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RR RUEHWEB

DE RUEHBO #1690/01 1462118
ZNR UUUUU ZZH
R 262118Z MAY 09
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 8896
INFO RUEHBR/AMEMBASSY BRASILIA 8923
RUEHCV/AMEMBASSY CARACAS 2290
RUEHPE/AMEMBASSY LIMA 7598
RUEHLP/AMEMBASSY LA PAZ MAY QUITO 8298
RUEHZP/AMEMBASSY PANAMA 3687

UNCLAS BOGOTA 001690 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EMIN SENV EIND ENRG ELAB CO
SUBJECT: GOC STRUGGLES TO COUNTER ILLEGAL MINING 
 
¶1.  SUMMARY:  Illegal mining is on the increase in Colombia, 
fueled by growing global markets, improved security in rural 
areas, and the difficulty of Colombia's law enforcement 
apparatus to effectively counter the well-heeled miners. 
Gold, platinum, and mercury extraction is most prevalent in 
the northwestern department of Choco, where the combination 
of vast resources, local corruption, and limited state 
presence provides the ideal conditions for uncontrolled 
exploitation.  The GOC is aware of the problem and in April 
carried out its first wide-scale law enforcement operation to 
counter illegal mining, seizing 24 gold dredges in Choco. 
They hope to accelerate such operations, but will need the 
support of local communities and the promise of economic 
alternatives to make their efforts stick.  GOC plans to 
convert illegal mines to legal operations have been hampered 
by bureaucratic delays. END SUMMARY 
 
Illegal Mining of Growing Concern to GOC 
---------------------------------------- 
 
¶2.  The mining sector accounted for five percent of GDP in 
¶2008.  In attempts to diversify its mining beyond coal and 
natural gas, the GOC has increased efforts to promote legal 
mining of precious metals -- specifically gold.  In 2008 
Colombia produced 34 tons of gold and the GOC expects that 
figure to increase to 105 tons by 2019, with production 
centered in the departments of Antioquia, Choco and Caldas. 
As with coal, however, illegal mining plagues Colombia's gold 
industry and the GOC is struggling to find the correct tools 
 
to counter the growing problem. 
 
¶3.  According to Beatriz Duque, Director of Mines at the 
Ministry of Mines and Energy (MME), the GOC currently has no 
official statistics on illegal mining.  They hope to have 
figures by the end of 2009 following a nationwide census that 
will provide estimates about the quantity of illegal mines, 
principally coal and gold.  She added that in 2008 the GOC 
created a working group -- comprised of the MME, Ministry of 
Environment (MOE), Fiscalia (Prosecutor's Office), 
Procuraduria (Attorney General), National Police and the 
military -- to promote collaboration on legal cases and 
assets seizures against illegal miners.  Following the Choco 
operation, the GOC is planning additional operations in 
Cundinamarca (coal), Boyaca (coal) and the Amazon (gold). 
 
¶4.  The department of Choco contains the most illegal mining 
activities, estimated by Duque to constitute 98 percent of 
all mining (gold, platinum and mercury).  Illegal gold mining 
is done using two methods, either by dredges or heavy 
machinery excavators.  Dario Cujar, the sub-director of the 
departmental environmental authority CODECHO, said in 2007, 
Choco had 105 illegal mines and 227 excavator operations in 
nine municipalities.  He added that only three companies in 
Choco have mining concessions, with only one also having the 
requisite MOE permit. (NOTE: According to the 2001 Mining 
Code, companies must obtain a mining concession from the MME 
and an environmental permit from the MOE, after 3-5 years of 
exploration, before drilling can commence.  END NOTE.)  Duque 
said the situation in Choco is the most severe, but is also 
typical of the reality in several other departments with weak 
state presence. 
 
First GOC Illegal Mining Operation 
---------------------------------- 
 
¶5.   In April 2009 the GOC executed its first major operation 
against illegal mining, seizing 24 gold dredges functioning 
on the Quito River.  Ayala said the GOC illegal mining 
working group began planning the operation in June 2008, and 
it cost the GOC USD 30,000 since the majority of 
participating police and military had to be brought in from 
outside Choco.  The operation was highly publicized in local 
media, and the seized dredges now sit in Choco's capital 
Quibdo, as property of the Fiscalia.  The owners of the 
dredges, the vast majority from Brazil or Antioquia, await 
Fiscalia criminal proceedings but are not incarcerated. 
 
¶6.  Catholic Priest Remo Segalla from Choco's Lloro 
municipality praised the operation, but criticized how long 
it took the GOC to act.  He said some of the dredges had been 
operating for over two decades without any GOC action, and 
that both the local and national GOC authorities knew where 
they were located.  Helcias Ayala from Pacific Environmental 
Institute (IIAP) contends that the local GOC does not have 
the will nor logistical capability to counter illegal mining 
in a significant way.  Segalla noted that the number of 
excavators in his municipality had increased from four to 
sixty in the last two years, even though the machines are 
clearly visible to all.  Segalla said the April operation has 
made miners in his town a "little more fearful," but not 
enough to make them suspend or hide their operations.  All 
local experts involved said the operation would not have 
occurred without the involvement and support of the local 
populations affected by the mining. 
 
No Economic Benefit to Local Community 
-------------------------------------- 
 
¶7.  The role of three Afro-Colombian "Consejo Comunitarios" 
from towns adjoining the Quito River were key to the April 
operation.  Representatives from the Consejos traveled to 
Bogota in June and July of 2008, meeting with the primary GOC 
stakeholders.  Senator Piedad Cordoba also met with the MME 
and MOE on their behalf.  Quibdo's Secretary of Government, 
Martha Salazar, said that the Consejos were fundamental in 
spurring federal action against the dredges.  Ayala said 
normally, illegal miners pay-off the local authorities, but 
the persistence of the Consejo leaders brought the situation 
to the attention of the GOC.  Segalla agreed that corruption 
is rampant, adding that the illegal dredge owners refueled 
their dredges in a station in Quibdo that is adjacent to a 
police outpost. 
 
¶8.  Benedesmo Palacios, president of one of the Consejos, 
said they opposed the mining because their towns did not 
receive the royalties due them, and because the activity 
generated no local employment even though Colombian law 
requires 80 percent local employment for any economic 
activity on Afro-Colombian land.  Presidential Envoy to Choco 
Juan Guillermo Angel told us that illegal miners in Choco do 
pay royalties, so that they can sell their minerals, but the 
royalties do not reach Choco.  They pay their royalties to 
authorities in Antioquia or Brazil (where the owners are 
from) who "doctor their books" and change the originating 
area of the minerals. 
 
¶9.  Given no local ownership of the machinery and detoured 
royalties, very few financial benefits of illegal mining 
touch the local community.  Salazar, said illegal miners 
rarely interact with the local communities, but rather 
construct temporary homes next to their operations and even 
bring their own non-local cooks.  She said local populations 
can economically benefit by sifting through the waste from 
the illegal machines, but it is dangerous work and provides 
finances sufficient only for day-to-day needs. (NOTE: Local 
press widely publicized the death of eight miners in April 
2009 in Choco, who were sifting when a structure collapsed 
upon them. END NOTE.)  Salazar said that if illegal mining 
does provide income for the local population, it is not 
enough to move to enable them to satisfy their basic needs. 
 
¶10.  Palacios said the lack of prior consultation also 
prompted the Consejos to act.  Afro-Colombian leadership must 
be consulted before the implementation of any economic 
activity on their land, a requirement ignored by the illegal 
miners.  The MME has created specific Afro-Colombian mining 
zones (zonas minerales de comunidades negras), limiting the 
MME's authority in those areas, with the hope that increased 
local control by Afro-Colombians would help stem the illegal 
mining.  Palacios, said, however, none of those legal changes 
have resulted in practical change.  Rather, illegal miners 
either completely ignore the community, or bribe and acquire 
permission from one member of the community to mine on 
his/her portion of the collective land -- never complying 
with legal obligations. 
 
Environmental Effects Far-Reaching 
---------------------------------- 
 
¶11.  Palacios said in addition to income disputes, the other 
impetus for the Consejo's actions was the environmental 
impact of the dredging.  Both illegal dredging and excavating 
generate deforestation, river bank deterioration, oil and 
mercury contamination in the rivers, and species 
endangerment.  Cujar said the environmental effects are 
comprehensive because illegal miners are not "true miners," 
(i.e. no exploration, studies, structured activity) but are 
simply "diggers" at random locations.  Cujar said that 
isolated desertification has already occurred in Choco, and 
it will spread if the GOC does not increase activities 
against illegal mining and develop a comprehensive 
reforestation program. 
 
Legalization Process Long and Tedious 
------------------------------------- 
 
¶12.  To counter the environmental effects, Duque said the GOC 
must provide incentives for the illegal miners to convert 
their operations to legal ones.  She added that the MME and 
MOE developed a special legalization program in 2001 and to 
date have received 3600 applications, approving 136.  To 
participate in the program illegal operators must acquire 
both the mining concession and environmental permit, as is 
the normal GOC process, but they are not held responsible for 
past royalties nor face legal repercussions from their 
illegal activities. 
 
¶13.  Despite the program's intentions, Salazar observed that 
many miners remain illegal specifically because of the 
time-consuming nature of the legalization process.  At a 
minimum companies have to undergo 3-5 years of exploration 
before receiving an environmental permit.  She said that 
while the MME and the MOE employ strict procedures for 
granting a concession or permit, they do not have sufficient 
personnel to even check and determine if companies have 
implemented those standards.  She noted that 144 companies 
from Choco applied for the MME legalization program in 2001, 
but when progress stalled, other companies decided it was not 
worth the effort.  Only one company in Choco has acquired 
both a mining concession and the environmental permit, 
spending eight years in the process. 
 
Additional Impediments:  Paras and Economic Alternatives 
--------------------------------------------- ----------- 
 
¶14.  All stakeholders said the presence of guerrilla groups 
(FARC, ELN) and paramilitaries (Aguilas Negras and the 
Rastrojos) is a principal impediment to controlling illegal 
mining.  Salazar said the illegal miners collaborate with the 
paramilitary groups, strengthening their presence in the 
area.  While coca remains the groups' principal economic 
activity, in the last five years they have begun to turn to 
illegal mining as an additional income source.  Duque said 
there is a direct correlation between illegal mining 
activity, the presence of para groups, and limited state 
presence.  Duque added that the GOC has difficulty 
distinguishing between subsistence miners and those who are 
part of a larger, more sophisticated organization. Given 
socio-economic conditions in the zone, they are more limited 
politically in their efforts to eradicate subsistence miners 
until they are able to provide alternative economic 
opportunities. 
 
Comment:  GOC Must Join Forces with Local Communities 
--------------------------------------------- -------- 
 
¶15.  To fully counter illegal mining, the GOC must 
simultaneously increase enforcement operations while 
providing more efficient procedures for those willing to 
legalize.  In departments such as Choco, where there is 
little state presence and rampant corruption, the local 
authorities have limited political will and capacity to 
address the situation.  The national government must take the 
lead, with the backing of local communities.  To be 
effective, they will need to harness the political support of 
disaffected local populations, and back it with the security 
and economic opportunities to guarantee that such efforts are 
more than a mere temporary fix. 
Brownfield