In collaboration with Cedetrabajo and the Alliance for Responsible Mining, Global Financial Integrity (GFI) presents its latest report, ‘The Gold Standard.’ This report examines illicit gold mining practices in Colombia and its effects on local mining communities, the environment, and trade.
In 2019, Colombia exported over 52 tons of gold worth an estimated US$1.75 billion to trading partners worldwide. As such, gold represents an important resource for the country, as well as an economic livelihood for many.
At the same time, Colombia’s gold sector has been plagued by many problems. To start with, there are certain qualities inherent to gold that make it vulnerable to illegal extraction, trafficking and laundering. Not only tremendously valuable, it is also portable and largely untraceable. Unlike narcotics, gold is not inherently illegal, and differentiating between legally and illegally sourced gold can be difficult. Moreover, legal requirements for transporting gold are less stringent than those for cash, making it relatively easy to move across international borders. These are all attractive aspects for Colombian criminal groups looking to maximize financial gains, shift profits from one jurisdiction to another, and minimize the risks of being caught. As a former Colombian Head of State has noted, “today, criminal mining brings more money to criminal groups, to guerrilla groups, to mafias … than drug trafficking.”
Regardless of whether the mining technique includes panning for gold in streambeds or extracting gold veins from rock, issues emerge within the sector. Many have pointed to the role of alluvial, or riverbed, gold-mining, 70 percent of which is done without any legal authorization. Yet to suggest that alluvial mining, which involves artisanal miners working in conditions of rural poverty, is responsible for the sector’s problems would be both simplistic and inaccurate. As Colombian gold expert Miguel Ángel Molino has noted, legality must be analyzed along two spectrums: first, extraction that ranges from legal to illegal, and second, commercialization that ranges from legal to illegal.
With this mind, Global Financial Integrity (GFI) has traced the sector’s vulnerabilities along the supply chain, from extraction to commercialization and exportation to international markets. In this report, GFI partnered with expert organizations from Colombia to explore what these vulnerabilities mean for the environment, for trade, and for artisanal mining communities themselves. The participation by these organizations ensures that a variety of perspectives are considered in exploring the problem – and in thinking of policy solutions.
This report is divided in two large chapters. The first looks at the country context in Colombia and why gold mining, with its long history, has recently been targeted by criminal groups. It then presents an analysis with environmental data that maps mining sites in relation to ecosystems and endangered species. Next, it presents an analysis by the Alliance for Responsible Mining regarding the challenges facing local mining communities.
The second chapter delves into trade issues. It begins with an analysis by the Centro de Estudios de Trabajo (Cedetrabajo) on trade misinvoicing within Colombia’s gold exports. Next, it presents
an analysis by GFI of trade data and risk factors for illicit transactions. The report concludes with a discussion of efforts by Colombian law enforcement to address the problem, and how future efforts could be strengthened through financial transparency strategies.