Blood gold

Quid non mortalia pectora cogis, auri sacra fames? (To what can you not lead mortal breasts, cursed lust for gold?)

— Virgil, Aeneid, III-56.

Well, it does lead certain people to the lawless and warlord-ridden northeast of the Democratic Republic of the Congo, where Hobbes’s “war as is of every man, against every man” runs daily. It is an ugly place, the northeast Congo. The revenue from small-scale gold mining pays to make it uglier.

In the gold fields around Bunia, Djugu and Watsa, armed factions — some of them local, others the clients of Ugandan and Rwandese governments — rule in the absence of effective government. They control the country, and so control its gold, and whatever they make from it goes to keeping them in power, and with the power comes the ability to coerce the unarmed and impoverished into mining more gold.

International research group Human Rights Watch has produced a report on the gold trade of the northeastern Congo, noting that about US$60 million in Congolese gold, all illicitly mined, flowed through Uganda in 2003 (based on average 2003 prices, that’s about 165,000 oz.).

The report accuses the warlords of mass murder, torture, rape, forced labour and extortion. It’s believable, and not far different from the “blood diamonds” scenes that played out in lawless West African countries in the past decade. And like the “blood diamonds,” Congolese gold has found its way downstream into the worldwide gold market, where it’s often impossible to identify its origins.

That leaves the global gold industry with an ethical problem, namely how to keep its hands clean — something Human Rights Watch made much of in its report. On the one hand, the report can be seen as targeting industry (knock the corporations, because the warlords aren’t reading your report anyway). On the other hand, it does sharpen the sensibilities of those corporations, who will not want to bankroll evil.

That was certainly the experience of Swiss metal refiner Metalor, which stopped buying gold from Ugandan sources in mid-May after an exchange of correspondence with Human Rights Watch. Metalor, despite assurances from its suppliers in Uganda and from the Ugandan government, wants to verify that the gold it gets comes from sources in the country and not in the Congo.

From our experience, we’d expect that refusing to bankroll evil would also be the position of AngloGold Ashanti, whose corporate relatives at De Beers were so prominent in the campaign against illicitly mined diamonds. Anglogold’s local subsidiary, Ashanti Goldfields Kilo, was named in the Human Rights Watch report for an acknowledged instance where it paid protection money to the Front Nationaliste et Intgrationiste, a Ugandan-backed armed group in the Mongbwalu area west of Lake Albert.

No surprise there: the FNI is a law unto itself in the area, and when AngloGold returned to the area in late 2004, the project’s management found itself under pressure to provide US$8,000 to the FNI for “expense money,” allowing FNI officials to travel to Kinshasa. Against official AngloGold policy, but with the knowledge of local officials of the central government, they paid up. So, also, they paid up on a US6-per-kilogram tax levied by the FNI on cargo moving through a local airfield. AngloGold put a stop to those payments once they became known at head office.

It’s not a hard and fast case. Faced with an armed faction that could shut down work, and do a lot worse (having already commandeered AngloGold housing in Mongbwalu), the project staff on the ground gave in. Maybe they shouldn’t have. Certainly that’s AngloGold’s view from Diagonal Street in Johannesburg, and HRW’s from Pentonville Road in London. But taking a firm stand isn’t easy when armed and bloodthirsty men want to talk business with you.

Should AngloGold have contracted a strong-arm international security firm on the pattern of the departed Sandline or Executive Outcomes? That would have put the FNI in its place, no doubt, but what would the activist groups have made of such a move?

It’s an ugly place, the northeast Congo. The mining and metals industry should not help make it uglier by caving into, and thereby legitimizing, morally questionable groups such as the FNI. But Human Rights Watch needs to put all the facts into perspective: it’s about the warlords, not about the pockets those warlords pick.