Recommendations by the London Bullion Market Association (LBMA) to foster responsible sourcing by international bullion centres can help to reduce the illicit trade in gold mined in the Democratic Republic of Congo (DRC),
The LBMA, the global authority for precious metals, in November published recommendations for bullion centres such as Dubai with three main aims: the responsible sourcing of recycled gold, eliminating cash transactions and support for artisanal and small-scale mining.
The LBMA says it will only permit its Good Delivery List (GDL) refiners to source material from bullion centres which meet OECD standards.
According to The Sentry, an investigative and policy group, 95% of the gold mined in east and central Africa reaches Dubai, where it enters international markets. Armed groups and criminal networks benefit from the trade, The Sentry says. The UN says that conflict gold provides the largest source of revenue to armed groups in the eastern DRC.
The LBMA initiative is welcomed by Joanne Lebert, executive director of the Canadian conflict minerals research group IMPACT, who notes the association’s traditionally conservative stance.
“The centres are the ones that can address the issues most directly,” she says. “Expectations have not been communicated so directly in the past. The world now knows we have a serious problem.”Africa InsightWake up to the essential with the Editor’s picks. Sign upAlso receive offers from The Africa ReportAlso receive offers from The Africa Report’s partners
- If the recommendations are not followed, the LBMA will be able to advise avoiding sourcing gold from centres such as Dubai, leading to a “potential boycott”, says Lebert.
- The scheme has also been welcomed by advocacy groups The Sentry and Global Witness.
Research from IMPACT has shown how gold is illegally exported from the Kivu regions of the DRC to Rwanda, Burundi and Uganda on its way to Dubai. East African governments are partly the victims of the loose practices of some trading hubs as they lose out on tax revenues from gold smuggling, Lebert adds.
In some cases, she adds, governments in the region are also complicit in the trade.
Women in artisanal mining
Some artisanal gold production benefits armed militias in the DRC who are involved in human rights violations. Such gold is often seen as a conflict mineral, but Lebert stresses its potentially positive economic role.
The LBMA recommendations exclude artisanal and small-scale mining (ASM) from the no cash transactions policy. Lebert argues that there is ultimately a need to go beyond compliance issues and address wider development aims. Otherwise, she says, the process risks becoming no more than “white-washing for companies.”
- Africans often combine artisanal mining with other activities such as agriculture, she says. Artisanal mining will continue to exist and there’s no point pretending otherwise.
- “It’s not just about conflict minerals and human rights abuses. Artisanal mining can be a driver of development, if well managed.”
According to USAID, at least 40 million people globally work directly in ASM, and between 30% and 50% of them are women. They can benefit disproportionately in financial terms.
Researchers led by Doris Buss at Carleton University in Canada have found the women in ASM in Uganda can earn 335% more at a mine site compared with non-mining activities, while men earn 65% more.
But Buss’s research found that licenses in the DRC, Rwanda and Uganda were expensive and out of reach for most women.
- “Licensing procedures were bureaucratic, legalistic, requiring literacy, comfort with navigating bureaucracy and interacting with male government officials.”
- Women on average have lower educational levels and so find it harder to deal with state bureaucracies using English or French, finds the research.
Bottom line
Better regulation of artisanal mining means taking into account the role of women in the sector.
