VOICES FOR THE AMAZON

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THE CHALLENGE

IN THIS SECTION:

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Introduction
The Gold Rush
Why?
Where?
Latin America
Africa
Asia
How?

The problems with gold sourcing may seem overwhelming, complicated, and distant from your jewelry bench. In reality – it’s very close and personal. From the hands that wear your gold wedding bands every day to the hands of the person that pulled that gold from the earth – we all have a role to play in reducing the environmental and socioeconomic harm caused by the jewelry industry. 

Part of the challenge of addressing the problems within gold supply chains is that many of the realities are hidden from the public, consumers, and even those in the trade. It’s difficult to sell a luxury item without a romantic story, and it’s easier to focus on being a part of somebody’s love story or special moment, rather to think about the harm we create in others’ lives, such as an artisanal miner. The truth is – if you are willing to face the realities, you can be part of the best story in the world- one where the work you do creates meaningful and lasting benefit for the people at the foundation of your supply chain and the environment we all share.

In a 60 acre plot in the Amazon scientists found 1,104 different species of trees, just under what is found in Asia, Europe, and North America combined.

GLOBAL GOLD RUSH

An increase in the price of gold over recent years has spurred an epidemic of informal gold mining globally. The results of this sharp uptick in informal mining activities are far-reaching effects on deforestation, displacement of indigenous communities, and toxic mercury polluting air, water, soil, and food chains.[2]

Artisanal and small-scale gold mining releases more mercury into the environment than any other sector.[3]

It is important to acknowledge that much of the unregulated mining that occurs is being done by informal artisanal and small-scale mining (ASM) operations. For many people in gold rich regions, informal gold mining is often the most lucrative form of work and is a vital source of livelihood. At the same time, informal mining activity feeds corruption and crime through an unregulated system of financial flows.

In Latin America for example, it is estimated that about 28% of gold mined in Peru, 30% of gold mined in Bolivia, 77% of gold mined in Ecuador, 80% of gold mined in Colombia and 80-90% of Venezuelan gold is produced outside of a legal framework.[4]

Peru’s Manu National Park contains at least 1,307 species of butterfly, twice the number found in the United States.

Why?

Gold is rare, highly valuable, and easily traded. The price for gold has reached its highest historical level, rising from $265 per ounce in 2000 to $1350 per ounce in 2018. This strong demand for gold is driving more gold mining everywhere, including legally protected and indigenous lands. 

Artisanal and small-scale gold mining (ASGM) is often pursued as a pathway out of poverty or to supplement insufficient income. The prospect of higher earnings is attracting more informal miners to participate in the process. It is also appealing to organized criminal entities, particularly in areas with low levels of government oversight where the informal gold trade is often seen as low-risk, high-reward.[6]

In 2014, it was estimated that 70,000 miners were operating in the Peruvian Amazon, having destroyed nearly 60,000 hectares of forest.

Where?

Informal gold mining occurs all over the world with heavier concentrations in countries located in Asia, Africa, and Latin America. Informal mining happens particularly in areas considered to have low and middle levels of income and a reduced capacity for oversight and good governance.

Latin America

The rate of informal gold mining in Latin America is accelerating. The number of miners recorded in 1999 at 641,875 ASM operators increased to over 1.4 million as of 2014.[7] Informal mining has reached epidemic levels in and around the Amazon Rainforest. As of 2018, there were at least 2,312 illegal mining sites and 245 large-scale areas where miners dredge for gold spanning Brazil, Bolivia, Colombia, Peru, Ecuador, and Venezuela.[8] In Peru, a majority of the mining is being done in protected areas in Madre de Dios and surrounding regions. In Latin America, the impacts of ASM are tied to challenges involving the environment and indigenous rights.

Africa

Informal gold mining is common in many areas of Africa with concentrations varying across countries. In most African countries, between 5-20% of the population is directly involved in artisanal mining.[9] The Democratic Republic of the Congo and Sudan are each home to more than 1 million miners with Ghana, South Africa, Sudan, Mali, Burkina Faso, and Tanzania being among the top gold producing countries. Between 40-50% of the ASM workforce in Africa are women – in some places, like Guinea, this number is as high as 75%.[10] In Africa, it is common for children to take part in ASM and work is largely driven by socioeconomic reasons. Large amounts of gold have been found to be smuggled out of Africa every year and much of it goes to Dubai. In these instances, the potential earnings from the export are often missed as taxes are not paid to the producing countries.[11] In African countries, the commonalities most tied to ASM include sustainable community development and health issues related to HIV/AIDS. 

Asia

Asia is also a major producer of gold with legal regulations and practices that vary across countries. In Asia, ASM is also seen as an additional source of income and is often tied to agricultural activity. The combination of agricultural activity and mining makes some areas in Asia subject to significant risks for pollution related to the use of mercury.[12] Informal gold mining is especially common in China and Indonesia. Indonesia drew international attention after the collapse of two unlicensed gold mines and another incident where 13 gold miners died of carbon monoxide poisoning in 2019.[13] Despite having laws in place for mining licenses and government supervision for safety practices, the complicated nature of obtaining a mining license can take years. Counter to their potential to generate revenue as a formal entity, informal  mines can cause governments to lose money through unpaid taxes and pollution. In Indonesia, the government allocated $20 million of its 2018 state budget to reclaim soil polluted by mercury and cyanide from unregulated gold mining, though they still note that it is an uphill battle.[14]

On average, 20-250 lbs of earth need to be mined to make one gold wedding ring.

How?

Several factors contribute to the anonymity of gold. Its physical properties make it easy to trade high values in small quantities and allow it to be easily mixed with other gold sources to enter legitimate supply chains. Gold is recognized as a form of global currency and provides reliable returns, thus making it a useful medium for exchange in illicit activities by various actors. Gold can be easily smuggled and traded. Transactions for the trade of gold are often underreported or not reported at all. 

In some cases, governments take part in illicit gold trade – making the task of stopping illegal flows all the more challenging. For instance, in 2019, Reuters found billions of dollars worth of gold being smuggled out of western African countries and going to the United Arab Emirates.[15] With billions of dollars of product leaving these countries unreported and no export tax paid, the producing countries miss out on important opportunities for the state to generate revenue that could support sustainable development. Furthermore, the unreported trade of gold makes it nearly impossible to trace the chain of custody of the gold and know who it may have benefited or harmed in the process. 

According to the United Nations Environment Programme artisanal and small-scale gold mining is now the number one release of mercury in the world.

In the News

(click on title to read) 

How Drug Lords Make Billions Smuggling Gold to Miami for your Jewelry and Phones (Miami Herald 2018)

Gold Worth Billions Smuggled Out of Africa (Reuters 2019) 

The Hidden Cost of Jewelry (Human Rights Watch 2018)

Deforestation in the Amazon (Council on Foreign Relations 2016)

Sources

[2]Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF). (2017). Global Trends in Artisanal and Small-Scale Mining (ASM): A review of key numbers and issues. Winnipeg: IISD.

[3]United Nations Environmental Program (UNEP), 2017. Global mercury supply, trade and demand. United Nations Environment Programme, Chemicals and Health Branch. Geneva, Switzerland. https://wedocs.unep.org/bitstream/handle/20.500.11822/21725/global_mercury.pdf?sequence=1&isAllowed=y   https://wedocs.unep.org/bitstream/handle/20.500.11822/21725/global_mercury.pdf?sequence=1&isAllowed=y

[4]Global Initiative Against Transnational Organized Crime. (2016). Organized Crime and Illegally Mined Gold in Latin America.  Global Initiative Against Transnational Organized Crime. https://globalinitiative.net/wp-content/uploads/2016/03/Organized-Crime-and-Illegally-Mined-Gold-in-Latin-America.pdf

[5]“LBMA Historic Gold Price.” ICE Report Center – Data, https://www.theice.com/marketdata/reports/178. Accessed August 19, 2019

[6]Vella, H. (2018, September 24). The rising risk of gold supply chains in South America. Retrieved from https://www.mining-technology.com/features/the-rising-risk-of-gold-supply-chains-in-south-america/

[7] Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF). (2017)

[8]Darlington, S. (2018, December 10). Illegal Mining, ‘Worse Than at Any Other Time,’ Threatens Amazon, Study Finds. Retrieved from https://www.nytimes.com/2018/12/10/world/americas/amazon-illegal-mining.html

[9] Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF). (2017)

[10] Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF). (2017)

[11] Lewis, D., McNeill, R., & Shabalala, Z. (2019, April 24). Gold worth billions is smuggled out of Africa – new analysis. Retrieved from https://www.reuters.com/investigates/special-report/gold-africa-smuggling/

[12] Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF). (2017)

[13] VOA News. (2019, March 14). Illegal Mining Endangers Lives, Environment in Indonesia. Retrieved from https://www.voanews.com/east-asia-pacific/illegal-mining-endangers-lives-environment-indonesia

[14] VOA News. (2019)

[15] Lewis, D., McNeill, R., & Shabalala, Z. (2019)

»Introduction

»About This Toolkit

»The Challenge

»The Cost

»What Has Been Done So Far?

»What Can We Do?

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