younger generations (e.g., students) and Indigenous environmental defenders continuing to place themselves at significant risk by calling out environmental corruption. Recent efforts by Mary Lawlor, the UN Special Rapporteur on Human Rights Defenders, and by Amnesty International, to highlight the risks to human rights defenders focused on both the environment and corruption must be further supported, with concrete legal and practical safeguards put in place for both students and Indigenous Peoples on these issues.
• Bolster data availability for transnational law enforcement on environmental corruption: Efforts to build serious law enforcement capacity to address corruption in particular countries continue and, in the longer term, all states must be capable of analyzing, investigating, and enforcing their anti-corruption and environmental legislation. But the pursuit of successful law enforcement on environmental corruption cases need not be hampered by corrupt special interests undermining enforcement in individual countries. Extra-territorial legislation such the US Foreign Corrupt Practices Act and UK’s Bribery Act can, for example, be used to pursue cases with a connection to the US and UK. Transnational law enforcement prospects could be further improved through the collation of relevant case data.

These findings and recommendations prompted discussion among staff focused on biodiversity and governance programming in USAID and WWF. They noted that some of the challenges presented relate to how to be effective upstream in aid project pre-design and strategic hiring. It was also suggested that governance and political constraints relating to renewable resources go beyond corruption, so an anti-corruption lens may be limiting. Poorly designed incentive systems to protect natural resources can fail because they are underpowered and/or underfinanced.