Boycotting artisanal gold miners is not the answer

Switzerland's anti-corruption champion Mark Pieth thinks Metalor was wrong to drop artisanal miners.   

The sudden decision by the giant Swiss refinery Metalor to throw a blanket ban on gold from small-scale mines in Colombia and Peru is an understandable knee-jerk reaction to growing public horror at the human rights, environmental and organised crime issues linked to artisanal mining. 

Yet it is a short-sighted business decision, or rather, wilfully blind. 

It is true that conditions in many artisanal mines and their surrounding communities can be appalling and dangerous – particularly illegal mines hijacked by organised criminals rather than traditional mining communities where the activity is merely informal.

I have seen with my own eyes women handling mercury with their bare hands and men working 28-day shifts in slave-like conditions in precarious tunnels carved into the rockface, surviving in shanty towns notorious for gun violence, forced prostitution and hijacking like Peru’s La Rinconada.

But – and it’s a big but – if other refineries follow suit rather than engaging with the issues and trying to solve them, it will be catastrophic for the 100 million people worldwide who rely on artisanal mining for their livelihoods.

About 80% of miners work in small-scale mines, but generate only 20% of the 3,200 tonnes of newly mined gold that is refined worldwide every year. The remaining 80% of our gold comes from sprawling industrial mines owned by powerful corporations like US-based Newmont Mining and the Canadian multinational Barrick Gold.

Firstly, it is simply not economically possible to disregard 20% of the world’s gold production. If responsible refineries refuse artisanal gold, it will instead end up in the cauldrons of poorly regulated refineries with zero care for compliance in the United Arab Emirates or India.

Secondly, it is a basic factual mistake to believe that gold from large-scale industrial mines is any cleaner than artisanal gold.

Toxic substances leech into drinking water supplies and major rivers with fatal consequences, through the collapse of cyanide pools (such as the Baia Mare disaster in Romania) or toxic mine drainage after the mines are abandoned. Huge piles of contaminated waste rubble, or tailings, turn landscapes into no-go wastelands.

Violent land-grabbing facilitated by corruption is common: in Ghana, there is even a word, galamsey, for traditional miners pushed into illegality through forced displacement without compensation.

Mark Pieth is Professor of Criminal Law at the University of Basel. He is well-known for spearheading initiatives to combat corruption and money laundering in all its forms through regulation, country monitoring, compliance, advocacy and arbitration. (University of Basel)

Most importantly, the Organisation for Economic Co-operation and Development (OECD) in its Alignment Assessment 2018 deplores the “risk-averse approach to sourcing” that Metalor has been panicked into taking, and this form of “internal embargo” on artisanal mining. It’s not hard to see why: it doesn’t solve the problems faced by artisanal miners, but instead takes away their only source of livelihood while allowing the refinery to tick a box and turn a blind eye.

So, what should Metalor and other responsible gold refineries with the collective power to change the industry do?

First, acknowledge the scale of the problems and show willingness to engage – with the problems and with others trying to solve them.

Second, pinpoint the obvious no-go areas. Gold coming from conflict areas (like Sudan) or mined by children (child miners are common in many countries, including Burkina Faso, Niger and Côte d’Ivoire), for example.

And third, work together with other refineries to jointly tackle the issues of artisanal mining and help raise standards for those 100 million impoverished people who rely on it.

Metalor cites “resources to secure compliance” as a reason for its blanket ban on artisanally mined gold. But the cost of proper, transparent audits tracing back through the entire gold supply chain is mere pocket money for a refinery of this size – and if the refineries engage in collective action, it’s a matter of gold dust. 

Mark Pieth’s forthcoming book, Gold Laundering: the dirty secrets of the gold trade – and how to clean up offers an in-depth insight into the global gold trade, its history and influence on our everyday lives, and the environmental damage and human rights abuses it still causes today. It will be published by the Swiss publisher Salis on 19 June in German and 28 June in English.

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