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  • Writer's pictureJuan Cabrera

"Shining a Light on Venezuela's Golden Opportunity: Tackling Risks and Promoting Responsible Mining

Gold extraction and trade in Venezuela has been booming since 2016 due to the country's economic crisis and the devaluation of its currency. Most gold production occurs in the southern regions of the country, particularly in the Amazonas, Bolívar, and Amazonas states. Informal and artisanal mining is prevalent in these areas, with a significant number of small-scale miners operating independently or in organized groups. However, illegal mining also takes place in protected areas, indigenous lands, and other sensitive areas.

The extracted gold is then traded within the country's informal market, where it is purchased by intermediaries, processors, and exporters. These intermediaries often smuggle the gold out of the country to avoid government regulations and taxes. The gold is usually sold to international buyers in neighbouring countries such as Colombia, Guyana, and Brazil or further afield in Dubai, Turkey, Switzerland, and other countries.

The OECD reports highlights the significant risks associated with gold extraction and trade in Venezuela, including conflict financing, economic crimes, and serious human rights abuses. These risks are exacerbated by the lack of transparency and accountability in the sector, weak governance, and corruption. The reports also note the negative impacts on local communities and the environment, such as the destruction of natural habitats, pollution of water sources, and the displacement of indigenous peoples.

The government of Venezuela and local stakeholders can take several actions to address these risks and improve the sustainability and transparency of the gold sector. Firstly, they can improve governance and regulatory frameworks to ensure that gold mining and trade comply with international standards, including environmental and human rights protections. This can involve increasing transparency and accountability, strengthening regulatory agencies, and implementing legal reforms.

Secondly, they can engage in multi-stakeholder dialogue and partnerships with local communities, civil society organisations, and the private sector to develop more sustainable and responsible mining practices. This can involve improving working conditions, supporting artisanal and small-scale miners, promoting environmental rehabilitation, and investing in local economic development.

Thirdly, the government can enhance its efforts to combat illegal mining and the smuggling of gold out of the country. This can involve strengthening law enforcement, improving border controls, and increasing cooperation with neighbouring countries.

International actors can support these efforts in several ways. Firstly, they can provide technical assistance and capacity building to strengthen governance and regulatory frameworks. They can also support multi-stakeholder dialogue and partnerships to promote sustainable mining practices and improve the livelihoods of local communities. Secondly, they can provide financial and technical support to combat illegal mining and the smuggling of gold out of the country. This can involve providing resources for law enforcement and border controls, as well as supporting initiatives to develop alternative livelihoods for those engaged in illegal mining. Lastly, they can encourage responsible sourcing practices by promoting due diligence and traceability in the supply chain and supporting initiatives to promote transparency and accountability in the gold sector.



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