//The Amazon’s Gold Rush

The Amazon’s Gold Rush

In South America, the cartels have put aside the drug business, and now a much larger industry has emerged: illegal mining. This has brought with itself human trafficking, violence, and massive contamination of the the Amazon forest.

by Jorge Pilares

Drug trafficking has always been the central axis of South American criminal organizations. Figures like Pablo Escobar and the Colombian Cartel have been popularized and impregnated in pop culture. However, those days are far gone. As a result of the “War on drugs” led by the U.S, criminal organizations have shifted to a much safer but also more profitable sector: the gold industry.  

Tensions between the US and China during the last year, along with the global pandemic we are going through, have created a high uncertainty in the economy, bringing price of gold close to record highs. These events have been a catalyst for a gold rush in the Amazon, an area with a geography so complex that the presence of the state is close to non-existent, giving space for the strongest to claim what they want. According to a report by Global Initiative in 2016, it is estimated that in Colombia, about 80% of gold extracted comes from illegal mining, and in Venezuela it is as high as 90%. Today, gold is the main source of income for South American cartels, leaving drugs far behind. 

Deep in the jungle, operations are run by two groups: the informal and the illegal miners. The former ones are integrated by independent artisanal miners, while the latter ones are integrated by large groups of people recruited from neighboring towns that operate machinery valued in millions. Although both operate outside the law, it is the second group that really represents a danger to the environment and to the people. Illegal miners belong to criminal organizations that carry drug operations, human trafficking both for forced labor and sexual exploitation, and extorsions. 

In Colombia and Peru, these operations are mainly led by narco-terrorist guerrilla groups such as the FARC (Revolutionary Armed Forces of Colombia) and the Shining Path, respectively. Conversely, Venezuelan illegal mining is led by criminal gangs with strong ties to the Venezuelan government. Cartel of the Suns, the biggest criminal organization in Venezuela is allegedly headed by high ranked members of the Venezuelan army. These criminal organizations are connected with other trafficking organizations around the world, such as the Chinese and Russian mafia, and the Italian ‘Ndrangheta, which help transport the gold to European, Asian and US markets, where the gold can be refined and then sold to the highest bidder. 

One of the greatest damages caused by illegal mining is the destruction of the Amazon forest and its indigenous population. As a fundamental part of the gold extraction process, mercury and cyanide are utilized to separate impurities from gold. Only in Colombia, more than 170 tons of mercury were released into the Amazon river and forest in 2015. In Bolivia, it is estimated that approximately 36 kg of mercury is released for every kilogram of gold extracted (in 2016, Bolivia’s gold exports to the US were more than 10 tons). The toxic waste is not only harmful to the miners that are in direct contact with the chemicals, but also to the villagers of the surrounding areas. According to the Peruvian government, more than 60% of the fish sold in Madre de Dios, the region where illegal mining is predominant, had high levels of mercury. This chemical causes neurological diseases and malformation in fetuses and children. Additionally, huge areas of forest are burned or cut down to facilitate the extraction of minerals. Mercury contaminated waters and the destruction of the entire jungle ecosystem represent a big concern for the preservation of animals in danger of extinction.

As a result of the adverse effects of mercury, local economies are destroyed. Without the possibility of fishing or farming, neighboring towns find themselves without any source of income. This, in addition to the increasing criminal activity, has caused hundreds of thousands of people to leave their hometowns, which has created an exodus in Latin America. In 2012, it was recorded that 230,000 Colombians fled areas with high illegal mining activity. Moreover, the United Nations Office for Coordination of Humanitarian Affairs (OCHA) has reported the displacement of 27 indigenous communities due to the presence of these organizations. 

With an industry as labor intensive as illegal mining, a large amount of labor is required. For this reason, these organizations are also actively involved in human trafficking. Children and adolescents are usually sold or recruited since they are easy to lure and ideal to access narrow caves. Once they are taken to the mines, they are forced to work for several months before getting paid and allowed to leave. For these children, escaping is not an option, both due to physical threats and isolation. The mines are located so deep into the jungle that the only way to return to the nearest towns is a multi-day boat trip. Unfortunately, the only boats available are operated by the same organizations. Finally, after completing the labor of several months, the workers are paid a few grams of gold nuggets, which are later sold to locals for prices much lower than the market price. 

In addition to forced labor, human trafficking is also used for sexual exploitation. Girls and women are kidnaped or recruited with promises of jobs as waitresses or cooks. Once they arrive to the mining camps, they are given false identities to evade eventual police controls, and then forced to work in bars and restaurant as prostitutes. These mining camps are full of isolated men that have been away from their families and partners for several months, so the demand for these services is high, and sexually transmitted diseases are common. 

The advantage that gold offers to criminal organizations is huge because it can be easily laundered. This is usually done in formal and informal processing plants, where they either exaggerate the production of gold or falsify purchase receipts (for example, purchase receipts of golden coins which are later melted). This is an easy task since this is done in countries where regulations are few and inefficient. Once this process is completed, gold can be legally exported to countries with strict control systems for gold such as Switzerland, the United States or Dubai. Illegal gold is so difficult to detect that, according to a study led by Verité Research in 2015, 64 of the Fortune 500 companies had suppliers who had been involved in the acquisition of illegal gold. Even though there are many international conventions and initiatives by the private sector, the problem prevails due to the lack of commitment from governments where these illegal activities are perpetuated. This is because international certificates of origin are given to companies that possess national certificates of origin, which are easy to get without much control. Without a strong national legal foundation, the rest of the international documentation is useless. 

One of the problems in the fight against illegal mining is not differentiating between informal and illegal miners. A common practice in these countries is the use of the army to invade the illegal mines and destroy all the mining equipment. While this partially stops criminal organizations, it also affects tens of thousands of informal workers who are already in a vulnerable situation, creating more poverty and decreasing the trust in the law enforcement officers. However, the cause of the high illegal mining activity in Latin America is the inefficient bureaucracy. The problem begins with the undocumented: people who have not been able to obtain birth certificates and therefore do not possess any kind of identification documents. For these people, it is impossible to formalize their job positions, so they are forced to work informally, being more susceptible to work for criminal gangs. The problem then extends further, with mining permits. It is estimated that in Peru, it takes around 1200 days and a considerable amount of money to obtain the corresponding permits. Without being able to formalize a job or possess an official identity, it is impossible to have access to bank accounts, loans, and other financial services, which would certainly boost the formal mining industry in the region. 

Illegal mining represents one of the biggest problems in Latin America. The difficulty of eradicating criminal organizations without destroying the sources of income of innocent people in the process is difficult since the traditional use of force is not enough. The solution however sounds simple, but it is incredibly complex in reality: a more efficient and inclusive bureaucracy. By simplifying the legal processes and promoting it in rural communities, millions would have access to loans, allowing them to start their businesses formally. This would improve the working conditions for everyone, and leave labor exploitation behind. Until Latin American governments do not focus on this problem, the state is not going to represent an entity that gives people protection and offers opportunities, but rather an obstacle for their dreams of progress.