Editions : April-June 2014

JOURNAL | INDONESIA 360 By: Yuyun Ismawati

Ma Onah is a 60-year-old abandoned housewife with three daughters. Her husband left her five years ago after she began experiencing bizarre health problems, including whole-body tremors and screaming in pain every night. She is now cared for by her youngest daughter, Seni, a 16-year-old high school student, and lives on other people’s donations. The doctor in her rural Indonesian mountain village in Banten province, West Java, which is a well-known gold mining and processing region, diagnosed her with a stroke and a nervous system disorder and gave her generic painkillers and drugs for her nerves. Earlier this year, Onah stopped taking the drugs because she could not afford them, and because they were not regularly available in the pharmacies in the West Java beach town of Pelabuhan Ratu, a three-hour drive from her village (the name of which is being kept anonymous due to local sensitivities).

Unlike her neighbors, Onah did not process or purify gold, nor did she handle quicksilver – another term for mercury, a toxic chemical that quickly extracts gold from chunks of ore and creates an amalgam. Sadly, she is not alone in the throes of illness. In her village, at least 20 other people suffer similar symptoms or have died from strokes. The most common health problems in her village are high blood pressure; upper respiratory, heart and skin diseases; strokes; and nervous system and digestive disorders. Not coincidentally, they are also the top health problems in other prominent small-scale gold mining and production hotspots around Indonesia including Lombok Island; Bombana, Southeast Sulawesi province; and Palangkaraya, Central Kalimantan province.

Rising gold prices, more temptation

In 2011, the United Nations Environmental Program (UNEP) stated that across the planet, Europe and Asia saw the greatest increase in gold supply between 2006 and 2009. A 29 percent increase in gold prices during that period and into 2010 drove new exploration activities in the formal gold sector that targeted deposits buried in remote corners of the globe, leading to shallow mining activities. While industrial mining abandoned mercury use in the 1960s, small-scale and usually illegal gold miners still use mercury. As gold has become harder to extract, these low-level artisanal and small-scale mining activities, known as ASGM, have expanded, taking advantage of regions with lax mining regulatory regimes and low environmental and social protection.

As mines age, extracting gold gets harder and costlier. Ores must be extracted from greater depths and generally at a lower grade; average grades having fallen 30 percent since 1999. Consequently, operational costs including labor and equipment have risen. A decade ago, the average cost of extracting an ounce of gold from the ground was a little over $200, but in 2010 it hit $857, according to industry analyst GFMS (formerly known as Gold Fields Mineral Services).

The gold industry worldwide is under pressure from depleted resources, but there is also an increased awareness of the importance of fair trade and human rights, largely as a result of the controversy over “blood diamonds” and the Kimberley Process, which was introduced to help combat the trade in diamonds from conflict zones. In the last 10 years, the minerals market generally has started to develop a common understanding about supply chains, especially for rare earth and precious materials including gold from high-risk countries. Global policy on mercury

Global support for a binding agreement on mercury use began building in 2003 when the Arctic Council reported elevated mercury levels in the Northern Hemisphere’s ecosystem. In February 2009, the 25th Governing Council of UNEP adopted a decision “to initiate international action to manage mercury in an efficient, effective and coherent manner.” An Intergovernmental Negotiating Committee (INC), chaired by Uruguayan diplomat Fernando Lugris, was established and supported by the Chemicals Branch of UNEP’s Division of Technology, Industry and Economics. The INC held five sessions to discuss and negotiate a global agreement on mercury. On Jan. 19, 2013, the lengthy negotiations concluded with 147 governments agreeing to a draft convention text.

The Minamata Convention on Mercury was adopted and opened for signature last October at a conference in Kumamoto, Japan. As of February, 96 countries signed the convention and one country, the United States, ratified it in November.

The convention will enter into force 90 days after it has been ratified by 50 nations. The convention was named after the Japanese city of Minamata to remind the global community not to repeat the mercury tragedy that occurred there in the 1960s. The tragedy was triggered by pollution from the Chisso Corporation, which discharged mercury-contaminated wastewater into the city’s bay, which accumulated in fish and killed and sickened thousands through a neurological syndrome later named “Minamata disease.” Through October 2013, about 80,000 people have claimed they were affected by the Minamata tragedy including the third generation of the original victims.

Mercury is a heavy metal and occurs in deposits throughout the world, mostly as the ore cinnabar, which is highly toxic if ingested or inhaled as dust. Mercury poisoning can also result from exposure to water-soluble forms of mercury (such as mercuric chloride, or methylmercury), inhalation of mercury vapor or eating seafood contaminated with mercury. Chronic exposure by inhalation, even at low concentrations, has been shown to cause tremors, impaired cognitive skills and sleep disturbance, all symptoms found among gold workers who use mercury.

Mercury is also widely used in products such as thermometers, barometers, manometers, sphygmomanometers, mercury switches, mercury relays, fluorescent lamps and other devices. In some industrial processes, mercury is a catalyst. Under the new mercury convention, the global community agreed to phase out its use in several products and processes by 2020. However, the target does not apply to the small-scale gold mining sector.

Local problems, global challenge

In the last several years, as global gold prices rose sharply, tripling between 1995 and 2014, so did the cost of exploration and production. In addition, most remaining deposits of gold are reportedly in remote areas, including under protected forests, national parks or traditional lands of indigenous peoples. Much of it can only be reached by smaller mining operations or groups of small-scale miners.

Globally, UNEP stated that as of 2013 smallscale gold mining was being practiced in more than 70 countries, involving between 10 and 15 million miners including as many as five million women and children. The small-scale sector produces between 12 percent and 15 percent of the world’s gold, and releases about 1,400 metric tons of mercury per year into the environment, causing harmful and irreversible health and environmental effects. The latest finding identified the ASGM sector as the largest single source of mercury emissions from intentional use.

Bryant (1997) stated that in the last decades, the link between poverty and environmental degradation is becoming more widely recognized, as poverty’s profile has become increasingly environmental. Small-scale mining is very often poverty driven and a form of a modern economic slavery, passing on debt to the next generation of family miners.

Conflicts over land, in particular regarding environmental degradation and the concession areas of large-scale commercial mining companies, as well as local political and development priority issues are common points of contention between miners and local indigenous populations. Furthermore, the illegal status of ASGM practices and the associated mercury contamination have become significant obstacles to sustainable development. However, for regions where economic alternatives are extremely limited, ASGM provides a temporary source of income for miners and generates several associated short-term economic activities.

As the gold price kept rising, small-scale gold mining in Indonesia has doubled, expanding into 22 provinces and encroaching on national parks, protected areas, large forests and even small islands. Like in other countries, most ASGM operations in Indonesia are illegal and backed by corrupt government officials, police, military, politicians and invisible financiers. Figure 1 shows the distribution of ASGM hotspots in Indonesia between 2006 and 2010.

Illegal mining practices in Indonesia increased in the wake of the 1997-1998 Asian Financial Crisis and became more rampant when national decentralization devolved much government authority to local regions shortly thereafter. This created a dilemma because of unclear and inconsistent regulations and policies. Environmental nongovernmental organizations also have accused the Indonesian government of practicing a double standard of only wanting to curb illegal operations within large-scale mining concession areas.

Mining activities have been the source of various conflicts caused by regulatory uncertainties over land-use and property rights, illegal artisanal mining, pollution and environmental impacts and uncertainty surrounding the livelihoods of local residents after mines close. Resosudharmo (2004) noted that these conflicts have become more profound under the current structure of autonomous local governments, and Indonesia’s substantially freer social and political environment.

In 2009, Indonesia was the world’s seventhlargest gold producer, with 140 tons of official production. However, my best estimate of illegal gold production in 2012 from smallscale mining activities in more than 800 hotspots across the country was between 65 and 130 tons, but of course there are no official records for this.

Born and abandoned

Due to its informal nature, ASGM activities follow a certain pattern. At every stage of the cycle, there are job opportunities and temporary economic improvements but also social and environmental problems. Figure 2 shows a simplified empirical cycle of ASGM practices in three stages: early (conventional exploration), later (supply push) and declining (supply pull).

At the early stage, public response to news of gold potential in particular regions attracts prospectors and experienced miners to do exploration, spurring economic activity. Several social and environmental problems are sparked due to the lack of control by the local authorities and the lack of readiness (social, physical, infrastructure, knowledge, capital) in the local community. During this stage, between 1,000 and 5,000 migrant miners will go to a new hotspot per year and try their luck.

During the supply push stage, both the production rate and illicit economic practices start to increase significantly, with mechanical and technology interventions. Mining activities expand via financing by family resources, individuals, formal and/or informal loans, applying simple technology and “learning by doing” where the entrepreneurial skills of risk-takers are challenged. Moreover, the pre-existing socioeconomic dynamics, such as poverty alleviation and the availability of quick cash and alternative livelihoods, influence the expansion of ASGM practices.

Some areas develop into semi-industrial mining zones with a pop-up gold rush town, and various profit-sharing schemes becoming more common. At this stage, social and environmental problems increase along with gold production and the number of miners. During this stage, between 5,000 and 40,000 migrant miners and workers will flock in to give it a try, sometimes bringing their families to live at the site. Entrepreneurs will move into the boomtown. The supply stage is really critical as it creates additional tensions and conflicts between all actors and irreversible impacts on public health and the environment. Mercury is used intensively during this stage.

At the declining stage, the production rate starts to fall due to numerous factors, including technical limitations, new government regulations, too many people working in one area, the arrival of new investors, and growing horizontal and vertical conflicts. The social problems and environmental destruction seem to slow but the impacts remain for a long time – in particular mercury pollution. At this stage, the number of miners and migrant workers will drop, leaving behind a ghost town and devastated environment. The time frame for every stage varies from one site to another, and the rate of gold production (in metric tons per year) also varies.

Mining and mercury

Getting into the ASGM business is very easy. People with money can be financiers or business partners, own mine shafts, or get involved in supporting businesses such as restaurants, transport, buying gold or selling mercury. People without money can find jobs as laborers. In addition, since mercury is the main working tool to extract gold from ore, it can be easily purchased from shops in mining villages, or gold and jewelry shops in nearby bigger towns. No permits are used, and there are no warning labels about the harmful effect of mercury on workers who produce it. They handle and treat mercury like water – though a far more valuable form. Mercury traders can be easily contacted locally, internationally and on the Internet without any worry that they or buyers will be arrested by Indonesian authorities.

Figure 3, showing the global mercury trade in 2011, was released during a mercury convention negotiating meeting in Nairobi. The map was derived from the dataset of the UN Trade Statistics Branch (UNCOMTRADE), which compiles export and import notifications from countries including Indonesia. The interesting information in the graph is the blue band from Singapore to Indonesia. UNCOMTRADE’s database stated that in 2010, Singapore exported 256 metric tons of mercury (HS280540) to Indonesia. However, Indonesia’s mercury import notification was only 2 metric tons. In 2012, 368 tons was exported to Indonesia but the country only reported receiving less than 1 ton. Indonesian statistics are also far different from the data of Global Trade Information Services and export data from the United States Department of Commerce. Given that the European Union and the US banned mercury exports in 2013, there is hope the volume coming into Indonesia will significantly decrease.

Indonesia has been a mercury importer since the 1980s, but the earliest data available on the UNCOMTRADE database is 1989. Figure 5 shows the amount of mercury exported to Indonesia between 1998 and 2012, correlating with the market price for gold. Based on the UN database, $32 million in mercury was exported to Indonesia in 2012.

Furthermore, Indonesia’s Ministry of Trade has reviewed regulations that were released in 2009 regarding the importation of hazardous substances. The regulation covering procurement, distribution and supervision of hazardous substances drastically reduced the volume of legal imports of mercury, by limiting the number of licensed importers and the ports through which it could enter Indonesia.

Aside from the drastically contradictory figures on exports of mercury to Indonesia and official imports, one of Indonesia’s largest mercury traders and distributors privately confirmed that the hundreds of tons of missing mercury was smuggled into Indonesia. The trader claimed that he was helped by brokers abroad and backed by powerful government officials. At the local level, in small-scale mining hotspots in West Nusa Tenggara province, for example, at least 30 tons of mercury was being distributed per week at Rp 1.5 million ($132) to serve about 20,000 “ball mills” – machines that spin multiple cylinders containing raw ore, mercury and water to extract the gold.

The ripple and rip-off effects

For sure, small-scale gold mining creates positive ripple effects in local economies across Indonesia: jobs and numerous supporting businesses. However, the ripoffs outweigh the positive ripples: deaths and illnesses; environmental damage and pollution; drugs, crime and prostitution in boom towns; modern-day slavery; wealth disparity; human rights violations; and inflation.

Most ASGM hotspots bring an economic spike and wealth for some villagers. A nouveau riche class emerges in gold rush villages, boasting new houses, vehicles and other forms of big spending. More people from villages are going on the Hajj pilgrimage and have attained a higher social status in their neighborhoods. The economic value of ASGM activities in Lombok alone was estimated to be about $22 million in 2012.

However, the health, social, cultural, economic and environmental problems come with the money. The sound of crickets and flowing water in villages has been replaced by the hum of generators from backyard ball mills. People who used to be able to work their farms into old age now endure body tremors, dizziness, high blood pressure, strokes, numbness and digestive problems. Given the misdiagnosis from local doctors and no proper medication, they become a burden on their families.

The soil, crops, fishponds and air are all tainted with mercury. Multiple studies have revealed elevated mercury concentration in the environment and food chain of many ASGM hotspots across Indonesia in the last 10 years. Some of them are 100 to 700 times higher than the safe level set by the World Health Organization. In some previous ASGM sites, I have found dozens of villagers who once handled mercury now suffering symptoms consistent with Minamata disease. In Minamata, tens of thousands of people are still trying to get certified as having been exposed to mercury poisoning so they can get compensation. Developing countries with small-scale gold mining industries, however, will lack the funds to properly deal with the health and environmental impacts of mercury pollution. 

What’s next?

Indonesia’s Ministry of Energy and Mineral Resources, in coordination with the Ministry of Environment, is preparing a National Implementation Plan to Eliminate Mercury in ASGM as mandated by the Minamata Convention. At the moment, Indonesia has not ratified the treaty, but some preparatory activities have been done by national stakeholders in anticipation of the treaty coming into force.

As the initial step mandated by the treaty, Indonesia should send a letter to UNEP and the Mercury Secretariat stating that ASGM activities have shown “more than insignificant” impacts. Building on that statement, Indonesia can develop its national action plan. Following national acknowledgement, local governments that have acknowledged ASGM activities in their regions should send an official letter to the Ministry of Environment and the Ministry of Energy and Mineral Resources. The letters should state that the gold mining activities in their areas have significantly impacted public health and the environment, followed by forming a local action plan. Mercury inventories should also be conducted both nationally and at the local level.

The only way to stop this looming environmental, health and social disaster is to end the use of mercury in ASGM and ban imports for the mining sector. Some worry that a ban would push mercury dealing further underground, but most of the mercury import and trade is already illegal. Now is the time to act. It could take between five and 10 years for the mercury treaty to go into force. Moreover, under Article 7 of the treaty, there is no agreed date to eliminate or phase out the use of mercury in ASGM globally. In other sectors, mercury use in several agreed products and processes will be phased out by 2020. The cost of inaction will be very high for Indonesia and other developing countries if they don’t take action immediately. As mandated by the treaty, Indonesia and other ASGM countries have to eliminate the four worst practices in ASGM: whole ore amalgamation; open burning of amalgam or processed amalgam; burning of amalgam in residential areas, which releases mercury into the atmosphere; and cyanide leaching in sediment, ore or tailings to which mercury has been added.

Public health is the most important component to be integrated into national and local action plans. Mercury poisoning causes irreversible health damage. While early detection of poisoning might be treatable, helping people in the later stages of poisoning is too risky and expensive for developing countries and poor communities to tackle. The best way forward is to prevent mercury exposure by prohibiting its use in gold processing and other areas, and increase the capacity of local and national health workers to understand the sources of exposure, risks and necessary preventive measures.

In addition, there must be options for alternatives livelihoods. Local governments must push their communities to switch from small-scale gold mining using mercury to safer and more sustainable lines of work.

In closing, only strong political will can stop the trade, import and use of mercury in Indonesia. The government must review and enforce regulations on mercury and other toxic chemicals, include all stakeholders in the process and undertake immediate environmental rehabilitation before it’s too late. We do not want to create a future Minamata tragedy in Indonesia or any other country. 

 

Yuyun Ismawati is co-founder of BaliFokus Foundation, an Indonesian nongovernmental organization working to eradicate mercury use in the country’s small-scale gold mining industry.

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