Artisanal and small-scale mining (ASM) reforms for gold mining sectors in developing countries have invariably taken the form of ‘formalization’-centred agendas aimed at bringing illegal mining activity into the formal sector, while redefining the terms and parameters of legal mining activity. This section will introduce the perceived ‘problems’ of ASM that provide the rationale for formalization agendas – typically, revenue and internal security challenges, but increasingly social and environmental factors. It will then identify formalization’s main policy components – private mineral rights and regulatory and technological policies – and discuss current global formalization efforts.
economy approaches (as in (Bernstein 2010) while the analysis of discourses draws from contemporary work in both the Habermassian (as in Dryzek (2013)) and Foucauldian (as in Hajer (1995)) traditions.
2.3.1. Rationales and storylines
ASM activity has received increasing academic and policy attention in the past ten years as a result of the growing recognition of its socio-economic role. The sector is estimated to employ around 13 million people worldwide, and support the livelihoods of a further 100 million (Banchirigah 2006). While extraction in developing countries is generally associated with underdevelopment and the ‘resource curse’, the specific popular image of ASM is that of an anarchic and chaotic activity that is responsible for conflict, social deprivation, and environmental degradation (Dondeyne et al. 2009; Huggins 2016). At the organizational level, a link is typically made between the illegality of the activity (with 90% of small-scale miners believed to be working ‘illegally’) and its impacts, which include lost government revenue, negative relationships with other illicit sectors, and poor labour and environmental standards that escape state regulation (Geenen 2012). At the level of scale, the small-scale sector is frequently compared unfavourably with the large- scale sector, whose greater capitalization is thought to facilitate the wider adoption of non-polluting recovery technologies, and whose more spatially-fixed nature is thought to make is easier for weaker states to regulate and extract rent from (Hilson et al. 2017). The dominant rationalization for formalization is underwritten by a so-called ‘legalist’ epistemology that argues that “most social and environmental problems associated with the sector stem from the fact that ASM is predominantly unregulated and operates outside the legal sphere” (Maconachie & Hilson 2011, p. 293). According to this logic, which invokes de Soto’s (2000) theories on informality and development and environmental and institutional economic theories, the lack of formal structures denies the miner the requisite tenure security to be able to invest in their business or access credit. For the regulator, it makes monitoring more difficult, denies the state a source of tax revenue, and can be a source of conflict. Although improved environmental practice in small-scale mining has sometimes been seen as more of an ancillary benefit of greater formalization, it has risen to prominence as a primary motivation for reform in recent years (Masson et al. 2013). The text of the Minamata clause4, for example, implies that formalization will be synonymous with better environmental management of mercury (Spiegel et al. 2015).
4 See http://mercuryconvention.org/Portals/11/documents/Booklets/COP1%20version/Minamata-Convention-booklet-
Overall, the dominant approach to reform could therefore be characterized, using Hajer’s (1995) concept, as a ‘storyline’ entailing three logic components. Firstly, that illegal small-scale miners are the root of the ‘problems’ of ASM. Secondly, that ‘responsible’ mining should be predicated on private mineral property rights and a supporting regulatory and technological framework. And thirdly, that these institutions will guide miners’ activities towards a more ‘sustainable’ or ‘green’ ideal.
2.3.2. ASM formalization policy form and components
Although there are variations between jurisdictions, ASM formalization agendas today appear to be broadly based on two sets of institutional structures: private mineral property rights and supporting regulatory frameworks.
2.3.2.1. Private mineral rights
Within formalization discourse, clearly-defined and stable private mineral property rights are the bedrock upon which the newly conceived mining sector must be governed. As an ILO (1999, p. 4) report argued, “the simple awarding of titles and licences and making them transferable, renewable and long-lasting is the bedrock of viable legal small-scale mining activity.” For the miner, demarcation is considered inherent to making extraction a profitable activity through the provision of an inalienable property right (Siegel & Veiga 2009). It is also believed to enable access to credit and other forms of market-based assistance. From an environmental perspective, rights are also thought to encourage investment and more ‘sustainable’ use of the resource (Hinton 2005).
From a regulatory point of view, tenure clarification and security is considered to help the state to minimize conflict between land users, which is often caused by overlapping interests (Hilson 2002). It should also enable the state to maximize its revenues by eliminating illegal and untaxed activity that is taking place outside the formal framework (Huggins et al. 2017). From an environmental perspective, property rights are thought to ensure that responsibility for any abuses of regulations is assigned to the perpetrator, rather than being socialized – thus protecting those who are outside the discreet, privatized mining spaces from the activity going on within (Vatn & Bromley 1997).
2.3.2.2. Beyond tenure – supporting regulatory and technological policies
Further to organizing mining activity into private titles, formalization advocates recognize the need for accompanying formal rules, regulations, and monitoring to guide
and guarantee good practices (Siwale & Siwale 2017). Although de Soto himself is vague on the nature of these regulations, Posner (2014) argues that in general the state should always aim to draft substantively efficient rules that internalize externalities. With specific respect to ASM, Clausen et al. (2011, p. 19) argue that only where miners are held responsible for damage done do they “have incentives to develop their claims in an environmentally, socially, and economically sustainable manner.” A substantively efficient ASM law would therefore have to include “a clear set of duties that miners have to obey, such as controlling the use of toxic chemicals used to process the minerals and rules governing the use of explosives” (ibid. p. 19).
Rules and regulations may then involve bureaucratic requirements for obtaining mine licences and mining permissions and specific technical requirements for mine management (such as correct mercury usage and the acquisition of Environmental and Social Impact Assessments (ESIAs) etc.) (Spiegel 2017). As non-compliance is considered the greatest challenge in governing ASM, theorists believe that the threat of onerous punishment can deter transgressions, and enforcement can be aided by comprehensive state monitoring (Spiegel 2012b). As meeting these new standards essentially requires “turning an ASM operation into a sustainable and profitable industrial extractive unit” (Seccatore et al. 2014, p. 804), some writers acknowledge the need to support miners in acquiring whatever technological capacity is required to meet new formalization requirements (Siwale & Siwale 2017). Siegel and Veiga (2009, p. 51), for example, argue that, as well as working within a formalized tenure framework, smaller miners should be ‘capitalized’ “in ways that permit them to move from transient artisanal mining so that they can move to more sustainable small- and medium-scale mining.”
2.3.3. A brief history of ASM formalization
Initial reform approaches to dealing with the perceived challenges of ASM that became increasingly identified throughout the 1990s did not initially favour what is understood today as ‘formalization’. Indeed, previous approaches favoured either trying to attract large-scale firms that would generate employment or trying to get people out of the sector altogether through ‘alternative’ livelihood approaches (Banchirigah 2008). However, following the world gold price increase in 2008, and with growing attention on the important socio-economic role the sector was playing (particularly compared with the minimal returns typically accruing from Large-scale Mining (LSM)), attention turned towards ‘how to mine better’, rather than whether to mine (Tschakert 2009; Hirons
2011b). Around this newly accepted reality, the increasingly standardized set of policy levers converged around ‘formalization’.
‘Formalization’ has become so dominant in policy discourse that, for some, it is now seen as the hegemonic way to manage land and resources (Putzel et al. 2015). For Hirons (2011b, p. 348) the popularity of ASM formalization reflects the triumph of the sustainable development narratives of large donors and development agencies that are based on the idea that it is possible to both “maximize economic growth whilst minimizing environmental costs.” In the area of ASM, in countries as diverse as Ghana, Cambodia, Indonesia, and Tanzania, property rights-based reforms have been developed and implemented, either constructing new institutional structures from scratch, or reforming existing tenure structures (Spiegel 2012a; Hilson & McQuilken 2014).
As well as the focus on property rights, a range of other schemes have been promoted, many of which are explicitly or implicitly linked to waves of interest in various global environmental narratives and indicators5. These interventions have variously focused on: improving miners’ access to finance so that they can invest in less polluting recovery technologies (Siwale & Siwale 2017); providing education to miners on ‘best practices’ (Spiegel 2012a); and organizing miners into groups in order to exploit economies of scale and benefit from niche markets (Childs 2014). States have correspondingly received donor financing to draft new laws and regulations, bolster their regulatory capacity, implement environmental projects such as land reclamation, and accede to international agreements aimed at improving mining sector governance, such as the Extractive Industry Transparency Initiative (EITI), the Kimberley Process, and the Minamata Convention (Dietsche et al. 2013; Bodenheimer, 2014; Collins & Lawson 2014; Herbert & Bolton 2018).