Source: Cambridge University Press.
Gold is the world’s seventh most traded product with a total trade value of $576 billion, accounting for 2.1 percent of total world trade. Among the world’s top gold producers is the Caribbean country of Suriname. With a population of around 600,000 people, most of whom live along the coast, the country’s substantial hinterland is sparsely populated, covered by some of the world’s most pristine forests. It also offers up a wealth of mineral resources, one of the most significant being gold. According to the World Bank, mining accounts for nearly half of the country’s public sector revenue and gold represents more than 80 percent of its total exports.
While gold plays an important role in Suriname’s economy, it has downsides, some of them related to transnational criminal activities, which benefit from relatively porous borders, stretched government resources (related to a lengthy economic crisis) and corruption. As part of the effort to deal with these issues the government of Suriname cooperated with the Organization of American States’ Department against Transnational Organized Crime (OAS-DTOC) to produce a long-awaited report, On the Trail of Illicit Gold Proceeds: Strengthening the Fight Against Illegal Finances: Suriname’s Case. Released in March 2023, the report provides a comprehensive look at Suriname’s gold industry, with a focus on industry’s structure, its importance to the Caribbean country’s economy, the shortcomings in government regulation and monitoring and recommendations.
Suriname’s role in the global gold trade is that of a producer and, according to the OAS report, a transit state for gold smuggled from Guyana, French Guiana and probably Venezuela. Within Suriname, the gold sector is divided between more regulated large multinationals. Those are represented by U.S.-based Newmont Gold and Canada’s IAMGOLD—which recently sold its Suriname operation to China’s Zijin Mining.
The gold sector employs an estimated 20,000 to 30,000 people, though unofficial estimates of non-registered miners range as high as 70,000. Most of those workers are in the informal sector which is dominated by Artisanal Small-scale Mining (ASM). According to the OAS, 60 percent of the ASM workers are illegal Brazilian immigrants called garimpeiros. The rest of the workforce consists of Indigenous people and Maroons (descendants of African slaves who fled into Suriname’s interior during Dutch colonial times). The OAS report also noted that the latest group involved in Suriname’s small-scale mining consists of Chinese immigrants. It is estimated that at least 20,000 other workers are in mining related jobs, such as hotels and bars or as sex workers in communities close to mines.
From the mines and pits in the interior, Suriname’s gold is sold to middlemen in the country’s capital Paramaribo. It then gets certified and heads out of the country for refining. Suriname’s main partner is the United Arab Emirates, where the raw material is refined and sold to end-users often in the form of jewelry and other products. Suriname’s total gold exports to the UAE were $621 million in 2021. According to the International Monetary Fund’s Direction of Trade Statistics, the UAE was Suriname’s biggest export market in 2022, worth just a little over $1 billion in exports, followed by Switzerland and Belgium.
The challenges facing Suriname’s gold mining sector are multiple. The OAS report notes: “Although this informal sector accounts for most of the gold produced in Suriname, for decades now, it has been of terrific aggravation for natural resources policy. Tax evasion, human trafficking, the illicit arms trade, deforestation, waterway pollution, and mercury poisoning are the main threats posed by small-scale mining.” Indeed, deforestation and the poisoning of inland water ways is leading to the deterioration of the health of the Maroons and Indigenous people who live and depend on the woodlands where most of the informal mining occurs. It is also a source of friction between the Indigenous population, who want greater control over what they regard as their land, and the government, which relies on gold sales for revenues.
The report further notes that Suriname’s tax rate on gold is lower than neighboring countries This leads to gold from French Guiana, Brazil, Guyana, and Venezuela being trafficked into Suriname and exported as if it were sourced from Suriname. Additionally, Suriname’s export volumes exceed its production volumes. Another dimension of the illicit trafficking is that while no mercury imports have been reported since 2003 (due to regulation enacted that year), mercury used in mining in Suriname enters the country illegally, some suggesting that China is the major source.
Another mining challenge to the environment and rule of law is the illegal dredging of rivers for gold. Dredgers, used in the country’s remote border areas, including those shared with French Guiana, are wreaking havoc on local waterways. Suriname’s government has sought to clean up the gold sector, reflected by the Extractive Industry Transparency Initiative (EITI), which was launched in 2016 to help map the supply chain of gold around the world. Although some efforts were made, the 2010-2020 period was dominated by President Desi Bouterse, whose administrations were riddled with corruption. There were considerable discussions that the Kaloti Suriname Mint House—which certifies gold mined in the country—operated under Bouterse’s protection and was involved in illegal activities related to gold, including certifying non-existent exports and laundering gold from Venezuela.
The government of President Chan Santokhi, who came to office in 2020, is seeking to deal with the shortcomings in regulation and monitoring. A study on beneficial ownership was released in September 2020, and its findings are now used in screening applicants for mining rights. Additionally, the government strengthened its Ministry of Natural Resources, with several recommendations for improvement to be implemented by April 2023.
The OAS indicates that considerable work still needs to be done, including a requisite to upgrade statistics and for reliable data gathering to help policymaking and decision-making. Also, a greater effort in dealing with illicit mercury trafficking needs to be prioritized, as well as better transparency on the gold trade between Suriname (which runs the risk of becoming a high-risk export country) and the UAE (which runs the risk of becoming a high-risk import country. Further measures are also required to create transparency in refining and exporting processes, with an eye to Paramaribo’s “gold shops”—which obscure the origins of gold. Equally important, measures must be taken against secondary illicit activities related to the gold trade, which encompass child labor, sexual slavery, and commercial sex work, as well as human trafficking and money laundering.
Probably one of the most important recommendations is for better regional coordination. The report stresses that even if the legal framework is updated, Suriname’s long and porous borders with other countries and inadequate logistics means that law enforcement authorities will be challenged to enforce the legislation fully. Essential to dealing with this problem is to create a more coordinated regional policy across the Guianas. As the OAS stresses, “This is likely the only rational policy for limiting environmental harm and addressing some of the cross-border challenges that the Guianas face in connection with illicit gold mining.”
While the OAS report could have benefited from greater information on particular transnational criminal organizations engaged in Suriname’s illicit gold trade, the document provides an important addition to a relatively sparse literature on the illicit gold trade in Suriname. In this sense, the OAS is pointing a flashlight into some of the darker corners of global criminal activities. For anyone interested in the illicit gold trade in Suriname this is a very welcome addition.
Scott B. MacDonald is Chief Economist at Smith’s Research & Gradings, Research Fellow at Global Americans, and Founding Member of the Caribbean Policy Consortium. His latest book, The New Cold War, China and the Caribbean, was recently published by Palgrave Macmillan.
