Costa Rica mining agency admits weak controls as scandal unfolds

March 6, 2009

To ensure that government officials are not favoring friends and family by awarding them valuable mining concessions, the agency in charge of processing and approving the concessions says it depends on the honesty of its applicants.

Tuesday, Environment, Energy and Telecommunications Minister Roberto Dobles resigned following allegations that he awarded a mining concession potentially worth several millions of dollars to a company controlled by members of his and President Oscar Arias´ family. Dobles and Arias are second cousins.

The same day, heads of the Geology and Mining Administration, an office under the Environment, Energy and Telecommunications Ministry (MINAET), called a press conference Tuesday to defend their agency.

While the agency´s Mining Code prohibits granting concessions to government officials´ “relatives in the first degree of blood relation,” the agency depends on a signed, sworn and notarized statement to confirm that is the case. The agency does no background checks into whether other corporations, owned by immediate family, own the one applying for the concession.

José Francisco Castro, the administration´s director, said the agency just doesn´t have the resources for that kind of follow-up, but acknowledged that it creates a loophole. He said that neither he nor Cynthia Cavallini, head of the National Mining Registry, had ever realized it until asked by The Tico Times on Tuesday.

“We follow the procedures required by law,” said Cavallini. “(To do further background checks), we would have to make a modification to the law.”

Both Castro and Cavallini said they had no idea that the agency was processing or had awarded any concessions that benefited members of Dobles´ or Arias´ family.

They later acknowledged that at least two other concessions were being processed that had ties to the same families.

The controversial concession that forced Dobles out of office, awarded in his first several months as minister in 2006, was given to a corporation where his uncle (and cousin to President Arias) is listed as vice-president. That corporation, in turn, is wholly owned by another, that is then owned by four others where Dobles´ wife, mother and two brothers are beneficiaries. Dobles has maintained that all his actions were legal.

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