Gold

Early in 2016, Natural Resources Minister Raphael Trotman raised eyebrows in the country when he declared that the amount of gold being smuggled out of Guyana amounted to around 15,000 ounces weekly. The figure was immediately challenged by the Guyana Gold and Diamond Miners Association (GGDMA) which never put forward an estimate of its own but told the Stabroek News that while it agreed “that smuggling is taking place, the figure being touted of 15,000 ounces per week is ridiculous… It is very difficult for us to fathom that 15,000 ounces are being smuggled out of the country on a weekly basis as this amount equates to over 770,000 ounces per annum, this would be approximately double the average annual yearly declarations over the last few years.”

The point about all this is that while we know that considerable quantities of gold are being smuggled out of the country and that the attendant loss of revenue is having a negative effect on the economy, we have no real clue about the extent of the smuggling or, by extension, the impact that it is having on the country economy. This speaks volumes about the weaknesses that attend the oversight of the sector.

Of course, given the increasing evidence that we continue to come by about the comings and goings of aircraft in and out of Guyana’s territory, without either the knowledge or consent of the state, there is really no telling for sure, whether, in fact, even the Minister’s figure may not be underestimating the extent of the problem. Given what we learnt, too, about the interest of the United States’ Federal Bureau of Investigation (FBI) and Department of Homeland Security in smuggled gold, one assumes that sooner rather than later there will be some sort of update on gold smuggling that points to the fact that the authorities have been involved, with external, diligent investigative pursuits., so that, hopefully, we might come closer to unraveling the mystery of smuggled gold.

For all this, Finance Minister Winston Jordan alluded to the “admirable performance” of the gold industry this year, asserting that end-of-year returns were certain to at least replicate what they were at the end of last year and are expected to do even better next year. No other sector in the country’s economy comes even close to attracting such an assessment from the Finance Minister. In the instance of his budget presentation, however, he too declines to put of number on the volume of smuggling, confining his estimate for smuggled gold to “thousands of ounces.”

All of this, of course, begs the question as to how much more the revenue from smuggled gold is likely to do for the country and whether or not there is any initiative in place that provides a reasonable likelihood of at least cutting back on gold smuggling.

Minister Jordan speaks to this issue in his budget presentation, asserting that “to help address this problem 41 trained wardens/compliance officers will be deployed to mining areas in 2018.” He goes on to say that the officers “will be vested with the powers of various categories of law enforcement and are tasked with enforcing mining regulations and other relevant laws.” The work of the “wardens” he says will supplement the efforts of the Guyana Geology and Mines Commission to reduce the incidence of illegal mining and to improve compliance.”

The first thing that should be said about the Minister’s pronouncement is that it is vague and devoid of even the most pertinent details even though we assume, hopefully correctly, that more details on the deployment of the wardens/compliance officers, the extent of their empowerment and the types and volumes of resources that will be placed at their disposal will be forthcoming. One makes this point based on what we believe is the altogether reasonable assumption that a high stakes pursuit like gold smuggling is attended by the application of considerable resources, including trained personnel, weapons and sophisticated means of transportation so that one would wish to secure some measure of assurance that the official response to the challenge of smuggling can serve as an effective counterweight to the practice. Unfortunately, and with the very best of intentions, a few dozen wardens, presumably armed and equipped with communications equipment can hardly, with the best will in the world, be expected to match the capabilities of gold smuggling operations in which the perpetrators have invested considerable resources including finance, planning, security and sophisticated transportation.

Additionally, however much we may wish  to the contrary, precedent – in terms of the relationship between the GGMC and the mining community – points to the ever present danger that operatives assigned to rein in the gold smuggling could be compromised. No one is of course wishing for this since it would be to the national good if those thousands of ounces of smuggled gold could be retained though the reality is that the questionable practices that attend the relationship between the state agency and the mining community, practices that have been exposed from time to time, raise legitimate and reasonable enquiries about the integrity of the compliance infrastructure.

In his budget presentation Minister Jordan also announced that “a set of incentives” aimed at encouraging increased gold declarations will be announced shortly. It has to go beyond that. If the country’s economy is as dependent on the returns from the gold sector as we are led to believe, then it is for the Ministry of Natural Resources to work with miners – both within and without the GGDMA – to fashion and continually refine regulations and procedures for gold mining that require miners to live within the law but at the same time does everything in its power to create a convivial environment that allows for mining operations to do well. What the recent past has shown is that soured relations between the authorities and the mining sector can have a seriously negative effect on the country’s economy at a time when unemployment levels are likely to witness an unprecedented rise. That apart, the pronouncements on the performance of the gold mining industry in this year’s budget provide some measure of evidence that the miners are doing their part.

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