Traces of Gold: How Bi-regional Knowledge Exchanges can Mitigate Socio-Environmental Impacts of Gold Exploitation in Colombia
The expansion of mining activities in Colombia has led to socio-environmental contradictions that aggravate armed conflicts, environmental destruction, and land and water grabs. Because gold exploitation in Colombia and consumption habits in Europe are intimately connected, this article argues that knowledge exchange between the European and LAC regions can help mitigate these negative effects.
Due to the unprecedented commodity price boom of the last two decades, mining operations are intensifying throughout the Latin America and Caribbean region (LAC). In Colombia, this expansion has led to widespread socio-environmental contradictions that aggravate armed conflicts, environmental destruction, as well as land and water grabs.[i] It is estimated that between 2000 and 2016, at least 179 active socio-environmental conflicts were related to mining in Colombia.[ii]
This article argues that knowledge exchange between the European and LAC regions can help mitigate these negative effects. We highlight the linkages between the impacts of gold exploitation in Colombia’s Antioquia region and consumption habits in Europe through a global supply chain analysis. Since the European Union (EU) and Colombia have a close relationship and are self-described allies, we suggest that drawing on the respective strengths of both the European and LAC regions can mitigate socio-environmental stress related to mining.[iii] In the EU, exposure to LAC First Nations’ cosmovisions can motivate European consumers to minimise consumption of gold-carrying products. In Colombia, the government could integrate core European environmental law principles, such as the polluter pays principle and the precautionary principle, which stipulate that uncertainty or incomplete information are not reasons for postponing interventions to halt environmental degradation. Additionally, it could adopt stronger environmental standards governing mining operations inspired by EU legislation, such as increasing water recycling and reducing waste.
Case study: The socio-environmental impacts of mining in Colombia
Since colonial times, the region of Antioquia has been the main producer of gold in Colombia. Following the gold rush of the early 2000s, violence in the region has intensified, as illegal armed groups have consolidated their control over mining areas. This has increased territorial disputes in this region, which still produces 20% of Colombia’s gold.[iv]The 2011 census carried out by the Colombian Ministry of Environment estimates that over 90% of the gold mines do not have an environmental plan or license.[v] According to official statistics, only 5% of mining activities operate under proper environmental and safety practices.[vi]
Artisanal and illegal mining relies heavily on the use of mercury; it is environmentally harmful as the chemical waste poisons bodies of water. Most unlicensed gold mines are filled with toxic gases that negatively affect the miners’ health, which is further aggravated by their precarious working conditions. In these mines, the whole extraction process is conducted by hand and the mining material is carried on the miners’ back and shoulders. Not only are the miners placed into a dangerous work environment, they are also caught in the crossfire between illegal groups and the Colombian military.[vii]
Since thousands of families depend on unlicensed mining for survival, a lack of alternative opportunities is a key element in the maintenance of this situation. Consequently, the Colombian government is trapped in a dilemma: cracking down on illegal extraction and favouring international mining corporations puts the miners’ incomes at risk. Gold mining generates almost 50,000 jobs—around 40,000 of which are provided by illegal mining (80%)—while legal mining contributes the remaining 10,000.[viii] On the other hand, the formalisation and regulation of mining activities can reduce environmental damages and improve the working conditions of miners.
The global gold supply chain: From mines in Colombia to consumers in the EU
The main gateways for Colombian gold exports are international traders from the United States (US) and Switzerland, which are responsible for the majority of exports. International traders are also major conduits for illegally extracted gold: in 2016, their purchases of Colombian gold surpassed Colombia’s official production figures. These traders abuse Colombia’s free-trade zones to hide dirty dealings, since tax and customs regulations are weaker. Gold is also smuggled to Venezuela and Panama or shipped to the Netherlands via its territories in the Caribbean.[ix] Gold is notoriously difficult to track; it can be melted and mixed, rendering its origin untraceable. Even with existing due diligence practices, vast amounts of “illegal gold slip through the system.”’[x] Once gold leaves Colombia, there is no way of knowing whether it was procured from illegal mines, facilitating its unquestioned entry in the global supply. Figures 1 and 2 illustrate how gold enters an opaque network of transnational criminal networks, semi-legitimate traders and dubious refiners before reaching the global market.
In 2017, the EU imported 14 million Euros of gold from Colombia; however, most gold enters the EU in the form of jewellery and the circuit boards used in electronics.[xi] Data by the World Gold Council indicates that the overwhelming majority of gold demand arises from the rapidly expanding jewellery and technology industries.[xii]Illegally mined gold from Colombia inevitably ends up in smartphones, laptops, cars and even coins. A 2018 investigation by the Miami Herald exposed how a US-based trader sold illegally mined gold from South America to 67 different Fortune 500 companies, including Apple and Tiffany & Co.[xiii]
Whereas India and China dominate the global demand for gold, the EU is the largest single economy and trade block in the global economy. With 500 million consumers and more imports than the US, China, or India, a large share of products carrying gold ends up in the EU. A 2014 United Nations study points to the scale of EU electronics consumption, noting that nine of the ten largest producers of electrical and electronic waste per capita are found in Europe.[xiv] Echoing findings for other precious metals, such as tantalum, EU consumer behaviours are critical for global supply patterns, which in turn have local impacts in Colombia.[xv] Structurally reducing the consumption of gold-carrying products alters the global demand and price of gold, in turn dis-incentivising gold extraction in Colombia and elsewhere.
Figure 1: The gold supply chain in Colombia
Source: Organisation for Economic Co-operation and Development, “Due Diligence in Colombia’s Gold Supply Chain – Overview,” OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (Paris: Organisation for Economic Co-operation and Development, 2016), p. 10.
Figure 2: Illegal armed groups, criminal organisations and their relation to the gold sector. BACRIM stands for bandas criminales, or criminal gangs, while DTOs stands for Drug Trafficking Organisations.