Several US Government departments have jointly issued an advisory for business investing in the sub-Saharan African gold sector.
The US Department of State, the US Department of the Treasury, the US Department of Commerce, the US Department of Homeland Security, the US Department of Labor and the United States Agency for International Development have released a statement urging businesses to “apply strengthened due diligence practices” to prevent the exploitation of resources and people.
According to the Department of State, the advisory is being issued “in light of increasingly concerning reporting related to the role of illicit actors in the gold trade”. The report singles out and condemns the actions of the Wagner Group, a Russian paramilitary group accused of a swathe of war crimes across Africa on several occasions.
As part of the report, the US declared its intention to address concerns surrounding the presence of terrorist organisations in the gold mining sector, stating that “industry participants should be prepared for increased U.S. government attention to the relationship between gold and these groups’ revenue streams and should be prepared for the possibility that U.S. sanctions could be used to disrupt these groups’ operations.”
The 38-page report gives detailed advice on several of the concerns around the mining industry in sub-Saharan Africa, honing in on corruption; conflict and organised crime; upstream smuggling; human rights and labour abuses; and environmental concerns. The report details the “numerous risks that are directly and indirectly connected” to the industry within the subcontinent, and makes recommendations on due diligence practices that can ensure responsible investment.
In a press release, the US Department of State highlighted the importance of due diligence, noting that “Without adequate due diligence and appropriate mitigating measures, an industry participant may inadvertently contribute to one or more of these risks, including conflict and terror financing, money laundering, corruption, sanctions evasion, human rights and labour rights abuses, and environmental degradation.”
However, the US Government makes it clear that it doesn’t wish to discourage investment in the sector, stating that “US persons should also explore opportunities for responsible investment in the African gold sector”, adding that “responsible industry participants can reduce risks and increase responsible opportunities associated with the gold industry in sub-Saharan Africa”.
