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License to Drill

World Bank

A Manual on Integrity Due Diligence for Licensing in Extractive Sectors

Cari L. Votava, Jeanne M. Hauch and Francesco Clementucci

Reducing corruption in the extractive sectors is now a high priority of the global development agenda because of the degree to which such corruption can impede economic development and contribute to illicit financial flows (IFFs). This kind of corruption can prove complicated and intractable to eliminate because mitigating corruption in natural resource and extractive sectors requires enhancing transparency and improving the quality and effectiveness of regulatory governance in order to eliminate the loopholes which corrupt officials can easily exploit in ways that are very difficult to detect. According to Al-Kasim, Søreide, and Williams (2008, 8), “Many countries have experienced firsthand how easily a few benefits to a few decision-makers can undermine an entire industry and impede welfare improvements to a whole population. This is, nevertheless, what corruption is often about: relatively small benefits in the personal world of civil servants and politicians that are sufficient to alter the decisions they make as representatives of the state.”