But efforts to change this patently unfair imbalance in access to justice come up against disappointing apathy from politicians and fierce resistance from powerful business lobbies.
It seems industrial mining companies, like many multinational corporations, are fully aware of the horrific environmental and human rights risks from their subsidiaries, contractors and suppliers overseas — and fear the cost of taking legal responsibility for them.
Displacement, Pollution and Violence
There are around 20 million small-scale, or artisanal, gold miners in the world, producing 20% of the world's newly mined gold each year and supporting roughly 100 million people in total. The other 80% of gold comes from the sprawling mining concessions of industrial companies like U.S.-based Newmont Goldcorp Corporation and Freeport-McMoRan.
Conflict frequently arises between industrial and artisanal mining operations where such concessions cover vast spaces, including traditional mining or farming zones. Multinationals have far more clout with governments and the judiciary, even if they don't resort to outright corruption.
The typical case study is Ghana's failed International Monetary Fund- and World Bank-supported initiative in the 1990s to encourage industrial mining in the country to support development. Farmers were disowned and evicted, and artisanal miners pushed from their traditional land with little or no compensation. These people are now among the tens of thousands of "galamseys" in Ghana — impoverished informal miners scraping a living at the edges of the industrial mines and on the borders of legality.
This story of dispossession repeats itself all over the world's mining regions, from Peru to Papua New Guinea. The latest case to hit headlines is the North Mara gold mine in Tanzania, indirectly owned by Canadian multinational Barrick Gold and the scene of 22 alleged killings by police and security guards of "intruders" since 2014. The victims are said to be local small-scale miners dispossessed of their land and livelihoods without adequate compensation.
The main environmental issue in the North Mara case — toxic chemicals spilling into rivers and contaminating the drinking water of surrounding communities — is a common phenomenon around many industrial mines. It is joined by the severe environmental and social impacts of thousands of metric tons of tailings — toxic piles of waste rock and slurry. Acid mine drainage can occur for years after the mine is closed when underground tunnels flood.
Organized crime joins industrial mining in hijacking the communities of traditional miners and driving them into poverty and illegality. Colombia currently has the largest number of displaced persons after Syria worldwide, with many of these being indigenous and Afro-Colombian communities who have lost their homes in centers of gold mining. Rather than multinationals, the main culprits here are armed guerrillas, paramilitaries and organized crime groups.
Miners' Access to Justice in Local Courts
What kind of access to civil or criminal courts do affected miners and their families have in their own countries? The short answer is: Poor, due to rampant corruption in local judicial systems.
A study commissioned by the International Bar Association in 2016 identifies widespread bribery and undue political influence in the judicial systems of countries with weak rule of law and governance structures. The resource-rich countries of the global south, in which most major gold mines are located and the majority of the alleged abuses take place, fall into this category.
Companies also commonly resort to "bribing" claimants who allege criminal offenses have taken place. In the North Mara case described above, an alleged victim of rape by the mine's security guards was paid $8,600 in return for signing a document she couldn't read. In doing so, she gave up her right to pursue the mine or its parent company Barrick Gold in a court of law.
Forums for Victims in the Jurisdictions of Parent Companies?
It is not necessary to bribe the judiciary in the jurisdictions in which many of these industrial mining companies are headquartered, including the U.S. and Canada. Here, the laws are in any case skewed in favor of the companies, forcing such cases to be tried in the country where the alleged offenses occurred.
There are encouraging signs that the laws, in some countries at least, may be changing to allow victims of abuses by subsidiaries of mining companies and other multinationals a forum in the jurisdiction of the parent company.
In 2017, France introduced a new Loi du vigilance, which makes large French stock companies liable for serious harm to human rights, health, security and the environment caused by their subsidiaries, contractors and suppliers abroad.
A landmark judgment by the U.K. Supreme Court in April this year ruled that a case relating to mine pollution, brought by 2,000 Zambian villagers against London-based Vedanta Resources and its Zambian subsidiary Konkola Copper Mines, can be tried in the U.K. The companies involved had tried to argue that the case should take place in Zambia. This judgment set a precedent that may soon allow other victims of alleged abuses by the overseas subsidiaries of U.K.-based companies recourse to the British justice system.
Resistance to the Swiss Responsible Business Initiative
The lack of forum for victims of human rights and environmental abuses by the subsidiaries of Swiss multinationals is the subject of vivid debate in my home country of Switzerland right now.
The Responsible Business Initiative is a "popular initiative" launched by a group of over 100 nongovernment organizations, or NGOs, and focused on the civil liability of large corporations. The "popular initiative" is a unique democratic feature of Switzerland, whereby 100,000 citizens can force a referendum on a change to the Swiss Constitution on virtually any topic.
If the Responsible Business Initiative passes, Swiss corporations would be required by law to implement human rights due diligence programs. They would be held liable for failures, including by controlled entities in their supply chain abroad, unless they can prove their good governance — the "rotten apple" defense.
Industry fiercely opposes the Responsible Business Initiative, not so much for its goal of protecting human rights, but because of the hard law approach. Industry associations fear international trade disadvantages and warn that the initiative may foster a risk-averse approach rather than the investment needed in particular in higher-risk countries. Risk aversion is indeed a threat, as a recent decision by Swiss gold refinery Metalor has shown, but this argument ignores the obvious disadvantages of soft law.
Some reputable lawyers argue that Swiss legal practice already finds many ways to hold the group responsible for failures by subsidiaries, for example through dual functionality of personnel or because the subsidiary acts as an agent of the parent company. This is not a convincing argument as long as it is not a general principle.
It remains to be seen whether Switzerland will take a step forward to allow artisanal miners and other severely disadvantaged groups access to a free and fair hearing in Swiss courts of law — or whether it will hang back and hide in the crowd.
Mark Pieth is a professor of criminal law at the University of Basel and president of the Basel Institute on Governance, a research and policy institute he founded to help combat public and private sector abuses of power. He is also a founding member of the Financial Action Task Force on Money Laundering and chair of a United Nations intergovernmental expert group on illicit drug trafficking. He served for 24 years as chair of the Organisation for Economic Co-operation and Development's working group on bribery. His latest book is "Gold Laundering: The Dirty Secrets of the Gold Trade — And How to Clean Up" (Salis Verlag, 2019).
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.