Key Issues & Impact
- Marginalization & Exploitation of Women
Approximately 30 to 35% of the membership consists of women with an estimated 20-25% being part of the cooperative management. While women are often excluded from more formalized large scale mining employment, many work extensively along with children and other family members in artisanal and small-scale mining in communities where it takes place. But small artisanal mining can be a demanding, dangerous, and often only marginally profitable sector for women, and job opportunities in small artisanal mining, even more than larger scale mining, can increase women’s burden of working both outside and inside the home. Small-scale miners are typically paid based on delivery of product, so women may work all day, but earn little cash income, and still be responsible for additional work and responsibilities at home. Also, on a majority of mining sites, women are not allowed to dig ores and can only involve in transport and processing of ores, although digging offer higher remuneration range. Working in communities where there are often few, if any other cash generating alternatives, women may work extreme hours, including at night, and even while heavily pregnant, but with no benefits or security. Furthermore, even in artisanal mines, women may have little control over resources. Evidence indicates that women often work longer hours than men, but on average earn four times less than male counterparts, a discrepancy which forces many women to look for additional work, increasing their time poverty and even resulting in women taking equally if not more dangerous work like prostitution. Small-scale mining tends to be much more unsafe compared to larger mines: small-scale and artisanal miners use less protective gear, and mining is less regulated, has poorer infrastructure, and is often more dangerous. In small-scale mining, women, approximately 60%, often conduct the processing activities, sometimes in the home, exposing themselves and their families to harmful chemicals such as mercury used to extract gold from ore, with minimal ventilation and protection. Women of childbearing age and children are frequently more susceptible than men to health risks from some of these agents – for instance, women of childbearing age are more susceptible to methylmercury poisoning, which can easily be transmitted to fetuses in utero, and can cause serious developmental problems for babies, infants and children.
- Healthy Ore Processing: Fair Congo will engage stakeholders (government, private sector, civil society and ASM cooperatives or networks) to encourage ASM to transition to mercury-free techniques, ensuring that women working conditions meet basic health and safety standards will help mitigate negative impacts and potentially increase women’s productivity in mining. As approximately 60% of ore processing is currently completed by women, this is where the greatest health impact can be made.
- Diversified, Non-Mining, Women Focused Business Reinvestment: As the Company reinvests its profits, it will also prioritize diversified business opportunities to women further empowering their economic status within the communities. Women who wished to move out of the mining industry and find alternative livelihood, would have the opportunity to find a more permanent and safe work in other small scale industries create by the company.
- Women in Mining Support Services: As mining incomes increase the supportive industries located at the mines such as sale of foods and drinks, clothing etc. will realize an immediate positive financial impact.
- Training: Specific training and management will be installed to ensure the equality and safety of women in the mining industry. Further training and support will be provided to women so that they can organize themselves into associations, mutual savings groups or cooperatives, and support them in local development, leadership and revenue generation initiatives designed to overcome their isolation and give them the collective strength that will allow them to improve their living conditions and the lives of their families.
- Youth Employment & Safety
In the DRC, due to lack of a real policy for youth employment, there is serious imbalance in the employment situation. The country has a high unemployment rate of 73%, and around 80% of the population operates in the informal sector. The country faces a major employment crisis particularly for its youth, with about 70% of the young population being unemployed. Furthermore, among the 9,000 students graduating from the Congolese universities each year, only 100 are able to find work. In the second Poverty Reduction Strategy Document (DSCRP 2), over 2012–16, the country targets the creation of 900,000 jobs annually for the young; however, considering the present youth employment scenario, such a high target appears difficult to achieve. Approximately 75% of the current cooperative membership consists of youth between the ages of 18 and 35 years. Youth consist of the majority of the workforce at most small-scale and artisanal mines due to limited employment options in most rural mining areas. Typically untrained, these youth often makeup the majority of the extraction teams used to bring the ore to ground level. Most often, shafts are dug into the ground with little to no structural supports to prevent cave-ins. Each year thousands of artisanal miners are killed from improper site planning and safety precautions.
- Safety Gear and Training: The Fair Congo will not only supply additional safety equipment, it will also provide training to the youth members and management to supervise extraction methods.
- New Employment Opportunities: As the Company reinvests into non-mining businesses, youth will have additional employment opportunities. Since much of this focus will be towards food production, this will have a compounding effect for addressing both youth employment as well as food security issues.
- Child Labor
In DRC, the prevalence of child labor is very high in the artisanal and small-scale mines. Although there is a lack of official data on the number of all child miners in the country, local and international organizations working in the field of child protection estimate that children represent up to 40% of laborers in artisanal mines. However, mining work is prohibited by the Congolese Labor Code for children under 18. Despite the legal prohibition, there are few initiatives to prevent children from working in the mines, and there are almost no prosecutions against those who employ children or buy minerals derived from child labor. This may be explained by the fact that the roots causes of child mining labor in DRC are mainly linked to poverty and a lack of free schools which together forces children to drop-out of school and begin working. The working conditions in the artisanal mines are dangerous and unhealthy for children, exposing them to the risk of fatal accidents and injuries. Children use their bare hands and feet to dig, sift, wash and lift heavy loads of minerals. These tasks expose them to high probabilities of being injured or killed. Due to their size, children may be put to work in small spaces and following narrow mineral veins. They are often required to carry out repetitive tasks such as rock crushing or panning. In some contexts, such as around gold mines, they may be exposed to high levels of toxins, such as mercury, used to mix with water and ore for amalgamation of gold. Children may be required to carry heavy weights of ore, waste, or water. The physical stress they face and the bodily damage they sustain is potentially greater for them than the adults. The children’s earnings range from $0.75 to $3 a day, which they use to buy food, clothes and shoes, or towards school fees. They see it as an opportunity to earn income, but the work conditions in the artisanal mines are entirely unsuitable for the under aged.
Children working in mines are also often exposed to physical and sexual violence. They are sometimes used by adults for the sale of drugs or alcohol, forced into prostitution, or subjected to other forms of sexual exploitation. Many children are left with physical, mental and emotional scars that prevent them from functioning normally as adults. Many of them are deprived of a better future, because they could not go to school.
- Educational Structures for Children: Education is a crucial component of any effective effort to eliminate child labor. Fair Congo does not allow child labor in mining and will invest a portion of its profits into building schools and other education facilities. Children attending school will not have to enter the mines to be cared for by parents or other family members. This can alleviate barriers to children’s education and encourage parents to remove them from work force. This provides a longer-term benefit to the economy and the children’s family as their increased level of education will have a direct correlation on their capacity to contribute to their community.
- Law & Contract Enforcement: The Company has a strict policy, written into the contracts with the cooperatives, of no children under the age of 18 allowed as labor of any sense. Any cooperative breaking this law will be subject to suspension and termination of all Company projects.
- Economic Family Empowerment: Mining cooperative members, likely parents with 3 to 4 children at home, will receive a potential fourfold increase in income. This will reduce the financial pressure to remove their children from school and bring them to work at the mines.
- Health & Safety Risks of Mining
Current artisanal mining activities generally includes the usage of hazardous chemicals ranging from Mercury (Hg) to Nitric acid (HNO3).
Mercury is used to amalgamate with gold during the panning process, is generally handled by bare hand and eventually burned off in a fire to isolate the gold. Mercury can be absorbed through the skin and mucous membranes and mercury vapors can be inhaled during the heating process. Mercury can cause both chronic and acute poisoning and is known to have significant health effects. Women of childbearing age and children are frequently more susceptible than men to health risks from some of these agents – for instance, women of childbearing age are more susceptible to methylmercury poisoning, which can easily be transmitted to fetuses in utero, and can cause serious developmental problems for babies, infants and children.
Nitric acid is a corrosive acid and a powerful oxidizing agent. It is used as a rudimentary purifier of gold dust and flakes as Nitric acid does not react with gold but does react with most other elements and compounds. Gold dust and flakes are mixed with nitric acid then, as with mercury, it is burned off in an uncontrolled environment. The major hazard posed by it is chemical burns as it carries out acid hydrolysis with proteins (amide) and fats (ester) which consequently decomposes living tissue (e.g. skin and flesh).
Small-scale mining tends to be much more unsafe compared to larger mines: small-scale and artisanal miners use less protective gear, and mining is less regulated, has poorer infrastructure, and is often more dangerous.
- Safety Training & Management: The company will assist in the promotion of training programms, i.e. short courses and best practice mines so that artisanal miners, supervisors, owners, and other associates mining can immediately improve their technical skills in terms of safety and mining
- Environmental & Ecosystem Damage
DRC is home to the second largest rainforest in the world, 54% of Africa’s fresh waters, 180 million hectares of arable lands that, if exploited, can feed 2 billion people, and more than $24 trillion worth in minerals. DRC’s mineral potential alone encompasses USA and European GDP combined.
Mining can be an intensive process and has affected some wilderness areas, including national parks and wildlife reserves such as Kahuzi-Biega and the Okapi Wildlife Reserve, both of which are world heritage sites. Mining in these areas is typically artisanal that takes place in river beds and can, cumulatively, be very environmentally damaging. Artisanal mining degrades riparian zones, creating erosion and heavy silting of the water. The tailings are often dumped into the rivers and could be contaminated with mercury and cyanide degrading the health of the river systems putting the wildlife and people at risk. Gold production is known to account for 11% of the human-generated atmospheric mercury emissions. Nitric acid is often burned off during the final gold ore processing stages which contributes to effects of acid rain. Nitric acid and mercury, however, are not always burned off and are often thrown into waste pits to mix with other chemicals and eventually enter in the general water supply and surrounding ecosystem. The deforestation and generally the environmental degradation have indeed important implications for the economies concerned, particularly on agriculture, which is often the main economic activity. Pollution becomes an additional cause of poverty.
- Proliferation and Promotion of Renewable Power: While most production equipment is dependent on fossil fuels at this time, the company makes every effort to implement solar power in both its offices as well as in the ore processing stages. A portion of the company’s reinvestment will also be into the distribution of solar powered products and other non-fossil fuel burning technologies. This will have a twofold benefit to the community both economically as well as environmentally. The company’s offices and infrastructure will greatly improve the efficiency and reach of these environmentally friendly products.
- Training & Management Implementation for the Protection of the Local Ecosystem: The Company has already engaged several NGOs and initiatives, in both DRC and US to assist with creation of training programs and management guidelines for the mitigation of environmental damage, the preservation of local wildlife and mine reclamation protocols.
- Long Term History of Conflict & Smuggling in the Mining Business
For more than a century, the Democratic Republic of the Congo has been plagued by regional conflict and a deadly scramble for its vast natural resources. Profit from the mineral trade is one of the main motives for armed groups on all sides of the conflict in eastern Congo – the deadliest since World War II. Armed groups earned hundreds of millions of dollars per year by trading four main minerals: the ores that produce tin, tantalum, tungsten, and gold. An estimated $400 million worth of gold was smuggled into the neighboring countries in 2013 alone. Furthermore, the UN group of experts on the DRC estimated in 2014 that 98 percent of the gold produced, in total, in the conflict areas of the DRC, was smuggled out of the country which in turn fueled conflict and deprived the population of significant revenues and benefits and undermined the stability of their country.
Initial military restructuring within Congo’s army has removed armed actors from many mines, and military operations undertaken by the Congolese army and the United Nations Force Intervention Brigade have significantly reduced the threats of powerful armed groups such as the M23 and the Allied Democratic Forces. Neutralizing these groups, two of the biggest contributors to Congo’s deadly conflict in recent years, is helping improve the situation in the areas where they operated with impunity. While conflict in south Kivu had ended a decade ago, the effects remain and little to no development efforts have been made to empower and rebuild the local communities.
- Fair Congo is the first and only fully compliant exporter, conforming to the ‘OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas’.
- Fair Congo is the first exporter to implement sustainable and overlapping traceability standards which incorporate elements from all of the major gold traceability initiatives currently being implemented.
- Fair Trade Value: The Company aims to provide a fair-trade value for each of the minerals extracted by the mining cooperatives and completes the sale within the DRC so that all taxes are paid locally. The primary objective of this initiative is to ensure that small scale artisanal miners receive a fair level of reimbursement for their minerals. This further eliminates the benefit for smuggling minerals into the surrounding region to save on taxes since the transaction, and therefore tax payments, are being completed “in country”.
- Undeveloped Local Economy
Systemic corruption since independence in 1960, combined with country-wide instability and conflict that began in the mid-90s has dramatically reduced national output and government revenue and increased external debt. With the installation of a transitional government in 2003 after peace accords, economic conditions slowly began to improve as the transitional government reopened relations with international financial institutions and international donors, and President Kabila began implementing reforms. Progress has been slow to reach the interior of the country although clear changes are evident in Kinshasa and Lubumbashi. The IMF estimates that poverty is more prevalent in rural areas (75.72%) than in urban areas (61.49%), while the provinces of Équateur, Bandundu and south Kivu have a poverty incidence of over 85% compared to Kinshasa’s 42%. The economy of the Democratic Republic of the Congo – a nation endowed with vast natural resource wealth – is slowly recovering after decades of decline. An uncertain legal framework, corruption, and a lack of transparency in government policy are long-term problems for the mining sector and for the economy as a whole. Much economic activity still occurs in the informal sector and is not reflected in GDP data. Renewed activity in the mining sector, the source of most export income, has boosted Kinshasa’s fiscal position and GDP growth in recent years. However, much of this development has failed to be reinvested into the interior of the country, in particular the Kivu region.
Artisanal gold mining produces between US$1-2 billion per year and undeniably represents the biggest single source of income for eastern DRC and the best hope for economic growth and development. At present, this sector provides a vital livelihood to many millions of people dispersed throughout the country, and constitutes over 80% of the entire mining sectors production. But gold miners do not receive full benefit from their mineral extraction and from notable improvements in the broader economic and security context, which include the establishment of peace in most gold-mining areas; record-breaking gold prices on world markets; and the restructuring of government agencies, partly supported by the international community, to increase supervision and enforcement of laws in all mining areas.
- Increased Local Tax Revenue: Approximately half of the taxes paid will be to the local government, increasing their capacity for local development.
- Compounding Economic Stimulus from Increased Local Earnings: The increased revenue received by the local mining cooperatives will add millions of dollars to the local economy each year. This will provide a compounding benefit to supportive industries as well as too the entire local community.
The Company’s mining activities will start with a small number of cooperatives and as revenues are generated, will scale its operations to other cooperatives in and outside the mining sector. As the estimated mining workforce throughout DRC is approximately 12.5 million people, 1/5th the total population of DRC, there will be no shortage of cooperatives or mining communities to implement the Company’s mining programs. Even outside of the mining industry, the cooperative structure is already replicated across many other industries such as coffee, lumber, food production and many others. The Company’s strategy of cooperative management, empowerment and reinvestment can be easily replicated to benefit across these industries just as it will throughout the mining industry. Furthermore, the cash flow generated from the initial programs will more than suffice for the continuous, self-sustaining expansion.