How Gold Trade Fuels Modern-Day Slavery in Peru

The report (pdf), by the US labor rights non-governmental organization Verite, chronicles the lives of kids like "Gordo." He was 12 when he was told he had to leave school and migrate to Peru's remote northern jungle region of Madre de Dios to work in the gold mines. Drug traffickers had forcibly displaced him and his family from their farm in the northern department of Iquitos.

Gordo -- who like many others in this report spoke on condition their real names not be revealed -- worked six years in the mines in return for food and a mat to sleep on. A fellow teenager who demanded pay when he turned 18 was murdered and buried in an unmarked grave, he told investigators.

"Oscar," meanwhile, was 16 when his cousin persuaded him to come to work in the mines with promises of being paid "in chunks of gold." When he arrived after a five-day journey on the river, he found out his cousin had sold him to the mine, and he would have to work 90 days moving wheelbarrows filled with rocks and sand to pay off his cousin's fee before he could leave.

Two weeks later, he fell sick with malaria and was left to die. Kept alive by other workers who gave him scraps of food, he ultimately worked a total of eight months in order to fulfill his "contract" and received ten grams of gold, which he sold for $115. He contracted yellow fever soon after escaping and was forced to go back to work in the jungle to pay back hospital fees borrowed from his mother.

These stories are not uncommon in Madre de Dios and other illegal and informal mining regions of Peru, the world's fourth largest gold producer. Indeed, the NGO found that such exploitation is standard practice, an issue to a large extent ignored by the major international companies using it to make and sell jewelry worldwide.

SEE ALSO: Peru News and Profiles

Conditions in Peru's informal and illegal mines were worse than anything Verite lead researcher Quinn Kepes had seen in places including Bangladesh and Liberia, he told InSight Crime.

"I can't think of any low-level unskilled worker in Madre de Dios I interviewed who is not suffering some kind of egregious labor rights violation," he said.

Billion-Dollar Industry Fueled by Slavery

Peru's human rights ombudsman estimated last year that informal and illegal mines directly employ 100,000 people and indirectly employ another 400,000. According to estimates by experts cited by Verite, such mines produce a 15 to 22 percent of all the country's gold, worth almost $3 billion annually.

A 2012 newspaper investigation found that "the majority of this illegally produced gold was exported by formal businesses that helped to launder it" -- a process explored in InSight Crime's Breaking Down the Chain of Illegal Gold in Peru. A network of family clans and illegal criminal groups control much of the extraction of the gold via forced labor that some would say is akin to slavery. 

Poor Peruvians travel to mining regions with hopes of escaping poverty. Many of these are "indocumentados," people who lack a National Identity Document (DNI), meaning they cannot work in any formal sector of employment in Peru.

"Extremely poor, geographically isolated, or indigenous Peruvians who never obtained a birth certificate and have thus been unable to acquire a DNI," fall into this category, noted Verite, "individuals [who] are generally very vulnerable due to their lack of alternative employment and their low levels of education and socio-economic status."

Typically recruited in their local communities by middle men paid by the mine owners, the workers are tricked when it comes to pay and employment conditions, and "told stories about miners striking it rich."

Having to work a 90-day contract unpaid, purportedly to pay off recruitment fees or travel expenses, is common. But workers often fall ill to tropical diseases, animal bites or mercury exposure; they get injured in workplace accidents, and time-off sick does not count towards the 90 days. They also accrue debts for food and lodging during that time, so the 90-day period only increases. Verite met workers who had worked nine months unpaid to complete the contract.

"Workers are unable to leave their employment before their contracts are up due to their extreme physical isolation and the lack of money to pay for transportation, (…) which constitutes physical confinement in the work location," Verite writes.

Even when the 90 days are completed, workers are often forced to continue working unpaid or severely underpaid, the report continues. Workers reported being threatened with guns when they demanded payment, or believing that other workers had been offered as human sacrifices to persuade the gods to put more gold in the soil. The matriarchal head of a major Madre de Dios mining family, for example, is believed to have "a devil's tail" and is rumored to have ordered the killing of workers. 

"Violence is rampant, but even if threats aren't real, the small police presence and faith in the supernatural means workers absolutely believe in the menace," said Kepes. 

Every Job Carries Risks

Aside from the debt bondage enforced by violence or the threat of violence, laborers face perils in the work itself. There are a variety of jobs to be carried out within the mines, which operate outside of health and safety regulations often using old and unsafe equipment. Almost all of the labor is dangerous and physically exhausting. Accidents are common.

"Macheteros," or woodcutters, cut down the trees. Peruvian gold mining has seen tens of thousands of hectares of trees destroyed in an area of exceptional biodiversity, with deforestation tripling over the last five years. Macheteros face risks from long periods of exposure to the sun, falling trees, poisonous animal bites and burns, said Verite.

"Carreteros," or transporters, move wheelbarrows laden with rock and dirt, also facing risks of exposure as well as risks of long-term injuries associated with carrying heavy loads.

The "buzos," or divers, go into the mercury-contaminated rivers directing pumps that suck up silt containing gold particles. They run the risk of drowning in air bubbles, being buried underwater by collapsing mountains of sand or having their organs sucked out by the pumps.

SEE ALSO: Coverage of Mining

"Maraqueros" operate the pumps and use mercury to separate and condense the gold particles that they collect. These workers pick out the globules with their bare hands, often during 24-hour shifts. They face risks of severe sunburn, exhaustion and dehydration, aside from the skin and breathing difficulties, organ failure and brain damage associated with mercury exposure. 

Finally, there are the truck operators, who are typically untrained. They dig holes and pile up mountains of sand, while facing risks of falling rocks and the dangerous, unpredictable movements of these mountains of dirt.

Verite received a large amount of reports of fatal accidents from miners it interviewed, and reports of workers being buried in unmarked graves without information being provided to their families or authorities.

The housing visited by Verite in Madre de Dios was also shoddy, typically made out of plastic sheeting, without electricity and running water. In some cases, workers had to drink mercury-infested water.

Medical attention for tropical diseases and injuries was usually non-existent. When it did, it was "generally rudimentary and expensive," said the report. Workers told Verite most of them did not live past the age of 40, although a formal study of life expectancy in the area has not been done.

A large network of peripheral workers serves the mines, including cooks, transporters, tire repairers and prostitutes, many of whom are minors, said Verite. Exploitation and dangerous conditions were also common in these sectors, especially in sex work.

Thousands of women and girls are trafficked to mining communities each year, usually by family or informal networks. According to Asociacion Huarayo, an NGO in Madre de Dios consulted by Verite, almost all of the girls trafficked to Madre de Dios are deceived, kidnapped or forced into debt bondage, with the confiscation of identity documents and physical threats against them and family members a common practice. Women hired as cooks are also often forced to provide "sexual favors." In remote mining camps with no state presence and no access to communication, there is little chance of escape.

Few Resources, Political Will

Peru's government has pledged to formalize the illegal mining sector, though with corruption rampant among state and local officials, it faces immense challenges. There is a lack of resources and little political will to truly tackle the problem. Verite found the Labor Ministry to be the government department most committed to changing the status quo, but a lack of resources seriously impedes its work. Researchers were told by one expert that there was no certified labor inspector for the whole of Madre de Dios.

Moreover, many mining regions are so remote and lawless, with mines guarded by heavily armed men, that "authorities are not able to take any action or even step foot on these lands unless they are provided with military support," said Verite.

The huge amounts of money at stake and the powerful interests involved in the industry mean prospects for real progress remain bleak unless the government summons up considerable resolve and financial resources.

There are campaigns such as the NGO Earthworks' "No Dirty Gold" lobby retailers and consumers and demand changes in unethical mining practices. And various corporate social responsibility programs exist for companies refining and selling gold, but they are voluntary. 

Though the outlook appears very bleak, Kepes said he remained hopeful.

"We have seen things change in a lot of industries," he said. "Over the years if you get people together from different sectors, from business, from government, from NGOs then there is an opportunity for progress. Hopefully that political will, which does exist in the Ministry of Labor, will get the support it needs from companies and institutions, and the rest of government, to do the work they need to do to combat this issue."