Global Trends in Artisanal and Small-Scale Mining: What do these mean for Mongolia?

Climate change and the failure of traditional livelihoods, economic transition and collapse, conflict, and high mineral prices have led to a doubling of the ASM population in fifteen years to a total of around 30 million worldwide.[1]

Internationally, inspired mainly by rising prices for mineral commodities, the number of people directly engaged in ASM has increased from 6 million to 30 million, which is equivalent to more than 150 million people indirectly dependent on this activity. About half of the world's ASM miners extract gold resulting in 90% of all employment in the gold sector and generating 12-15 percent of all worldwide gold production. In this same period a range of mega-trends have created challenges and opportunities for fulfilling the human rights of artisanal miners and their stakeholders around the world. In this blog, we consider the case of Mongolia based on a research commissioned by the Swiss Agency for Development and Cooperation (SDC) and conducted by Estelle Levin in June 2014.[2]

The protection of human rights is a more prominent feature of governance of the ASM sector, though it is far from mainstreamed. John Ruggie’s 2011 Protect, Respect and Remedy Framework and the accompanying UN Guiding Principles for Business and Human Rights (UNGPS) has established the duties of governments and responsibilities of businesses (i.e. ASMOs, LSM and gold buyers) in fulfilling the human rights of stakeholders by private sector actors.[3] As businesses, Mongolian ASMOs must address how their activities impact the human rights of third parties; and the Mongolian state, as a signatory to the UNGPs, must support the ASM sector fulfil the human rights of its stakeholders. As citizens, individual artisanal miners have human rights themselves that must also be fulfilled.

The acceptance of the UNGPs as a mandate for action has led to strong attention to responsible sourcing by downstream companies that consume minerals produced by ASM. Supply chain due diligence – and in particular application of the OECD Due Diligence Guidance[4] - is now expected as a standard practice for preventing the worst abuses and ensuring the responsible sourcing of minerals. Particular attention is being paid to sourcing from artisanal and small-scale miners, since significant risks of human rights violations, environmental damage and commercial malpractice exist in this sector, leading to some buyers disengaging from this sector altogether. This is an opportunity for Mongolia to position itself as a source of responsible ASM on the back of the SAM and ESEC[5] projects’ achievements, on the one hand, and to promote its achievements to other countries as to what is possible on the other.[6]

There are other responsible sourcing initiatives that offer opportunities to Mongolia’s ASM sector. Fairtrade[7] and Fairmined[8] standards certify that a gold-producing ASMO complies with a range of performance-based standards on a diverse range of risks. The Responsible Jewellery Council’s (RJC) Code of Practices[9] and Chain of Custody Standard[10] set requirements for responsible sourcing from ASM, and engagement with ASM by LSM on whose concession the ASM may be operating. The Swiss Better Gold Initiative and Solidaridad’s Gold Program[11] are also targeting ASM producers. The Alliance of Responsible Mining’s Fairmined Initiative is presently operational in Mongolia, and there is scope for expansion of their activities as well as the potential involvement of the others mentioned here.

Due diligence on ASM is not only a concern of buyers from ASM, but of investors in large-scale mines. Financial investors (e.g. the International Finance Corporation, Banks, Investment Companies) and Mining industry associations (e.g. the Property Developers Association of Canada, International Council for Mining and Metals) give attention to ASM as a critical risk for LSM profit and resilience. ASM and LSM relations are particularly important for exploration and junior mining companies, who typically are first to engage ASM but with limited resources and uncertainty as to future mining activities. This trend is encouraging LSM to engage constructively with ASM on their concessions, a common occurrence – and one supported legally - in Mongolia.

ASM pose a risk to LSM, but it also works the other way round: the exploration boom, which has been taking place on the back of rising mineral prices in the past decade, is leading to widespread disenfranchisement of ASM as corporate mining companies appropriate mineral rights and thus land. ASM are being forced to reskill or relocate to more marginal sites with consequential impacts on their productivity, community, and environment. Revisions to the IFC Sustainability Framework in 2012 has provided some headway for protecting artisanal miners’ rights to a livelihood, but meaningful engagement of ASM and fulfilment of their rights is a rare achievement in the world of ASM-LSM relations. Consideration of ASM-LSM relations in the context of cooperation rather than co-habitation is an important step in the right direction, and an area where Mongolia is breaking new ground.

Internationally, the formalisation of the ASM sector and management and eventual eradication of mercury remain subjects of continued focus. Ongoing and recent legal and policy work in China, DRC, Mozambique, Colombia, and Peru, as examples, all present opportunities for shared experiences, both good and bad, with Mongolian counterparts on good governance of the ASM sector. A huge leap forward for mandating the intensification of efforts to formalise ASM occurred on October 10^th 2013 when the Minimata Convention was adopted and opened for signature in Kumamoto, Japan. Today, 100 countries, including Mongolia, have signed; the first ratification was by the USA on 6^th November, 2013.[12] This convention includes provisions to control and, where feasible, reduce mercury emissions, including from the informal ASM sector. It was SDC's experience which convinced participating governments at the 3rd Intergovernmental Negotiation Committee (INC) meeting about the pivotal role of formalisation in eliminating mercury.[13]

The encouragement and enablement of responsible ASM also remain high on the international agenda, with the issues of child labour and child protection, forced labour, and environmental impacts being increasingly in the limelight.[14] Renewed attention to slavery and human trafficking in Western legislation and media is likely to position forced labour (included indebtedness) as an emerging ‘hot topic’ in the world of ASM analysis and action.[15] NGOs and UN agencies are also shining a light on managing ASM in protected areas, as exemplified by work led by IUCN and the governments of the SADC region in 2014 to establish best practice guidelines for extractives (including ASM) in protected areas, as well as work done under the ASM-PACE programme.[16] Mongolian miners’ attitude towards the environment is a breath of fresh air, with miners proudly demonstrating their attempts to rehabilitate and in some cases restore mined out areas, quite in contrast to ASM in other parts of the world for whom the importance of environmental protection is not understood or accepted. SDC’s ESEC II project, being implemented by the Asia Foundation, is seeking to pilot new models of environmental rehabilitation amongst ASM and ELL is proud to have also supported this work.[17] Lastly, international actors seeking guidance on good practice in occupational health and safety also would do well to turn to Mongolia for inspiration – for the first time in my life, and at more than one mine site, artisanal miners gave me a security briefing before entering the workings.

• Tagged:
• Mongolia
• ASM
• Child Labour
• Human Rights