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Date: November 25, 2024 Mon
Time: 9:08 pm
Time: 9:08 pm
Results for illicit gold
1 results foundAuthor: Hunter, Marcena Title: Follow the Money: Financial Flows Linked to Artisanal and Small-Scale Gold Mining in Sierra Leone: A Case Study Summary: Artisanal and small-scale gold mining (ASGM) has largely been dismissed as an economically insignificant, subsistence based activity in Sierra Leone. This is in sharp contrast to the artisanal diamond sector, which has historically been seen as a much more significant livelihood option. As one Mining Ministry agent stated: it's different with diamonds, you understand. If you are in diamonds, you want the license, because it's worth so much. But with gold, not so much: it's small and quick and just for survival. However, an investigation into the sector reveals that Sierra Leone's ASGM sector is not only active and vibrant, but also generating significant economic value. Despite government and civil society efforts at formalisation, Sierra Leone's ASGM remains largely in the informal sector. Investigations reveal most of Sierra Leone's gold never enters the formal supply chains within its borders. Rather, gold is mined, bought, sold and exported through informal networks that only occasionally and selectively intersect with formal supply and value chains prior to crossing the border. Consequently, the country records minimal gold exports and the Government of Sierra Leone (GoSL) reaps little benefit from the gold sector through formal channels of taxation. This is not to say the sector is not benefitting the people of Sierra Leone. ASGM is providing rural communities a critical livelihood option across Sierra Leone. Sierra Leone registers some of the most challenging development and poverty statistics in the entire world, ranking 181 out of 188 countries on the Human Development Index. The Ebola crisis (2014 - 2016) seriously exacerbated these challenges, extracting a massive socio-economic toll on the country. ASGM has evolved in this context as a strong economic magnet, drawing in old stakeholders and new entrants alike. In addition, ASGM plays a vital economic function in many communities, providing investment opportunities, an economic social safety net, an avenue to social mobility, and contributing to local economic growth. While a number of positive attributes can be linked to ASGM in Sierra Leone, the informality of the sector also results in undesirable outputs and impacts including: value from the ASGM sector is not equitably distributed; evidence of bribery and corruption of traditional and government officials; negligible protections against environmental degradation; and opportunity for money laundering and criminal exploitation. In turn, while there are a number of short-term benefits to informality, persistent informality has the potential to undermine long-term development and governance aims. The informality of Sierra Leone's gold sector is perpetuated and exacerbated by downstream illicit financial flows (IFFs). Defined as 'money illegally earned, transferred or used', IFFs are paradoxically dualistic. On the one hand, IFFs linked to ASGM serve a critical economic function, fuelling an informal sector which plays an important role in poverty alleviation and economic development in Sierra Leone. On the other hand, IFFs are facilitating complicated layers of exploitation and victimisation by opportunistic actors along the value chain. In the Sierra Leonean context, many upstream financial transactions (i.e. those which take place at the mine site) are better characterised as informal transactions, while those that take place further downstream (i.e. the buying and selling of smuggled gold) are IFFs. Upstream actors who engage in IFFs tend to reinvest profits back into the ASGM sector, thus perpetuating supply chains and financial relationships reliant on informal and illicit activity at all levels. In turn, IFFs are a bulwark against ASGM sector formalisation efforts in Sierra Leone. Any attempt must acknowledge the complex nature and impacts of IFFs if they are to hope to be successful without further marginalizing vulnerable populations. Without appreciating the extent and efficiency of ASGM and related IFFs to meet local economic needs, formalisation efforts will fail to replace them, and at worst could have devastating consequences. As a government agent stated, gold mining is a livelihood activity, so it is difficult to strongly enforce laws that are perceived to be harmful to local people (GOV080716c). Details: Geneva: Global Initiative against Transnational Organized Crime, 2017. 56p. Source: Internet Resource: Accessed March 8, 2017 at: http://globalinitiative.net/wp-content/uploads/2017/03/sierra-leone_06.03.17.compressed.pdf Year: 2017 Country: Sierra Leone URL: http://globalinitiative.net/wp-content/uploads/2017/03/sierra-leone_06.03.17.compressed.pdf Shelf Number: 146411 Keywords: Financial CrimesGold MiningIllicit GoldMoney LaunderingOrganized CrimePovertySmugglingSocioeconomic Conditions and Crime |