From Drugs to Gold: Colombia's Drug Barons Diversify

Increasing pressure from anti-drug trafficking activities are forcing Colombia's illegally armed groups to diversify their traditional income streams. Against this backdrop, revenue generated through other sectors, such as gold mining, could begin to rival the drug trade as a leading driver of regional insecurity.

By Matt Ince, RUSI

24/-6/12 - Attempts to coordinate international policy responses to the global drug trade are underway as foreign ministers gather in Peru this week for a two-day Anti-Drug Summit. This also coincides with the release of the 2012 World Drug Report, the UN's annual review of global illicit drug trends. However, while both are likely to point to the gains being made in Colombia's on-going 'war on drugs', successes have been accompanied by the growing involvement of illegally armed groups in Colombia's booming gold mining sector. This trend is fuelling national economic and environmental security concerns in Colombia and is illustrative of attempts by organised crime groups to offset their loss of revenue from the drug trade; by boosting their involvement in lower risk criminal activities. It also exemplifies the increasingly post-ideological nature of Colombia's current security challenges and the many difficulties associated with bringing an end to the country's half century long conflict.

Making Gains in the War on Drugs

Colombia has continued to make significant gains in the 'war on drugs' in recent years, having succeeded in reducing coca cultivation by 65 per cent over the period 2000-2010. Latest successes also include the announcement that top Colombian drug lord Diego Perez - leader of the criminal group Las Rastrojos and one of the most wanted criminals in the Americas - was arrested by police in neighbouring Venezuela earlier this month.  Other recent developments have also included the disbandment of one of Colombia's largest drug trafficking groups, El Ejército Revolucionario Popular Anticomunista de Colombia (ERPAC), and a number of significant government victories against the Revolutionary Armed Forces of Colombia (FARC); most notable amongst them being the death of legendary FARC commander, Alfonso Canno, in November.

The drugs trade has long fuelled Colombia's violent internal conflict, providing the primary source of revenue for many of the country's illegally armed groups such as the FARC, Colombia's oldest left-wing guerrilla insurgency, and Colombia's former right-wing paramilitary groups, such as the United Self-Defence Forces of Colombia (AUC). Nevertheless, while a decade of US-backed coca eradication programmes may have significantly reduced the amount of income that the FARC are able to generate from this lucrative business, the group, along with Colombia's new generation organised crime gangs - now commonly referred to as 'bandas criminales' or BACRIMs - have now turned their attention to alternative sources of revenue to improve their longer term prospects for survival.

Extorting Colombia's Illegal Gold Mining Sector

While Colombia's guerrilla groups and their former paramilitary adversaries have long been involved in the country's illegal mining sector, such undertakings were typically used to supplement their primary income from the drug trade, kidnapping and other extortion activities. Now, according to the Colombian police however, the FARC and BACRIMs have significantly expanded their operations in gold mining and are now believed to either extort from or have direct control over mines in 489 out of Colombia's 1,119 municipalities. This has led to Colombia's Mining and Energy Minister Mauricio Cardenas stating publically that unlicensed mining should be given the same treatment as drug trafficking, and General Oscar Naranjo, who formally stepped down as Colombia's national police chief on the 12 June, stating that illegal mining is the biggest challenge facing his successor.  In particular, Naranjo identified the municipal departments of Antioquia, Valle del Cauca, Cordoba, and Tolima as the areas most affected by this growing phenomenon.

Nevertheless, the growing involvement of Colombia's illegally armed groups in the illegal mining sector differs dramatically from province to province and is by no means uniform.  For example, reports by InSight Crime, a Medellín-based consultancy, claim that the FARC's 36th Front, operating out of the municipality of Anori, charge around 3 million pesos (approx  $1,600) tax for each backhoe which enters their territory, and an additional 1 million ( $530) per month maintenance fee.  Miners risk having their equipment destroyed if they fail to pay the extortion fee to the group. 

In contrast, reports also suggest that guerrillas and the BACRIMs oversee all activity in their mines in other parts of the country, taxing the amount of material produced rather than extorting the miners' equipment.  For instance, at FARC controlled mines in Guainia, miners reportedly pay a 10 per cent tax on their daily profits to the guerrillas, and in Valle del Cauca, gold panners are similarly believed to have to pay 10 per cent of their earnings to BACRIM group las Rastrojos.  Other BACRIMs, including the Urabeños and the Paisas, are also now believed to control gold mines in Antioquia's Bajo Cauca region, where an estimated 23 tons of gold are thought to be extracted illegally every year. There is also a cross-border dimension to this growing security challenge.  In particular, claims suggest that the FARC's 16th Front, based in Colombia's eastern departments of Guainia and Vichada, also extort miners across the Venezuelan border; where they are also believed to be expanding their operations into coltan mining.

Understanding the Security Challenges

As these armed groups control a growing number of unlicensed mines in Colombia's most lucrative and resource-rich districts, they undermine national efforts to rely upon its booming mining sector to be a major locomotive for future fiscal growth. It could also constrain the government's ability to attract foreign investment to help develop the country's mining sector in the future.

The increased dependence of Colombia's criminal gangs on the revenue gained from illegal mining is also contributing towards environmental insecurity across the country.  One of the biggest challenges associated with the practice of illegal mining is mercury poisoning, as miners use liquid mercury to separate gold from river sediments; a process during which the toxic compound mercury-cyanide is formed and then released into local rivers and creeks.  As a result of this process, Colombia now releases 130 tons of mercury annually from artisanal gold mining, making it the world's highest per capita mercury polluter.

Heightened activities in illegal mining by such groups fuels Colombia's internal conflict as revenues accrued from such activities help maintain their grip on traditional territorial strongholds. It also acts as an incentive for them to sponsor political candidates in Colombia's major mining areas, while additionally driving violent gang-rivalry in some of Colombia's most prolific gold-producing districts. A recent example of this was seen in the municipality of Remedios, where the recent death of five people was, according to security forces, part of the larger on-going struggle between the Urabeños and las Rastrojos, for control of unlicensed mining operations in the area.

It has also been reported that the FARC and the BACRIMs, who have historically occupied opposing ideological camps, are at times either working together or operating under pacts of non-aggression in their efforts to exploit Colombia's mining sector.  The fact that the interests of the FARC are becoming intertwined with those of other illegally armed groups illustrates the post-ideological nature of today's conflict in Colombia. Compared to the late 1990's, when the FARC were traditionally concerned with remedying Colombia's social inequalities through the implementation of far-reaching agrarian reform, the group is now preoccupied with financial gain over the pursuit of their their traditional Marxist-Leninist agenda. Indeed, this trend towards transition and diversification is part of a wider move taking place in South America where organised crime groups are upping there involvement in lower risk production, extortion and trafficking activities.  These include activities in areas such as illegal mining, logging, and oil and gas industry, which do not involve illicit products, services or goods and are therefore accompanied by less severe punishments than drug production and other trafficking activities. 

The 'War Against Illegal Mining'

The seriousness of this challenge has led the Colombian government to embark upon a nationwide campaign to close down unlicensed mines, seize machinery and reform the legal frameworks which dictate how the offense can be prosecuted.  To date, these efforts appear to be having some impact, with security forces claiming that they made 1,228 arrests related to illegal gold mining in 2011 and shut down 275 mines.   There was also the creation of a new National Mining Agency; a body charged with promoting the development of this sector through the introduction of greater technical aid to traditional miners and the reinforcement of the powers of the security forces to destroy equipment used by criminal groups. Other recent efforts to legitimise the sector include the government setting up a prosecutor's office designed to deal with the unlicensed exploitation of resources, as well as other related crimes such as environmental contamination and invasive use of protected land.  

Nevertheless, while these new legal frameworks represent a step in the right direction, they are yet to be as extensive as existing structures intended to combat drug trafficking.  Furthermore, it is not necessarily clear whether or not the government's push to legalise the mining industry actually takes into account the fact that not all forms of illegal mining are the same, and the reality that groups such as the FARC and BACRIMs are involved in the sector to varying degrees from one part of the country to the other.

The Need for a Regional Approach

Conscious of the cross-border nature of many of the challenges associated with the fight against serious organised crime, President Santos has sought to improve Colombia's international relations with its neighbours, particularly with Ecuador and Venezuela, with whom diplomatic ties hit a notable low under Colombia's previous Uribe administration. These efforts appear to have had some successes, as demonstrated by the number of high profile extraditions which have taken place in recent months.  For example, in late 2011, a joint Colombian-Venezuelan operation in the northern Venezuelan state of Aragua led to the capture of one of Colombia's most-wanted men, Maximiliano Bonilla Orozco, who had purportedly headed up the Medellin based drug trafficking cartel 'The Office'.  In addition, Colombia has also established a bilateral pact with Brazil which came into force last year and aims to increase intelligence sharing in the fight against organised crime, illegal mining, and illicit cultivations along the Colombian-Brazil border. 

Yet, despite gains in this regard, efforts to reduce the involvement of Colombia's illegally armed groups in the illegal mining sector will only be truly effective if they are not undermined by inadequate levels of enforcement elsewhere.  Therefore, of particular concern are  activities taking place along the Colombian-Venezuela border; as illegal mining is likely to have been pushed down the list of political priorities in Venezuela in recent months as President Chavez recovers from a series of cancer related medical operations and the country goes to the polls in October.

While tackling the drug trade is likely to remain the primary preoccupation of Colombian security forces for the immediate future, their successes are likely to make illegal gold mining an ever more appealing source of income for Colombia's illegally armed groups.  Especially while legal structures intended to deter such groups from the sector remain weaker and less severe than those aimed at reducing drug production and trafficking activities. 

Like other aspects of the broader war against serious organised crime throughout the Americas, tackling the challenges associated with the growing involvement of illegally armed groups in the gold mining sector requires a more joined-up international response due to the inherent cross-border nature of such activities. However, this should also be accompanied by the introduction of more discriminate reforms to national legal frameworks, which dictate how illegal mining activities can be prosecuted. Otherwise governments may find it increasingly difficult to prevent sources of illegal income, gained from the extraction, cultivation or trafficking of legal commodities, from overtaking the drug trade as a major driver of regional insecurity in the period ahead.


Matt Ince

Associate Fellow

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