GOC STRUGGLES TO COUNTER ILLEGAL MINING

UNCLAS BOGOTA 001690

SIPDIS

E.O. 12958: N/A
TAGS: ECON EMIN SENV EIND ENRG ELAB CO
SUBJECT: GOC STRUGGLES TO COUNTER ILLEGAL MINING


1. SUMMARY: Illegal mining is on the increase in Colombia,
fueled by growing global markets, improved security in rural
areas, and the difficulty of Colombia's law enforcement
apparatus to effectively counter the well-heeled miners.
Gold, platinum, and mercury extraction is most prevalent in
the northwestern department of Choco, where the combination
of vast resources, local corruption, and limited state
presence provides the ideal conditions for uncontrolled
exploitation. The GOC is aware of the problem and in April
carried out its first wide-scale law enforcement operation to
counter illegal mining, seizing 24 gold dredges in Choco.
They hope to accelerate such operations, but will need the
support of local communities and the promise of economic
alternatives to make their efforts stick. GOC plans to
convert illegal mines to legal operations have been hampered
by bureaucratic delays. END SUMMARY

Illegal Mining of Growing Concern to GOC
--------------


2. The mining sector accounted for five percent of GDP in

2008. In attempts to diversify its mining beyond coal and
natural gas, the GOC has increased efforts to promote legal
mining of precious metals -- specifically gold. In 2008
Colombia produced 34 tons of gold and the GOC expects that
figure to increase to 105 tons by 2019, with production
centered in the departments of Antioquia, Choco and Caldas.
As with coal, however, illegal mining plagues Colombia's gold
industry and the GOC is struggling to find the correct tools

to counter the growing problem.


3. According to Beatriz Duque, Director of Mines at the
Ministry of Mines and Energy (MME),the GOC currently has no
official statistics on illegal mining. They hope to have
figures by the end of 2009 following a nationwide census that
will provide estimates about the quantity of illegal mines,
principally coal and gold. She added that in 2008 the GOC
created a working group -- comprised of the MME, Ministry of
Environment (MOE),Fiscalia (Prosecutor's Office),
Procuraduria (Attorney General),National Police and the
military -- to promote collaboration on legal cases and
assets seizures against illegal miners. Following the Choco
operation, the GOC is planning additional operations in
Cundinamarca (coal),Boyaca (coal) and the Amazon (gold).


4. The department of Choco contains the most illegal mining
activities, estimated by Duque to constitute 98 percent of
all mining (gold, platinum and mercury). Illegal gold mining
is done using two methods, either by dredges or heavy
machinery excavators. Dario Cujar, the sub-director of the
departmental environmental authority CODECHO, said in 2007,
Choco had 105 illegal mines and 227 excavator operations in
nine municipalities. He added that only three companies in
Choco have mining concessions, with only one also having the
requisite MOE permit. (NOTE: According to the 2001 Mining
Code, companies must obtain a mining concession from the MME
and an environmental permit from the MOE, after 3-5 years of
exploration, before drilling can commence. END NOTE.) Duque
said the situation in Choco is the most severe, but is also
typical of the reality in several other departments with weak
state presence.

First GOC Illegal Mining Operation
--------------


5. In April 2009 the GOC executed its first major operation
against illegal mining, seizing 24 gold dredges functioning
on the Quito River. Ayala said the GOC illegal mining
working group began planning the operation in June 2008, and
it cost the GOC USD 30,000 since the majority of
participating police and military had to be brought in from
outside Choco. The operation was highly publicized in local
media, and the seized dredges now sit in Choco's capital
Quibdo, as property of the Fiscalia. The owners of the
dredges, the vast majority from Brazil or Antioquia, await
Fiscalia criminal proceedings but are not incarcerated.


6. Catholic Priest Remo Segalla from Choco's Lloro
municipality praised the operation, but criticized how long
it took the GOC to act. He said some of the dredges had been
operating for over two decades without any GOC action, and
that both the local and national GOC authorities knew where
they were located. Helcias Ayala from Pacific Environmental
Institute (IIAP) contends that the local GOC does not have
the will nor logistical capability to counter illegal mining
in a significant way. Segalla noted that the number of
excavators in his municipality had increased from four to
sixty in the last two years, even though the machines are
clearly visible to all. Segalla said the April operation has
made miners in his town a "little more fearful," but not
enough to make them suspend or hide their operations. All
local experts involved said the operation would not have
occurred without the involvement and support of the local
populations affected by the mining.

No Economic Benefit to Local Community
--------------


7. The role of three Afro-Colombian "Consejo Comunitarios"
from towns adjoining the Quito River were key to the April
operation. Representatives from the Consejos traveled to
Bogota in June and July of 2008, meeting with the primary GOC
stakeholders. Senator Piedad Cordoba also met with the MME
and MOE on their behalf. Quibdo's Secretary of Government,
Martha Salazar, said that the Consejos were fundamental in
spurring federal action against the dredges. Ayala said
normally, illegal miners pay-off the local authorities, but
the persistence of the Consejo leaders brought the situation
to the attention of the GOC. Segalla agreed that corruption
is rampant, adding that the illegal dredge owners refueled
their dredges in a station in Quibdo that is adjacent to a
police outpost.


8. Benedesmo Palacios, president of one of the Consejos,
said they opposed the mining because their towns did not
receive the royalties due them, and because the activity
generated no local employment even though Colombian law
requires 80 percent local employment for any economic
activity on Afro-Colombian land. Presidential Envoy to Choco
Juan Guillermo Angel told us that illegal miners in Choco do
pay royalties, so that they can sell their minerals, but the
royalties do not reach Choco. They pay their royalties to
authorities in Antioquia or Brazil (where the owners are
from) who "doctor their books" and change the originating
area of the minerals.


9. Given no local ownership of the machinery and detoured
royalties, very few financial benefits of illegal mining
touch the local community. Salazar, said illegal miners
rarely interact with the local communities, but rather
construct temporary homes next to their operations and even
bring their own non-local cooks. She said local populations
can economically benefit by sifting through the waste from
the illegal machines, but it is dangerous work and provides
finances sufficient only for day-to-day needs. (NOTE: Local
press widely publicized the death of eight miners in April
2009 in Choco, who were sifting when a structure collapsed
upon them. END NOTE.) Salazar said that if illegal mining
does provide income for the local population, it is not
enough to move to enable them to satisfy their basic needs.


10. Palacios said the lack of prior consultation also
prompted the Consejos to act. Afro-Colombian leadership must
be consulted before the implementation of any economic
activity on their land, a requirement ignored by the illegal
miners. The MME has created specific Afro-Colombian mining
zones (zonas minerales de comunidades negras),limiting the
MME's authority in those areas, with the hope that increased
local control by Afro-Colombians would help stem the illegal
mining. Palacios, said, however, none of those legal changes
have resulted in practical change. Rather, illegal miners
either completely ignore the community, or bribe and acquire
permission from one member of the community to mine on
his/her portion of the collective land -- never complying
with legal obligations.

Environmental Effects Far-Reaching
--------------


11. Palacios said in addition to income disputes, the other
impetus for the Consejo's actions was the environmental
impact of the dredging. Both illegal dredging and excavating
generate deforestation, river bank deterioration, oil and
mercury contamination in the rivers, and species
endangerment. Cujar said the environmental effects are
comprehensive because illegal miners are not "true miners,"
(i.e. no exploration, studies, structured activity) but are
simply "diggers" at random locations. Cujar said that
isolated desertification has already occurred in Choco, and
it will spread if the GOC does not increase activities
against illegal mining and develop a comprehensive
reforestation program.

Legalization Process Long and Tedious
--------------


12. To counter the environmental effects, Duque said the GOC
must provide incentives for the illegal miners to convert
their operations to legal ones. She added that the MME and
MOE developed a special legalization program in 2001 and to
date have received 3600 applications, approving 136. To
participate in the program illegal operators must acquire
both the mining concession and environmental permit, as is
the normal GOC process, but they are not held responsible for
past royalties nor face legal repercussions from their
illegal activities.


13. Despite the program's intentions, Salazar observed that
many miners remain illegal specifically because of the
time-consuming nature of the legalization process. At a
minimum companies have to undergo 3-5 years of exploration
before receiving an environmental permit. She said that
while the MME and the MOE employ strict procedures for
granting a concession or permit, they do not have sufficient
personnel to even check and determine if companies have
implemented those standards. She noted that 144 companies
from Choco applied for the MME legalization program in 2001,
but when progress stalled, other companies decided it was not
worth the effort. Only one company in Choco has acquired
both a mining concession and the environmental permit,
spending eight years in the process.

Additional Impediments: Paras and Economic Alternatives
-------------- --------------


14. All stakeholders said the presence of guerrilla groups
(FARC, ELN) and paramilitaries (Aguilas Negras and the
Rastrojos) is a principal impediment to controlling illegal
mining. Salazar said the illegal miners collaborate with the
paramilitary groups, strengthening their presence in the
area. While coca remains the groups' principal economic
activity, in the last five years they have begun to turn to
illegal mining as an additional income source. Duque said
there is a direct correlation between illegal mining
activity, the presence of para groups, and limited state
presence. Duque added that the GOC has difficulty
distinguishing between subsistence miners and those who are
part of a larger, more sophisticated organization. Given
socio-economic conditions in the zone, they are more limited
politically in their efforts to eradicate subsistence miners
until they are able to provide alternative economic
opportunities.

Comment: GOC Must Join Forces with Local Communities
-------------- --------------


15. To fully counter illegal mining, the GOC must
simultaneously increase enforcement operations while
providing more efficient procedures for those willing to
legalize. In departments such as Choco, where there is
little state presence and rampant corruption, the local
authorities have limited political will and capacity to
address the situation. The national government must take the
lead, with the backing of local communities. To be
effective, they will need to harness the political support of
disaffected local populations, and back it with the security
and economic opportunities to guarantee that such efforts are
more than a mere temporary fix.
Brownfield