Isamu Okada, GSID, Nagoya University
Oct 11, 2019
International Workshop: Resource Politics in Asiaand Latin America, @CIRAS, Kyoto University§ Transnationals vs SOEs
§ Resource nationalism in the 1970s§ Privatization in the 1990s§ Some countries maintained policy principle while thependulum swung in others in the 2000s

Related discussion§ Political vs economic reasons§ National strategy and political goals§ Interests in the marginal benefit produced by pricefluctuation§ Production efficiency§ Compliance to shareholders/stakeholders
2§ Categorically, there exists a third path in which

individuals or groups other than SOEs or private
corporations produce minerals.

§ Definitional discussions
Ø Small-scale mining?
Ø Artisanal and small-scale mining (ASM)?
Ø Informal?
Ø “Extractive peasants” (Lahiri-Dutt 2018)

propose to accept flexible manifestations but
stressing them as moral agents§ I use the definition of ASMs ”Mining byindividuals, groups, families or cooperatives withminimal or no mechanisation, often in the informal(illegal) sector of the market” (Hentschel,Hruschka, and Priester 2002: 4)

3

§ Revived scholarly attention during the last mining boom
§ In general

ILO (1999), Hentschel, Hruschka, and Priester (2002),Hilson (2002; 2003), Sinding (2005), Seccatore et al.
(2014), Lahiri-Dutt (2018)§ In sub-Saharan Africa

Banchirigah (2006), Hilson (2009), Siegel and Veiga(2009), Jønsson and Fold (2009), Perks (2013), Hilson,Hilson and Abu-Darko (2014), Hilson and McQuilken(2014); Kelly (2014), Bakia (2014), Tschakert (2016)§ In South America

Chaparro (2004), Fisher (2008), Güiza (2013), Milanez
and de Oliveira (2013), Hennesy (2015), Dargent andUrteage (2016)§ In Asia

Lahiri-Dutt (2004), High (2012), Langston et al. (2015),
Spiegel (2015), Verbrugge (2015a; 2015b; 2016; 2017)4§ Economic backgroundØ Production types
Ø Mining priceØ High return by low skill (gold, diamonds, gems)§ Structural backgroundØ Privatization of state-owned companies
Ø Weakened state regulation
Ø Lack of alternative economy and unemployment
Ø Ungovernability caused by insecurity
Ø Lack of attention by policymakers, inaccessibilityof information§ Agency

5

PositiveØ Employment and poverty alleviation
Ø Contribution to national revenues, foreignexchange earnings

NegativeØ Uncontrolled environmental costs
Ø Health risk
Ø Diffusion of HIV/AIDS6

§ Legalization and formalization
Ø State control on environmental damages andcriminal activities

Ø Local community development
Ø Unregulated contact with investors with lower

compliance requirements§ Lack of analytical framework (Lahiri-Dutt2018)

7

Most literature recognize ASMs as residuals of state andprivate enterprises. This standpoint was revisited only tothe height that this marginal group merits “support”(Hilson and McQuilken 2014) or that they are “moralagents” (Lahiri-Dutt 2018).
There’s no imagination of ASMs as an actor inpolicymaking process with interest and power resources of
their own.
I challenge this implicit assumption by illustrating the caseof Bolivian mining cooperatives who are politicallypowerful and play a key role in policymaking.
If ASMs enjoy economic and political support, would theychoose to formalize?
What logics promote the cooperation or confrontation
between state, private company, and ASMs in thepolicymaking process?
8§ The exploitation of indigenous people in silver mines

during the colonial era left a culture of mineral theftcalled “jukeo”.

§ The closure of state-owned mines in the 1930s gave birth

to the first cooperative Palliris K’ajcha Libre.

§ Bolivian revolution in 1952 nationalized the mines

owned by tin barons.

§ The state established legal recognition and protection tomining cooperatives in 1958.

§ The debt crisis forced the Bolivian governments toprivatize former state-owned mines in 1986.

§ Evo Morales government proclaimed to revert theprivatization since 2006.

§ Mineral price hike in the 2000s increased the number ofcooperatives, particularly of gold in the northern
Amazon of La Paz department.

9Figure 1

The registration of mining cooperatives and mining export
180

4000

others (right axis)

160

3500

Au+La Paz (right axis)

140

3000

Mining export (nominal value inmillions USD, right axis)

2500

120
100

2000

80
1500

60

1000

40

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

1979

1977

1975

1973

1971

1969

1967

1965

0

1963

0

1961

20

1959

500

Source: author based on Espinoza (2010: 443), INE and the registry of the General
Division of Mining Cooperatives, shared by Richard Canaviri
10SOE: COMIBOL
Mining syndicates: FSTMB

Private“Medium mines”: ANMM
“Small mines”: CANALMIN

Mining cooperatives
FENCOMIN

11

Figure 2

Labor force distribution in Bolivian mining sector

State mines

Medium mines

Small mines

Cooperatives

140000120000100000
80000
60000
40000
20000

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013

0Source: author based on Ministerio de Minería y Metalúrgia (2014)12

Figure 3

Mining royalty by producer type

Mineral price(2005 = 100)

Mining royalty in140 100 millions

250USD)

120
200
100
150

80

60

100

4050
20

State mines

Medium mines

Small mines and cooperatives

Price average of main minerals

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

0
1980

0

Source: author based on Ministerio de Minería y Metalúrgia (2014) and IMF
13

General factors§ Tax exemption§ Cheap labor supply§ The legacy of privatization in the 1990s

Bolivian factors§ Pressure group capacity as a result of unionism tradition§ Gold boom with high cross-border mobility in Amazon

Subsequent reasons§ Tax evasion resulted from ungovernability§ Backed by private investors who needed a protection fromstate expropriation
14§ FENCOMIN was founded in 1968.
§ FENCOMIN monopolizes the official

representation of all mining cooperatives, collectmembership fees, select the executive boards via
biannual national congress, and makes collective
decisions for elections and manifestations.

§ FENCOMIN has its own representatives innational and subnational legislative bodies as wellas in the Mining Ministry.

§ The president says "Desde el año 2005 lascooperativas mineras son aliadas, aliadas naturales
de carácter incondicional de este proceso.”
https://www.paginasiete.bo/economia/2013/11/8/afirmacooperativistas-aliados-naturales-5442.html
15§ Informality in the guise of formality§ While cooperatives are registered in state system andendowed with prerogatives in tax and royalties, mining
cooperatives are effectively autonomous in making andchanging laws governing them.

§ All popularly elected presidents since the privatization in

the 1980s have offered material supports to mining
cooperatives.

§ It was the means of cooptation i.e. gifts to buy electoral

votes and material compensation after social conflicts.

§ No state control on the commercialization process, laborand environmental protection, and tax collection.

§ Recent expansion of gold extraction groups in remote

Amazon area enjoys the umbrella protection ofFENCOMIN in exchange of membership fee.

16

Laws offering
benefits to mining
cooperatives

1997, Mar 19

Law 1786

G. Sánchez de Lozada

2000, Sep 22

D.S. 25910

Hugo Banzer

2001, Sep 15

D.S. 26313

Jorge Quiroga

2001, Oct 17

D.S. 26354

Jorge Quiroga

2002, Oct 12

D.S. 26812

G. Sánchez de Lozada

2003, Aug 14

D.S. 27137

G. Sánchez de Lozada

2003, Sep 30

D.S. 27192

G. Sánchez de Lozada

2003, Sep 30

D.S. 27193

G. Sánchez de Lozada

2003, Oct 8D.S. 27205

G. Sánchez de Lozada

2003, Oct 8D.S. 27206

G. Sánchez de Lozada

2004, Jan 31

D.S. 27334

Carlos Mesa

2004, Feb 6

D.S. 27358

Carlos Mesa

2005, Dec 25

D.S. 28536

Eduardo Rodríguez V.

2007, Mar 21

Law 3620

Evo Morales

2008, May 21

D.S. 29578

Evo Morales

2008, May 26

Law 3866

Evo Morales

2008, Oct 29

D.S. 29769

Evo Morales

2008, Dec 29

Law 3994

Evo Morales

2009, Apr 15

Law 4019

Evo Morales

2011, Nov 17

Law 186

Evo Morales

2015, Jun 10

D.S. 2398

Evo Morales
17

Source: author based on Espinoza (2010: 239-241) and la gaceta oficial

Conflicted Issue

ActorsPeriodFSTMB, el Sindicato Mixto de
Production rights in Cerro Posoconi,
Trabajadores de Huanuni,
October 2006
Huanunicooperatives
Minera Barrosquira, mining workers
April-July
Ownership of Mina Sayaquiraof the company, cooperativas and2011
neighbor communities
South American Silver (CompañíaMay-July
Production license of Mallku Khota Minera Mallku Khota), neighbor2012
communities
Minera Colquiri (Synchi Wayra),June-October
Production rights in Mina Colquiri FSTMB, the cooperative 26 de2012
febrero, FENCOMINFENCOMIN, FSTMB, Mining andJuly 2013 Making of a new Mining Law 356 Labor Ministries, COMIBOL,May 2014
Canalmin, ANMM
Modification of Mining Law 356
FENCOMIN, the nationaland state direct purchase of minerals
August 2016
government
produced by cooperatives
Note: FSTMB = Federación Sindical de Trabajadores Mineros de Bolivia, FENCOMIN = Federación Nacionalde Cooperativistas Mineros de Bolivia, COMIBOL = Corporación Minera de Bolivia, Canalmin = Cámara
Nacional de Minería, ANMM = Asociación Nacional de Mineros Medianos.
Source: author18

§ ASMs can be influential policymaking actors

depending on power distribution.

§ State, private companies and cooperatives

essentially fight each other to win the lion’s shareof mining rent.

§ Formalization is a difficult challenge when ASM

consolidates its power while keeping its economic
prerogatives.

§ The retreat or absence of state fosteredinformalization and initiated its positive feedback.

§ “Supports” to the marginalized sector arenecessary, but political context might change themeaning.

§ Does Bolivian case have any equivalents

elsewhere? Elite capture by local informal leaders?

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§ Banchirigah, Sadia M. 2006. “How have reforms fueled the expansion of artisanal mining: Evidence

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CEPAL working paper§ Dargent, Eduardo, and Madai Urteaga. 2016. “Respuesta estatal por presiones externas: losdeterminantes del fortalecimiento estatal frente al Boom del oro en el Peŕú.” Revista de Ciencia
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§ Güiza, Leonardo. 2013. “La pequeña minería en Colomia: una actividad no tan pequeña.” Dyna 181,109-117.

§ Hennessy, Logan. 2015. “Where There Is No Company: Indigenous Peoples, Sustainability, and theChallenges of Mid-Stream Mining Reforms in Guyana’s Small-Scale Gold Sector” New PoliticalEconomy 20(1), 126-153.

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