Opinion – Marcos Lisboa: A story of gold and blood

The tragedy of violence against the Yanomami has finally awakened indignation and solidarity. There are many dead, including children.

The Yanomami are the most fragile and visible group in an announced tragedy. This column tells a part of that story, which, despite being announced repeatedly, has been ignored in the public debate. Illegal gold mining, encouraged by amendments to a law passed a decade ago, contributed to an increase in violence that killed many people.

Homicide rates increased by about 20% in indigenous and environmental protection areas in the Amazon with gold deposits, starting in 2013. This brutal increase in violence was due to the addition of some articles in a law that had nothing to do with the problem , but which ended up facilitating illegal gold mining. The result was a massacre.

In regions where mining is illegal, many more homicides occur per year, around 8 per 100,000 inhabitants, compared to areas where it is allowed. It is an expressive number.

To get an idea of ​​the damage, this increase is about three times the annual total of homicides per 100,000 inhabitants that occur in Asia and Europe. In the case of São Paulo, an increase of 8 homicides per 100,000 inhabitants would mean more than doubling the state’s annual rate.

As so often happens, the devil was in the details.

In 2013, the Dilma government enacted a provisional measure (MP) that addressed the Crop Guarantee Program, aimed at family farmers in municipalities with crop failure, due to excess or lack of rainfall.

In processing this MP, Congress inserted addendums that had nothing to do with the proposed topic. There were many tortoises, including four articles that changed the rules and obligations for the transport and sale of gold.

Until then, the gold purchase points (PCOs), which are the typical buyers in the Amazon, had to verify the origin of what they acquired, as they would be held responsible in case of sale of illegally mined gold.

With the amendments to the 2013 law, PCOs are now able to purchase gold with the presumption of good faith. They could assume that the miners weren’t lying about where the gold came from. If it were a case of illegal extraction, buyers would not be held responsible.

A second amendment to the law allowed people other than prospectors to sell gold. It was enough that they were in some way service providers for the extraction of gold, such as airplane pilots, food traders or equipment sellers.

Leila Pereira and Rafael Pucci studied the impacts of these changes using detailed microdata from the Amazon in the article “A tale of gold and blood”. They analyze the evolution of homicide rates in municipalities with up to 200,000 inhabitants, separating them into two groups.

On the one hand, there are municipalities with gold deposits in indigenous reserves or preservation areas, where mining is prohibited. On the other hand, there are those where gold can be extracted.

Using good econometric techniques, they tested how the homicide rates behaved in the two groups after the approval of the 2013 law, and the results showed that, in regions where mining is illegal, the number of homicides increased by about 8 per 100,000 inhabitants per year, compared to what was verified where mining is allowed.

Pereira and Pucci identify many other outcomes, such as increased forest devastation in these regions. Good luck to anyone trying to refute the result of these researchers.

The lesser responsibility of those who buy irregular gold has encouraged illegal mining. The result was the violence of conflicts that arise when someone occupies land that does not belong to them.

Larissa Rodrigues, from Instituto Escolhas, documented the impressive web of companies from the main buyers of gold in Brazil.

Rodrigues’ estimates of the gold mined in Brazil are disturbing: more than 50% is from illegal sources. Part comes from preservation areas, part comes from areas where there is authorization, but there is no indication of extraction. In some cases, data indicate extraction beyond what is legally permitted.

PCOs are regulated by the Central Bank. Unlike other financial institutions, however, they must not verify the origin of what they buy. Banks, for example, are required to investigate whether the funds deposited by their customers have a legal origin. If in doubt, they should report to Coaf. Nothing similar occurs with PCOs.

To ensure transparency, I must say that I was president of Insper until March of this year, where Pereira and Pucci were PhD students and are now researchers (I communicated my decision to leave in September of last year). And I am a member of the board of Instituto Escolhas (without remuneration).

By the same principle, I should clarify that the author of the amendments to Law 12,844 of 2013 was federal deputy Odair Cunha, from the PT of Minas Gerais. These additions to the law were incorporated by the MP’s rapporteur in Congress, Senator Eunício Oliveira (PMDB-CE).

In neither of these two cases should one argue guilt by association. Better analyze the data and evidence to identify those responsible for the debacle.

But let’s not forget that the story of gold and blood in the Amazon was expanded in 2013 with the additions inserted in Law 12,844 (articles 37 to 41). Repealing them will be a step towards stopping this tragedy.