1. Illicit Financial Flows, Artisanal Gold, and Conflict Estelle Levin Miners, Minerals & Minimata Roundtable December 2015

2. ASM risk being excluded from Responsible Supply Chains Photo © Dan Fahey 2014 Supply chain due diligence has emerged as a form of control to mitigate risks of human rights violations and white collar crime in mineral supply chains. Focus is on conflict minerals, the ‘3TG’. SC DD is making it less desirable for responsible buyers to source from ASM The answer is ‘formalisation’ Buying gold in Tanzania & Madagascar © Estelle Levin, 2007 Estelle Levin Miners, Minerals & Minimata Roundtable December 2015

3. ASM Formalisation is not So Easy Photo © Dan Fahey 2014 Very few ASM are formalised : e.g. 7% in Mongolia. There are many reasons why an ASM sector doesn’t get formalised. Urgent to unpack some of these barriers more. ELL is working with the Global Initiative Against Transnational Organised Crime to shine a light on the elephant in the room: illict financial flows. illicit financial flows are money or capital that is illegally earned, transferred, or utilised. Often it is moved from one country to another Gold in a sluice © Estelle Levin, 2007 Estelle Levin Miners, Minerals & Minimata Roundtable December 2015

4. Three Insights ASM is Business Mining Begins with the Money Formalisation Doesn’t Happen in a Vacuum Estelle Levin Miners, Minerals & Minimata Roundtable December 2015

5. ASM is Business Photo © Estelle Levin Ltd. 2007 Estelle Levin Miners, Minerals & Minimata Roundtable December 2015

6. © Estelle Levin Ltd. What’s the primary motivation? Profit or survival? Is it a profession? An answer to a problem? A gamble? Principal livelihood or a complementary / supplementary one? How does it build individual / household resilience? Primary or secondary business activity? Does it serve a commercial or even criminal purpose? e.g. money laundering, conflict financing, tax avoidance, currency management, avoidance of banking channels Brazilian gold miner, Jacobinas © Estelle Levin, 2005 ASM is Business: know the motivations Estelle Levin Miners, Minerals & Minimata Roundtable December 2015

7. Operating environment: Legal, semi-legal, illegal? Regulated or unregulated? Enforcement? Land tenure arrangements; property rights; mineral rights Impacted stakeholders Public perception Options for finance Extension services / subsidised support Government / Development agency / NGO programmes? ASM is Business: know the operating environment The Fokontany in Antanimbary, Madagascar, © 2008 Estelle Levin Miners, Minerals & Minimata Roundtable December 2015

8. Protections and Access Who do I need on my side? How do I do this? How do I compete with the other guy? Joint ventures Facilitation payments & ‘Leave-me-alone’ payments / actions Use of social / cultural / ethnic / family ties to ensure entitlement Protecting access License from central government Local permissions Use or threat of violence (armed operations) Organising production & benefits How to get upfront capital, and be able to repay it. Utilisation of human vs. mechanised labour? Team composition, structure, reward. How to approach the deposit? © Estelle Levin Ltd. ASM is Business: Protection Economy & Organisation of Production Gold mine in Madagascar © Rupert Cook, 2012

9. Commercial preparations Financing Prospecting Access site Land tenure / licensing processes Tributes Ceremony Mining process Clear vegetation Remove soil, overburden to access deposit Extract auriferous layer Wash auriferous layer Post-mining Manage wastes Rehabilitate land Commercialisation Sell gold Benefit sharing Debt amortisation Reclamation photos © FESS All other photos © Estelle Levin Ltd. © Estelle Levin Ltd. Mining Begins with the Money

10. The Supply Chain Starts Before the Mine Graphic © GI 2015 Estelle Levin Miners, Minerals & Minimata Roundtable December 2015

11. Formalisation Doesn’t Happen in a Vacuum Photos © Estelle Levin Ltd. 2007 & AP 2015 Estelle Levin Miners, Minerals & Minimata Roundtable December 2015

12. Formalisation Doesn’t Happen in a Vacuum Photos © Estelle Levin Ltd. 2007 & AP 2015 $ tip Legal transfer of diamondBlack Owns diamond (primary beneficiary) Illegal transfer of diamondOrange Illegally owns diamond (primary beneficiary) Transfer of money:Blue Involved in trading diamond and securing ownership, employed by superior in chain (secondary beneficiary) Official taxesGreen Monitors chain or extracts rents (tertiary beneficiary) Rents / extortions / bribesRedIllegal or informal beneficiary $ % S Mines Manager Labourers Financier Licensed Miner Dealer’s Agent’s Coaxer Dealer’s Coaxer Exporter’s Agent Dealer Exporter Dealer’s Agent Illegal Diggers LH Mines Manager Illegal Dealer Smuggler Mines Wardens MMR (Mines Monitors) Gold and Diamond Department Police Customs Traditional AuthoritiesMinistry of Mineral Resources (Mines Engineer) OVERSEAS BUYERS 1.Miners are not free to formalise 2.What’s there already works Estelle Levin Miners, Minerals & Minimata Roundtable December 2015

13. The GIFF Project Estelle Levin Miners, Minerals & Minimata Roundtable December 2015

14. The GIFF Project #FollowTheMoney Estelle Levin Miners, Minerals & Minimata Roundtable December 2015

15. ASM is Business Photo © Estelle Levin Ltd. 2007 Estelle Levin Miners, Minerals & Minimata Roundtable December 2015