Is ethical gold possible?

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Is ethical gold possible?

Gold companies clean their image, but they abuse human rights and the environment, writes Stephanie Boyd.


A memorial for baby Andini, who died from skin problems, in Buyat Bay, Indonesia. Locals say the Newmont gold&mining company poisoned the sea with heavy metals. Many children have been born with problems here. (© Earthworks)

Modern goldmining is like the story of King Midas. Gold makes a lot of money but has a terrible effects: more than 900 farmers poisoned by mercury in the water in the mountains of Peru; Akyim indigenous people from Ghana were forced to leave their forest homeland; an Indonesian bay and fishing community was poisoned by arsenic and mercury; the Western Shoshone nation in Nevada lost their rights and land.

These are only some of the terrible things people say the Newmont Mining Corporation have done.

And still, Newmont says it is an ethical gold producer. The company has ISO (International Organization for Standardization) certification for environmental management and has been on the Dow Jones Sustainability Index for seven years.

Newmont also belongs to groups like the United Nations Global Compact, the Voluntary Principles on Security and Human Rights, and the Partnering Against Corruption Initiative.

This all sounds good until you look at the details: companies choose to join these groups, and they are usually controlled by other companies that they pay. And when there is external control, companies with bad records of human rights violations, like Newmont, still get on the list.

And it’s not only Newmont. People have said all the important gold companies abused human rights and poisoned the environment. They are very happy now with the image of responsibility.

Destroying the environment

Robert Moran is a scientist. He has worked for more than forty years looking at problems with water in the mining industry. He says that most goldmines only follow their own rules. People from the government cannot visit the mines without getting permission first, and it is the companies that give the information (eg. types of chemicals used and waste). Moran says he has never seen a long-term sustainable mine - from how they use water.

But now, people know about these problems. The mining companies are afraid of the protests against new mines around the world. And economists are worried too because social unrest makes prices go down.

Two years ago, Newmont had a project called Minas Conga in the mountains in Peru. It was going to destroy several lakes. But they had to stop it because of protests. Now, Newmont is still trying to tell the investors that they will dig the mine. But there are hundreds of farmers camping by the lakes, who are fighting to keep the machinery away.

This fight is big news in the business world, but ethical investment firms (eg. the Christian Brothers in the US) still sell Newmont stock.

The investors who say they are ethical say that they ‘challenge’ the companies, they write them letters and tell them the decisions of shareholders. But how effective can they be if they do not change the way companies work? Do they give the companies green stars they don’t deserve?

Many socially conscious investors wonder if ‘ethical gold’ exists, or if it’s just another lie that businesses tell.

Certified clean?

Ten years ago, some charities (led by Earthworks and Oxfam) decided to fight this problem and they started a campaign called No Dirty Gold. More than 100 jewellery stores, including 8 of the top 10 US jewellery stores, signed the ‘Golden Rules’ agreement. They promised not to buy gold from companies associated with abuse human rights and the environment.

So how do jewellers know for sure that they’re buying ‘clean’ gold?

The jewellery industry set up an organization called the Responsible Jewellery Council (RJC) to tell buyers and jewellery companies which shops sell clean, green gold. The RJC has more than 450 member companies: goldmines, refineries and jewellery stores.

But a report, “More Shine than Substance”, says the RJC uses weak standards, especially about environment and workers’ rights, and is not clear. If you look at the RJC list, there are many companies accused of breaking human rights.

For example, Rio Tinto, the very large goldmining company. They have a bad reputation, so environmental and human rights groups protested against the agreement they had to make the 2012 Olympic Games medals. Also, the gold refinery Argor-Heraeus SA. They are under investigation in Switzerland for buying gold from an illegal armed group in the Democratic Republic of Congo. The money from ‘conflict gold’ in the Congo is helping to pay for a terrible civil war which has killed almost six million people since the 1990s.

Two other RJC members, MKS Finance and PAMP, gold processing companies from Switzerland are in court for buying illegal gold from Peru’s Amazon. More than 40,000 hectares of Peru’s Amazon has been destroyed by illegal goldmining. And people have accused the gold industry of many abuses of human rights: eg. poisoning workers with mercury, forced labour and sex trafficking of young girls.

Survival mining

It can be difficult for a big certification organisation like the RJC to follow where the gold goes - from the mine to the person who buys it. It is easier with smaller certification groups: eg. Fairtrade gold (from the Fairtrade coffee people) and Fairmined gold (by the Alliance for Responsible Mining - ARM). These groups work directly with communities in Latin America and Africa that produce gold, so they know exactly where it goes.

Fairtrade International says that about 100 million people in the world work with handmade, small-scale mining. They produce only about 10 per cent of the world’s gold each year, but they are about 90 per cent of the workforce in goldmining. The money they earn is important for their families.

‘The miners are fighting against poverty,’ says Manuel Reinoso from ARM. ‘Big mining companies exploit workers and take 90 per cent of the money from mining out of the country and leave nothing for the local people.’

Reinoso, from Peru, knows how difficult it is to work in mines. He has worked all his life in mines, which is why he is fit and muscular.

He says there are still environmental problems with certification – some ARM and Fairtrade gold still has some mercury and cyanide. Reinoso says they’re trying to stop using chemicals, but this takes time and money.

ARM is doing projects in Africa mining gold with no chemicals. And Fairtrade has created the ‘Ecological Gold’ label for gold produced without chemicals. But even without mercury or cyanide, mining affects the environment a lot eg. rainforests and water flow.

So organisations like Fairtrade and Fairmined have to stay small; if they grow, they will not be sustainable.

Many environmentalists, like Eduardo Gudynas, say that no goldmining is ‘sustainable’. Gudynas has said they should stop goldmining in Latin America.

Only nine per cent of our gold use is for electronics and medical equipment; the rest is used in jewellery and the finance. The World Gold Council says that we already recycle a third of the total supply of gold. And we are recycling more and more, so we could have enough for what we need for technology and medicine without any new goldmining.

But we would need to change our economic system completely. We would need to change the way we buy much more than we need. We would need to find new jobs for the small-scale miners.

It was not long ago that people used to buy ivory from elephants’ tusks and proudly wear their coats made of sealskin. Maybe gold and wedding rings will be the next taboo, symbols of war, greed and environmental destruction?

One thing is certain: if we keep supporting ‘dirty gold’, we could be like a modern King Midas: we could destroy the environment for gold and then we will see, too late, that there’s nothing left to eat or drink.

Stephanie Boyd is a writer and filmmaker based in Peru and writes for New Internationalist. She is writing a book on what goldmining does to the environment and local communities called The Price of Gold.

NOW READ THE ORIGINAL: (This article has been simplified so the words, text structure and quotes may have been changed).