Illegal exports of “dirty gold” from Peru, Colombia and Chile

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Dirty Gold: the rise and fall of an international smuggling ring is a compelling and well-written book about the problematic relationships of a US-based company called Elementary LLC and its subsidiary NTR Metals. The authors use unpretentious detective story prose to tell the story of Elemental’s illegal foray into the world of illegal gold mining in South America. The book features a number of characters one can relate to, including a university-educated Chilean gold exporter, a flamboyant Peruvian gold merchant, three relatively low-level corporate criminals, a police officer. DEA based in Peru and a prosecutor based in Miami. Dirty gold was written by a team of journalists including Jay Weaver, Nicholas Nehamas, Jim Wyss and Kyra Gurney.

At the beginning of the book, the authors explain: “For years the central government of Peru refused to put an end to illegal mining, even as it became an international embarrassment. It just generated too much money for almost everyone; collectors, mine owners, hardware vendors, pimps, drug dealers, even dirty politicians and police who took bribes. The authors describe the situation in Peru as “a perfect storm of geology, corruption, globalization, greed and decades of neglect.”

Peru is a deeply divided country that fights against corruption. Peru has a population of 32 million and an average per capita income of just $ 6,430. Meanwhile, about a fifth of the people of Peru live below the poverty line. There are six Peruvian billionaires, including Carlos Rodriguez Pastor, whose net worth exceeds $ 5.3 billion. Income inequality in Peru is not as bad as in Brazil or Mexico, but worse than in Haiti and El Salvador. Peru occupies 94th place in Transparency International ranking Corruption Perception Index.

Political corruption is a serious problem in Peru. In surveys unrelated to the Dirty gold scandal, former Peruvian presidents Pedro Kuczynski and Alejandro Toledo are now under house arrest. Another, Alan Garcia, committed suicide while facing arrest for corruption. Yet another, Ollanta Humala, faces corruption and money laundering charges and is prohibited from leaving Peru before his trial. September 28, 2021 an American judge has ruled that another former Peruvian president, Alejandro Toledo, can be extradited to face corruption charges in Peru.

Dirty gold is an ambitious book that tries to explain a very difficult political context. To his favorite, Dirty gold excels at bringing court documents to life, telling the story of the investigation and prosecution of young men directly involved in the purchase, export and processing of illegal gold. What is visibly missing from the book are the voices of Peruvian and Colombian environmental activists who work in the regions most affected by illegal mining. It is not clear whether any of the authors actually visited the remote areas of Peru where mining takes place. More lively storytelling and field reporting from Peru would have improved the book. The police black the style makes the reading entertaining, but it ignores the scale of the environmental catastrophe unfolding in Peru and Colombia. Presenting the story as a cat-and-mouse game between law enforcement officers and a small group of sympathetic criminals borrows the plot from Miami vice and risks reinforcing superficial tropes about good-humored American police and dangerous Latin American criminals. Spoiler alert: No top US-based executive has been jailed for their role in the scandal.

Overall, none of the key business executives involved, including John and Steve Loftus, the co-founders of Elemental, the parent company of NTR, Bill LeRoy, CEO of Elemental, or Steve Crogan, head of Elemental’s compliance, has not been the subject of criminal proceedings or imprisonment.

Elemental has sold its dirty South American gold to a long list of blue chip American companies including Apple, Google, HP, IBM, General Motors, Ford, Johnson & Johnson, Dow Jones, Merck, Lockheed Martin, Macy’s Staples, Ralph Lauren, JetBlue, and the Walt Disney Company. None of these companies or their executives have faced criminal charges or fines. All of these companies could and should have performed better due diligence reviews of their suppliers and included more rigorous human rights due diligence as part of their internal control of their supply chains.

Globally, Dirty gold is an entertaining book. It highlights the reasons why foreign companies operating in Latin America must have strong human rights due diligence programs in place to avoid serious damage to their reputations.

Further reading: Are the Mexican Cartels Winning the War on Drugs?


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