Author: Cristian Darío Castro Urrego [1], Head of Governance for the Alliance of Responsible Mining, 11/2020

Small scale mining governance context: Who promotes it?

The current situation around the world with Covid 19 has made us look into our own abilities to find alternatives as individuals, State institutions, companies, and organized civil society in order to get out of the crisis and turn unfavorable phenomena on economy, sustainable development, and social dynamics as a whole into opportunities.

Such is the case of mining, specifically artisanal and small scale mining (ASM), a sector that makes its way through the reality of an armed conflict in several regions of the world and the context of global dynamics that determine the market, the price and mineral commercialization, such as the case of gold.

According to Reid and Lewis (2020), artisanal and subsistence miners “use rudimentary techniques – and number around 40 million worldwide, according to a 2019 estimate by Delve (an artisanal mining database). [Additionally], Those mining gold account for 20% of global gold supply, The World Bank estimated in 2013”.

Just the same, ASM governance has become highly relevant for the economic growth of several places in the world over the years, because of the opportunities it offers in income and employment generation for whole families dedicated to this ancestral mining activity.

For their part, responsible mining international standards have, in most cases, been based on the principles of the Sustainable Development Paradigm from the Club of Rome report (1975 growth limits), Brundtland report (1987) of The United Nations (World Commission on Environment and Development), The Earth Summit, 1992, Rio + 20, The Development Goals of the Millennium and The Sustainable Development Goals.

From the point of view of natural resources governance, especially ASM, there has been timid support from public organizations. This occurs at several scales and with different impacts. On that aspect, governments, despite their large bureaucratic structures on mining and high income generation for royalties, have not been able to grant a special, differential treatment to ASM in order to strengthen it. Civil society organizations have been the ones promoting and providing the biggest support to this type of mining and have had incidence to make an advance in natural resources and sustainable development governance processes where ASM is practiced.

 

Challenges of formalization and mining regulation

Additionally, mining regulations of developing countries in Latin America and Africa tend to focus more on the aspects of royalties than on ASM promotion and sustainable development, which are necessary to make it a legitimate and inclusive activity worldwide.

Mining regulations generally require “an array of requirements that ASM miners may not always comply with due to lack of economic resources, knowledge of requirements and staff trained in these issues to guide them. One of the concerns is that, as small miners, they have to comply with requirements that are similar to those of medium and large mining companies, and they do not have the technological and economic resources to stay up to date with those requirements” (ARM, 2020b), and their training process implies to assume a new burden of taxes and difficult procedures with mining and environmental authorities.

In fact, we can say that ASM performed responsibly and under sustainability criteria is supported with higher determination by international instances and organizations such as the Organisation for Economic Co-operation and Development (OECD), United Nations Environment Programme (UNEP), ARM, Solidaridad, Pact, or the United Nations Development Programme, among others. They do it from criteria based on compliance of international standards on environmental, labor, social and mining training issues, such as CRAFT code and the Fairmined standard (promoted by Alliance for Responsible Mining – ARM), which have been applied mostly on Latin America, Africa and Asia. Thus connecting gold mining in rural territories with global markets and chain supplies.

In the case of ARM, they have supported in the formalization processes of artisanal and small mining organizations by getting to know and attending the difficulties mentioned earlier that take place in several parts of the world to generate new employment, new formalization opportunities under a progressive goal achievement approach, international commercialization processes and with transparent chain supplies under the highest environmental, work, and social standards.

Clearly, a latent challenge is to achieve an including governance process among public and private actors to think ahead and implement strategies for ASMO miners to perform their activities through concerted promotion mechanisms, of organizational strengthening, and with a progressive reduction of barriers or limitations for ASM activity.    

 

ASM: an opportunity for all countries

Mining sector is relevant for all countries, and artisanal and small scale mining (ASM) takes a relevant place because of the gross of families that depend on these activities worldwide. Currently, special attention should be addressed to the fact that ASM is making its way through this difficult scenario of Covid 19, as a pillar of economic reactivation for Latin American and Caribbean countries, and it can especially become a table of salvation for families and communities that live out of their ancestral ASM activity (in Colombia it is also known as a subsistence activity).

In Latin America, there is a great effort from public entities, private companies, public opinion, as well as men and women miners, to create discussion spaces in virtual forums looking forward to the development of economic reactivation programs, new mining advancement schemes, post-pandemic scenario planning, mining formalization strategies, mining production under bio-safety protocols, market strengthening for a responsible ASM, and safeguards to help workers and citizens that see mining in general, and ASM responsible mining particularly, as an opportunity to generate income and reduce poverty.

Big and small scale mining as development engines is a commonplace idea in discussion scenarios, seen from the economic and social point of view, if carried out with proper awareness of environmental care. Thus, there are other aspects that  contribute to the economic reactivation in the context of Covid 19 that may generate great opportunities, employment and investment generation, such as the determining role that infrastructure plays on reactivation, the potential of agricultural sector, the importance of protecting businesspeople, the increase of commerce with neighboring countries and the articulation of work between national and regional authorities” (El Tiempo, 2020) to assist men and women miners who traditionally live out of ASM and that, at the same time, live with a deficit of public goods, utilities and services, or in a poverty condition in community terms.

 

Economic reactivation and international experiences

It is possible to say that these reactivation plans have examples in the history of humanity when, for instance, difficult times for populations during the great depression of 1929 come to be considered, which opened the way for the idea of a strong State intervention in the economy through investments to reactivate added demand, capability of selling and buying fluently, cash flow for all the sectors, and the use of the public expenditure tool on social services and labors; all of these coming from the thesis of economist John M. Keynes and the theorists of The Welfare State. 

Also, in a pragmatic way, we have examples of Chinese history with the four strategies of economic modernization and activation by Deng Xiaoping. “Deng adopted in 1978 the thesis of the Four Modernizations, announced by Zhou Enlai in 1964, which pointed out that scientists had to support China’s science, agriculture and defense modernization as a priority. He started from this thesis to give a decisive push to economy by means of an increase in productivity. It was about transforming the productive system for China to turn into a rich economy” (Montenegro, 2012).

In general, reactivation plans in the context of Covid 19 should make State investments flow, along with those from big companies, international cooperation and philanthropy to put resources into the pockets of several economic actors (small companies, cooperatives, associations, ASM organizations, women organizations, community organizations, vulnerable families, among others). This should take place with a strategic approach of design and implementation of local projects, subsidies and microcredits to activate the economies of the countries, especially in marginal urban zones and rural zones where there is ASM activity.

In global terms, there is a great bet on economic reactivation from many sectors, but responsible mining is one of the alternatives that may activate employment and cash flow faster in developing countries. However, it must be developed under international standards in the environmental, work, and social aspects; and focus on feasibility of mining operations in several territories in a way that bring a reduction of poverty for families in the context of Covid and Post-Covid 19.

  

The harsh reality, impacts of Covid and conflicts for resources

Not everything is idea planning nor it is peachy, given that the impulse of many institutions and organizations to think of economic reactivation has made a contrast with a difficult reality for men and women miners, because such new reality, has led to “border closure (…), to the dramatic reduction of employment and gold sale in international markets. (In fact), informal gold miners from South America to Africa are selling gold at almost 40% discounts” (Reid and Lewis, 2020). As measures to hold the adverse effects of the pandemic, sale inside their own countries and manage to increase cash flow in the territories are some options, despite international gold prices have paradoxically increased during the pandemic.

In Latin America and Africa, where mining business is a real alternative for economic reactivation, there are latent difficulties in the setting of the civil society of rural mining zones represented in “

In the case of Colombia, according to Eslava (2020), there are cases differentiated in the impact of Covid 19 on ASM families. Some miners still make an income since they have gone to work on their own, but there are other families that have been through hunger in the pandemic context due to mobility restrictions and health self-care. As a matter of fact, in regions such as ¨Chocó, Antioquia and Santander, (families dedicated to ASM) have had to skip meals since the beginning of the pandemic, and most of them have still done it in July 2020. The only exception to that tendency is on the families that live away from the city and take food from crops in their own plots ¨ (Eslava-Portal DELVE, 2020).

The answers from authorities have been diverse in the regions of mining vocation in Latin America and Africa, but a common denominator has been “the lack of government presence on the ground that has affected ASM miners’ capacity to operate. (In some mining zones of Colombia) AMS miners have received support in the form of food from the gold purchase stores to which they sell. (However, in contrast) this delay in government response was exacerbated by the lack of bank accounts amongst ASM miners, making direct transfers impossible.” (Eslava-Portal DELVE, 2020), making reference to money and subsidies granted by government agencies during the Covid 19 pandemic.

In addition to the above, sanitary crisis causes more conflicts for the access to natural resources, for which miners at all scales (small, medium and large) have to compete. However, these conflicts for resources are not exclusive of the ASM sector or appear only with Covid-19, but they become more acute in the poverty of certain zones or regions that see mining as their only means of survival.

Nevertheless, it is important to remember that mining, coexistence, and ASM conflicts are reflected on the territories and they also take place in other economic sectors and different activities. For example, in fishing, access to water resources, and land property rights associated to agriculture and cattle. In this sense, it is possible to say that there is a whole academic literature based on conflicts and forms of collective cooperation on Common Pool Resources (CPR), coming from pioneer concepts, theories and case studies by Elinor Ostrom (et.al., 2011), Economy Nobel Prize in 2009. 

In Volume 2 of this Opinion Blog, we will discuss the needs and alternatives for the creation of public goods in rural territories and participative budgets as opportunities for the development of mining communities and the strengthening of the artisanal and small scale mining (ASM) territory context.

About the author:

 [1] Cristian is a PhD on Political Studies from Universidad Externado de Colombia. He is a Professional in Government and International Affairs and Magister in Government and Public Politics from Universidad Externado in Double Degree with SIPA of Columbia University. He made a research stay at Institut d’études politiques de Paris (Sciences Po). Has been University Professor of History of Politic Ideas, Political Sciences and Project Formulation. He has performed as consultant for international organisms such as IFC World Bank, International Organization for Migration (IOM), and Management Systems International (MSI Programa CIMIENTOS – USAID). He also worked as Coordinator of Social Projects at Presidency of the Republic (Colombia Joven) and in the Ministry of the Interior of Colombia (Topics: Alliances for prosperity and oil conflict). He has also performed as researcher, writer of several academic publications and consultant for Corporación Opción Colombia, Escuela Galán, Alfil Proyectos Company, Fundación Imago, Fondo Acción and the company Signum Consulting.

References for both blogs

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