Economics and politics

In order to make a contribution in line with what this academic highlights, Advances in Science presents the findings of these three researchers.

EL ROSARIO, WITH MINING IN ITS SIGHTS
The recent passing of the Law of Royalties has led to the increase of illegal mining in some of Colombia’s towns. This is one of the conclusions of research by the Faculty of Economics at the Universidad del Rosario, which has made a map showing the locations of illegal open-cast mines.

Intuition points to mining municipalities receiving a lower percentage than that paid by the companies. Furthermore, the study revealed a serious deterioration in the health of newborn babies born ‘downstream’ from illegal mining exploitation. Behind the research now producing results by professors Santiago Saavedra Pineda of the Faculty of Economics, and Mauricio Romero of the University of California-San Diego, was their desire to know whether the reduction from 50 to 10 percent in royalty income for Colombian towns, written into the Decree-Law 4923 of 2011, had influenced the increase in illegal mining.

The researchers formed the hypothesis as to whether the mining parties, following royalty reform, preferred illegal exploitation because the amount for bribing local authorities is less than the cost of meeting the demands for obtaining a legal licence. “Theoretically, we expect illegal mining to increase because the local authority gets less in royalties after the reform,” points out Saavedra, holder of a PhD in Economics from Stanford University.

“Local incentives and national tax evasion: The response of illegal mining to a tax reform in Colombia” is the title of the research study, whose first major challenge came from the lack of information on the location of the country’s illegal mines.

The researchers decided to tackle this by using technology and tools allowing them to cross reference variables and create a map. “To solve the problem of measuring illegal activity, we build a set of innovative data by using predictions from automatic learning using satellite images,” explains the professor.



 

This is where ‘Machine Learning’ comes in to build the predictions. Taking as a basis the way one sees a landscape of an open-cast mine (lacking vegetation and brown in color, for example), they fed in the data to obtain predictions. “Our estimations suggest that 89 percent of Colombian mining areas are exploited without a licence, a high percentage but a figure close to that put out by the United Nations Office for Drugs and Crime (UNODC), which claims that 78% of gold extraction in Colombia is illegal,” explains the researcher.

With this clear information, the academics had to confirm or discard the theory on the increase of illegal mining after Decree 4923. For greater certainty in the outcomes, they chose to follow the same process used for mining in Peru, comparable to that of Colombia since it employs similar legislation. For each country, maps from before and after the passing of the law were analyzed, and the expected results were confirmed: the area proportion mined illegally in Colombia increased 4.47 percentage points, especially in towns with less central government influence.

“Illegal mining levels in Colombia changed in comparison with those in Peru,” assured the economist Saavedra. The researchers calculate that, under the reformed royalty system, between 19 and 57 million dollars of revenue stopped coming in. This was due to the increase in illegal extraction. So, for each redistributed peso, between 3 and 9 centavos is lost through evasion. The health cost must be added to this amount, because the researchers found that the health impact
associated with illegal mining grew tenfold.

A NEW HYPOTHESIS
Colombian law requires companies with mining licences to have an environmental licence for exploitation phases, one that controls the negative effects on the environment that may be caused by the activity. Not complying with these practices not only impacts a region’s biodiversity, but also causes damage to the health of residents living near the mine, and this fact led to the economists’ next concern.

“We had the elements of the mine, the river’s flow, the municipal capital, the fact that illegal mining causes grave damage to the environment, and the health of nearby populations due to the quantity of mercury thrown into rivers from gold extraction. So then we launched our next hypothesis: illegal mining impacts in major proportions on the health of the newborn of towns ‘downstream’ from mines,” recalls Saavedra.

It is well known that mercury, which is essential to gold exploitation, affects the heart, the kidneys, and the central nervous system, especially in women and children. For this reason, the figure we found is alarming: the effect on the health of newborn babies ‘downstream’ from an illegal gold mine is 2.53, ten times greater than that produced by a legal mine, 0.27.”

“And here we are talking about open-cast mines. There is no way of quantifying what happens with subterranean mining,” concludes Saavedra, whose study provides a clear picture of illegal mining in Colombia, one involving corruption, a lack of observation by the state, damage to the environment, deterioration in people’s health, and whose continuance is limited to the work available, legal or illegal.

SEARCHING FOR THE MIDDLE GROUND
Andrés Gómez Rey, a lawyer specializing in Environmental Law and holder of a Master’s Degree in Administrative Law, is the co-author of Mining Activity in Moorlands, Wetlands, and
Forest Reserves, a book that sets out to explain to the layman about prohibitions on this activity that work as a protection measure for the aforementioned ecosystems.

Since the market offers no book on ‘flora and fauna for dummies’, the text—which provides as much reflection as research— is written so that persons with no knowledge of the subject can grasp what is happening in the area of environmental protection. “Its aim is to explain in some way why the current disorder has a historical background, the product of state behavior,” he points out.

Athough Gómez Rey sees himself as being on the “green wing” of mining law, he is committed to finding the middle ground so the state can maximize its benefits from this activity but with the minimum possible detriment to environmental and social conditions where it is carried out. In his view, allowing unrestricted freedom for extractive activities simply to boost GDP is an incomplete vision of mining; and protection in defence of renewable natural resources “sounds pretty” but it also has undesirable effects on people’s fundamental rights.

“Being very ‘grey’ has some effects, and so too does being ‘green’. But it’s really about looking for middle grounds. The book aims to tell what has happened and show that each possible interpretation has consequences. And we must get Colombia to protect its environment, but also its GDP,” he underlines.
 

DOING THINGS WELL IS NOT ENOUGH
To illustrate his viewpoint, Gómez Rey turns to an example he himself recognises as “very radical”, but he argues that not all the implications of doing things well are necessarily positive. “What is needed in order to kill well? Completely end the activities and life of a person, which can be achieved in innumerable effective ways. That, however, does not make killing good,” he stresses.

As a further example, he talks of his experience of once living in a town that heightened his love of nature. “I went back five or six years later when a very large mining project was going on, and I found that a lemonade no longer cost 1,000 pesos but 3,000, and only those working in the mine could afford to pay for one. This has such a big effect on people who need to buy a cure or a drink but do not have the means, so they end up stealing. A high rate of prostitution had also resulted.”

One element could be highlighted from this mining activity, namely that it was well carried out in technical terms, but it was clear that the situation had additional impacts. “I believe that environmental protection is not simply a question of doing it well,” the expert says, repeating that someone can steal efficiently, kill efficiently...or mine efficiently, so it is necessary that this ‘well done’ mining does not alter the social situation or dynamics. “We need to minimize pressures on people and on the environment.”

THE INTRICATE DEPTHS OF ENVIRONMENTAL LAW
As part of his search for a middle ground, Gómez has found a key ally in the interdisciplinary approach. “This work includes all disciplines, and each discipline has a different rationale, and each different rationale impacts on the way in which legal order is seen and how each activity is carried out,” he maintains.

This reality involves an additional ingredient for the case of mining, and environmental law has certain peculiarities that set it apart from other fields of more dogmatic tradition and with more rigid and structured features. “Environmental law feeds on passions, discourse, emotions; but also on anthropology, sociology, accountants, mathematicians, economists, and so on. And all this distils into the need to create rules. Such rules must have all the logics of the world, and this makes it very pretty but also somewhat chaotic.”

“It’s not totally subjective either, but it is a little bit more friendly with the changes. It’s a law area that has to react to the untimely alterations in nature (such as the landslide caused in Mocoa, April 2017, by the the overflowing of three rivers), so for this reason it is much more dynamic. And the responsibilities involved in all these disciplines—and, in a flash, passions— make it a much more agile law.”

Returning to the book, Mining Activity in Moorlands, Wetlands, and Forest Reserves, Gómez Rey points out that current laws are in place to protect ecosystems, but legal regulations are one thing, while another thing entirely is how they translate into practice. And, here again, many things on the ground depend on the points of view of each agent involved.

“If you ask a biologist studying the interrelation between living beings in moorlands, any mining activity is going to be egregious and make for a very alarming panorama; these tend to be the visions of some organizations. But if you look at it from the point of view of the operator who has managed to extract thousands of tons of gold or coal from a 1000-foot pit, this is the best mining option around! It’s just a little bitty hole for such a tonnage! Obviously they will tell you it’s a great thing.”

The research provides the further example of the surface gravel put down, thanks to mining, on rural roads, and this is so necessary for farmworkers to transport their products and avoid intermediaries. It’s a requirement for the country, so mining does bring positive aspects. “But you have to conjugate all the variables, and this is the point we are trying to make.” Bringing three lawyers, two psychologists, and an anthropologist to agree on something is no easy task, Gómez Rey admits.

But he summarizes the objectives of environmental law in two fundamental actions: “One, make our behavior apt for the protection of natural resources and to attend to emergencies if they occur. Two. Regulate anthropocentric activities that might affect society and the environment, such as mining, the exploitation of hydrocarbons, and infrastructure.”