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Risk Analysis of Indicators of Forced Labor and Human Trafficking In Risk Analysis of Indicators of Forced Labor and Human Trafficking in Illegal Gold Mining in Peru Table of Contents Executive Summary ..................................................................................... 4 Map of Peru and Departments under Study ............................................... 7 List and Description of Common Terms and Acronyms .............................. 8 Research Methodology ............................................................................... 9 Research Team ......................................................................................... 9 Research Timing and Locales ................................................................... 9 Interviews .............................................................................................. 10 Data Analysis .......................................................................................... 12 Background ............................................................................................... 14 Gold Production ..................................................................................... 14 Economics of Gold Production ............................................................ 15 Gold Production in Peru ......................................................................... 16 Peruvian Gold Exports ......................................................................... 17 Artisanal, Informal, and Illegal Gold Mining in Peru ........................... 17 Problems Related to Illegal Gold Mining in Peru ................................... 20 Forced Labor and Human Trafficking .................................................. 21 Child Labor .......................................................................................... 22 Health and Safety ................................................................................ 23 Environmental Damage....................................................................... 24 Gold Laundering and Exports of Illegally Produced Gold .................... 25 Government Enforcement Efforts .......................................................... 27 Government Efforts to Combat Forced Labor and Human Trafficking 27 Government Efforts to Combat Illegal Mining .................................... 30 Challenges to Government Enforcement Efforts ................................ 32 Corporate Social Responsibility Initiatives ............................................. 33 Research Findings ...................................................................................... 36 Research Findings in Madre de Dios ...................................................... 36 Background ......................................................................................... 36 Indicators of Forced Labor .................................................................. 39 Child Labor .......................................................................................... 42 Health and Safety ................................................................................ 43 Sex Trafficking ..................................................................................... 45 Gold Laundering .................................................................................. 48 P a g e | 2 Research Findings in Cusco .................................................................... 50 Background ......................................................................................... 50 Indicators of Forced Labor .................................................................. 51 Child Labor .......................................................................................... 53 Health and Safety ................................................................................ 53 Sex Trafficking ..................................................................................... 53 Gold Laundering .................................................................................. 54 Research Findings in Puno ..................................................................... 55 Background ......................................................................................... 55 Indicators of Forced Labor .................................................................. 57 Child Labor .......................................................................................... 60 Health and Safety ................................................................................ 61 Sex Trafficking ..................................................................................... 62 Gold Laundering .................................................................................. 63 Research Findings in Arequipa ............................................................... 64 Background ......................................................................................... 64 Indicators of Forced Labor .................................................................. 65 Child Labor .......................................................................................... 73 Health and Safety ................................................................................ 73 Sex Trafficking ..................................................................................... 74 Gold Laundering .................................................................................. 74 Conclusions and Recommendations ......................................................... 77 Recommendations to the Government of Peru ..................................... 77 Recommendations to the Government of the United States ................ 79 Recommendations to Buyers and Corporations .................................... 80 Appendix 1: Presence of ILO Indicators of Forced Labor .......................... 82 Appendix 2: Sample Interview Questions ................................................. 94 Bibliography ............................................................................................ 102 Endnotes ................................................................................................. 111 P a g e | 3 Executive Summary Verité carried out desk and field research on forced labor and human trafficking in illegal gold mining in Peru from August 2012 through January 2013 with the support of Humanity United. In August, Verité conducted desk research, a mapping of production areas and the supply chain of Peruvian gold, and expert consultations in order to prepare for field research. During September 2012, Verité carried out expert consultations in Lima and expert and worker interviews in the Departments of Madre de Dios, Cusco, and Puno. During January 2013, Verité carried out field research in the Department of Arequipa and additional expert consultations in Lima. In total, Verité interviewed 33 experts (representatives of NGOs, government, and academia), 95 workers directly involved in gold mining, and 79 other individuals (labor intermediaries,1 an employer, gold buyers, gold processors, jewelry sellers, independent gold producers, cooperative members, union representatives, sex workers, worker transporters, child mechanics, cooks, and a teacher).2 Verité analyzed the findings in accordance with the International Labour Organization’s (ILO) guidance on indicators of forced labor, as well as the United Nations’ Protocol to Prevent, Suppress and Punish Trafficking in Persons Especially Women and Children, and drafted this report in January 2013. Verité’s research indicates that Peru is one of the world’s largest producers and exporters of gold. Verité’s research also suggests that over 20 percent of Peru’s gold is produced illegally, and that indicators of vulnerability to forced labor are present in the illegal mining sector. Verité found evidence that illegal gold is often “laundered,” after which it makes its way into Peru’s exports and the global supply chain. Although there are few official statistics on the amount of illegally produced gold that makes its way into global markets, Verité found cases in which gold exported to Switzerland could be traced back to areas in which the vast majority of gold is produced illegally and/or in which indicators of vulnerability to forced labor and human trafficking were present. In addition to using a large amount of gold in its banking sector, Switzerland is a global clearinghouse for gold, with much of the gold it imports eventually making its way into gold bullion, jewelry, watches, and electronics that end up in the hands of consumers in countries around the world. During research on forced labor in illegal gold mining in Peru, Verité found a number of indicators of vulnerability to forced labor in the Departments of Madre de Dios, Cusco, Puno, and Arequipa. Verité also collected some data on child labor, health and safety, and sex trafficking during research activities, although these issues were not the focal points of the research. Verité’s research was qualitative in nature and sought to determine which indicators of forced labor could be found in gold production in a variety of Departments in Peru rather than making a determination of whether there was a significant incidence of forced labor in Peruvian gold mining or in Peru as a whole. Therefore, this study cannot claim to be statistically representative on a national or sectoral level. Worker interviews carried out by Verité and complimented by desk research and interviews with experts and other actors suggest the presence of a variety
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