In-depth Report Proposes Seven Solutions for Governments, Gold Industry to Bring Conflict Gold into Legal Trade
April 30, 2015 – A trade in illegally mined and smuggled “conflict gold” is fueling both high-level military corruption and violent rebel groups in eastern Democratic Republic of the Congo (DRC), according to a new report by the Enough Project.
While 70 percent of tin, tantalum, and tungsten mines in eastern Congo are now conflict-free, the report identifies that only 35 percent of gold mines are free from the control of armed groups or Congo’s armed forces. Gold smuggled from Congo is worth an estimated $400 million annually, with a significant portion benefiting rebel and Congo army commanders whose troops are responsible for attacks on local communities and rape.
The report, “Congo’s Conflict Gold Rush: Bringing gold into the legal trade in the Democratic Republic of Congo,” by the Enough Project’s Fidel Bafilemba and Sasha Lezhnev, offers an in-depth portrait of the conflict gold supply chain, from muddy artisanal mines where gold is dug out with shovels and pick-axes, through illicit transport routes in Uganda, Burundi, and Dubai, and out to international markets.
Fidel Bafilemba, report co-author and Enough Project field researcher, based in Goma, DRC, said: “Despite growing attention to the conflict gold trade, the documented smugglers of gold in Congo and neighboring countries continue to traffic with impunity. The Obama administration and the U.N. Security Council should place targeted sanctions against these smugglers who act as business partners to deadly armed commanders.”
Sasha Lezhnev, report co-author and Associate Director of Policy at the Enough Project, said: “Lessons from efforts to combat illicit gold trafficking around the world show that tighter controls only increase smuggling. Instead, strong incentives including progressive tax policies are needed to bring the gold trade into legal markets. If the Congolese government decreased its gold tax to 1 percent, national and provincial revenues would increase by over 800 percent, money that would be available for services urgently needed in impoverished Congolese communities.”
John Prendergast, Enough Project Founding Director, said: “Armed warlords from the FDLR and other militias as well as Congolese army commanders continue to trade gold for bullets in eastern Congo. Over $400 million in illegally traded gold is smuggled out of Congo every year, money that could be used for building school, hospitals, and roads. The U.S., European Union, and other actors with influence should support the Congolese government to launch a major anti-corruption initiative to prosecute corrupt officials and bring the trade into the legal sphere.”
Based on field research, the report notes growing momentum to address the deadly trade. Sixty-nine gold refiners, including all of the world’s nine largest, have passed third-party audits on conflict sourcing.
One major refiner, Kaloti, was delisted on April 13, 2015 for its failure to meet responsible sourcing standards in the U.A.E.
Gold mines in Congo are starting to be inspected using conflict-free standards, with 50 more gold mines due to be inspected in 2015. Industrial gold mining is also growing in Congo, as Banro and AngloGold Ashanti/Randgold Resources exported a total of 17.4 tons of gold in 2014 worth roughly $700 million, a major development over the past three years.
The report offers recommendations to help shift the DRC’s conflict gold market to a conflict-free, legal trade. Proposed steps include:
- The U.S. and European Union urge Congo’s Mining Ministry to temporarily halt the issuance of gold certificates by the International Conference on the Great Lakes Region (ICGLR), an intergovernmental organization of African countries in the African Great Lakes region, until the ICGLR takes steps to make the process compliant with regional standards.
- Congo’s Mining Ministry should allow mining cooperatives to apply for mining licenses.
- Socially responsible investors and jewelry retailers also have a role to play in signaling demand for conflict-free gold from Congo, and should set up a Congo gold responsible investment fund.
Images contained in the report are available for media use.
ABOUT THE ENOUGH PROJECT
For media use, short version: “The Enough Project, an atrocity prevention research and policy group.”
The Enough Project is a project of the Center for American Progress aiming to end genocide and crimes against humanity. Founded in 2007, Enough focuses on the crises in Sudan, South Sudan, eastern Congo, Central African Republic, Somalia, and areas affected by the Lord’s Resistance Army. Enough conducts intensive field research in conflict zones, develops practical policies to address these crises, and shares sensible tools to empower citizens and groups working for change. For more information, visit www.EnoughProject.org