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Artisanal Gold Mining in DRC: Time to Get Down to Earth

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Artisanal Gold Mining in DRC: Time to Get Down to Earth ecdpm’s Making policies work DISCUSSION PAPER No. 223 Artisanal gold mining in DRC: time to get down to earth By Karim Karaki March 2018 Summary In the Eastern provinces of the Democratic Republic of the Congo (where most of the Congolese gold is mined), artisanal and small-scale (ASM) gold mining contributes to the livelihood of about 200,000 miners and their families. This type of mining however, has a significant environmental and social impact. Development partners seek to support the sector and make it a vehicle for sustainable development. This comes with a range of challenges, because of the nature of ASM itself, and because of the local political, economic and social context in DRC. This study illustrates and sheds new light on some of the ASM realities in Eastern DRC. More specifically, it analyses the political economy of the ASM gold mining in Eastern DRC and the challenges and opportunities for economic development using a territorial development approach. There are three main implications for development partners: • Be realistic about what can be achieved, and work following a flexible and adaptive approach. • Foster vertical and horizontal linkages and synergies, in particular between ASM and agriculture, and ASM and large-scale mining. • Engage, facilitate and support partnerships between businesses, civil society organisations (CSOs), communities and formal and informal authorities. Discussion Paper No. 223 www.ecdpm.org/dp223 Table of Contents Acknowledgements ......................................................................................................................................... iv Acronyms ........................................................................................................................................................ iv 1. Introduction .................................................................................................................................................. 1 2. Understanding the political economy of ASM in DRC ................................................................................. 2 3. ASM as a spatial development challenge .................................................................................................... 8 4. Implications for development partners’ interventions ................................................................................ 13 Bibliography ................................................................................................................................................... 15 List of Boxes Box 1: ASM - an unorganised sector? ............................................................................................................. 3 Box 2: Land tenure system: content specific mix of formal and informal arrangements ................................. 4 Box 3: Example of rent seeking from ASM activities at local level .................................................................. 5 Box 4: Example of linkages between ASM and LSM .................................................................................... 12 List of Figures Figure 1: Political inclusiveness and developmental orientation ..................................................................... 6 Figure 2: Illustrative stakeholders interests and expectations mapping .......................................................... 9 Figure 3: Spectrum of mining activities ranging from informal artisanal to formal large-scale mining .......... 13 iii Discussion Paper No. 223 www.ecdpm.org/dp223 Acknowledgements ECDPM gratefully acknowledges the financial contribution of the UK Department for International Development (DfID) that made this study possible. The author would like to thank his colleagues Alfonso Medinilla, Jan Vanheukelom, Jeske van Seters and Dr San Bilal for their guidance and help in shaping the analysis, and tireless support and inputs. The views expressed in this study are those of the author only and should not be attributed to any other person or institution. Acronyms ASM Artisanal and small-scale mining CSO Civil society organisations CSR Corporate social responsibility DfID UK Department for International Development DRC Democratic Republic of Congo ECDPM European Centre for Development Policy Management FARDC Forces Armées de la République Démocratique du Congo FDI Foreign direct investment ICMM International Council on Mining and Metals IMF International Monetary Fund LSM Large-scale mining MNC Multinational companies NGO Non-governmental organisation OECD Organisation for Economic Co-operation and Development PEA Political economy analysis PFM Public financial management SAESSCAM Service d'accompagnement et d'encadrement du small-scale mining SDG Sustainable Development Goal UN United Nations iv Discussion Paper No. 223 www.ecdpm.org/dp223 1. Introduction Artisanal and small-scale mining (ASM) covers a wide spectrum of mining activities, the scale, features1 and legal status of which varies significantly from country to country. While there is no agreed common definition of ASM, it usually refers to low-tech, labour-intensive mineral extraction and processing (Hilson & McQuilken, 2014). In most Sub-Saharan African countries like the Democratic Republic of Congo (DRC), ASM is rooted in local history and part and parcel of the socio-economic fabric of society. ASM in the gold sector occupies about 10 to 15 million artisanal and small-scale gold miners worldwide, including 4.5 million women and 600,000 children (OECD, 2017); and represents a production of about 380 to 450 tonnes of gold per year, or 17–20% of the gold produced globally (Seccatore, Veiga, Origliasso, Marin, & De Tomi, 2014). In the Eastern provinces of DRC alone (where most of the Congolese gold is mined), ASM contributes to the livelihood of about 200,000 miners and their families. Gold production in the area is estimated at around 10 tons per year (BGR, 2010), of which 98% is undeclared, according to a United Nations (UN) Group of Experts.2 That said, rather than the contribution of ASM gold mining to employment and production, it is its negative attributes that attract most international attention, e.g. informality, mercury pollution, hazardous and unhygienic working conditions, prostitution, disease, drug abuse, and child labour (Hilson & McQuilken, 2014). This helps explain why some argue (e.g. Hilson & McQuilken, 2014) that until recently, ASM has occupied such a peripheral position on the economic development agenda of Africa, in comparison to large-scale mining (LSM). This applies both to governments and development partners. The World Bank, for example, between 1988 and 2012 dedicated USD1,4 billion to mining sector reform, stimulating foreign large-scale (mostly foreign) investment, and at the expense of ASM (Hilson, 2016).3 Even activities aiming to support ASM through finance, formalisation/regulation or capacity building, have had limited impacts - because of the informality, large size and complex nature of ASM, which makes it difficult to achieve significant broad- based impact, in spite of numerous positive initiatives (Sippl et al., 2012). For example, the World Bank’s DRC programme ProMines (Projet d'Appui au Secteur Minier)4 - a single donor trust fund, ‘failed to make sufficient progress’5 leading DfID to exit this fund. This suggests that supporting ASM is a complex and challenging endeavour, which requires development partners to adapt their programmes to the complexities of ASM and the local political, economic and social context in which ASM activities take place. This brief aims to reconcile the gap between policy and practice by illustrating and shedding new light on some of the ASM realities on the ground in the context of gold mining in Eastern DRC. It draws some implications on what these mean for development practitioners and other actors engaged in ASM in DRC. To do so, it seeks to draw some insights from two interlinked dimensions: the political economy of the ASM gold mining in Eastern DRC; and the territorial development approach, which looks more specifically into the value chains and sectoral linkages of ASM. 1 These may include e.g. the volume of production, the amount of capital invested or the number of people employed. 2 More information at: https://impacttransform.org/en/countries/democratic-republic-of-congo/ 3 However, these numbers should be treated carefully as LSM projects cost a lot, as opposed to small scale projects for ASM. 4 This programme includes results on improving living conditions of artisanal and industrial miners communities, improving the capacity of SAESSCAM (government service to support artisnal miners), or establishing a registration system for artisanal miners (more information at http://projects.worldbank.org/P106982/drc-growth-governance- mineral-sector?lang=en&tab=results) 5 More information at: https://devtracker.dfid.gov.uk/projects/GB-1-105844/documents 1 Discussion Paper No. 223 www.ecdpm.org/dp223 2. Understanding the political economy of ASM in DRC The exploitation of natural resources can effectively contribute to sustainable and inclusive development. Yet too often, resource-rich countries have failed to leverage the potential of their natural endowment and transform their economies (Bilal, 2017). The poor performance of some resource-rich countries can be explained by a number of economic (fluctuation in commodity cycles, the Dutch disease etc.) and political factors, including power relations and institutional settings (idem). The latter are of particular
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