1. Social, Legal, Financial Issues Susan Egan Keane Conclusion Workshop Southeast Asian Regional Artisanal and Small Scale Mining Strategic Planning Project March 23, 2011

2. Outline 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

3. UNEP 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

4. Priority Social Issues Health and occupational hazards to miners, mining communities and adjacent communities Open burning of amalgam without any protective equipment Photo: Ban Toxics!

5. Social issues (cont) Women panning with children, Mali Photo: L. Bernaudat Gender issues Child labor, ILO Minors out of Mining program

6. Social Issues (cont) Land and resource conflicts in mining areas; Unregulated migration in gold rush areas, creating conflict and strains on social services.

7. Case Studies on Legalization and Formalization Cases from Zimbabwe, Tanzania, Ecuador, Bolivia, Peru, Mongolia Highlighted common issues countries face when developing a legal framework for ASGM

8. Definition of ASM How to define different activities of ASM –individuals, cooperatives, associations, community enterprises –artisanal 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

9. Artisanal? Photo: UNIDO Global Mercury Project

10. Small Scale? Photo: UNIDO Global Mercury Project

11. Blue Reef Small Scale Gold Mine (Tanzania) Photo: Global Mercury Project. Final Country Report for Tanzania. November 2007 Medium Scale?

12. Complexity of Regulation Dont know how to apply for licenses Dont know rights and obligations Complicated process Long distances to travel Complex regulations tend to favor the owners, disempower miners

13. Land 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)

14. Where are the Spaces for ASGM? Tanzania Mineral Rights Map (mostly large & medium size companies) Map: Sam Spiegel

15. Royalties 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? market? Question: Why not buy gold at above spot prices, to subsidize the rural poor and eliminate the black market?

16. Barriers to Financing Most important barrier: lack of access to credit because of the informal nature of the sector Most important barrier: lack of access to credit because of the informal nature of the sector Lack of credit hampers ability to make improvements Lack of credit hampers ability to make improvements One reason why formalization is critical to improve practices One reason why formalization is critical to improve practices

17. Financing Options Miners: – –Form entrepreneur groups, traditional funding systems e.g. group saving schemes; – –Develop a savings culture; – –Increase income through value-added activities

18. Financing Options Financial institutions: Financial institutions: –Affordable credit schemes; –Mobile banking systems; –Miners cooperative banks; –Rotating savings and credit associations;

19. Financing 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

20. Formalization is critical, 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.

21. UNEP Formalization Document 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

22. Legal Mechanisms Legal status of miners Diversity and scale of activities Mining and environmental laws and policies, and their role in formalization efforts

23. Economic and Financial Mechanisms 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

24. Institutional Mechanisms Miners organizations: a key factor for formalization Miners organizations: a key factor for formalization Small-scale and large-scale mining working together Small-scale and large-scale mining working together Role of the Governments in supporting formalization: opportunities and challenges (mining departments, academic, research and technology centers, others) Role of the Governments in supporting formalization: opportunities and challenges (mining departments, academic, research and technology centers, others)