Monday, May 25, 2015
How Gold Pays For Congo's Deadly War
The price of gold set another all-time record this past week. There's demand for gold for investments, for circuits in cell phones and computers, and, in this holiday season, for jewelry. But there's another price being paid for gold that you probably haven't heard about.
Gold and other minerals are funding the deadliest war since World War II. More than five million people have died in the Democratic Republic of Congo. Years ago, the jewelry industry banned the trafficking in so-called blood diamonds, but the same hasn't happened with gold.
In the heart of central Africa, "60 Minutes" found a campaign of rape and murder being funded largely by gold that is exported to the world.
Photo Essay: Congo's Gold
Web Extra: Uranium for Sale
Web Extra: Greed and Chaos
International Rescue Committee: Congo Crisis
Human Rights Watch
The Enough Project: Conflict Minerals
No Dirty Gold Campaign
Responsible Jewellery Council
Correspondent Scott Pelley visited a gold mine in eastern Congo, dug from the side of a mountain by the bare hands and stooped backs of a hundred men. They've lifted tons of dirt one pan at a time, building terraces as they descend. The hunger for gold drives men into the earth so that other men can kill.
Joining Pelley was Anneke Van Woudenberg, who has spent ten years in Congo. She investigated the mines for Human Rights Watch and wrote one of the most respected studies on the trade.
"You know, this is a little bit dangerous business…especially for those guys," Pelley remarked, as they maneuvered along one of the narrow mud terraces of the gold mine.
"It's particularly for those guys," she replied. "And there are regular mudslides, rock falls. You know, the death rate is extraordinarily high in these mines."
Asked what life is like for Congolese miners, Van Woudenberg said, "You make maybe if you're lucky a dollar or two a day. You have no health care, no social insurance, you have nothing. People do this because they hope to become rich, but very few do."
The people are destitute. But Congo is the Saudi Arabia of minerals. In addition to gold, the earth is loaded with metals such as tin, copper, and something called coltan that is essential to the circuits in computers and cell phones.
Our journey started beside Lake Kivu in the teeming city of Bukavu. Eastern Congo is spectacular, remote and lawless.
To get to the gold fields, we traveled through territory controlled by one militia, then another. We found a gold mine on the Mwana River in the province of South Kivu. The first thing you notice are the children. Families set them to work early and for many it's the only life they'll know.
Their method for mining is at least 2,000 years old. They lay blankets in the riverbed and let the sediment collect in the fibers. The blankets are wrung out and somewhere in all that mud is treasure.
They mix mercury into the sediment, which chemically binds the gold together. Then they simply burn the mercury away. No one worries too much about the toxic fumes; the neurological damage from mercury may not show up for years.
Pelley watched as a mercury burner produced a tiny piece of gold, worth perhaps $5.
The gold is one of the factors driving what is now the deadliest war on Earth.
In 1996, Uganda and Rwanda invaded Congo. Seven more countries joined in and started stealing Congo's resources. The invasion ended, but ever since, rebel militias and government forces have fought over local power, ethnic hatred and control of the minerals.
We heard it firsthand from former rebel soldiers. Pelley visited a school that teaches guerilla fighters, who've laid down their guns, how to be civilians again. One former major told us that when his troops controlled a territory, he demanded gold from every miner, every day.
"We collected gold, and then we went to buy medicines. We went to buy ammunition. We went to buy guns," he told Pelley.
Asked who sold him the ammunition and guns, the man said, "We would buy those things from Congolese army soldiers."
He's saying government troops sold weapons to him, the enemy. Congo is so destitute, even its army goes without pay and becomes just another predator among the villages.
"Is the violence increasing? Decreasing?" Pelley asked John Prendergast, who worked on Africa policy in the Clinton White House.
"It spikes. It comes in phases. And it's very localized," he explained.
Prendergast co-founded something called "The Enough Project," which works to expose war crimes.
"If you do a conflict analysis, you will find that when there are spikes in violence, it has something to do with contestation over the mineral resources. Gold, and the rest of 'em," he told Pelley.
One recent spike centered on a village called Kanyabayonga. We went there with United Nations troops and found that a rebel militia had raided the village and burned 70 homes.
Why attack the civilian population?
"It's a very effective strategy. It scares the people. It terrorizes them into compliance," Prendergast explained. "It's chaos that is organized in order to exploit the gold and other minerals for the enrichment of these armed groups and it just keeps the cycle going and going until we break that cycle and begin to address the root issue here which is the gold and the other conflict minerals."
Villagers caught in the combat pour into camps like the one we visited in the province of North Kivu. It's a desperate place where a fist of flour can be, in the moment, as precious as gold.
Pelley met Fidel Bafilemba, a relief worker for the International Rescue Committee, a global charity that brings water and health care to the camps.
"How many camps are there like this in eastern Congo? How many people are displaced?" Pelley asked.
"Oh my God. Oh my God. We have served so far one million individuals, displaced individuals. And to name specific camps here, I think we have over 100 camps within this country," Bafilemba said.
One woman told Pelley that three of her children, aged 15, 7 and 6, were shot to death by soldiers.
The story of just that one woman captures Congo. We found her in the camp. We won't use her name but she asked us to show you her face. Her village was destroyed by a militia, burned in 2007. In addition to the three children, she lost her husband and her parents.
Her parents were burned alive in their house. "It wasn't only my family. There were about 280 people burned alive in their homes," she recalled.
She ran with three surviving children to a makeshift camp for the homeless. But then the camp was attacked and there was a second massacre.
When that round of the killing began, the people fled to the relative safety of a United Nations post. The post has grown into a camp of more than 13,000 people. In terms of food, they're largely fending for themselves.
On the day "60 Minutes" visited, the United Nations was distributing flour and beans and cooking oil. But the last time that happened was five months earlier.
Most the time the camp's people forage for food outside the camp and that is where the woman who survived the massacre fell victim to the other atrocity of Congo: rape.
"We went to look for food but also firewood mostly. And that's where we got raped by people in uniform," she told Pelley. "Very hard to tell whether they were soldiers or rebels. All we knew and all we saw is that they were in uniforms and were armed with machine guns."
It is estimated 200,000 women have been raped in eastern Congo. Rape is a weapon there, and often a lethal one.
Because of the suffering, the U.N. has tried to stop the trade in Congo's illicit gold. But we found the gold from these mines is being smuggled into world trade.
First, all those nuggets are combined in border towns and then the gold is slipped over the border to Uganda's capital Kampala.
Uganda is right next door to Congo, but it has almost no gold production of its own. In fact, in 2007, Uganda produced about $500 worth. But in the same year, it exported $75 million in gold. Almost all of that is coming from the war zone.
We took a hidden camera into a trader called "Jit." We offered gold for sale and we were clear it came from Congo.
He bought our gold. And we got hold of internal Ugandan records that list 228 international shipments by Jit and many others. U.N. investigators say most of it is gold from Congo, relabeled as a product of Uganda. After Kampala, it heads to refiners in Dubai and then out to the world.
No one can say how much of the world market is fed by Congo gold. The best estimates are around one percent. So it's not likely any particular watch or wedding ring contributed to rape or murder. But we wondered how a consumer would know.
Matt Runci represents retailers as head of the trade group Jewelers of America and the Responsible Jewellery Council (sic).
"Does your certification mean for example that the gold didn't come from Congo?" Pelley asked.
"Source of origin is not yet a part of the council's frame work," Runci said.
Asked how they keep that gold out of American jewelry stores, Runci said, "One needs to know where the sources of controversy are if one is to try to prevent those sources from getting into the legitimate supply train."
"It's been pretty well known for a long time where the sources of controversy are in Congo," Pelley pointed out.
"Well, in the eastern province, yes, it has," Runci agreed.
Jewelers know about the tragedy in Congo, but it has never been standard industry practice to trace gold to its source. Jewelers buy gold from middlemen; they don't ask where it comes from.
It was seven years ago the industry banned so called blood diamonds from West Africa. But, up until now, it hasn't done the same for gold.
"Banning the gold is a noble goal. But one that requires, I think, some thoughtful consideration and a positive engagement between stakeholders, governments and industry to bring to achievement. And the industry stands ready to work with stakeholders and with government to achieve that end," Runci said.
"What's to talk about? Why can't the industry cut off the supply from Congo and strangle the civil war there?" Pelley asked.
"There is absolutely no place and no need for debate around the question of whether any illegally sourced mineral ought to be part of the industry supply chain. It should not be," Runci said.
"Walmart is the largest gold retailer in America," Pelley remarked. "What effect would it have if Walmart simply declared that it would demand traceability all the way to the mine for all the gold that it sells?"
"There's no question in my mind that commercial pressure can and should and must be brought to bear," Runci said.
Asked why it isn't done, Runci told Pelley, "I don't think the question's been put to them, frankly."
60 Minutes did put the question to them. And of the major jewelers we talked to, only Tiffany said it can trace nearly all its gold directly to a mine; theirs is in Utah. Walmart told us it plans to trace the source of 10 percent of its gold products by next year.
And the Responsible Jewelry Council says that it is developing a system for the industry that will, one day, trace gold to its source.
If Congo's gold is less than one percent of world supply, that still comes to more than $300 million a year - enough to keep the war going forever, mining an inexhaustible wealth of misery.
Produced by Solly Granatstein and Nicole Young