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Transcript of Social, Legal, Financial Issues Susan Egan Keane Conclusion Workshop Southeast Asian Regional...
Social, Legal, Social, Legal, Financial IssuesFinancial Issues
Susan Egan KeaneSusan Egan Keane
Conclusion WorkshopConclusion Workshop
Southeast Asian Regional Artisanal and Southeast Asian Regional Artisanal and Small Scale Mining Strategic Planning Small Scale Mining Strategic Planning ProjectProject
March 23, 2011 March 23, 2011
OutlineOutline
Observations and conclusions of ASGM Global Forum regarding social, financial, and legal issues
Introduction to the UNEP Formalization Document– Approaches to formalization from
around the world
UNEP ASGM Global ForumUNEP ASGM Global Forum
Held December 2010 in Manila 17 ASGM countries from three
regions: governments, miners, donors, NGOs, experts
Discussed technical, social, legal and financial issues
Priority Social IssuesPriority Social Issues
Health and occupational hazards to miners, mining communities and adjacent communities
Open burning of amalgam without any protective
equipment
Photo: Ban Toxics!
Social issues (con’t)Social issues (con’t)
Women panning with children, Mali Photo: L. Bernaudat
Gender issues Child labor, ILO “Minors out of Mining”program
Social Issues (con’t)Social Issues (con’t)
Land and resource conflicts in mining areas;
Unregulated migration in gold rush areas, creating conflict and strains on social services.
Case Studies on Case Studies on Legalization and Legalization and FormalizationFormalization Cases from Zimbabwe, Tanzania,
Ecuador, Bolivia, Peru, Mongolia
Highlighted common issues countries face when developing a legal framework for ASGM
Definition of ASMDefinition of ASM
How to define different activities of ASM – individuals, cooperatives, associations, individuals, cooperatives, associations,
community enterprisescommunity enterprises– artisanal versus small scale versus medium scaleartisanal versus small scale versus medium scale
A long-standing, unresolved issue Definitions provide basis for creation of ASM-
specific policies, licensing and enforcement Often categories ignored, becoming “extra-
legal”
Artisanal?Artisanal?
Photo: UNIDO Global Mercury Project
Small Scale?Small Scale?
Photo: UNIDO Global Mercury Project
Blue Reef Small Scale Gold Mine (Tanzania) Photo: Global Mercury Project. Final Country Report for Tanzania. November 2007
Medium Scale?Medium Scale?
Complexity of RegulationComplexity of Regulation
Don’t know how to apply for licenses
Don’t know rights and obligations Complicated process Long distances to travel Complex regulations tend to favor
the owners, disempower miners
Land AllocationLand Allocation
Competition with/ preference for concessions to large scale mining – reliable source of tax revenue
One solution: establish ASM mining zones– Bolivia and Brazil: Special concession
regime for cooperatives and ASM mining How do these compete/overlap with
LSM? (note depth limit for ASM)
Where are the Spaces for Where are the Spaces for ASGM?ASGM?
Tanzania Mineral Rights Map(mostly large & medium size companies)
RoyaltiesRoyalties
Some miners avoid becoming legal to avoid taxes One solution: different royalty schemes for ASGM
miners– Bolivia: Special royalty regime for ASM: LSM (4%-7%) vs.
ASM (1.5% -2.5%)– Ecuador: Exemption for artisanal mining from royalties,
royalty for small scale is minimum 5% Question: Why should low income miners pay
taxes? Question: Why not buy gold at above spot prices,
to subsidize the rural poor and eliminate the black market?market?
Barriers to FinancingBarriers to Financing
Most important barrier: lack of Most important barrier: lack of access to credit because of the access to credit because of the informal nature of the sectorinformal nature of the sector
Lack of credit hampers ability to Lack of credit hampers ability to make improvementsmake improvements
One reason why formalization is One reason why formalization is critical to improve practicescritical to improve practices
Financing OptionsFinancing Options
Miners:– Form entrepreneur groups,
traditional funding systems e.g. group saving schemes;
– Develop a savings culture;– Increase income through value-
added activities
Financing OptionsFinancing Options
Financial institutions:Financial institutions:– Affordable credit schemes;Affordable credit schemes;– Mobile banking systems;Mobile banking systems;– Miners’ cooperative banks; Miners’ cooperative banks; – Rotating savings and credit Rotating savings and credit
associations;associations;
Financing OptionsFinancing Options
Third parties:– Third-party guarantees;– Creation of a system of staking and
selling ASM claims– Government-run Mining Development
Fund to support purchase of simple mining equipment
Formalization is critical, Formalization is critical, but:but: Specific requirements will vary from situation
to situation; Requires collaboration across spectrum of
stakeholders; Also requires financial and technical support,
access to markets, capacity-building and training;
Must manage important and complex relationship between artisanal and small-scale gold mining and large-scale mining.
UNEP Formalization UNEP Formalization DocumentDocument Series of case studies to capture
global experience Will serve as a guide to others
who want to approach formalization of the sector
Estimated to be completed by Autumn 2011
Legal Mechanisms Legal Mechanisms
Legal status of miners Diversity and scale of activities Mining and environmental laws
and policies, and their role in formalization efforts
Economic and Financial Economic and Financial MechanismsMechanisms Potential credit mechanisms Use of economic incentives to
formalize, including “responsible gold” Taxes, royalties and the gold supply
chain Advantages and disadvantages of
privatization/free trade of gold Public private partnerships in ASM gold
production
Institutional MechanismsInstitutional Mechanisms
Miners’ organizations: a key factor for Miners’ organizations: a key factor for formalization formalization
Small-scale and large-scale mining Small-scale and large-scale mining “working together” “working together”
Role of the Governments in supporting Role of the Governments in supporting formalization: opportunities and formalization: opportunities and challenges (mining departments, challenges (mining departments, academic, research and technology academic, research and technology centers, others)centers, others)