Elsevier

Geoforum

Volume 39, Issue 1, January 2008, Pages 386-400
Geoforum

‘Fair trade gold’: Antecedents, prospects and challenges

https://doi.org/10.1016/j.geoforum.2007.09.003Get rights and content

Abstract

This paper critically examines the challenges with, and impacts of, adopting the models in place for fair trade agriculture in the artisanal gold mining sector. Over the past two years, an NGO-led ‘fair trade gold’ movement has surfaced, its crystallization fuelled by a burgeoning body of evidence that points to impoverished artisanal miners in developing countries receiving low payments for their gold, as well as working in hazardous and unsanitary conditions. Proponents of fair trade gold contest that increased interaction between artisanal miners and Western jewellers could facilitate the former receiving fairer prices for gold, accessing support services, and ultimately, improving their quality of life. In the case of sub-Saharan Africa, however, the gold being mined on an artisanal scale does not supply Western retailers as perhaps believed; it is rather an important source of foreign exchange, which host governments employ buyers to collect for their coffers. It is maintained here that if the underlying purpose of fair trade is to improve the livelihoods and well-being of subsistence producers in developing countries, then the models that have proved so successful in alleviating the hardships of agro-producers of ‘tropical’ commodities such as coffee, tea, bananas and cocoa, should be adapted to artisanal gold mining in sub-Saharan Africa. Campaigns promoting ‘fair trade gold’ in the region should view host governments, and not Western retailers, as the ‘end consumer’, and focus on improving governance at the grassroots, organizing informal operators into working cooperatives, and addressing complications with purchasing arrangements – all of which would go a long way toward improving the livelihoods of subsistence artisanal miners. A case study of Noyem, Ghana, the location of a sprawling illegal gold mining community, is presented, which magnifies these challenges further and provides perspective on how they can be overcome.

Introduction

The purpose of this paper is to critically examine the challenges with integrating the gold extracted on an artisanal scale into the fair trade agenda. The literature depicts, perhaps overzealously as suggested by some (see, e.g. Fridell, 2006), fair trade as a successful departure from the conventional trade of ‘tropical’ agricultural products. It markets the bananas, coffee, tea and cocoa produced by smallholder farmers in developing countries – who are particularly susceptible to price fluctuations, vulnerable to middlemen, and have minimal access to support – as ‘ethical’ or ‘humane’ (Moberg, 2005), its underlying aim being to connect producers with consumers. The publicity surrounding the ‘success’ of international bodies such as the Fair Trade Federation (FTF) and Fairtrade Labelling Organization International (FLO) with organizing and delivering support to these farmers has raised questions of whether parallel initiatives could be launched for artisanal gold mining, a subsistence industry comprising a broad spectrum of activities characterized by a relatively low degree of mechanization, minimal capital investments, widespread illegality and high labour intensity (Hinton, 2005). In sub-Saharan Africa alone, an estimated 2.6 million people are employed in artisanal mining (ILO, 1999); its activities provide jobs to hundreds of thousands of subsistence seasonal farmers, nomads and redundant public sector workers in such countries as Tanzania, Ghana and Mali.1 The majority are organized in a series of small gangs (groups) and work on near-surface and alluvial deposits of gold, which generate high, and immediate, economic returns (Hentschel et al., 2002, Hinton et al., 2003).

Officers at the Association for Responsible Mining (ARM)2 have spearheaded a recent drive to launch a global ‘fair trade gold’ initiative modelled heavily upon the schemes in place for tropical agricultural products. Drawing upon their experiences from Latin America, as well as inputs from the FLO, International Labour Organization (ILO), UK Department for International Development (DfID) and the World Bank, ARM officers have drafted the Fair Trade Artisanal Gold Standard Zero,3 ‘an adaptation of the FLO standards for small producers to the situation of artisanal and small-scale mining (ASM)  [that will] follow the characteristic fair trade grouping of social, economic, labour and environmental development standards’ (ARM, 2006). The Fair Trade Artisanal Gold Standard Zero, maintain officers at ARM, is an effective blueprint for facilitating fairer trade for artisanal gold miners, who, it is argued, endure similar hardships to the coffee, tea and cocoa producing groups that the FLO and allied organizations target in their own programs.

Much like fair trade agricultural projects, the aim of Gold Standard Zero is to facilitate increased interaction between retailers (Western jewellers) and producers (artisanal miners), which, proponents believe, is the key to remedying many of the latter’s struggles. In the case of sub-Saharan Africa, most artisanal miners operate without a license, and in unsanitary and hazardous conditions; moreover, their ‘illegal’ status4 prevents them from accessing the credit, loans, and technological support needed to improve production and escape what policymakers now refer to as the industry’s ‘vicious cycle of poverty’.5 An inability to secure assistance through formal sector channels has, in turn, created innumerable opportunities for middlemen, who provide loans and other supplies to needy artisanal miners in exchange for gold at below-market prices (see UNIDO, 2005, Spiegel et al., 2006, Hilson and Pardie, 2006). Proponents of Gold Standard Zero contest that the actions of unscrupulous middlemen are trapping artisanal miners in poverty, but that these hardships could be alleviated by putting them into direct contact with jewellers – the idea being to encourage retailers to purchase supplies of gold directly from grassroots operators. Such a change, it is believed, would net miners greater returns, and therefore improve their livelihoods. A less poverty-stricken group of people would also be more receptive to addressing the adverse impacts of their activities, including deterioration of top soils and deforestation; extensive pollution from toxic mercury, which is used to amalgamate gold; high levels of child labour; and unsanitary living conditions, disease and unsafe work practices (see ILO, 1999, Hentschel et al., 2002, Van Straaten, 2000a, Van Straaten, 2000b, Kambani, 2003, Maponga and Ngorima, 2003, Hinton et al., 2003, CASM, 2005, Heemskerk, 2005, Hilson and Yakovelva, 2007, Hilson et al., 2007a, Hilson et al., 2007b, Yakovleva, 2007).

Whilst Gold Standard Zero has helped increase awareness of the problems in the artisanal mining sector and the struggles endured by its operators, in the case of sub-Saharan Africa, the implementation of fair trade gold schemes modelled upon those in place for agro-products would be exceedingly challenging, and could prove detrimental to the economic well-being of host countries. Moreover, the problems faced by the region’s artisanal gold miners may appear to be similar to those of their farming counterparts, but are far more complex that ARM officers have diagnosed. First, unlike a commodity such as cocoa, the production of which is confined to a small group of countries, artisanal gold mining activities are far more widespread and illegal. Any attempt to liaise with such miners, therefore, is bound to encounter resistance from host governments, which tend to shy away from providing them with assistance over fears of being seen by prospective foreign investors as endorsing illicit activities (Hilson et al., 2007b). Second, the high market value of gold has given rise to a flourishing underground economy, which, coupled with data deficiencies (production figures, employee numbers, ethnic background of operators, etc.), could render the organization of artisanal mining operations a challenging task. How familiar are ARM officers with artisanal miners’ needs, and how do they propose to remove the middlemen who are deeply entrenched within the production chain without the backing of governments? Finally, the proposed ‘reconfiguration’ of grassroots operations engaged in the extraction of high-value commodities such as gold could have significant implications. Not only has competition over precious minerals divided populations and fuelled civil violence in countries such as Angola, Sierra Leone and the Democratic Republic of Congo, but the gold mined on an artisanal scale is also an important source of foreign exchange. Host governments, therefore, are likely to be even less inclined to support any program that encourages the direct exportation of gold.

It is against this background that this paper calls for a ‘rethink’ of the fair trade gold model being proposed by ARM and its supporters. The underlying aim of fairer trade is to ensure that the subsistence producer’s livelihood is improved, which can involve a wide range of activities: ensuring that equitable returns are received for goods that cover the cost of production – whether they are for export or not – as well as administering financial and technical assistance to smallholders; forging contracts with producers that allow long-term production planning; promoting gender equality and ensuring that the participation of children in activities does not adversely affect their well-being; and advocating the adoption of sustainable environmental practices (after Hira and Ferrie, 2006). It is maintained here that in the case of artisanal gold mining in sub-Saharan Africa, the fair trade model being developed by ARM and supporters should be modified, emphasizing mainly the production-side elements which make artisanal gold mining a corrupt, highly impoverished and environmentally destructive industry. It is imperative that policymakers do not lose sight of these problems, which threaten to undermine any effort to promote fairer trade in the industry.

Section snippets

Conceptualizing and re-conceptualizing the fair trade discourse

The contemporary fair trade movement has emerged in direct response to the hardships endured by subsistence farmers in the developing world who produce ‘tropical commodities’ – mainly, coffee, tea, cocoa and bananas. In the literature (Goodman, 2004, Fridell, 2006), it has been charged that symbolically, fair trade seeks to ‘challenge the traditional neoliberal view of commercial conventions through a reconsideration of the meaning of “fairness” in commodity prices, market exchanges, and

Facilitating fairer trade in the artisanal gold mining sector: overcoming the challenges

Growing coverage (e.g. ILO, 1999, Hinton et al., 2003) of artisanal miners’ hardships – particularly in sub-Saharan Africa – is generating considerable enthusiasm over the prospect of fair trade gold, particularly the plan being proposed by ARM and supporters of Gold Standard Zero; but the movement’s fixation on improving buying arrangements for impoverished miners, including putting them into direct contact with jewellery retailers, warrants a thorough re-examination, and further

Facilitating fairer trade in artisanal gold mining: a case study of Noyem, Ghana

To recapitulate, it is imperative for proponents of fairer trade in the artisanal gold mining industry to first focus their efforts on alleviating the hardships of artisanal miners, not on putting them into direct contact with retailers, something that not only promises to be unpopular with governments but which also ARM and partner organizations, with their limited resources, are likely incapable of initiating, at least in sub-Saharan Africa. The priority should be ensuring that miners receive

Concluding remarks

Fair trade has helped alleviate the hardships of tens of thousands subsistence farmers worldwide, marginalized by trade liberalization policies, by awakening the consumer conscience. Revisiting Goodman (2004, p. 900), through imagery, the network has enabled Western consumers to ‘meet people in distant regions, learning how they work, live and raise their families’. Fridell (2006, p. 20) echoes these sentiments, noting how fair trade’s greatest potential is ‘its ability to raise awareness among

Acknowledgements

An earlier version of this paper was presented at the 6th Annual Communities and Small-Scale Mining (CASM) Conference in Antsirabe, Madagascar, November 11–15, 2006. The author would like to thank Dr. Chris Anderson of Newmont Gold Mining Ghana and Dr. Frank Nyame of the Department of Geology for their assistance with work undertaken in Ghana. The author would also like to thank Professor Noel Castree, Dr. Roy Maconachie, Professor Michael Samers and three anonymous reviewers for their

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