Gold Rush in Colombia: Part 1

by Amanda Tello

Colombia is one of the most bio-diverse, resource-abundant countries in the world. Home to the Amazon rainforest, the Andes mountains, la Guajira desert and the Pacific and Caribbean coasts, it contains more than “10% of the world’s plant and animal species.” Beneath the rich soil lie the keys to Colombia’s energy development as well as the sources of continual violence and displacement: oil, coal, emeralds, silver, nickel, copper and – gold. Before the arrival of the Spanish conquistadors, gold mining was an important means of survival for the indigenous population and continues to support millions of small-scale miners throughout the country. The recent surge in prices and demand for gold have sparked a modern-day “gold rush,” which has ignited a conflict between local communities and an influx of foreign corporations looking to profit from Colombia’s vast natural resources. The state’s desire to capitalize on the mining boom and present Colombia as an investment-friendly country has especially threatened Afro-Colombian and indigenous communities who inhabit strategically important territory and practice small-scale mining in many areas.

Mining Boom 

In recent years, the Colombian government has been campaigning to increase production in the extractive energy sector as a “development” strategy that will bring employment, infrastructure and wealth to the country. Beginning under the Uribe administration, the government implemented the “National Plan for Mining Development and Environmental Policy Vision Colombia 2019,” which seeks to “convert Colombia into a ‘mining country’” by establishing mining districts targeted for development. Current President Juan Manuel Santos has enhanced the government’s support for extractive industries, declaring mining an “activity for public utility and social interest” that will bring “prosperity to all.” Consequently, the number of mining licenses granted to individuals and multinational corporations (MNCs) has increased significantly in recent years. According to a report published by Peace Brigades International (PBI), “Mining in Colombia: At What Cost,” “between 1990 and 2001 in Colombia, 1,889 mining licenses were awarded (157 per year), but by 2010 there were already 8,928 concessions (4,839,149 hectares) and 20,000 applications pending.” In other words, 40% of Colombian territory has either been awarded or solicited by multinational corporations in the mining and energy sectors.

Minister of Environment; Right: Minister of Energy and Mining. El Tiempo

The modern “gold rush” in Colombia has been further fueled by the increase in market price and worldwide demand for the precious commodity, with a substantial portion of that demand emanating from the United States. The price of an ounce of gold increased from US $700 in 2008 to US $1,800 today, providing a strong incentive for corporations to invest in Colombia. Moreover, Vision Plan Colombia 2019 hopes to increase gold production from 40 tons annually to 80 tons in the next year. The combination of these factors has led to record foreign direct investment (FDI) in Colombia. During an interview at the World Economic Forum, Colombian Energy and Mining Minister Mauricio Cardenas said he “expects a $10 billion investment in crude oil, energy and mining projects in 2012.” In 2011 alone, “82% of the FDI in Colombia went to the energy sector” and overall investment grew by 113% to $14.4 billion.

Legislative Reforms 

With the hope that mining would become an economic “engine of growth,” the government enacted legislative reforms to benefit the mining industry. Law 685, referred to as the Mining Code, was passed in 2001 under the advisement of a law firm representing “half of the mining companies found in the national mining registry,” including a number of Canadian companies that now comprise 43.41% of the mining corporations in Colombia. Under this law, mining companies no longer need licenses for all phases of mining activity so they can begin the exploration phase without obtaining authorization. Subsequently, companies do not run the risk of losing their licenses due to potential environmental degradation or protestation from local communities.

Open Pit Mining Outside Segovia – PBI

Following a recommendation from the World Bank, Colombia “eliminated the State’s role in direct investment,” which not only limited its power to oversight and regulation but also “ended the possibility of State earnings from net returns.” Therefore, the state only benefits from the “surface rights fees and royalties that companies pay during exploration and mining phases.” Corporations also benefit from low royalty levels and tax exemptions, which are lower now than they were in the 1990s. Currently set at 4%, the royalty rates for gold extraction are so low that some experts argue Colombia is effectively paying “multinationals to extract their resources,” especially given the enormous environmental and social costs that large-scale mining operations often inflict.

The Plight of Afro-Colombians and Indigenous Peoples

Listening to President Santos’ rhetoric on the potential of the mining industry to create employment, foster security and alleviate poverty, it appears to be a win-win situation for citizens and corporations. However, a more complicated picture emerges when the plight of Afro-Colombian and indigenous communities are considered. Colombia is home to more than 102 indigenous groups totaling almost 1.4 million people and between 4-13 million persons of African descent. The competition over mining operations oftentimes threatens the resource abundant territories and livelihoods of Afro-Colombian and indigenous peoples, many of who have been mining in their communities for decades or centuries.

Although the Constitution formally recognizes the rights of Afro-Colombian and indigenous communities in the form of “collective land titles” and reserves, they face constant threats from armed actors and the “implementation of economic development or mega-projects,” such as mining. The government has further exacerbated the precarious plight of these groups by awarding mining licenses in indigenous reserves and collective territories belonging to Afro-Colombians without first obtaining the “prior and informed consent” of local communities – a right guaranteed in the Colombian Constitution as well as the UN Declaration on the Rights of Indigenous Peoples. For example, in July 2010, the UN Permanent Forum on Indigenous Issues determined that “mining concessions had been awarded in 80% of legally recognized reserves.” Not to mention, 27% of indigenous peoples and 60% of Afro-Colombians live outside of legally recognized territory and thousands of pending requests are being delayed in order to ensure the development of mega-projects.

Afro-descendent Community Lands – Indigenous Reserves -- PBI

Many inhabitants of these territories have been practicing small-scale, artisanal gold mining for generations. It is estimated that five million people subsist on small-scale mining in 44% of Colombia’s municipalities. However, many of these mines are not legally registered with Ingeominas, the government agency responsible for mining operations. According to reports from InSight, 6,000 small-scale mines are not legally registered, which comprises as many as 50% of Colombia’s mines. The 2001 mining code mandated that small-scale miners register their operations within a three-year period. Subsequently, the government was overwhelmed with requests and the “the legalization process quickly fell into a limbo.” Out of 2,845 requests submitted during the stipulated time period, only 23 were approved. Additionally, many miners in remote regions were not aware of the new requirements, lacked the resources to apply or found that their lands had already been ceded to MNCs.

PBI

Although small-scale mines produce the majority of Colombia’s gold, they face growing competition from primarily Canadian, English and South African mining corporations. As a result, small-scale miners “find themselves increasingly marginalized and in some cases persecuted for their traditional labor,” which is viewed as an obstacle to modern, industrial mining and investment. In fact, mncs have been found guilty of partnering with paramilitaries and other armed actors in order to intimidate labor union and community leaders and displace local populations from resource rich lands.

According to PBI and the National Mining Company Minercol Workers Union:

“80% of the human rights violations that have occurred in Colombia in the last ten years were committed in mining and energy-producing regions, and 87% of Colombia’s displaced population originate from these places.”

“At least 20 trade unionists from the mining and energy sector suffered attacks or attempted assassinations in 2010 and 78% of the crimes against trade unionists were committed in mining and energy areas”

According to professor and author Mario Murillo, the state’s support of large-scale mining projects and failure to obtain the “prior and informed consent” of impacted communities has paved the way for the disappearance and displacement of indigenous and Afro-Colombian peoples. Consequently, these marginalized groups make up a disproportionate number of the 3-4 million people displaced in the conflict thus far. It is estimated that indigenous peoples represent up to 7% of the displaced population and Afro-Colombians up to 17%. As PBI’s report astutely surmises, the decades-long conflict in Colombia is essentially a “competition over the use of the soil and subsoil for implementing economic projects,” in which Afro-Colombian and indigenous peoples are tragically viewed as obstacles to progress.

Special thanks to Peace Brigades International for their research on this topic.