The biggest challenge currently facing Africa and its mining industry was corruption and, if not addressed, would be the biggest destructor of Africa, bulk-materials handling solutions provider ELB Engineering Services Group CEO Dr Stephen Meijers said.

Speaking at the company’s Bulk Materials Handling Technology Day, held in Sandton last week, he attributed the prevalence of corrup-tion to decolonisation because Europe made its way back into Africa through the ability to bribe.

“Across Africa, at various projects, there was always a centre of money going into the wrong hands. Corruption went straight through – from government, mining companies, and engineering houses to our day-to-day living,” he said.

The only way in which this could be changed was if every person made the decision to oppose corruption, he said, adding that “we could not continue to point fingers at govern-ment while still encouraging corruption in whichever form”.

Meanwhile, advisory firm Ernst & Young states in its ‘Business risks facing mining and metals 2012–2013’ report that fraud and corruption was the tenth-biggest challenge mining companies were faced with in 2012 and will continue to face in 2013.

“Fraud and corruption remain on this year’s risk radar owing to the increased political risk we’ve observed in several key mining and metals companies’ investment destinations, and in their increased regulation and enforcement activities,” Ernst & Young states in the report.

The effects of fraud and corruption can impact on a company’s reputation, social licence to operate and bottom line.

Additionally, the extent of fraud and corruption and the associated effect on private and public citizens of countries have led governments to implement far-reaching regulatory changes, Ernst & Young says.

In response to new regulation and enforce-ment, companies are actively changing the way they do business through compliance monit- oring, an increased focus on third-party liabil-ity, which is determined through increased due-diligence initiatives around third parties as part of their corruption gap analysis, and encouraging whistle-blowing, Ernst & Young adds in the report.
“Bribery and corruption remain a threat to participants in the mining and metals sec- tor. Companies are increasingly concerned about the potential negative impact on their reputations and realise the importance of having an active anticorruption programme in place that includes continuous rather than periodic monitoring,” Ernst & Young fraud investigation an dispute services Oceania man- aging partner Paul Fontanot states in the report.

Meanwhile, Meijers also identified education and dramatic fragmentation as challenges facing Africa.

“Education was important, as Africa could only grow if Africans had pride, and the only way to be proud was to satisfy a person’s basic need for education and growth,” he said.

Further, he pointed out that dramatic frag- mentation was taking place in Africa, speci-fically in South Africa.

“South Africans have the habit of blaming others – ‘those people’ – when things go wrong. For the country to grow, we have to move away from shifting blame and return to being one nation.

We have to go back to being one nation to prevent other countries, such as Australia and Canada, from using our mining oppor-tunities,” he concluded.