High price of gold is child slave labor

[bobalot]

SAN FRANCISCO (MarketWatch) — Gold has been one of the greatest investment stories of the past decade, and its safe-haven appeal is likely to continue, with demand remaining solid for physical gold and gold jewelry. But regardless of the price gyrations in gold futures and demand, do we really know what the cost of gold is in human terms?

The surge in demand for physical gold has not only polished the fortunes of large mining companies, but has also driven a modern-day gold rush: The United Nations estimates there are between 15 million and 20 million gold miners in more than 70 countries worldwide.

What consumers need to be aware of is where the gold (NAR:GLD) and gold jewelry they purchase originates from. For the most part, gold comes from large-scale industrial mining operations which require skilled labor. Large mining operations in developing country can spur economic growth for the region.

But some artisanal and small-scale mining operations, known as ASMs, operate in poorer regions and places where child exploitation and human trafficking is common.

Because these ASMs do not have the oversight and regulations that the industrial miners do, child labor and slavery make up a large part of their work force, experts say. The International Labor Organization, the labor agency of the United Nations, estimates that tens of thousands of children work in gold mining and considers any child labor in mining as a “worst form” of labor because of the dangerous conditions.

This sector of mining represents up to 20% of the gold mined each year, according to Solidaridad Network, a non-profit organization working to help end the practices of enslaved labor and child labor.

The number of artisanal and small mining operations has risen dramatically since 2007, said Jennifer Horning, a coordinator for the Solidaridad Network.

Human Rights Watch estimates more than 20,000 children work in gold mining in Mali. The ILO estimates as many as 50,000 in Peru. In one township alone in the Chocó region of Colombia, 776 child slaves were found working in ASM gold mines. Overall the ILO estimates an increase of child labor by 35% between 2007 and 2009.

“If children are trafficked, they can suffer terrible physical and mental abuse and are literally enslaved,” Horning said. “Boys frequently work under harsh conditions in the mines and girls are forced into prostitution or domestic service.”

Many of the children are forced into the mines after having been promised jobs in a tourism-related industry. Or, due to economic need, many work willingly alongside their parents despite the dangerous conditions.

“It’s important to understand the motivations of the children, but also for governments, civil society and companies to take responsibility for protecting them and ensuring they have viable alternatives,” said Karen Stauss, director of programs for Free the Slaves, a Washington, D.C.-based group dedicated to working with governments and businesses around the world at a grass-roots level to end slavery.

“It may feel like a necessity for the children under the present circumstances, but their willingness to literally risk their lives to do this work does not mean that we can accept it on their behalf as well. There is a duty of care,” Stauss said.

According to both Solidaridad Network and Free the Slaves, not enough is being done by the industry or governments to end this practice, but some small steps are being taken.

Beginning this year, under the California Transparency in Supply Chains Act, major companies — not only those based in the state, but also many that do business there — are required to post information on their websites regarding their policies and some of the steps they’re taking to address human trafficking within their supply chains. Currently some companies only monitor labor issues at their first- or second-tier suppliers.

The Dodd-Frank Act includes a provision that companies that have gold or one of three other minerals in their products are required to tell the Securities and Exchange Commission in their annual filings whether those minerals — known as “conflict minerals” — came from eastern Congo. If they did, the companies must explain the acquisition process to ensure there was no illegal or abusive armed groups profiting from the mining. This provision of the act will go into effect after the SEC issues clarification on the regulations, which have been delayed. Enforcement details are expected sometime in the coming weeks.

Jewelry buyers can seek out and support “fair trade” jewelers and encourage their government representatives to support legislation to help end and prevent slavery and abuse in gold mining.

Jeanette Pavini is a regular contributor to various publications and Better.TV. She also hosts the weekly TV series, “The Real Deal” on NBC Bay Area and is the national spokesperson for Coupons.com. Write to her at BuyerBewareMKTW@gmail.com .

I suspect there are other commodities with high prices that are increasing the rate of child slavery.

[K. A. Pital]

Of course. Coltan, et cetera. Any African or Latin American conflict mineral is likely to stimulate child labour, especially in mining.

[Mayabird]

Diamonds have been that way for decades but that hasn't stopped anyone from buying their shiny useless gems.

Yes, diamonds have very good industrial uses, but the vast majority of industrial diamonds are manufactured, not dug out of the ground by slave labor. Gem quality diamonds are kept at artificially inflated prices by the DeBeers diamond cartel and still despite all this people will pay several months' wages for an engagement ring because advertising has made society expect this of them.

[Chirios]

Diamonds have been that way for decades but that hasn't stopped anyone from buying their shiny useless gems.

Yes, diamonds have very good industrial uses, but the vast majority of industrial diamonds are manufactured, not dug out of the ground by slave labor. Gem quality diamonds are kept at artificially inflated prices by the DeBeers diamond cartel and still despite all this people will pay several months' wages for an engagement ring because advertising has made society expect this of them.

As someone whose country is literally kept afloat by peoples desire for the useless gem quality diamonds I'm going to go with a resounding 'meh'.

“If children are trafficked, they can suffer terrible physical and mental abuse and are literally enslaved,” Horning said. “Boys frequently work under harsh conditions in the mines and girls are forced into prostitution or domestic service.”

The problem is that in many of these countries it's literally impossible to properly track these children down.

[K. A. Pital]

Resounding "meh" because your entire society profits from massive human suffering? You're more cruel than I thought, indeed.

[Starglider]

It's ok everyone, no need to be worried about this, after all the gold bubble has burst and is on the way to $1000.

What's that? Gold is back over $1700, up 9% since that was posted? Oh noes, clearly we need more child labour to flood the market with supply and bring the price down! Distressing I know but of course like huge US deficits and high European unemployment it will be a strictly transitory phenomenon.

[Pendleton]

I'm not up on US politics to a great extent, still, isn't one candidate in the Republican race a gold bug?

[Starglider]

I'm not up on US politics to a great extent, still, isn't one candidate in the Republican race a gold bug?

Oh really? I guess the other two are a stock guppy and a real-estate cockroach?

[Pendleton]

I think I've just found two new terms I'm going to be using in the future.

[bobalot]

It's ok everyone, no need to be worried about this, after all the gold bubble has burst and is on the way to $1000.

What's that? Gold is back over $1700, up 9% since that was posted? Oh noes, clearly we need more child labour to flood the market with supply and bring the price down! Distressing I know but of course like huge US deficits and high European unemployment it will be a strictly transitory phenomenon.

I knew when I posted this that you wouldn't be able to keep your gold wankery and economic doomerism out of this thread.

Child Labour and slavery is an issue with any commodity that has high prices, particularly in developing countries. Is it possible to keep with the fucking thread topic, asshole?

[Starglider]

I knew when I posted this that you wouldn't be able to keep your gold wankery and economic doomerism out of this thread.

You're the one starting threads about gold and Ron Paul constantly. I have no idea why you are so insecure about something that is obviously just a silly fad.

[Skgoa]

I suspect there are other commodities with high prices that are increasing the rate of child slavery.

Uranium comes to mind.

[SirNitram]

I knew when I posted this that you wouldn't be able to keep your gold wankery and economic doomerism out of this thread.

You're the one starting threads about gold and Ron Paul constantly. I have no idea why you are so insecure about something that is obviously just a silly fad.

Keep on topic. I shouldn't even have to remind people of this, but apparently posting about anything related to Ron Paul tangentally erases people's brains.

[bobalot]

I knew when I posted this that you wouldn't be able to keep your gold wankery and economic doomerism out of this thread.

You're the one starting threads about gold and Ron Paul constantly. I have no idea why you are so insecure about something that is obviously just a silly fad.

How many threads have I made about gold prices recently, asshole?

[SCRawl]

How many threads have I made about gold prices recently, asshole?

You've just had a warning about keeping on track from Nitram, and yet you felt it necessary to give voice to your grievances in the same thread.

If you want to flame each other about this, take it to PM.