Extract Minerals, Not Blood

The mining industry has a long, brutal history of abuse, murder, massacre, and slavery. Finally, real attempts are being made to clean things up.

Even in today's gridlocked politics, five centuries is a long time to wait for legislation. Yet this is how much time lapsed between early European efforts to ensure humanitarian practices in mining, and the enactment of two new human rights reforms for the extractive industries which were quietly attached to the recent U.S. financial reform law.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law July 21, included two related transparency reforms for the mining, oil, and gas industries. One requires U.S. multinationals to disclose their payments to foreign governments. The other is an obligation to report trafficking in conflict minerals.

Although details remain to be clarified in the bureaucratic – and heavily lobbied – rulemaking process, expectations are high for these transparency reforms. The hope is they will: 1) provide investors a holistic view of risk, including political and reputational risk; 2) help citizens of developing countries hold their governments accountable so that resource profits support sustainable growth rather than disappear into the pockets of elites; and 3) curb transactions in conflict minerals.

If successful, these reforms will provide a legal structure for what until now has been a voluntary, largely ineffective system for eliminating the corruption, conflict, and human rights abuses that have plagued the extractive industries for centuries, if not millennia.

The earliest recorded calls for "social responsibility" in mining appeared in 1556, when the book De Re Metallica (the nature of metals) was first published in Switzerland. Its author, the German physician Georgius Agricola, conducted the first comprehensive survey of European mining operations, endeavouring to defend the virtues of the extractive industry from attacks by anti-mining agriculturalists.

"If there were no metals, men would pass a horrible and wretched existence in the midst of wild beasts," Agricola wrote, responding to a longstanding criticism dating back to Roman writers that mining is the source of all human avarice.

Agricola did for geology and mineralogy what Darwin did for biology, meticulously describing a science of mining that pushed the alchemical tradition into oblivion and dispelled beliefs in fanciful practices like the divining power of dowsing twigs.

In addition to writing a science of mineral processing, he laid a surprisingly modern foundation for the ethics, risk assessment, and social relations of extractive industries. "The miner," Agricola writes, "should not start mining operations in a district which is oppressed by a tyrant." To avoid hostile attacks, theft, and labour unrest, Agricola advises miners to determine if the overlord is friendly or inimical: "Be careful to learn the nature of the locality, its roads, its salubrity, its overlord, and the neighbours," he cautions.

One need not dig deep into history, however, to realize that Agricola's call for sensitive community relations went unheeded. To study the history of mining is to uncover legacies of abuse, murder, massacre, slavery, and genocide executed in the pursuit of mineral wealth.

There was Stalin's transfer of Ukrainians to the mines of Siberia and Central Asia, resulting in the death of two million miners – one-third the number of Jews murdered in the Holocaust; or the Spanish cleansing of millions of indigenous peoples in Santo Domingo, Cuba, Jamaica, Peru, and New Granada (now Colombia), creating a labour shortage that was resolved by purchasing and importing African slaves to staff silver and gold mines in those countries.

The list of grievances is limitless, the crimes so outrageous that it is hard to even imagine countervailing efforts to limit these perversions. Yet there were such efforts: British colonial laws limiting harsh treatment of slaves in mines, Spanish-built hospitals and clinics at the famous Potosi silver mine.

Still, humanitarian practices remained the exception rather than the norm. In 1545, for example, when Spain enacted the New Law of the Indies to protect the "natural rights" of indigenous people from brutality, injustice, and slavery, the colonists refused to implement it, insisting the law would ruin economic and Christian enterprises.

From this brutal history we derive the fundamental paradox of modern life: A progressive civilization constructed atop the economy of extraction, whose capital nevertheless "comes dripping from head to foot, from every pore, with blood and dirt," as Marx wrote. The "sinew of war," the "origin of avarice," the "seed of destruction" – are all phrases that have been used to describe the extractive economy over the centuries.

Until 50 or 60 years ago, North American citizens retained a connection to the centrality of extractive industries in the industrial economy; people were cognizant of the presence of coal miners, and during the Great Depression many survived by working as gold miners. But today mining is distant and remote, countenanced only when disasters such as the West Virginia coal mine explosion in April remind us precisely how we come to have abundant electricity, automobiles, consumer goods, and weapons.

In part, the unfamiliarity with mining as a daily reality is an outcome of stronger regulations in North America. These restrictions, coupled with the need to explore new reserves, pushed extractive activity into Africa, Asia, and Latin America, especially bush areas where government authority is limited, local communities have little in the way of human rights protection, and conflict is more often settled by force than negotiation. In short, we have exported – not settled – the injustices of the extractive economy.

Over the past decade, voluntary initiatives to humanize the industry have sprouted from international institutions – the International Finance Corporation's Performance Standards, World Bank Extractive Industries Review, and the finance sector's Equator principles to name a few – creating a toothless landscape with overlapping systems, little enforcement, and no authority.

It is too early to say if Dodd-Frank can radically reform the ethical behaviour of multinational extractive companies operating in the developing world. The outcome depends on how the SEC interprets the law and how legitimate the enforcement regime proves to be.

Nevertheless, people inside the mining industry already see Dodd-Frank as the beginning of a new era, especially because of how it will influence relations among investors, retailers, and mining companies. As one mining official tells me, "Retailers are going to push mining companies to prove they aren't selling them conflict minerals. And it's a small step from these legal requirements to a point where investors are asking for greater certainty about the sustainability of operations on the ground."