ARTISANAL AND SMALL- SCALE MININGapi.ning.com/files/X8RfJU1r51ddxlXJzyP3LrAHtOAEQAsCvZUQGXADv-KrP4*dn… · Artisanal and Small-Scale Mining Page 5 I. INTRODUCTION Although governments

ARTISANAL AND SMALL-SCALE MINING

Improving the Contribution of Artisanal and Small-Scale Mining to Sustainable Development

Artisanal and Small-Scale Mining Page 2

TABLE OF CONTENTS

Abbreviations

I. INTRODUCTION

I.1. Profile of Artisanal and Small-scale Miners I.2. The Vicious Circle of Poverty I.3. ASM and the Millennium Development Goals (MDGs)

I.4. Major Issues in ASM

II. ENVIRONMENTAL ISSUES

II.1. Environmental Impacts of ASM II.2. Protecting the Environment in ASM

III. SAFETY AND HEALTH ISSUES

III.1. Dangerous and Health Threatening Working Conditions III.2. Improving Working Conditions

IV. WOMEN IN ASM

IV.1. Gender Discrimination in ASM IV.2. Assisting Women in Mining: Gender Sensitive Approaches IV.3. Women’s Mining Associations IV.4. Implications for Children

V. CHILD LABOUR IN ASM

V.I. Eliminating Child Labour in Mines V.II. addressing Child Labour Issues in Mining Policies and Development Programmes

VI. RELATIONSHIP WITH LSM

VI.1. ASM-LSM Conflicts VI.2. Cooperation between LSM and ASM: Improving Relations

VII. POLICY AND LEGAL ISSUES

VII.1. The Difficulties Faced by ASM to Operate in the Legal Domain VII.2. Improving the Regulatory Environment VII.3. Law Enforcement


VIII. LEGAL AND TRANSFERABLE RIGHTS

VIII.1. Informal Land Rights VIII.2. Formal Property Rights VIII.3. Allocated ASM Areas

IX. ACCESS TO FINANCE AND CREDIT

IX.1. Constraints on Obtaining Credit IX.2. Improving Finance Systems

X. MARKET ACCESS AND CERTIFICATION

X.1. Reasons for Illicit Marketing X.2. Better Markets for ASM Products X.3. Certification

XI. ORGANISATIONS AND ASOCIATIONS OF ASM

XI.1. ASM Associations XI.2. ASM Cooperatives XI.3. Unions and Syndicates

XII. ALTERNATIVE INCOMES, LIVELIHOODS

XII.1. Constraints to Exit ASM

XII.2. Promoting Alternative Livelihoods (enterprise development, opportunities within the LSM sector & agriculture)

XIII. CONCLUSION: TABLE OF RECOMMENDATIONS

BIBLIOGRAPHY


Abbreviations

ASM: Artisanal and small-scale mining

CASM: Communities and small-scale mining

DFID: Department for International Development

ILO: International labour organisation

IPEC: International Program on the Elimination of Child Labour

KPCS: Kimberley Process Certification Scheme

LSM: Large-scale mining

MDG: Millennium Development Goal

SSM: Small-scale mining

TAWOMA: Tanzanian Women‟s Miners‟ Association

UNECA: United Nations Economic Commission for Africa


I. INTRODUCTION

Although governments have their own interpretations of artisanal and small-scale mining (ASM),

defined according to criteria such as workforce size, production and revenues, ASM is generally

identified in international development circles as the most rudimentary branch of the mining

sector. ASM is usually defined as a low tech, labour intensive mineral processing and excavation

activity. ASM has become an integral segment of the developing world‟s rural economy.

“There are signs that the development sector is increasingly recognizing the opportunities

artisanal mining communities present for development processes. Heads of State meeting at the

2007 G8 summit highlighted the importance of the artisanal mining sector and reaffirmed the

need for increased support to CASM and other organizations working on artisanal and small-

scale mining issues.”1

Individuals may be involved in ASM activities for a number of reasons: traditional ASM activities;

gold or diamond rush ASM activities; temporary ASM activities; isolated and remote ASM

activities without or with very little involvement in nearby communities; seasonal ASM activities

within the agricultural cycle; or poverty driven.

I.1. Profile of Artisanal and Small-scale Miners

Artisanal mining represents the bottom end of the small-scale mining sector. Artisanal mining

typically uses manual labour, simple tools, and basic recovery and processing techniques. Small-

scale is also labour intensive but employs a higher level of mechanisation and more sophisticated

processes.

Miners include subsistence farmers and their families working on a seasonal basis. A large portion

of the miners are migrant workers. ASM is frequently migratory as miners move from site to site

in search of minerals. A combination of practical, economic and social factors including the life

of the mine; the lure of high-value mineral strikes in other areas which create a „rush‟ to that site;

exclusion from the arrival of a LSM company or the agricultural season explain the rate at which

they move and the geographic area within which they travel. A huge variety of minerals are mined

on an ASM basis in Africa including: gold; precious stones; semi precious stones; industrial

metals and minerals, building materials and consumables such as salt. Due to technical

limitations, operations are usually confined to surface mineralization and shallow underground

workings. In many countries, most of the artisanal and small-scale miners produce gold which

has the advantage of being relatively simple to extract, refine and transport.

1 Jon Hobbs, DFID representative and chairman of CASM


Despite the actual and potential economic value of this livelihood, those occupied in the ASM

extraction are among the poorest and most marginalised members of the community.

The major characteristic of ASM is the low barriers to entry. The basic requirements for the start-

up of a new mining operation in terms of skills, investment capital, infrastructure,

implementation time and minimum reserve are lowest for ASM, especially for artisanal mining

growing with increasing scale of operations. Due to this limited barriers to entry, a large number

of people are involved in the sector in developing countries. Moreover, as a highly labour-

intensive activity, ASM provides employment for a significant number of people, particularly in

remote rural areas, where alternative livelihoods are rare and low paying.

The absence of formalisation in ASM together with the seasonal and migrating character of the

activity makes the administration and control of the sector extremely difficult.

I.2. The vicious circle of poverty

Poor and inadequate policies, inefficient equipment and an inability to diversify income-earning

activities may be the main driving forces behind the impoverishment of ASM. In the most basic

of situations, nomadic small-scale miners use basic equipment and operate under harsh and risky

conditions. Miners face considerable challenges in their efforts to mechanize, unable to mobilize

the funds needed to purchase sophisticated equipment.

The vicious circle of poverty can be illustrated as follows:


I.3. ASM and the Millenium Development Goals (MDGs)

Table 1: The MDGs and ASM

Source: CFC ( Common Fund for Commodities) 2008 report on ASM

The 8 MDGs have been adopted by the international community as a framework for the

development activities of over 190 countries in 10 regions; they have been articulated into over

20 targets and over 60 indicators.

A progress report was published in 20082 and a number of targets are expected to be reached by

2O15. However, ASM is not really be impacted by the improvements. ASM-related poverty is not

2 The millennium development goals report, Department of Economic and Social Affairs of the United Nations

Secretariat, Inter agency and Expert group on MDG Indicators.

MDG Relevance to ASM

Eradicate extreme poverty

and hunger

8.775m people in Africa depend ASM for their livelihood. ASM is

driven by poverty, can reduce or can perpetuate poverty.

Unregulated ASM undermines agriculture and food security.

Achieve universal primary

education

676,000 children work in ASM in Africa. For many this is a result

or cause of exclusion from school.

Promote gender equality

and empower women

4m women work in ASM in Africa. Women suffer inequality and

abuse in ASM and need urgent support to strengthen or transform

their roles.

Reduce child mortality/

Improve maternal health

ASM communities rarely have access to health, care, decent

hygiene or sanitation, clean water, or good nutrition. Women and

children are highly vulnerable in ASM communities.

Combat HIV and AIDS,

malaria and other diseases

ASM is a high-risk activity for HIV/AIDS. ASM camps are high

risk for diseases such as malaria, and water-borne diseases.

Ensure environmental

sustainability

ASM causes water contamination, mercury poisoning, erosion,

degradation of landscapes an agricultural land, deforestation.

Develop a global

partnership for

development

A range of ASM partnerships already exist and can be incorporated

into global alliances to bring ASM into a stronger position for

interventions.


reducing; the number of projects actively assisting children to leave the mines and enter school is

too small; there are few HIV/AIDS programmes for ASM areas; ASM areas can suffer from

increased malaria prevalence due to standing water and lack of access to prevention programmes;

water quality in ASM areas is poor and progressively deteriorating.

The Yaoundé Vision Statement‟s recommendations contribute „to sustainably reduce poverty and

improve livelihood in the African ASM communities by the year 2015, in line with the MDGs‟.

The goals identified included:

Acknowledge and reflect ASM sectoral issues in national legislation and codes;

Mainstream poverty reduction strategies into mining policy inclusive of ASM policies;

Integrate ASM policy into PRSP processes with linkages to other rural sectors, develop a

strategic framework for PRSPs;

Revisit existing thinking on ASM legislation (traditional land rights, and modern land use

legislation nexus) and role of central government;

Strengthen Institutions by improving availability of appropriate technologies and

developing analytical and business skills; and,

Undertake necessary reforms of the ASM sector: improve policies, institutions, processes

and the ASM stakeholders‟ livelihood; reduce child labour; ensure gender quality; improve

health and safety; develop partnerships; promote sustainable use the natural resources;

infrastructure development; land use management.

A series of recommendations were made for government, development partners, and for

international and national stakeholders including the private sector, donors and NGOs.

I.4. Major Issues in ASM

The challenge facing LSM companies, governments and civil society is to harness ASM as an

activity that can contribute responsibly towards the achievement of local development objectives

and national development.

In addition to providing obvious employment benefits for citizens, a formalized ASM sector

would also benefit governments. For ASM formalization to work, some emphasis should be

placed on studying, and ultimately absorbing, existing customary practices developed informally

by the miners. It is also important to look at the different problems faced by ASM, and to look

for ways to improve the situation.

The sector is burdened with issues ranging from child labour, gender inequality, environmental

devastation, poor health and safety, lack of capital and fair markets and conflicts with the LSM

sector.


While it is difficult to define sustainability for an operation, which exploits a non renewable

resource, interventions to help ASM workers to improve productivity and to use safer, more

environmentally sound and socially responsible mining techniques have a very important role to

play in improving ASM‟s contribution to sustainable development.

ASM is an important part of the social and economic infrastructure in many developing countries and should be accorded sufficient attention to ensure its contribution to the local and national economy.

The main issue is how to ensure that ASM does not harm the community and creates the basis

for poverty reduction and sustainable development.

The paper will depict issues of environmental management, occupational health and safety, social,

policies and regulatory framework, conflicts with LSM operations, technical and financial

assistance, market access and alternative livelihoods in the ASM sector.

II. ENVIRONMENTAL ISSUES

II.1. Environmental Impacts of ASM

ASM produces negative impacts on environment during the different stages of mining

(exploration, exploitation, processing and closure).Some of the environmental problems caused

by ASM, inter alia, are: mercury and cyanide pollution; pollution of watercourses, with sediments

and heavy metals, of rivers used for the water supply of cities; acid rock drainage; pollution by

heavy metals of surface and groundwater; improper closure; river damage in alluvial areas; river

siltation; landscape destruction; garbage and solid waste; tropical diseases (malaria); and

uncontrolled ASM activities in protected areas.

There are multiple causes for the severe environmental impacts in ASM:

• Lack of knowledge, education and training (technical and environmental);

• Inefficient technology and limited techniques;

• Inefficient administrative management;

• Errors in human control;

• Economic limitations;

• Lack of access to better techniques;

• Lack of information about good practice;

• Lack of control and enforcement; and,


• Non adequate environmental legislation.

The difficulties are great to control, monitor and enforce environmental violations due to lack of

resources and the inaccessible nature of the sector. Law enforcement efforts so far seem to be

unsustainable and counterproductive.

In Gorgongoza (Mozambique), by being prohibited to use mining wealth, the miners feel that

they were being denied economic development for the sake of wildlife conservation.

II.2. Protecting the Environment in ASM

Identifying the best solutions requires socio-economics issues to be taken into account. There is

a need for elaborating strategies such that the local population can benefit from the mineral

wealth but without being detrimental to ecologically valuable areas and without jeopardizing the

potential for tourism. Policies and programmes addressing environmental issues should include:

A monitoring scheme to check the environmental impacts and to enable elaborating

strategies for dealing with the environmental impact of the mining and the enforcement

of appropriate penalties;

Solutions which are “win-win” or at least “win - do not loose” are likely to have success, taking into account that the ASM;

Incentives and training rather than programmes or policies strictly focused on traditional monitoring and enforcement systems;

Benefits need to be demonstrated and standards must not be unrealistic and unattainable;

Improved community awareness on environment; and,

Environmental problems cannot be solved by technically oriented approaches alone, the implementation of technical „solutions‟ always require detailed knowledge of the cultural, social, economic and organisational context of the miners.

ASM specific legislation or regulations could be more effective, environmental problems require technical solutions that are culturally relevant, and an integral approach is needed for changes to be implemented. In the Tanzanian law („The Mining Act”), there is ASM specific environmental legislation. ASM using different mining techniques than LSM, and therefore different environmental impacts, it should be addressed separately.


III. SAFETY AND HEALTH ISSUES

A critical issue in ASM is the frequent lack of health and safety standards in relation to mining,

transport and processing standards. In many cases, basic standards are articulated by government

through mine law or ASM regulations; however these are rarely disseminated and even more

rarely enforced. Specific legislation addressing issues on health and safety or SSM is rare, this

issue is mostly addressed under general regulations.

III.1. Dangerous and health threatening working conditions

ASM has a poor reputation for safety. The five major health risks in small-scale mining and

processing, according to ILO are:

• Exposure to dust (silicosis);

• Exposure to mercury and other chemicals;

• Effects of noise and vibration;

• Effects of poor ventilation (heat, humidity, lack of oxygen); and,

• Effects of over-exertion, inadequate work space and inappropriate equipment.

ASM mines can be extremely dangerous. ASM operations rarely have good personal protection

or other safety protection. Examples of particularly dangerous practices include diamond divers

who spend long periods underwater, often in fast flowing water, with no proper equipment just a

hosepipe in the mouth for air. Gemstone miners in Zambia have been known to enter deep shats

and galleries with a car inner tube around their neck as an emergency air supply. 3

The nature of ASM (low level of mechanization, low intensity of operation) might lead to think

that some of the risks can be lower than in LSM. Practice however shows, that this isn‟t always

the case, and many fatal and disabling accidents do occur in ASM, accidents that can be

considered to be preventable.

The reasons for such negligence and risk-taking and the reasons that there may sometimes be

more accidents in many artisanal and small-scale mining operations than in larger, more formal

mines are varied and include:

Inappropriate working conditions;

Lack of resources;

3 CFC (Common Fund for Commodities) 2008 Report on ASM


Lack of, or non-application of safety regulations;

Lack of inspection;

Lack of law enforcement or deterrent penalties;

Lack of awareness, and illiteracy;

Lack of training;

Inadequate equipment;

Lack of access to safety equipment and the wherewithal to buy it;

Remote location;

Cost-cutting and speed; and,

Tradition.

Problems relating to occupational health are serious and persistent, touching all who work in and around ASM and processing operations, and their families. More attention should be paid to improving the occupational health and safety of mineworkers and their communities.

III.2. Improving health and Safety in ASM

Even if attitudes towards improving mine safety can be improved and those concerned motivated

to take action and to achieve a lasting improvement, the resources necessary to achieve the results

are too often lacking.

Health and safety legislation or regulations must take into account the economic situation of

ASM. Most artisanal, small-scale mines are working under marginal economic conditions. Even

basic safety measures have a certain cost. Such regulations should be accompanied with

equipment and technical assistance programmes.

Specific ASM regulation could be more effective. Safety regulations LSM are not generally

applicable to ASM without prior analysis and adapting. Exaggerated safety requirements tend to

discourage small-scale miners, inspiring them to simply ignore all safety advices as “utopic”. The

Zambian regulations have ASM specific occupational health and safety sections. The regulations

specific to SSM, address issues such as ventilation and air pollution arising from dust, fumes and

other toxic gases. It provides measures for determination of concentrations of such pollutants

and sets standards for air quality.

The „ Safety & Health in Small-scale Surface Mines Handbook‟ of the ILO (2001) includes

guidance on accident prevention; hazards in the working environment; health; welfare and


hygiene; first aid; protective equipment; safe practices; safe use of mechanised equipment;

explosives and mine closure.

Safety inspection are sometimes weak and the quantity and quality of safety inspectors are

insufficient in view of the nature of the task and the number and wide dispersion of artisanal and

small-scale mines. Even when inspections are made, focus is often more on verifying production

to ensure royalty payments are correctly calculated and collected than on safety and health.

Having different agencies responsible for safety and health, production permits, working and

living conditions, and migrant workers inevitably could be a solution to the problem.

Unawareness of risks, especially concerning risks of chronic occupational diseases (dust,

vibrations, nitrous gases, mercury, cyanide, etc) due to missing or inadequately implemented

education and training. Education and training programs need to be designed according to the

social, cultural and ethnic characteristics of the small-scale miners‟ communities. Education,

training, demonstration and surveillance are the key elements of any program to improve

occupational safety and health in ASM. Both mineworkers and owners must be helped to realize

that accident prevention and improved occupational health are worth obtaining and keeping. In

the short term, safety and health has a cost, in the mid- or long-term it produces revenues.

Mercury amalgamation is the preferred gold recovery method employed by artisanal gold miners

and its misuse can result in serious health hazards for miners involved in gold extraction, as well

as for surrounding community inhabitants, who may be exposed to mercury. The basic

techniques characteristic of ASM result in a number of occupational hazards. Several

technologies and methods commonly utilized by LSM operations can be downsized to smaller

scale operations.

Fast track mechanization without implementing complementary safety measures could be

dangerous. Inadequate, inappropriate or unsafe equipment are real problems in many small-scale

mines, including in some cases equipment provided as part of technical cooperation programmes.

Such equipment leads to increased risk as workers try to adapt it to their needs. Any mechanized

working requires the correct application of the technology. The introduction of the ThermEX

glass retort in ASM can be taken as a n example. The ThermEx glass retort allows miners to

observe the entire process of separation of mercury and gold from the amalgam. Other

advantages include: the warm-up time is shorter compared to metallic retorts ; contrary to

metallic retorts where the gold becomes darker or browner due to its reaction with iron, in the

glass retort there is no colour change; and there are less gold losses than in metallic retorts where

gold infiltrates into iron surfaces. While mining legislation in Tanzania dictates the use of retorts

for gold recovery, virtually no miners use them, indicating the inadequacy of previous

introduction attempts. The likelihood that miners will adopt these large-scale methods, or those

developed specifically for ASM, depends upon some key factors. For an artisanal miner, these

factors include: increased or comparable simplicity, quick recovery of the economic mineral, and

demonstrated financial gain. Other practical aspects, such as the availability of materials

(chemicals, steel rods, piping, generators, etc), capital and operating cost requirements and access

to technical support, also influence acceptance of new techniques.


Any intervention that seeks to address ASM must look at the health and safety implication of the

practices in and around the mine sites. When dangerous ASM areas have to be closed, or certain

practices have to be banned, a campaign of public information dissemination is essential.

IV. WOMEN IN ASM

Women may constitute up to half of the workforce in Africa. Women frequently use ASM as a

supplementary income source, often seasonally, and their presence around the mines may be less

visible so they may be excluded from estimates.

IV.1. Gender discrimination in ASM

Women in ASM suffer discrimination in relation to opportunities and pay. Women face a rage of

risks in the mines, particularly relating to health and sexual violence. Unlike their low level of

participation in the LSM sector, women play a significant role in ASM. In fact, generally the

handling of mechanised equipment and machines is reserved for men. This may be due to

assumptions that women do not have the technical skills or cultural suitability to operate

machinery or may be due to the fact that as income generation opportunities improve, men

dominate the new better paid options while women are relegated to the lower income activities.

Women‟s participation in ASM involves not only mining but also the supply of food, drink, tools

and equipment, as well as sexual services. Women are also involved in the trading of minerals

such as gold and gemstones.

Regardless of the region or the type of mining there are common problems that are faced by

women miners or women who want to work in ASM other than at the most menial level. These

include:

Women are not given equal opportunities regarding access to financial, technical or legal

support.Legal, administrative and financial constraints prevent women's participation in

ASM or limit it to basic wage-earning, often in informal, illegal mining;

The fear that women's presence might lead to "indiscipline", the pragmatic reasoning of

some mine owners that women create a distraction for the male workers;

Cultural taboos, superstition and concerns for health and safety;

Less technical know-how than their male counterparts and women's perceived inability

to cope with much of the physical side of mining;

Lack of representation and support;

Lack of management and administrative skills; complex and lengthy administrative

procedures;

Widespread illiteracy; the fact that many women lack formal education may further stifle

their ability to deal with formal lending institutions;

Socio-economic perceptions about their status; and,


Cultural traditions that impose a heavy family burden and limit their independence and

mobility. Cultural barriers can affect women's participation even when the others have

been overcome. Family responsibilities restrict the time many women can devote to

mining activity, reducing their productivity and earning capacity.

Without credit, women are generally trapped at a subsistence level of mining, extracting what is

easiest, possibly to the long-term detriment of the available mineral reserves, and confining

themselves to a precarious existence.

Another layer of challenge is added for women in countries where land rights are not equitable

for men and women. In such cases, women have little opportunity to develop strong livelihoods

within ASM, “policies that restrict or deter women from obtaining concessions or land rights further contribute to

the feminization of poverty ’4

IV.2. Assisting women in mining: Gender sensitive approaches

Mining policies should address women issues and aim to alleviate barriers and encourage their

employment. Interventions that support all ASM workers should perhaps emphasize on ensuring

equal access to finance, technology and markets for women. A gender-sensitive approach is

needed in project planning. A gender-sensitive approach analyses the different needs, challenges

and opportunities faced by men and women. Women must be involved in all aspects of

consultation, and must be empowered to participate fully and equally in decisions regarding the

allocation and utilization of benefits. If women are not included, they may fail to access the

benefits of the intervention. For example, many mercury awareness campaigns in the past have

targeted men, and their education and literacy levels tend to be higher, women are often less

aware of the risk of mercury than their male counterparts who can read the awareness notices put

in place. 5

There are many ways in which women can profit from engagement in and around ASM. They

can assume many different roles and may have particular skills and qualities to contribute to

certain tasks.

The participation of women as entrepreneurs rather than as labourers in ASM can contribute to

improving the status of women generally. Women entrepreneurs can serve as role models and

can offer opportunities to other women. Another interesting opportunity for women within the

ASM may lie in certification and market access, particularly in the precious metals and gemstones

4 Hinton, et al.

5 Hinto, Jennifer J, Veiga, Marcello M. & Beinhoff, Christian (2003) Women and Artisanal Mining : Gender Roles

and the road ahead, As : Ch. 11 in The Socio-Economic Impacts of ASM Mining In Developing Countries. Swet.

Publ., ed. G. Hilson The netherlands


markets aimed at jewellery where women are primary consumers and could have an empathetic

predisposition to products branded as coming from women‟s ASM businesses.

The programmes assisting women in mining in ASM should focus on, inter alia:

Managerial training; delivering technical services and support;

Educating women at different levels so that they have the chance to be upwardly mobile

in small-scale mining;

Sensitizing women and the community to ASM;

Improving women's domestic situation, for example by improving food processing and

preparation activities;

Delivering financial assistance;

Obtaining the right to land ownership;

Establishing credit;

Increasing women's empowerment; and,

Delivering services such as health care, education, child care and first-aid

Awareness-raising, training, confidence ,image building and the setting up of support groups are

all elements in the process of providing the means for women to break through the barriers that

confine most of them to a menial role in ASM. When these are combined with the removal of

legal and financial obstacles and socio-cultural taboos, women will be in a much better position

to take advantage of the opportunities that ASM can provide.

The „Women Microfinance Project‟ 6(2001 to 2008), worked to increase the capacities of micro-

finance institutions in the DRC to improve their ability to provide cost effective, year-round

services that are able to meet the needs of the DRC‟s female population. The project‟s efforts

resulted in an improved quality of life for the women participating and increased economic

activity in the district in which the project takes place. The project also contributed to greater

economic and decision making power exercised by women in the DRC.

Another programme in the DRC is the „WORTH‟ programme, in the region of Katanga, that

provides literacy skills and financial management training, and helps groups of women to form to

collectively save a weekly income. This group fund can then be used to start micro-enterprises,

with assistance from social development programmes of mining companies and USAID.

6 Overview on donor activities in the SSM sector in DRC.


IV.3. Women’s Mining Associations

The creation of women‟s associations can generate social benefits. A number of women‟s mining

associations have been developed which attempt to overcome the barriers to women‟s

advancement within the industry.

For example, in Southern Africa, the SADC Women in Mining Trust addresses the needs of

women miners and has members in Angola, Botswana, Namibia, Congo DR, Mozambique,

Swaziland, Tanzania, Zambia and Zimbabwe. The main objectives of the Trust include: lobbying

for support of women in mining both regionally and internationally; identifying the training and

technical needs of women miners and conducting training programmes to meet those needs;

training women in environmentally sound mining methods; establishing revolving loan funds to

increase women miners access to capital; and to network and facilitate the marketing of members

products.

The Tanzanian Women Miners Association (TAWOMA) mission is outlined as follows: „to

facilitate women miners to organise and access required financial, technical and marketing

services so that they can carry out mining activities that are both economically and commercially

viable and environmentally sustainable and thereby raise the standard of living for women miners

and their families.‟ In terms of long-term goals, TAWOMA is working towards establishing a

centre for the rental of mining equipment and tools; a lapidary and jewellery production unit; and

a skills training centre focusing on environmentally sustainable mining and processing methods,

health and safety issues and the rehabilitation of ecologically sensitive mining areas.

IV.4.Implications for children

When women are forced to bring their children into the mines, this can have negative effects on

the children‟s health, access to education, and future development. The presence of children

assisting their mothers, including school children working after school or instead of going to

school may be due to the fact that the mothers have no other alternative than keeping them by

their side. The idea of providing crèche facilities for children near mines has been proposed by

the ILO.

The physical presence of children in the mine can be a contributor to child labour in mining as

the children are given tasks to do within the mine. If they become habituated to this, if the

income they generate is essential to the family, or if the mine is remote of any schools; these

children can be excluded from education. It is important that initiatives aiming to remove

children from mines consider if and how the mothers are engaged in and around the mines.

Finding ways to supplement the mothers‟ income or otherwise support them to improve their

household finances, may have a direct impact on the welfare and labour status of the children.


V. CHILD LABOUR IN ASM

The reasons for child labour in mining are mainly poverty driven and could include:

• Low family incomes in the ASM regions; the families do not have enough income for school

material, clothing and food;

• Lack of educational infrastructure;

• Lack of interest of the parents in the education of their children;

• Lack of awareness of the parents for the risks of child labour in mining;

• Lack of orientation of the parents concerning the future of their children;

• Traditional reasons; and,

• Lack of legislation, enforcement and labour inspection

V.1. Eliminating Child Labour in Mines

The UN convention on the Worst Forms of Child Labour identifies mining as ‘work, which by its

nature or the circumstances in which it is carried out is likely to harm the health, safety and moral of children’ .

The convention has been ratified by 41 countries and, in many, there is a legal age limit

established for the issuance of mining licences which precludes young people under the age of 18

from working directly in the mines.

The consequences of child labour are multiple; among others:

• The children do not go to school at all or irregular; they risk being excluded from education and

therefore their prospects and potential for future employment in a sector other than ASM are

reduced. On the other hand, ASM may be the means by which children or their families earn the

money for school fees. Only few children go to school, even if schooling is available. Since many

mining sites are seen as temporary, there is little incentive for the local authorities to provide

schooling;

• Problems in the physical and psychological development of the children; children working in

small-scale mining are not only exposed to immediate risk but they are also jeopardizing their

long-term development both physical and socio-economic;

• Health problems, for example through mercury exposure or carrying heavy load (overexertion,

malnutrition, TB, malaria, diarrhoea, lack of hygiene, dust, noise, vibration, mercury and other

chemicals) ;and

• Fatal and serious accidents; the hazards faced by children are the same as for adult miners

(inundation, cave-in, asphyxiation, trips and falls etc. ) but the risks to immature bodies are much

more severe.


The ILO‟s programme „Minors out of Mining‟ launched in 2005, aims to eliminate child labour in

ASM completely within ten years. It is a tripartite effort initiated by the concerned governments

with the support of the industry (companies and workers) and the ILO through its technical

assistance program, IPEC (International Programme for the Elimination of Child Labour)7. At

the country level, the projects are similarly tripartite: under thee leadership of the government,

workers employers and communities address the issue of child labour in SSM and its roots causes

in a coordinated way. Additional partners will also play a key part.

Each country project takes a two sided approach: upstream action to create a policy environment

conducive to regularisation of SSM operations, and downstream activities to monitor children in

mining areas, withdraw those found to be working and place them in school and training. The

overall target of the project is to remove one million children from labour in mines by 2015 in

the countries concerned which are Brazil, Burkina Faso Colombia, Côte d‟Ivoire, Ecuador,

Ghana, Mali, Mongolia, Nicaragua, Pakistan, Peru, Philippines, Senegal, Tanzania and Togo. The

target for achieving clear results from this programme is five years.

In Peru, pilot initiatives supported by IPEC in 3 departments demonstrated that the elimination

of child labour from mining is possible. The initiatives showed that for the progressive

elimination of child labour, it is firstly important to improve the mining industry through changes

in technology, income generation, social protection, improvements in basic services,

organisational strengthening and sensitizing at the national and regional level. The initiatives also

achieved a political commitment from the State to address the problem of child labour in SSM

through a tripartite agreement with employers, government and trade unions.

In Niger, the sites of Komabangou and Mbanga are examples of the positive progress that can be

made against child labour in mining8. By making illegal the labour in gold extraction and

processing of girls under 15, by sensitizing parents and employers to the dangers of employing

children and by the close collaboration between ILO-IPEC, the police, administrative authorities

and schools, the approach seems to be successful.

These projects have demonstrated that it is possible to tackle the problem of child labour in ASM

communities by a widespread sensitization of the dangers of child labour, collaboration between

the government, the police and civil society, improved labour and living conditions, the provision

of a free and quality education and the close monitoring of children at risk. However, thee always

remains the threat that communities will retreat into using child labour.

V.2. Addressing child labour issues in mining policies and development programmes

Considerable care is needed if programmes for removing children from hazardous work are to

succeed. The local situation must be carefully studied and the children concerned. Child labour is

not an issue that can be dealt with in isolation. Removing children from the workplace without

7 Minors out Mining, ILO-IPEC, 2006

8 Girls in Mining, ILO-IPEC, 2007


providing the means for them to go to school and ensuring a compensatory contribution to the

family income will eventually result in them drifting back to the work they left.

Working conditions and health and safety risks affecting children in ASM differ widely according

to whether work is underground or on the surface, the type of mineral being mined, and the type

of processing that is carried out and children's involvement in it. Clearly those at greatest risk

should be the primary focus of programmes to stop their participation and prevent it recurring.

The programmes and policies aiming to eliminate child labour should focus on, inter alia:

Improving children's working conditions as a first stage towards eliminating child labour;

Withdrawing children from dangerous activities;

Making children, parents, employers, private and public institutions and the public more

aware of the dangers of putting children to work in mines;

Preventing children being put to work in mines;

Improving legislation and enforcement ;

Gaining a better idea of the living and working conditions of children involved in small-

scale mining; and

Providing working children and their families with viable alternatives.

VI. Relationship with Large-Scale Mining (LSM): Cooperation or Confrontation?

The relationship between ASM and LSM is often complex. It is widely recognized that

maintaining a harmonious relationship between LSM multinational companies and local ASM

operators is crucial if both parties are to maximize their contributions to the economy and

livelihoods in the operational areas.

VI.1. ASM-LSM conflicts

LSM and ASM often compete to exploit the same mineral resources. Trespassing by ASM

operators on concessions acquired by companies and the eviction of indigenous miners by large

mining companies often leads to confrontations. Tension and conflict between displaced small-

scale miners and large mining companies can be politically and financially damaging for foreign

investors and national governments, particularly if it discourages new mining activity.

There have been violent clashes in several countries as small-scale miners have sought to re-enter

what they considered to be their rightful mining territory (traditional land ownership) which had

been assigned by the government to a large mining company. The strained relationship between

ASM and LSM can start from the point of exploration. Abandoned or active artisanal workings

are an indicator of resources for geologists when prospecting for minerals. In the same way, the


arrival of a company‟s prospection team in an area can stimulate artisanal mining activity. Thus

interactions between mining companies and ASM workers can commence at a very early stage in

a new mining project.

In Ghana, although the laws governing mining may clearly define the processes and ownership of

mineral concessions, there has been a conspicuous absence of political will to enforce the laws,

which has often fuelled conflicts between ASM and LSM operators.

There is often a clash of interest between small-scale and large minesOnce formal title is

established and mine development is underway, the process of removing artisanal miners and

maintaining this exclusion is a key point at which conflicts can occur. These conflicts can be

violent and even fatal.

VI.2. Improving relations between LSM and ASM

There are several approaches to developing a better relationship between the two sectors. There

is scope for mutually advantageous co-operation between the two groups. It creates a conducive

mining environment for LSM and access to appropriate technology, markets and training for

SSM.

Although the often complex relationship between the two sectors, an increasing number of

examples show that it is possible to strike a balance between the economic objectives of large-

scale miners and the livelihood requirements of artisanal miners.

VI.2.1 LSM strategies to address ASM issues

Companies can face considerable difficulties to find solutions to the presence of ASM on a

concession. Approaches and steps which can be taken range from:

forced evacuation of the site;

negotiated departure from the site, with or without resettlement and compensation;

purchasing arrangements whereby the ASM community becomes a legal/formal supplier

(notably for tailings);

providing access to technical support such as mineral processing facilities;

subcontracting to commercial SSM ventures;

providing emergency rescue services if needed;

job creation schemes;


creation alternative livelihoods, supplier businesses; and,

social development projects that improve the lives of the surrounding community

including the ASM workers.

Companies must determine the approach they are willing to take in relation to the desired

outcome. Than physical security measures, it is better for a company to try to find employment

for some of the small-scale mineworkers, or take the ASM under its wing, than to shut them out

by force of the concessions.

Through recent workshops and dedicated research, CASM is focusing efforts on opening paths

to achieve such a balance. Through a workshop in Lubumbashi, DRC, for instance, participants

from both large-scale and small-scale mining operations discussed some practical solutions and

identified key steps to facilitate positive interactions and co-habitation between the two sectors

where feasible.

Various guides and tools are available to help with developing and implementing plans for this,

notably the IFC Guide producing a Guide for LSM-ASM relations.

In Ghana, AngloGold Ashanti is working with other mining companies, the Chamber of Mines

and the National Minerals Commission to identify properties which are suitable for SSM and to

promote registration by miners in respect of operations on these properties. In 2008, AngloGold

Ashanti started a project to create „model‟ SSM on its concession in the DRC. These mines will

process gold tailings, using trained manual labour and mercury reduction/elimination methods.

In Tanzania, an LSM company is working with local government officials and community

representatives at the Geita mine in an attempt to identify property which is appropriate to ASM

and to promote registration by ASM operators in terms of relevant legislation. In 2008, Barrick

Gold Tanzania Ltd invested $2.5m to establish and fund an initiative in support of ASM. Under

the initiative, small-scale miners will receive support such as registration of cooperative societies,

land acquisition, training and skill-imparting. Other supports include identifying and sourcing of

mining technology as well as sourcing for sustained funding of the intitiave.

VI.1.2. LSM’s Assistance to ASM

Areas in which larger mines could be of assistance to ASM include:

Mediation between artisanal miners and government and/or assistance programs;

Providing training and technical advice;

Sharing geological information;

Occupational health and work safety;

Helping to set up or sponsor small-scale central processing plants;

Buying services, tools and equipment from the local community;

Assistance in the purchase and storage of explosives;

Providing custom milling services and workshop facilities;

Buying and treating tailings (directly, not through intermediaries);


Releasing land that is suboptimal for large-scale mining;and,

Providing emergency assistance and mine rescue.

But how much further does the responsibility of a large mining company towards ASM go?

Releasing mineral rights is one thing; providing material support and assuming some kind of

overall responsibility is another. While private companies are not expected to support informal

sector activities, they generally have a role in communities in developing countries that goes

beyond that of employer. Assisting ASM could be a valuable part of this activity.

Close collaboration between the two sectors will be good for mining, good for the company

concerned, good for small-scale and artisanal miners and the local community. When artisanal

miners are not taken into consideration within the general context of a mining project, the

project with all its investment may have problems of conflict, inter alia, during the development of

its activities. Moreover, governments will find it difficult to tackle the problems of ASM including

labour and social issues, without the technical, logistical and financial support of the mining

industry.

There are many cultural, procedural and political challenges to companies opening their doors to

small-scale mining. These include: avoiding an influx of small-scale miners and people looking for

work in the large mine who might turn to small-scale mining; ensuring that sufficient resources

exist to enable small-scale mining to continue for an agreed period (possibly for the life of the

large mine); and getting government agencies to accept and meet their responsibilities towards

the community.

In developing successful partnerships with small-scale and artisanal miners and their community

it is important that the company communicates its needs in a non-threatening way, at the same

time learning the community's needs and trying to incorporate them into the company's strategy

for development and operation. A mining company has to understand how artisanal mining

functions in aspects such as, technical, socio-economic, cultural, and spiritual. The mining

company should respect the interests and affairs of the artisanal miners by creating an

atmosphere of “partnership”.

A mining company should create an honest atmosphere with the ASM sector, one of real

expectations through an open informative policy that is appropriate and real. The artisanal miners

must understand that a mining company cannot solve all their problems.

The company should start the dialog and the process of consultation, coordination, information

and agreements with the artisanal miners as early as possible, preferably during the exploration

phase. Artisanal miners should be actively involved in the exploration phase. Consultations

should be made, not only with the artisanal miner‟s leaders, but also with the other members.

If the artisanal miners are composed of indigenous groups with some mining tradition, they will

require a much more sensitive treatment. Frequently, indigenous groups have a different

understanding of the law, or have their own laws that are not always compatible with


Government laws, particularly with respect to natural resources. The company must take into

account this reality and search for routes of understanding.

VII. POLICY AND LEGAL ISSUES

ASM takes place illegally in many countries but the nature of lawbreaking and the reasons for it

vary. Sometimes there is no land available for small-scale mining -- it has all been allocated to

large companies for prospecting or exploration. Sometimes the regulations are so complex that

small-scale miners are dissuaded from attempting to adhere to them. Moreover, the widespread

lack of institutional capacity to implement small-scale mining regulations means that the chances

of being caught and sanctioned are slim.

Whatever the reasons, illegal small-scale mining is accompanied by considerable economic losses,

and there is no possibility of using official means to improve working conditions and

occupational health and safety so long the activity itself remains illegal.

VII.1. The difficulties faced by ASM to operate in the legal domain

Failure to take into account the dynamics of ASM communities may lead to the implementation

of inappropriate legislation and industry support schemes. The „user unfriendliness‟ of the

sector's legislation has been put forward by the ILO (1999). For instance, in the case of

Zimbabwe9, the main government initiatives undertaken to manage small-scale gold mining in

recent years have proved counterproductive, and a drastic policy overhaul may be needed to

ensure that operators are supported effectively.

The difficulties faced by ASM to enter the legal domain include:

Obtaining titles;

Security of tenure;

Obtaining licences to prospect and mine and their short duration;

Problems with the regulations that may be inappropriate for small-scale mining because

they tended to favour large mines;

Excessive amounts of centralized government;

Demanding bureaucratic requirements and institutional delays in licensing systems;

Lack knowledge of legal requirements.

Where communities have traditionally operated outside of the formal sector, they may also be

reluctant to be legalised, particularly where there are no obvious incentives to do so and where

legalisation involves paying taxes that they would otherwise not pay. A lack of capacity on the

9 Resource policies and small-scale gold mining in Zimbabwe, Samuel J. Spiegel, January 2008


part of governments to enforce penalties and to provide the benefits, which should be associated

with legalisation, acts as a further disincentive to miners to be legalised.

There is a danger that, in working to attract large, foreign mining investment, governments

framing ASM legislation will focus on how best to confine small-scale mining rather than

encourage it. Sometimes the regulations serve to suppress ASM rather than promoting it as a

sustainable, profitable entrepreneurial activity that can provide significant employment in rural

areas. So the only way forward is down an illegal path. The tension between large and small

operations will also have a severe long-term negative impact if large mining companies are

deterred from investing because of the extent of illegal ASM. Governments must therefore find

the right balance. Hence there is a need to decide at the outset whether the objective of

legislation is to control or confine ASM, particularly with respect to large mining operations, or

whether it is to enable the sector to flourish as a viable entrepreneurial economic activity.

VII.2. Improving the regulatory environment

What are the problems faced by the governments in developing policies and laws that would

enable ASM to operate in the legal way and make a tangible, recognized contribution to

economic development?

In order to obtain a sustainable development of the sector, which contributes to the rural

development and which is integrated into the formal economy of the country the governments

need to adopt a regulatory framework that is sound and appropiate.

The regulatory mechanisms should be objective, consistent, transparent and non-discriminatory,

which offer easy access to mining titles and legal production. This includes good governance by

an administrative procedure following transparent, clear and fixed rules. The government‟s role in

the ASM sector should be linked to normative and control issues.

Policies addressing the ASM sector should focus on management of the exploitation of the

national mineral resources in a socially acceptable, environmentally sound and sustainable manner

, the promotion of investment into the sector the licensing the mining titles and the promotion of

the legalization and normalization of the ASM operations

Recommendations for improving the regulatory environment:

i. specific legislation is needed for small-scale mining, developed in consultation with all

concerned;

ii. policies should take in account ASM special needs;

iii. legislation must be motivational for ASM to operate in the legal domain;

iv. legislation should facilitate the requirements for obtaining permits and not be restrictive;

v. legislation should cover occupational safety and health and environmental matters;

vi. control over all aspects of small-scale mining should be vested in a single, well-resourced

agency that would act to facilitate small-scale mining as well as regulating it;


vii. local or decentralised governments should have more authority;

viii. legal texts need to be accessible to the miners;

ix. loan and credit systems should be carefully studied not to impoverish miners further; and,

x. tax concessions or forgoing royalties for a limited time and foreign investment should be

used as appropriate to encourage the development and expansion of small-scale mining.

i. Specific ASM legislation

Some African countries have ASM specific legislation and countries. Others the national mining

law applies to all mines regardless of size. Some aspects of small-scale mining, notably labour and

social concerns such as occupational safety and health, employment and working conditions, and

environment, tend to be covered by other, broader legislation, often that dealing with small

businesses.

Many countries now have new mining legal frameworks designed to regulate the sector, improve

its economic and development potential, and to attract new investors by increasing their

confidence that there is a transparent and legal framework within which they can operate. Often

however, mining legislation is drafted and adopted with the needs and potential of LSM as the

focus, and ASM given merely brief and inadequate reference. In South Africa, ASM is regulated

by the same legislation (i.e. for the environment, labour, mineral rights, exploration and mining

permitting and skills development) as LSM. Specific legislation dealing with ASM‟s special needs

is needed, developed in consultation with all concerned.

ii. Understanding ASM’s needs

Insufficient knowledge on artisanal mining populations and of areas suitable for their activities,

tends to affect government‟s ability to regularize, improve and organize the sector. ASM

regulations must not be disconnected from the realities on the ground.

Legislation need to be achievable within some realistic time frame. In cases where there is much

to achieve between the ideal of the law and the challenges of reality, governments should

propose, develop, consult and agree a timetable and a series of viable steps towards achievement

of the law.

There is also the problem of the cost of compliance with the law. Artisanal miners are usually

extremely poor. SSM operations are often struggling to survive in a competitive market.

Regulatory instruments which are not sensitive to these constraints and which establish

prohibitive tariffs for licences can create barriers to entry into the legal ASM system and may

result in ASM remaining outside the law.

Formal legislation shouldn‟t be in contradiction with traditional and local management structures

and norms. This creates a further layer of complexity and confusion within which illegal activity

can occur and proliferate. Traditional land rights and control mechanisms are often better known


and more widely implemented in ASM areas that modern laws and this is an area where

community consultation and engagement is essential if legislation is to be effective.

iii. Incentives for ASM to operate in the legal domain

Legislation must be motivational and rewarding as well as regulatory and punitive, if it is to

impact positively on ASM. There is a need for incentives for ASM communities to operate within

the legal domain otherwise legislation can actually push more people into illegal activity. For

instance, excessive amounts of centralized government, bureaucratic requirements and

institutional delays in licensing systems may contribute significantly to the illegality of ASM

workers.

If a requirement to obtain a mining licence is financial and technical ability then the government

should try to provide services to develop these skills. The mine operators will be motivated to

legalize their activities and the mines are more likely to be successful, improving the returns and

benefits to all.

Box 1: The Diamond Areas Community Development Fund

In 2001, the Sierra Leone government established the Diamond Areas Community

Development Fund (DACDF). The government approved the allocation of 25% of revenue

accruing from Diamond export taxes to a fund for the development of diamond mining

communities. By the end of 2004, 54 chiefdoms with a combined 2313 licenses had benefited

from the fund. A total of nearly 1 923 00 USD has been paid out to mining chiefdoms by the

government10 in 2006. The fund was considered as an incentive for both miners and chiefdoms

to engage in legal diamond mining activities and revenue reporting. Since the fund was initiated

an unprecedented amount of diamond revenues has been returned to diamond mining

communities.

The fund targets those chiefdoms where diamond mining takes place. The government in 2001,

sought to establish a set of criteria for the designation of the chiefs: proposals about how the

fund were to be used, with clear project aims and objectives, were to be submitted before the

fund was disbursed. Chiefdoms benefit according to the number of diamond mining licenses

issued and the value of legal exports overall. No official rule was made about how DACDF

funds were to be used by chiefdoms, but it was generally understood that they would go to

projects that would enhance social and economic development in diamond mining communities.

Funds disbursed are earmarked for specific community development projects, priority was

placed in the funding of community infrastructure (schools, health centres, markets, roads etc),

community agriculture, and vocational skills training centres.

In addition to providing valuable resources for social and economic development, the fund is

suppose to encourage chiefdoms to monitor mining more effectively and to eradicate illegal

10 Diamond Industry Annual Review, 2006


activities.

The disbursement of funds, however, and community capacity to implement and monitor

projects, has provoked controversy, concerns of the misuse of the DACDF continue to be

raised. While many chiefdoms have demonstrated the capacity to use the fund effectively, it is

also evident that many have not. It should however be noted that the introduction of the

DACDF in 2001 has changed to some extent Sierra Leone‟s diamond mining.

iv. Restrictive provisions

Restrictive provisions, both technical and administrative (such as short-term permits, and lack of

security of tenure), constrain development, trapping small-scale mining in a suboptimal state, or

they encourage illegal mining.

Engulfing small-scale mining with many regulations and short-term, non-negotiable permits

makes expansion difficult, credit virtually impossible to obtain, and consideration of

environmental impact most unlikely.

Legislation should include simple, transparent processes for the granting and transfer of permits

and for ensuring security of tenure.

v. Addressing environmental, labour and social issues

Legalisation should also help to ensure that the negative social and environmental effects of the

sector are better managed and will enable governments to capture more of the revenues from the

sector.

For the most part ASM legislation focuses on permits, taxes, marketing and, sometimes,

environmental management. While small-scale mining legislation rarely addresses labour and

social issues directly, the very fact of improving the framework under which small-scale mining

operates, increasing monitoring and control, and providing technical and legal advice to small-

scale miners, will lead to greater prosperity and so to better working and living conditions for

those involved.

vi. Local government

ASM may offer a practical means to delegate resource regulation authority and royalty

management to local government and communities from whence the minerals are sourced.

The decentralization of the mining sector administration may be a tool to guarantee proximity. In

order to integrate the ASM sector development further into the rural development and to avoid


conflicting interests, the mining authorities are advised to coordinate activities with the local

administrations and communities.

Where legislation has enabled monitoring and control of ASM to be decentralized to local

authorities or to local mining inspectorates, it has been effective in targeting local issues, such as

environmental degradation, occupational health and illegal migration in border areas. In cases

where the local authorities have been able to collect royalties, they have a clear incentive to

control and foster small-scale mining.

In Madagascar, in a local commune Antanimbary, was carried out a pilot project to test the

benefits of decentralisation. The project included the local authorities, artisanal miners and

traders and involved training, formalising ASM sites, recording transactions, and disseminating

information. The results included increased transparency in mineral trading, development of

social infrastructure with the revenues received and better working condition for the ASM

communities.11

vii. Dissemination of the law

Dissemination of the law is also essential. In many ASM communities, the miners know neither

their rights, nor their responsibilities.

Legal texts need to be made accessible, both physically and intellectually in order for ASM

workers to understand the constraints and opportunities of the specific context in which they

operate. The legal texts should be translated into local dominant languages.

viii. Question of loans and credit

There is a risk of impoverishing miners further if unpaid packages lead to accumulating excessive

debt and if careful planning in mine development is not appropriately encouraged during the

lending process. Microfinance for ASM should be developed but only if monitored carefully as

most miners could benefit greatly from investment assistance.

ix. Taxation of ASM

There is a real potential for ASM to contribute to the national treasury. There are examples of

heavy, legal, tax burdens being imposed on ASM operators and traders. In Zambia, the Emerald

and Semi-Precious Stones Association of Zambia (ESMAZ) report that they pay area charges per

hectare of land, property taxes, mineral royalty tax, deemed turnover tax, company tax as well as

11 Green (2006) « Appui à la Gestion Décentralisée des Ressources Minérales de la Commune Rurale

d’Antanimbary-Maevatanana », CASM 6th Annual Conference Madagascar


the Value-Added tax (VAT) for most of their purchases when most of the large copper mining

companies as well as some of the larger emerald mine operators are exempted from some these.12

In order to be effective, tax systems on ASM work and products must be practical and affordable

in relation to ASM income; supported by a viable and official collection system which issues

verifiable receipts and can withstand corruption; known to the ASM communities to reduce their

vulnerability to exploitation through illegal taxes; and supported by a system of redress and

appropriate legal instruments which protect all parties.

VII.3. Law enforcement

A country can have the best mining legislation and regulations possible, but if these are not

enforced then the ASM sector will not contribute to improving the lives of the population or the

economy.

VII.3.1. Challenges in implementing mining regulations

Transforming policy into practice is a serious challenge for ASM. The implementation of ASM

regulations requires significant investment in, and support for, government capacity within the

sector. Law enforcement in ASM can result in violent clashes between the miners and the public

security forces. Government capacity for constructive law enforcement in relation to ASM, the

institutional capacity, financial and human resources to oversee the sector is often lacking. ASM

inspectorates or regulatory agencies which have the mandate to, capacity and resources to assess

the legal status of an operation and to make practical, feasible steps towards legality can help to

move ASM into the legal framework without the risk of conflict or violence.

There is also a real need for penalties to be appropriate if they are to be a realistic deterrent. It

shouldn‟t be far beyond the means of ASM workers that the penalty is simply ignored. Different

aspects of ASM (including occupational health, safety, employment, environment, community

health, education, migration, labour, finance) are often the responsibility of separate government

agencies, but in practice it usually falls to overstretched, inadequately funded and poorly staffed

mines inspectorates to oversee small-scale mining operations. Notwithstanding the broad roles

assigned to the inspectorates, many are unable to do more than collate returns from the small-

scale mines that lodge them and verify production and royalty payments. Sometimes they can

make sporadic visits to nearby small-scale mining sites, but often the lack of vehicles or fuel

precludes inspectors from leaving their offices to make mine visits. This limited activity is not

surprising in the light of the general lack of resources in many mines inspectorates in developing

countries, made worse when much small-scale mining is outside the law anyway and will stay

there until the inspectorate is in a position to make a difference.

12 Lungu, John & Shikwe, Adrain (2007) Corporate Social Responsibility Practices in Small-Scale practices on the

Copperbelt


VII.3.2. Establishment of an efficient monitoring body

To ensure the compliance with the law, many mines inspectorates will need to be expanded and

decentralized if efforts to legalize small-scale mining are to pay off in terms of increased

production, productivity, investment, employment and income. Several countries have dedicated

ASM services within the Ministry of Mines. In 2008, a Ministerial Department for ASM has been

created within the Ministry of Mines. In the DRC, a similar structure is the Service d’Assistance et

Encadrement d’Artisan et Small-Scale Mining, SAESSCAM.

Box 2: SAESSCAM in the DRC

SAESSCAM (service d‟assistance et d‟encadrement du small-scale mining) is the Congolese

state‟s technical service for the formalisation of the ASM sector. SAESSCAM also serves an

extension service provider to the sector, providing assistance in law awareness, training in

mining techniques, cooperative formation, health and safety advice, social services and

numerous other tasks. In 2007, SAESSCAM has been allocated a budget of 5 million USD and

is in the process of reaching minimum operational capacity in a number of strategic areas. In

theory, a SAESSCAM representative is to oversee the trading chain and record keeping at ASM

site. SAESSCAM operates a number of antenna offices in mining regions. A Belgium donor

programme is planning a support project for SAESSCAM.13

The establishment of such a body (mine inspectorates or regulatory agencies) is the first step to

an effective implementation. The agency must have a clear legal remit, simply stated and enacted.

Its duties should include the monitoring and control of mining operations and the provision of

advice and training to ASM owners and workers (at mines and in workshops at suitable

locations). The body should have public acceptance: the role, responsibilities and limitations of

the agency must be known to the community and ASM operators, and there must be visible

benefit seen from their presence.

The agents need to have the technical skills to carry out their work in an effective manner. The

agency must have professional, motivated staff with a commitment to achieving the agency‟s

mission. This is often extremely difficult to achieve as government staff are often moved between

departments with little consideration for their core skills, incentives are poor, and typically

government salaries are low and uncompetitive in comparison to the private sector. The agency

needs to have the physical and financial resources to adequately cover the territory for which it is

responsible.

13 Overview on donor activities in the SSM sector in DRC.


More, better paid, independent inspectors with better training, more offices in mining regions

and more equipment are necessary if regular visits to small-scale mines are to be feasible and their

statutory duties discharged.

VIII. LEGAL AND TRANSFERABLE RIGHTS

Legal and transferable rights are essential to organize and transform this informal industry: the

right to mine, the right to land title, and the right to minerals. A formal title can give minerals

transferable capital against which micro loans can be financed. Property rights are the basis of

poverty alleviation, serving as the first step towards turning miners‟ assets into capital.

VIII.1. Informal land rights

ASM may be carried out on traditional lands where tenure is recognized informally by simple

occupation of the land, or through a system of rents paid to local chiefs or others who historically

control the land. However, as external investment in industrial mining has increased, and

formalization of mining legislation and concession rights has occurred across Africa, the land

available under such informal or traditional systems has dwindled.

The unavailability of land for ASM acquisition is largely a result of the majority of concessions

being leased out to LSM companies. In some countries, mineral rights are non-transferable which

prevents the reassignment of sections awarded to LSM companies that prove unfeasible to work

but are at the same time, suitable for SSM. Resource and land rights are increasingly being sold

to LSM companies who typically have sole mining rights on the concession. Most legislation

dictates that ASM is excluded from industrial concessions and therefore the workers sometimes

turn to illegal activity in desperation.

This exclusion coupled with the lack of alternative sites or resource-access mechanisms, mean

that artisanal miners who live in proximity to LSM may choose to occupy LSM sites, and this is

one of the key reasons that ASM is carried out illegally. Even when ASM is recognized as a legal

activity in national legislation, the provisions to enable ASM to operate within the law are weak.

VIII.2. Formal property rights

Formal property rights are the basis of a miner‟s access to legal redress when rights are violated

by government or company. Without a system of rights, there is little to prevent a state or

corporation from unilaterally evicting miners.

Lack of legal access to high-quality and mineable resources and associated security of tenure

means that ASM workers cannot generate adequate income or use those mineral rights as security

for funding or to enter joint ventures with partners capable of improving their resource use and


return. As stated by the World Bank „no real solutions will be possible unless artisanal miners are

given full legal and transferable mining titles to their claim‟14.

VIII.3. Allocated ASM areas

Given the importance of the issue of land and resource access and rights, some governments

have taken steps to set aside land for ASM:

The government of Zambia has set aside plots for emerald ASM operators, however the

ASM communities report that same plots are too small and the minerals are too deep.

In 2007/08, the government of Tanzania has set aside 295,000ha for SSM throughout the

country however this is tiny compared to the demand and only some areas have actually

been assigned.

In 2007/08 the government of the DRC identified six copper and cobalt concessions

belonging to the state-owned enterprise, Gecamines, for transformation into Artisanal

mining zones however these sites are marginal with no accompanying technical or

financial resources for effective mine development or management.

Since 2007, the government of Mozambique has set up 58 legal areas for gold and gem

ASM activities.

The creation of areas to be owned and managed by ASM communities or groups is challenging.

Leaving aside the issues of technological evaluation, management and accountability, creating an

ASM area is not just a matter of allocating commercially marginal land which may or may not

have adequate and accessible resources, but rather of ensuring that the supporting elements of

land ownership, tenure, and legal status are in place. The designation of ASM areas should be

accompanied by geological mapping and mineral inventory.

Even where provision is made for ASMs lands to be allocated, security of tenure can be weak.

The DRC Mining Code for example, supports the creation of ASM zones but „ If a new deposit

which does not lend itself to artisanal mining has just been discovered… The minister proceeds

to close the artisanal mining area…The artisanal miners are oblige to free the artisanal mining

area within 60 days. The group of artisanal miners concerned have a priority right to request a

Licence for a industrial exploitation or SSM within 30 days.‟

Few countries have genuine capacity within their government bidy tasked with the allocation of

mineral rights to focus on the specific needs of ASM. Fewer still have mechanisms whereby there

can be public consultation and local involvement in the activities of the Mining Registry or

Cadastre.

IX. ACCESS TO FINANCE AND CREDIT

14 ILO, 1999


Access to credit is an obstacle to successful development of the sector. On its own improving the

formal property rights system process cannot bring miners out of poverty; there still has to be

tangible assistance in which miners can rely. The lack of capital is an obstacle to mechanization

and improving efficiency. These in turn lead to low productivity, low revenues and, where they

are paid, low wages. As a result, miners tend to ignore health, safety and environmental measures.

Most of the small enterprises would like to semi-mechanize and to upgrade production capacities

or to develop new reserves. All the mentioned measures require investment capital. Generally the

ASM sector tends to demand better access to financing. But in practice, access to credits and

formal banking is difficult for ASM miners, and they face serious problems dealing with formal

financing.

IX.1. Constraints on obtaining credit

Access to finance is essential to enable the formalization, improved production, and

strengthening of ASM. However such finance is difficult to obtain for the sector.

Artisanal miners typically present a suite of factors which make them unattractive to lenders:

they tend to be already in debt;

they are frequently migratory and ensuring potential repayment of credit is difficult;

they generally have few if any assets that banks and other lending institutions will accept

as collateral;

they rarely have the capacity or expertise to be able to present a viable business plan for

why they need the credit or how it will be effectively used;

ASM is rarely well reported statistically and therefore does not allow for risk analysis by

creditors; and

There is only few of lending institutions that provide this type of credit or support for

ASM.

If any financing institution is willing to deal with the artisanal and small-scale miners, generally

the interest rates have to be rather high. This has negative drawbacks on the viability of the

projects. Given these constraints, artisanal miners usually resort to the most accessible local

source of funds, namely pre-financing by traders, which further compounds the problems of debt

as these loans may demand high rates of interest and sale of the product to the trader at a sub-

optimal price for the miner.

Even when mining rights exist, banks are usually not prepared to take them as collateral because

of the geological risk of unmined reserves, the mobility of many small-scale and artisanal miners

and the widespread lack of enforcement of laws and regulations. Therefore, miners find

themselves caught in a vicious circle:


Since even a modest investment in tools and equipment can improve productivity and resource

utilization and result in more revenue to all concerned, it is in everyone's interest to break this

circle, create self-sustaining financing mechanisms and provide access to credit for artisanal and

small-scale miners.

IX.2. Improve Finance Systems

Obstacles to obtaining formal credit can be overcome if governments recognize mining claims

and issue mining rights that can be freely traded, sold or pledged as collateral.

Alternatives to direct finance can also be used. The financing of ASM projects should be tailor-

made and consider, instead of regular credits, financing through leasing of equipment; own

capital resources; joint ventures and equity participation.

A recommendation made in Tanzania for practical steps to support ASM was that equipment

should be made available on a hire-purchase basis (particularly for identification, cleaning and

cutting gems). This has been advocated and tested in countries like Ghana, Burkina Faso and

Mozambique however success has been limited.

Equipment leasing schemes are a technical initiative that has become increasingly popular in the

last few years: “equipment is made available on a cash sale or loan basis [to miners], and is

manufactured in collaboration with local fabricators”15.

The Ghanaian government has set up a revolving fund and lent 2.23 billion cedis to small-scale

miners in Talensi Nabdam district in the upper east region “aimed at increasing the production of

15 UNECA, 2002, p. 29


gold and diamond”16. Whilst such schemes do give artisanal miners rare access to credit, the

quality of the lent equipment may be substandard or inappropriate for the tasks required.

For this reason, the equipments must have guarantees or warrantees.

Training in savings and financial management should be a precursor to any projects which

ultimately aim to provide credit to artisanal miners.

ASM communities frequently have a significant amount of potential capital moving through the

system; however this is widely dispersed and tends to be spent on short terms needs, either for

survival or for luxury items which relieve the tedium of the work. If artisanal miners are given

support to recognize, save and harness the financial resources that already exist within their

communities this can be an important step towards increase economic viability.

In June 2008, the Nigerian Ministry of Mines and Steel Development establish a $10m facility to

assist artisanal miners with funding from International Development Finance, a subsidiary of the

World Bank. The fund will be used to formalize ASM, encourage the formation of cooperatives,

and to provide training and access to finance with a significant programme to provide ASM

development grants.

For the credit financing should be taken into account:

• Finance means not only credit, but also savings. Self-financing or savings should be included

into the finance program.

• Significant outreach, or a high number of clients, is important for achieving development

impact, as well as for making the program economically viable through economies of scale.

• Subsidies to ASM should not be given in the form of a subsidized loan, but in form of training

or other technical support.

• Regular control and supervision of the financial institution as well as guidance is required.

Eventually, a credit scheme should not be instrumentalised for the one-time delivery of

equipment, but focus on financing a business over a long period.

• The compliance of the environmental legislation

• The possession of an environmental operation license

• The registration of the company at the mining authority or other fiscal authorities

• The payment of taxes (royalties, company taxes etc.)

16 Ghana Districts, 2007b


• The enrolment of the staff at the national social security system as well as

• The legal exportation of the products (export license, export tax etc.)

X. MARKET ACCESS AND CERTIFICATION

In considering how to improve ASM market access it is necessary to first understand how ASM

actors currently access their markets, the different problems they face and then to look at if and

how this can be improved.

X.1. Reasons for illicit marketing

X.1.1. Smuggling, Money Laundry and Guerrilla Activities

Illicit marketing is primarily the result of inadequate government policies. In countries where

commercialization is not based on free market mechanisms and where sales are not transparent,

smuggling is usually the first choice for miners and, or merchants, and much of the benefits to

the government are lost.

Nevertheless it has to be pointed out, that smuggling or illegal trading usually happens with some

adjacent country where market conditions are more. Decades of diamond smuggling in Sierra

Leone have contributed to the corruption of the government, deprived the country of millions of

dollars in development revenue and fostered political instability more broadly within the West

African sub-region.

Especially artisanal gold and gemstone mining are frequently and involuntarily used as a vehicle

for money laundering or financing guerrilla activities. A common practice of money laundering is

to buy gold from informal artisanal small-scale miners with “narcodollars” and to declare it as

part of the production of a formal mine. Again it has to be pointed out, that not the artisanal

miners, but the product of their activity are the subject of these illegal practices.

The usually existing links between money laundering, guerrilla activities and civil wars (“blood

diamonds”) cause in some countries the complete “outing” of ASM, an effect that contributes to

maintain the system, forcing the miners into the illegal and informal status.

X.1.2. Intermediate traders

Emphasis has to be made that smuggling usually is not performed by the artisanal small-scale

miners themselves, but by intermediate or major illegal traders. Artisanal miners are frequently in

an established relationship with their most immediate trader. Traders provide debt financing to

artisanal miners to pay for the costs associated with mining; These may include equipment, site

access fees, taxes to local authorities and others including security services, transport costs,

transfers to other mines, and subsistence during periods of mining when there is no income. In

return, the trader expects to have preferential offers and a discounted price on the minerals, as

well as, in some cases, payment of interests.


The relationship can lead to significant debts which, at their most extreme, may be manifest as

bonded labour and may even be passed on to subsequent generations. Whilst this relationship

may be exploitative and illegal, it is often the only option available to miners to survive. This may

also be a long-standing tradition and relationship which is difficult to change. It is often assumed

that supporters and middlemen are the problem and should be eradicated. In Sierra Leone,

diggers have been found to be reluctant to abandon their relationships their intermediate traders

who provide occasional but very important financial or political assistance in times of trouble.

X.2. Better markets for ASM products

It is important to note that marketing chains have often developed and evolved over years to

adapt to the particular conditions and constraints of their social and economic environment.

They have perfected their performance by a form of natural selection. The challenge of a

development intervention is to first identify the constraints which may be changed and, second,

to assist the adaptation so that it evolves in a direction which benefits the intended population

groups.

X.2.1. Regional harmonization of policies and practices

One driver for minerals smuggling is the differing levels of export tax amongst countries in any

region mean which encourage minerals to be smuggled to countries with lower fees for export.

Harmonization of export tax is frequently proposed as an important step to reduce such

disparity, however tax harmonization has political and economic complexities including

implications for sovereignty and potential loss of revenue for specific countries so this is not a

straightforward process.

Other aspects of control also been proposed for harmonization including legal frameworks in

relation to formalizing and regulating the sector. Yet another proposal is to harmonize customs

procedures as well as legal penalties and enforcement mechanisms.

X.2.2. Market access

State-owned enterprises or agents often play a key role as an ASM‟s product buyer. In

Mozambique, the Mineral Development Fund plays a dual role in licensing and regulating ASM,

as well as acting as a buyer, particularly in remote sites where the miners have restricted access to

competitive pricing. In the DRC, the state-owned enterprise for copper, Gecamines, is a key

buyer for ASM product.

A propose study in the DRC by the university of Brussels will look at the potential to create an

ASM „bourse‟ or legal, collective market for ASM products as a clearing-house where lots

produced by artisanal miners could benefit from organized pricing, bargaining power, etc.

There are important domestic markets for some ASM products, notably construction materials

(sand, gravel, stone, etc.). For minerals destined for the export market, depending on the mineral,

the number of export traders may be quite small.


X.2.3. Fair Traded ASM Products

The mining of gold and precious stones throughout the world today is noticeably characterized

by high social and ecological costs. Anyone who buys jewellery today can no longer be sure that

the purchase made does not in some way either support child labour or slave-like working

conditions in a struggling developing country, or even contributes to financing a war. This

situation has been seen as a challenge for certain ASM operations.

Aroused by the need for a reaction against these prevailing conditions, a number of small-scale

mining experts, gem specialists and goldsmiths have formed an initiative, which, under the

patronage of the Fair Trade e.V. (a German based NGO) and with local NGO participation, has

set out to establish the practice of fair-trading in business dealings associated with precious

metals and gems. By using the principles of fair-trading, small-scale producers in developing

countries are to be given the opportunity of trading their products under better selling terms and

conditions. The prerequisites and criteria for fair trade with small-scale mining products have

been worked out and are strict, and these include the following aspects the operation has to fulfill

to be eligible: candidates are to be legally constituted small-scale producers operating within a

democratically organized trade framework (e.g. in the form of a cooperative society or association

etc.), their approach to mining is to reflect a responsible attitude towards the environment, a

social conscience and commitment to ILO conventions including child labour in regard to the

welfare of workers and their families.

These artisanal and small-scale producers can profit from fair trade in two ways:

1. By improving the selling conditions for the raw-products, wherever possible through direct

sale to the end-user and therefore excluding any unnecessary intermediary transactions by

middlemen.

2. By the producers' participation (the mining people and workers engaged in mining processing)

in the profits margin achieved from the market value of the products .

The miners have to invest the additional payments in improving their social and environmental

performance. These investments should support the miners to overcome the grip of poverty and

the difficult social conditions with which they have to cope.

Box 3: Fair Trade: a “solution” to ASM-related poverty in sub-Saharan Africa?

The impetus for exploring avenues for launching a Fair Trade gold campaign has emerged from the success of parallel campaigns in other

smallholder-dominated sectors. Indeed, the successes of the Fair Trade movement are well documented. Annually, the Fair Trade of agricultural

products, including coffee, tea and cocoa, generates between US$400 and US$600 million in sales.

However, the historical dynamism of the Fair Trade network has occasioned not only

“successes” but also has been accused of failing the small-scale producers that it aims to help.

The markets of some (well-established) agricultural products, such as Fair Trade coffee in


Europe, have reached a ceiling limit that threatens to prevent small-scale farmers from either

entering the Fair Trade markets or, in the case of existing groups, from being guaranteed a Fair

Trade buyer. Such a situation could well arise with regards to Fair Trade gold (and expansion

into other commodities) without accurate forecasting of future markets for ethical gold.

Demand for ethical gold (and jewellery more generally) from consumers located in the global

north does engage with the need for product diversification away from Fair Trade's traditional

reliance on agro-exports (Murray et al., 2003, p. 26).

However, this may instead precipitate a geographical shift in demand for Fair Trade gold away

from domestic markets in gold producing countries and create a dependency upon Northern

consumers‟ demand for the product. The potential for destabilising effects on rural livelihoods

created by such dependency is best evidenced by the historical effects seen in global (and Fair

Trade) coffee markets.

The transient nature of ASM is problematic: gold is extracted from sites over a finite period of

time before a community moves on. This, in turn, may impact upon the way in which

development initiatives, derived from Fair Trade premiums, are initiated because there is no

long-term, sustainable community which it can be aimed at.

The Fair Trade network's interest in ASM points to a desire to address all of the different

documented forms of poverty that mark the industry. Indeed, there is as much attention given

to an amelioration of health conditions for small-scale miners and a reduction in the

environmental impact of their activities as there is towards ensuring a better price for their gold.

There remains considerable speculation, however, as to whether Fair Trade can or should be

applied to ASM. Little is known about the working groups being targeted and, most

importantly, the potential obstacles impeding the launch of such a project.

Source:17

X.3. Certification

When considering how best to improve the livelihoods of artisanal miners and ASM workers,

certification is often proposed as a means to guarantee improved living, work and trading

conditions. Certification provides third party assessment and guarantee that a particular product,

production method or supply chain conforms to a given set of social, environmental, political,

economic or ethical criteria. Certification is a means by which buyers can seek to ensure that the

17

Reforming small-scale mining in sub-Saharan Africa: Political and ideological challenges to a Fair Trade gold

initiative

http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VBM-4THS3MS-1&_user=5948236&_coverDate=12%2F31%2F2008&_rdoc=1&_fmt=full&_orig=search&_cdi=5930&_sort=d&_docanchor=&view=c&_acct=C000067044&_version=1&_urlVersion=0&_userid=5948236&md5=c4bc5ce26de3797e79a1bf99dd14daed#bib37


products that they purchase are produced and traded in accordance with these criteria. There are

two types of minerals certification: certification of origin and certification of ethical quality.

Certification of origin is used to assure buyers that the minerals do not originate from places

where they may have been implicated in war or human rights abuses.

Certification of ethical quality assures buyers that the minerals have been mined, processed, and

traded in ways that do not compromise defined ethical standards.

X.3.1. Setting of criteria

Before certification enters into any ASM policy or planning, it is essential to be sure that this is an

appropriate intervention. Assurance as to a product‟s provenance or pedigree can be provided by

government through legal instruments, by companies through their trading and corporate social

responsibility standards, and through voluntary standard-setting by multi-stakeholder groups such

as certification bodies.

One of the key challenges in creating useful certification systems is the setting of the criteria by

which ASM operations can obtain their licence. Existing criteria under which certification

systems operate include:

Minerals that are not mined or traded under conditions of war, or to fund conflicts;

Decent work conditions;

Environmental and „green‟ issues;

Mercury free gold treatment;

Child labour free products;

Fair trade where ASM workers receive an improved income; and,

Transparency of revenues and tax payments.

A factor in assessing the success of certification systems is whether or not the producers can

attract a price premium for their certified product. This benefit is frequently promoted by

certification systems, particularly in relation to fair trade. However there are not yet many

examples of this being effective in ASM.

Certification in ASM is still in very early phases and lessons should be learned from other sectors

such as food, textiles etc. where consumer choice and market mechanisms to respond to

purchaser criteria are more developed. However, what is already clear in ASM is that there is a

risk of a proliferation of certification systems which could create confusion in the market as each

looks to gain market recognition and to establish its brand. Synergies, shared objectives,

collaboration and good communications are all essential when designing or selecting certification

systems.


X.3.2. Traceability

If illegal transactions are to be eliminated from ASM trade, traceability of materials is an

important element. However, this is extremely difficult in practice as ASM materials may be

produced by workers, often clandestinely, making it progressively more difficult to determine

origin.

Traceability can lead law enforcement agents and inspectors to sites where poor or illegal

practices are used, which in turn could result in fines or prosecution. It facilitates taxation. It

exposes illegal actors and profiteers in the supply chain, thereby disrupting their income.

There must be a clear incentives for the miners and traders to support traceability. For the miners

themselves, any motivation must include the potential for improved income and working

conditions. For legal buyers linked to the formal supply chain, the motivation will be improved

market access and opportunities. For responsible government concerned with national revenues

and economic development, the incentive will be improved tax returns and investment in their

minerals trade.

Box 4: Certified trading chains in mineral production

The concept of certified trading chains (CTC) was raised in the preparatory discussions for the

G8 summit in 2007. The summit protocol stressed the need for action in the ASM sector and

acknowledged the potential of certification systems to implement ethical standards, good

governance and transparency in mineral production.

In this effect a pilot project was carried out in Rwanda to test the feasibility of a certification

system for selected raw materials in artisanal mining. The CTC introduced a concept of

voluntary self-commitment among the partners in the trading chain. The CTC put in place a set

of standards derived from 5 principles: 1. Transparency 2. Relatively good working conditions

and no child labour 3.Protection of human rights 4. Community consultation, contribution to

the local community and gender sensitive approaches 5.protection of the environment

These standards were drafted after mining company audits in Rwanda and were based on

international as well as national instruments. There are five levels of compliance to these

standards.

Through the strengthening and supervising of the mining sector in the country, Rwanda

supports the desire to establish CTC. Companies engaging and working with ASM have

expressed their interest to participate in this certification exercise. By implementing the

exemplary pilot project in Rwanda and launching the next certification exercise in DRC, CTC

aims at enhancing regional stability and peace builing

Source: V. Steinbach, April 2009 : “CTC in Mineral Production Project Outline and


Status”, Multi-year expert meeting on commodities and development

X.3.3. The Kimberley Process Certification Scheme (KPCS)

The KPCS is a joint governments, industry and civil society initiative to stem the flow of rough

diamonds used by rebel movements to finance wars against legitimate governments. The KPCS

imposes extensive requirements on its members to enable them to certify shipments of diamonds

as „conflict-free‟.

A review of its functioning and impact was carried out in 2006 after three years of operation18.

The report indicated that the KPCS has been successful in curbing the low in conflict diamonds

down to less than 0.2% of the world‟s total annual production of diamonds by volume.

The KPCS has led the way with its program for certifying the origin and legal international

trading of diamonds. Other initiatives, such as the International Conference for Peace in the

Great Lakes, are considering replicating the process for other minerals, especially for colored gem

stones owing to the implication of these in funding wars, terrorist activities and human rights

abuses in Colombia, Sri Lanka, Pakistan, and Burma

18 Ad hoc Working Group on the review o the KPCS (2006) third year review


The KPCS (signed by 80 countries) is a possible way forward in breaking the link between the

legitimate trade in diamonds and uncontrolled violent conflicts.

There is evidence, therefore, of the positive impact of the KPCS in relation to its specific,

focused aim of reducing the trade in conflict diamonds. But this is an exception as there is little

other independent evaluation available to give informed opinion on the impact of other

certification systems. It is postulated that certification is more effective in relation to precious

metals and gemstones which are used in the jewellery business as it is easier to make an emotional

connection to the mineral in this sector, whereas in industrial minerals it is more challenging to

connect the buyer to the market.

However, its success will be short lived if the root causes of the problems associated with this

trade are ignored. Many of these problems revert back to artisanal diamond miners and the

poverty and exploitation they endure. While the KPCS has undoubtedly made significant inroads

in addressing illicit diamond-mining activities and their link to violent conflict, some have pointed

out that the initiative has done relatively little to address the poverty, inequality and desperate

working conditions that small-scale miners must endure on a daily basis. 19

CASM has assisted the Kimberley Process Certification Scheme working group on Alluvial

Diamond Diggers (chaired by Angola) with issues papers and participation in the CASM

network, especially through south-south cooperation between African and South American

members. It has also assisted the Belgian Royal Institute for International Affairs helping this

group get a better understanding of the artisanal mining issues. Through education, policy

dialogue and projects targeted directly to artisanal diamond miners and their communities, the

Diamond Development Initiative (DDI), another forum trying to address these issues is

intending to demonstrate that diamonds can be an asset for economic growth and a catalyst for

individual and community development in conflict affected countries.

XI. ORGANISATIONS AND ASSOCIATIONS OF ASM

Organization is seen as a way of establishing and defending ASM rights. It is a way of accessing

supplies through collective purchase, and to access materials or resources which may be restricted

for individuals, such as explosive. The miners see organization as a means of creating better

trading conditions and, as organizations become more mature, this encompasses certification and

access to international markets. Working in groups can confer significant advantages to ASM

workers in terms of collective action and political leverage, improved productivity and market

access.

The objective of government in organizing ASM is to make the sector more identifiable including

the potential for licensing and census; to improve potential for management and regulation; to

create more effective channels of communication; and to create platforms whereby interventions

19 Silberfein, 2004; Olsson, 2006


can be more effectively delivered. Organized ASM is also easier to tax. There is a range of

structures which can be established to improve ASM organization including cooperatives,

associations and unions.

XI.1 ASM Associations

By organizing artisanal miners into associations, technical and financial assistance could be

directed to them and such associations would also benefit to the government as they could also

be partners for controlling the illicit commercialization of mineral resources.

In five major artisanal mines of central Mozambique, miners‟ organizations have been

strengthened and registered as associations. Experience shows that these organizations are

helpful for introducing improved and safer mining techniques. In contrast, in illegal, unregulated

mines, children are often employed and safety is largely neglected. The Mining Development

Fund only gives financial support to registered mining associations The Mining Development

Fundis a government initiative that provides technical and financial support to artisanal miners.

There are considerably more examples of effective associations in the SSM arena than in the

artisanal community. These associations represent the collective business interest of their

members to government and the markets rather than trying to create a shared economic

livelihood model. In Tanzania, the associations have further consolidated their membership and

impact through the creation of umbrella bodies such as the Federation of Mining Associations of

Tanzania (FEDEMA) and the Regional Mining Association (REMA). There are examples of

mineral-specific associations such as the Emerald and Semi Precious Stones mining Association

of Zambia (ESMAZ) which has a membership base of 400 owners of emerald mines. ESMAZ

has carried out workshops for its members on accountability, basic geology and accounts and

book-keeping.

There are also examples of women‟s associations including the Association of Zambian Women

in Mining (AZWIM), South African Women in Mining Association (SAWIMA), the Tanzania

Women Miners Association (TAWOMA).

XI.2. ASM cooperatives

The ILO defines a cooperative as an „autonomous association of persons united voluntarily to

meet their common economic, social and cultural needs and aspirations through jointly owned

and democratically controlled enterprise‟. This is not always the case in ASM cooperatives. Some

groups of artisanal miners form cooperatives in order to comply with the law in countries which

require ASM to be structured, others to access services.

In Mozambique, 61 cooperatives have been established as a part of a pilot project. These groups

are given support by the government on legal issues, technical assistance and training. The nature

of high value, low volume, and portable products such as diamonds or gold may create barriers to

cooperative structures. A single stone may be of significantly higher value than the rest of a day‟s


production and the finder may be reluctant to contribute this to the collective income. The

market access and reward opportunities may, therefore, predicate against successful cooperative

structures.

XI.3. Unions and Syndicates

Unions also exist in ASM and are another form of organization which can improve ASM rights

and representative, though these are far less developed and active in Africa than in other parts of

the world. The Mineworkers Union of Zambia is actively trying to sensitize the workers in the

SSM to join unions in order to exercise their right to collective bargaining to have the right of a

living wage.

XII. ALTERNATIVE INCOMES, LIVELIHOODS

Even if ASM is regulated, formalized, given technical support, achieve fair prices and good

market access, in the end this can only be for a period of time. In some cases ASM can exist for

decades, even centuries. But in others, the life of the mine can be extremely short, and ironically

may be even shorter if ASM techniques and access improved.

The number of people working in ASM is vast. Many of them will eventually leave ASM of their

own accord when there are simply no more accessible minerals to mine.

Finding ways to help ASM workers to develop no-mining incomes and livelihoods must be a

fundamental part of any policy that addresses ASM.

XII.1. Constraints to exit ASM

The reasons for most of miners remaining in ASM without looking for other livelihoods include:

Many ASM workers may have been in the sector for a long time and therefore may have

been excluded from education or training opportunities and may have limited skills and

confidence to enter new activities;

Access to finance for ASM is limited for those wanting to leave ASM and to start a new

activity;

Artisanal miners often have debts which have to be paid before they can leave ASM;

High commodity prices can make alternatives less attractive and less competitive; ASM

can still be more lucrative than other sources of income. A study carried out by USAID

in Tanzania found that ASM miners earned on average six times more than the average

wage farm labour;

ASM typically delivers a daily income to miners and others. Other livelihoods such as

agriculture, may involve a long lead-time and investment before returning a profit;


Every artisanal miner who has to leave ASM reduces the income of other actors in the

supply chain which can result in disruption of vested interest; artisanal miners may be

pressured into remaining in ASM by traders and others;and,

Some forms of ASM (such as diamond mining) are addictive. The „casino mentality‟

describes artisanal miners‟ believe that they will find a very valuable stone of resource and

creates a gambler‟s commitment to continue mining.

The alternative livelihoods programmes propounded by policy makers have emerged with the

aim of encouraging moves away from mining activity altogether, many of these are unsuccessful.

Some have argued that poorly researched initiatives that have failed to engage with grassroots

communities sufficiently can actually serve to deepen the poverty cycle further rather than

alleviating it20.

Certainly, such projects have failed to reduce the numbers participating in ASM and there is a

suspicion that, while they may appear fashionable, “the reality is that in most cases, the profits

potentially earned from activities such as snail rearing, batik and soap making within the localities

in which they are being promoted are significantly less than those that could be earned in

artisanal mining”21.

XII.2. Promoting alternative livelihoods

Artisanal and small-scale miners can be supported to set up alternative businesses, offered

opportunities within the LSM sector or assisted to develop agricultural skills.

XII.2.1. Enterprise development for ASM workers

Supporting artisanal miners to set up alternative businesses can be a way to support

diversification of livelihoods. This has potential, however there are some basic factors which

must be included in any project or programme to develop (SMMEs).

The first, essential criterion for a successful Small, Micro or Medium Enterprises is

entrepreneurial spirit. Other elements such as business planning access to finance, business

development support, access to markets etc. can all be provided through development

programmes but they will only be successful if the individuals identified have the drive and

enthusiasm to create a business.

Workers who have been employed all their lives in often paternalistic state monopolies may have

little inclination or aptitude for the significant personal investment and energy required to

establish a new business enterprise. It may be more effective to identify key individuals who have

20

Hinton et al., 2003; Banchirigah, 2006

21 Hilson, 2007, pp. 245–246


the potential to create business that can generate employment for others and to invest in them,

rather than disperse resources widely and to risk creating a number of highly dependent often

struggling small enterprises.

ASM workers may face significant challenges in relation to literacy, skills, understanding of

financial management and social stigma, so programmes should include and address these basic

issues before introducing the technical elements of capital, training and business development.

Such skills and programmes for diversification do not have to be addressed separately from

programmes that aim to support ASM strengthening. If ASM workers are given the training and

support they need to work more efficiently and more effectively in ASM, they can apply these

skills to diversification as the resource dwindles or other opportunities become apparent.

The project „Market Approaches to livelihood Improvement‟ (MALI) (2003-2005) based in

Katanga, comprises different activities in the fields of agricultural production, micro enterprises

development and finance as well as improving market access. The outcome of the project, among

many others, has been the creation of 300 agriculture and related small and micro enterprises in

SSM communities.

XII.2.2. Opportunities within the LSM sector

The role of LSM in creating alternatives is extremely important. The first and most obvious is in

job creation. As contact usually starts at the exploration stage, artisanal miners can be employed

by prospection teams to provide manual labour, land clearance, camp support, security services

and other activities. These jobs may be temporary or may create further opportunities within the

company during the subsequent stages of mine development and construction, both of which are

labour intensive.

Creating local supply opportunities which can absorb large numbers of ASM workers can be an

important way of creating new livelihood opportunities within the new markets provided by

LSM. LSMs can conduct proper environmental, social issues assessment in order to improve

ASM‟s working conditions.

Another important intervention which can create alternative sources of income of artisanal

miners and other community members is the use of high intensity manual labour on

infrastructure projects such as road construction. This can often be a challenge for LSM

companies as they tend to work on tight timelines and need mechanized approaches to carry out

work quickly to meet their mine development schedule. However road rehabilitation and

maintenance may be an ongoing activity where manual labour is appropriate as the duration of

the project is longer and the deadlines less urgent.

AngloGold Ashanti recognises that many regions in Ghana have no longer the mineral resources

in appropriate forms or quantities to support the number of small-scale miners operating in a

region, in the Obuasi area for instance22. The company is working directly with the communities

22 AngloGold Ashanti’s approach to ASM


and development agencies to promote agricultural projects to offer communities economic

opportunities to complement mining.

XII.2.3. Challenges in depending in LSM-based alternatives

But LSM mining is no more sustainable than ASM as the challenge of non-renewability remains,

therefore all interventions that are undertaken need to constantly plan for the impact of mine

closure and emphasize those activities which can survive when the resource is exhausted and the

major economic powerhouse of the area, the mine, is closed.

Another complication that LSM creates is that of magnetic attraction to people in the mining area

, based on the new economic opportunities and social development benefits , which increases

the population, puts pressure on the resident communities and their resources, and draws people

away from other areas and activities which may be inherently more sustainable for the long term.

To counteract this, LSM must work in partnership with government planning to determine how

resources and revenues can be managed to ensure development of other parts of the region

rather than those directly around the mine. This is difficult as the expectations of the immediately

adjacent communities are high.

XII.2.4. Opportunities in agriculture

The relationship between agriculture and ASM is important. ASM often degrades agricultural

land and resources such as water. ASM may attract people away from agriculture and if a „rush‟

occurs at a critical time in the agricultural season, the crops or the year may be destroyed,

abandoned, or consumes by migrants leaving the original community destitute. ASM can attract

the most physically capable away from a village, leaving behind the older, weaker members who

have less capacity to manage their fields.

There is a need for serious effort to go into strengthening agriculture to make it a viable and

attractive alternative for ASM workers. This may have particular viability if a seasonal transition is

used, so that for part of the year ASM is the main income source, and for part of the year it is

agriculture. Of course this will not work if the best season for both coincides.

The challenges of transition can be managed but this requires multi-party input and approaches

to address all the critical elements. Land rights and access, assistance for survival during

transition, support for agricultural inputs and training, support for the creation of community

agricultural structures, ensuring transport and access to markets are all components to create an

enabling environment for transition.


XIII. CONLUSION: TABLE OF RECOMMENDATIONS

The absence of formalisation together with the seasonal and migrating character of ASM makes

the administration and control of the sector extremely difficult.

Uncontrolled ASM can cause serious negative effects in various ways. Areas of particular concern

as shown in the paper, include unacceptable environmental practices, poor social, health and

safety conditions, illegal mining and marketing and lack of alternative livelihoods.

Instead of alleviating poverty uncontrolled ASM can perpetuate poverty as it attracts people away

from other more sustainable livelihoods such as farming, and can destroy the future potential of

such areas if there is a resource found on agricultural land ; can compromise the levels of

education and skills for employment of young people; creates debt which can trap people in

ASM; has little culture of savings and inefficiently uses non-renewable resources with little

revenue going to the state or being used for social investment.

Illicit marketing and illegal operations are primarily due to inadequate government policies. As

mentioned in the introduction, artisanal and small-scale miners find themselves trapped in a

vicious circle of poverty, and in order to improve ASM‟s contribution to sustainable development

there is an urgent need to break this cycle of cause and effect.

Governments are also caught in a “paralysing cycle of causality”23 that aggravates the problem.

One of the principal effects of illicit trading is the loss of tax. Lack of operational resources is

the primary cause of the inability of mining authorities in many developing countries to control

the activities. Inadequate control results in a environmentally harmful mining, poor health and

safety and illegal operations. Illegal operations leads to the inability to collect taxes and royalties

due to the government which restricts the capacity to allocate the necessary resources to its

agencies.

In developing countries, mine inspectors are unable to visit artisanal operations regularly, which

makes it impossible to enforce the sector‟s regulations even if they were adequate and most likely

to address the sector‟s issues.

The table below summarizes the recommendations made throughout the paper for a more

sustainable ASM. But it seems that the first main step to break the cycle affecting both miners

and mining authorities is to adopt incentives for ASM to operate in the legal domain. Due to the

large numbers of miners, their mobility and their remote locations, adopting measures to improve

ASM, reduce illegal trading and make miners change their traditional ways of mining will be

extremely difficult unless the activity is formalised.

Formalisation will facilitate reaching the target group with assistance programs and increasing

their awareness on the negative effects of their traditional mining techniques. There needs to be a

23

R. Noestaller ‘historical perspective of artisanal mining’


strong and continued government commitment. To reduce the growing and large number of

people in ASM exploiting limited resources, a special attention must be given to creating

alternative livelihoods in ASM communities.

Area of

Intervention

Goals Recommendations

Environment Protect the environment and promote environmentally sound mining techniques

Implement a monitoring scheme to check the environmental impacts and enforce appropriate penalties

Interventions focused on incentives and training

Improve community awareness on environment

Promote culturally relevant technical solutions to environmental impacts

Occupational

health and

safety

Improve the

working

conditions of the

miners

Safety equipment assistance and technical cooperation

Improve awareness of health risks

Education and training programmes

Surveillance of ASM concessions

Gender

Issues

Strengthened

role for women

Ensure equal access to finance, technology and market:

gender sensitive approaches

Training for literacy, business development skills, capacity

and image building

Support the creation of women‟s associations

Interventions that empower women and recognize

inequalities

Delivering services such as health care, education, child

care and first aid

Child labour Eliminating child

labour

As a first stage, improve children‟s working conditions

and withdraw children from dangerous activities

Improve awareness of the dangers of putting children to

work in mines

Enforcement of regulations addressing child labour

Providing working children and their families with other

alternative incomes, and reinsertion of children in schools

Relationship

with LSM

Develop a better

relation between

the two sectors

Creating an atmosphere of „partnership‟

Understanding by LSM operators of ASM needs and

mining traditions

LSM assistance to ASM through technical, financial

cooperation, job creation etc.


Policy and

legal issues

Implement and

enforce

appropriate ASM

regulatory

frameworks

Incentives for ASM to operate in the legal domain

Specific legislation that takes into account ASM special

needs

Facilitate the requirements for obtaining permit

More authority and prerogatives to local decentralised

government

Establishment of an efficient monitoring body

Dissemination of the law, and realistic penalties

Improved taxation systems

Properly implemented and enforced laws and regulations

Mining rights Confer to miners

easily accessible

legal and

transferable

rights

Expand property rights to absorb the extralegal mining

activities

Legal access to mineable resources (allocated ASM areas)

Security of tenure

Finance and

credit

Alleviate barriers

to ASM finance

and credit

Easier access to finance

Training in savings and financial management

Equipment leasing schemes and other alternatives to

direct financing

Market access

and

certification

Better markets

for ASM

products

Regional harmonization of policies and practices to

reduce smuggling

Hold ASM trades fair

Develop and adopt appropriate certification systems

Organisations

of ASM

Organised and

formal ASM

structures

Support the creation of associations and other organised

ASM structures that defend ASM rights and economic

interests

Alternative

livelihoods

Reduce ASM

dependency and

create other

livelihoods

Supporting ASM miners to set up alternative businesses

through financial and financial support

Job creation in LSM operations

Training and support for alternative livelihoods in

agriculture


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