12/14/2022
Devastated area in Amazon Forest due to illegal gold-digging
A regulatory change in gold acquisition from companies which purchase the metal in Brazilian Amazon’s extraction areas stimulated illegal gold-digging and, consequently, the increase of homicide in those regions.
In 2013, those companies named Gold Purchase Points, who are controlled by major financial institutions, were released from legal accountability from purchasing gold from undercover activity. Insper researchers Leila Pereira and Rafael Pucci assessed the effects from such release on the violence registered in Amazon areas in which illegal gold-digging takes place.
Approved without alarm in a pack of a law that approaches various themes, this deregulation established the principle of good faith on gold acquisition by primary purchasers who, therefore, lost incentive to oversee metal’s origin by themselves. Without a governmental oversight compensation action, literature foresees an expansion of the illegal activity, stimulating violent conflicts associated to it.
In order to verify the hypothesis, Leila and Rafael’s research focused in towns with less than 200,000 inhabitants in Brazilian Amazon with gold deposits that include indigenous lands or environmental conservation units. As mining is not allowed in those areas, they become potential targets to illegal activity.
After the change in legislation in 2013, homicide rates in illegal gold-digging areas increased in 8,5 cases per group of 100,000 inhabitants, comparing to Amazonian towns with general gold deposits (legal or illegal). It is a 20% increase occurred after deregulation.
In order to prove illegal gold-digging expanded in those territories, becoming the probable trigger to increase violence, the researchers showed the illegal mining fines increased after change in legislation. This did not occur with other metals, what strengthens the connection between change in legislation, restrict to gold, and expansion of clandestine gold-digging areas and homicides.
READ THE STUDY:
A Tale of Gold and Blood: The Consequences of Market Deregulation on Local Violence