Last year, Congolese civil society leader Eric Kajemba helped broker a deal between the army, local authorities, three powerful Congolese families and a Canadian mining company to demilitarize the Mukungwe gold mine in the Democratic Republic of the Congo (DRC).
The mine supports 5,000 thousand so-called “artisanal” gold miners, who work in harsh conditions and have for years lived under constant threat of extortion and violence by armed groups, the military and criminal gangs.
Kajemba’s efforts, and the support from the mining company and the Congolese government, were made in part because of growing international pressure to ensure that minerals don’t finance or fuel violent conflict or human rights abuses when mined in conflict zones.
Yet this same push for “conflict-free” minerals has also created new challenges for mines in eastern Congo, like Mukungwe, to access formal gold markets, mainly because of unreasonably high expectations from the market that go beyond international standards.
In 2010, the US Congress adopted section 1502 of the Dodd-Frank Act, obliging public companies to report on products containing certain minerals that may be benefiting armed groups in the DRC. The European Union also proposed a draft regulation in March 2014 on responsible supply chains of minerals from any conflict area worldwide. An OECD Due Diligence Guidance was singled out in both cases as the key standard for companies to maintain responsible mineral supply chains.
Gold is targeted by these efforts and the big players in the gold industry have taken note. The London Bullion Market Association (LBMA) made it mandatory for its refiners to undergo annual audits that would demonstrate they sourced gold responsibly and in line with the international standards set by the OECD. The World Gold Council and the Responsible Jewellery Council adopted voluntary certification schemes to implement the OECD’s due diligence guidance. The Dubai Multi-Commodities Centre also adopted audits requirements for its refiners in 2012.
The audited LBMA refiners alone cover 85 to 90 percent of gold produced annually and it’s tempting to say “mission accomplished,” since the gold market is largely conflict-free. However, shrinking the last 10 percent of the informal gold will be crucial. In 2013, more than $115 billion worth of gold was produced. Even if only 5 percent of that production benefited armed groups or criminal organizations worldwide, that’s still almost $6 billion that ended up in the wrong hands.
In contrast to the formal gold industry, there has been little progress towards creating responsible supply chains of artisanal gold — 90 percent of the global gold mining workforce.
For the rest of this column, click here: http://www.huffingtonpost.com/oecd/responsible-gold-also-mea_b_7108464.html