Case Studies

An investigation by Insight Crime in 2024 discovered that prospectors are damaging Bolivia’s Tuichi River and Madidi National Park in their search for gold. As miners increasingly breach the reserve, park rangers have reduced their patrols and inspections. The mining is carried out by small-scale cooperatives, known locally as cooperativas, which sometimes act like mafias. These cooperatives control 94% of Bolivia’s national gold production. They often operate in a state of near-impunity, thanks to grey areas in Bolivian law and little oversight by the government’s mining agency, AJAM. The cooperatives have political power and have been known to hold the government hostage, bribe and coerce mining agency officials, and have dealings with Colombian and Chinese mining outfits. Bolivia is currently experiencing a gold boom, with production increasing from 6.3 tons in 2010 to 42 tons in 2019, fuelled by a distinct lack of controls on the mining, sale, or export of the precious metal. 

Keywords: Latin America, Bolivia, minerals, primary production, gold, corruption and bribery, illegal gold mining

Source: https://insightcrime.org/investigations/gold-mining-state-sanctioned-scourge-bolivia/ 

A powerful Fujian/Putian criminal network based in Bolivia, has established a far-reaching collaboration network that extends to China. This network includes customs officials and Chinese-based traders.  In addition to illegal logging and illegal wildlife trafficking, the group is heavily involved in illegal gold mining in the Amazonian regions of Bolivia, in an area very close to one branch of the amazon river. Informants shared that the unauthorised mining is conducted with Chinese associates, and the gold is often sold in a small town nearby. During their investigation, Earth League International (ELI) uncovered patterns of corruption involving government officials. The criminal network has been facilitating the acquisition of large procurement contracts for managing sites and roads on behalf of Chinese state-owned companies.  ELI informants had also revealed that the group bribed a local politician and the indigenous village chief to gain permission to illegally dig gold mines in the smaller river areas around Rio Suapi and Rio Alto Beni.  

 
Keywords: Latin America, Bolivia, minerals, gold, primary production, procurement of permits, illegal gold mining, corruption and bribery, serious organised crime

Source: https://earthleagueinternational.org/wp-content/uploads/2023/06/ELI-Environmental-Crime-Convergence-Report-June-2023.pdf

Bolivia's Minister for Rural Development and Land, Edwin Characayo Villega, was arrested for allegedly accepting a bribe related to land trafficking, according to InSight Crime. Edwin Characayo is accused of accepting a cash bribe of $20,000. This bribe was part of a larger scheme in which he and other public officials were expected to receive a total of $380,000 to facilitate the transfer of land ownership in the municipality of San Ramón. Characayo also allegedly used his position to coerce individuals seeking to acquire and clear land for agricultural purposes into paying bribes. He is accused of exploiting his role as a minister to influence land transactions in favour of certain individuals, bypassing legal and regulatory processes. Characayo, who denies the charges, follows his predecessor Wilson Cáceres, fired for nepotism and influence peddling. The issue of corrupt land trafficking schemes, which often involve government officials, has plagued Bolivia for years. Despite a 2014 law imposing up to eight years' imprisonment for illegal land sales, the practice continues to fuel corruption. 

Keywords: Latin America, Bolivia, procurement of permits, corruption and bribery, agriculture

Sources:  https://insightcrime.org/news/corruption-fuels-land-trafficking-bolivia/#:~:text=Bolivia's%20minister%20for%20rural%20development,country%20time%20and%20time%20again 

Corruption is a significant issue in the Bolivian timber industry, with false or fraudulent documents being issued by government officials. Companies launder illegal timber into supply chains by fraudulently obtaining paperwork, falsifying the Forestry Origin Certificate (CFO), or selling timber without a CFO. Most of this illegal timber comes from protected areas, indigenous territories, or natural forests. 

Illegal timber is laundered out of Bolivia by loggers making fraudulent declarations of greater numbers of trees than exist, artificially inflating the number of trees in authorised forest management areas or logging plans. This allows them to supplement their timber consignment with illegally extracted timber from other areas. 

René Noel Sivila Céspedes, a former Forest and Land Authority (ABT) official, reportedly signed 2,096 documents authorising the clearing of protected areas between 2015 and 2018. A 2018 report by the ABT found that the agency authorised the cutting of at least two protected species at far higher rates than is permitted by law. 

Keywords: Latin America, Bolivia, timber, primary production, corruption and bribery, fraudulent documentation, illegal timber trade

Source: https://www.forest-trends.org/wp-content/uploads/2022/01/Bolivia-Timber-Leaglity-Risk-Dashboard-IDAT-Risk.pdf 

A report by Afrik 21 has found that the export of Cameroonian timber to Vietnam involves significant environmental and fiscal abuses, including illegal logging and false invoicing. To safeguard its forest biodiversity, which covers 48% of the country, Cameroon enacted a law in 1999 that strictly bans the export of certain wood species in log form, including doussie, mukulungu, sapelli, padouk, and movingui. However, after a three-year investigation into the timber trade route between Cameroon and Vietnam, the Environmental Investigation Agency (EIA) and the Centre for Environment and Development (CED) have uncovered the extent of illegal activities in the sector, characterised by corruption, false invoicing, and unlawful logging. These illegal activities allow loggers to largely bypass existing regulations. The report reveals that at least 132,000 m³ of logs were exported from Cameroon to Vietnam in violation of forestry regulations from January 2016 to July 2020. This illegal trade has resulted in an estimated loss of $58 million in public revenue during this time period. The report also suggests that state agents may be complicit in the illegal timber trade. 

Keywords: Sub-Saharan Africa, Cameroon, timber, primary production, trade and transport, illegal logging, illegal timber trade, fraudulent documentation, trade misinvoicing, corruption and bribery, tax evasion

Sources:  https://www.afrik21.africa/en/cameroon-timber-trafficking-with-vietnam-threatens-biodiversity-and-the-economy/ 

In Santander, a region of Colombia, corruption is a common practice in the timber industry. Timber traders will exploit the regulatory, police, and judicial systems in order to enable the illegal trafficking of wood. Government agencies, such as the Autonomous Corporation of Santander (CAS) and the Corporation for the Defense of the Bucaramanga Plateau (CDMB), which are responsible for regulating timber extraction, have become riddled with corruption. Officials within these bodies have been found to issue false permits, recycling old ones and creating fake licences to launder illegally sourced timber. Police officers, bribed by the criminal organisations, frequently allow trucks carrying illegal timber to pass through checkpoints. In addition to this, the judicial system is also compromised, with prosecutors being influenced by bribes to exploit procedural loopholes. This allows seized timber to be returned to traffickers. An example of this corrupt behaviour is the Los Ingenieros criminal network’s use of intermediaries. These individuals will manage the logistics of illegal timber transport, securing false permits, and connecting loggers with buyers. Businessmen in major cities including Bogotá or Bucaramanga purchase timber through these intermediaries. This corruption has led to widespread deforestation in natural reserves such as Yariguíes National Park, while key figures often evade punishment.  

Keywords: Latin America, Colombia, timber, primary production, trade and transport, corruption and bribery, serious organised crime, illegal timber trade, illegal logging, fraudulent documentation, deforestation

Sources:  https://insightcrime.org/investigations/colombia-purveyors-illegal-wood/ 

Research from NGO Verité found that up to 91% of Venezuela’s and 87% of Colombia’s gold exports are illegally produced, often controlled by organised crime groups backed by large-scale investments. Some of the world’s most active organised crime groups and non-state armed groups are reportedly directly involved in the production and sale of such illegal gold, including Mexico’s Sinaloa cartel and Italy’s ’Ndrangheta mafia, as well as Brazilian, Russian, and Chinese syndicates. 

Illegally produced gold from Latin America is exported to refineries (with the help of corrupt officials), melted down and blended with legally produced and scrap gold, or mixed to make alloys, then exported to global markets. Canada and the US are the biggest importers of Latin American gold – indeed, the latter’s gold imports from Latin America exceed the volume of gold that Latin America claims to export. 

Whilst Switzerland is responsible for refining around 70% of globally-produced gold, some of the county’s refineries have stopped purchasing gold from Latin American suppliers linked to illegal gold mining and human rights abuses, leaving a gap in the market which US refineries have rushed to fill, purchasing this surplus gold in Switzerland’s place and introducing it to global markets. Indeed, Verité found that 90% of the Fortune 500 companies that filed conflict mineral disclosures last year (from across telecoms, IT, car manufacturers, and machinery producers) had purchased gold from refineries linked to illegally mined gold from Latin America. 

In 2022, over 320 illegal gold mines were counted in the nine states that make up Brazil’s Legal Amazon. Major drug trafficking factions, including the Primeiro Comando da Capital, have infiltrated mining operations in Indigenous territories, running protection rackets, extorting taxes, controlling pits, and forging partnerships with gangs in neighbouring Venezuela to sell contraband minerals. Gold is also the top export of Bolivia, with the mining region transecting national parks and reserves. 

Keywords: Latin America, Colombia, minerals, gold, primary production, serious organised crime illegal mining, corruption and bribery, drug trafficking, tax evasion, Indigenous rights, human rights violations, gold trafficking

Source: https://www.theguardian.com/global-development/2016/aug/16/illegal-mines-local-mafia-take-shine-off-latin-american-gold-peru

The United States (US) sanctioned international mining magnate Dan Gertler for amassing a billion-dollar fortune through opaque and corrupt mining deals in the Democratic Republic of the Congo (DRC). In 2017, Gertler was sanctioned for allegedly using his close friendship with then President Joseph Kabila to act as an intermediary for mining asset sales in the DRC, which created a system where multinational companies had to go through Gertler to do business with the Congolese state. According to the US, the DRC reportedly lost over $1 billion in just two years due to Gertler’s corrupt deals. Despite being sanctioned by the US, Gertler was able to continue operating in the DRC’s mining sector through an international money laundering network that spanned from the DRC to Europe and Israel. In one instance, Gertler acquired new mining permits through proxy companies in the lead up to the 2018 Congelese elections. Moreover, as of 2022, Gertler was still reportedly earning millions of dollars from copper-cobalt mining interests in the DRC despite US sanctions.  

Keywords: Sub-Saharan Africa, Democratic Republic of the Congo, minerals, cobalt, copper, corruption and bribery, sanctions evasion, money laundering

Source: https://home.treasury.gov/news/press-releases/sm0243  

In 2022, the Swiss mining giant Glencore International was found responsible for sending cash bribes and corrupt payments to Equatorial Guinea, amongst other African countries such as Cameroon, Ivory Coast and Nigeria. Prosecution against Glencore International was a coordinated effort across several civil authorities in the U.K., U.S. and Brazil. The U.K.’s Serious Fraud Office (SFO) opened its investigation into Glencore’s activities in Equatorial Guinea in 2019, and uncovered a trail of text messages, large cash withdrawals and deliberately concealed payments.    

Glencore paid bribes worth a total of US$29m in order to secure access to oil. It was also exposed that the company used high-profile agents to funnel bribes into state-owned oil companies and government ministries, often disguising bribes as unspecified ‘service fees’ or ‘success fees’ in reports. In addition, Glencore and some of its employees were convicted by the U.S’s Commodity Futures Trading Commission (CFTC) for manipulating benchmark price assessments for fuel oil products between January 2011 and August 2019. This manipulation was aimed at artificially inflating or deflating prices to benefit Glencore's physical contracts and derivative positions.  

Keywords: Sub-Saharan Africa, Equatorial Guinea, minerals, primary production, corruption and bribery

Sources:  https://www.justice.gov/opa/pr/glencore-entered-guilty-pleas-foreign-bribery-and-market-manipulation-schemes 

https://www.sfo.gov.uk/2022/11/03/glencore-energy-uk-ltd-will-pay-280965092-95-million-over-400-million-usd-after-an-sfo-investigation-revealed-it-paid-us-29-million-in-bribes-to-gain-preferential-access-to-oil-in-africa/ 

An article by Mongabay details the case of illegal timber seizure in Antwerp. On July 8, 2019, Belgian authorities blocked a shipment of tropical timber from Gabon after a tip-off by Greenpeace. The timber, which was being exported by Wan Chuan Timber SARL (WCTS), a Chinese logging company operating in Gabon, has been exposed and fined for a series of grave offenses. The company receiving the shipment, Antwerp-based Compagnie de Bois Anvers, is now under investigation for a possible breach of the European Union Timber Regulation (EUTR). The shipment came from Gabon, a country with 85 percent coverage of incredibly biodiverse rainforest, and whose forestry sector is inextricably linked to high level corruption. WCTS’s business model was alleged to involve structural over-harvesting, tax evasion, money laundering, and corruption. The company was extracting between two and three times its legal quota and was already cutting down forest in areas it was not supposed to have reached until 2030.

Keywords: Sub-Saharan Africa, Gabon, timber, primary production, illegal logging, corruption and bribery, tax evasion, money laundering

Source: https://news.mongabay.com/2019/07/gabonese-timber-linked-to-illegal-logging-seized-in-antwerp/