Holding Sudan to the Gold Standard

Although it may have slipped from headlines, the conflict in Sudan’s western region of Darfur has not disappeared. Indeed, the region has seen almost unabated violence for over a decade, notably spiking in January 2013. In February of this year, a Human Rights Watch report shed light on the violence, documenting mass rape and other atrocities committed by forces loyal to the Sudanese government from October 30 to November 1, 2014.

Though these stories of government-allied Janjaweed militias ravaging Darfur harken back to the early 2000s—when pro-government militias carried out systematic killings across the region—a new factor has emerged in the conflict since the separation of Sudan and South Sudan: the Sudanese government’s struggle to finance and maintain the support of their proxy militias. Before South Sudan’s independence, much of Sudanese government revenues came from oil located in what is now South Sudan. Though Sudan now earns some fees for allowing the transport of oil out of landlocked South Sudan, civil conflict within South Sudan and standoffs between the two nations have made this an uncertain source of revenue.

Without this income, the Sudanese government has turned its attention to another natural resource: Darfur’s gold mines. The Sudanese government not only operates the country’s sole gold refinery, it is also the only entity allowed to sell gold abroad. To encourage miners to sell their gold to the government, rather than to smugglers, the Central Bank offers competitive prices, leaving the government with an effective monopoly on the trade. Though the IMF reports that gold accounted for only 13 percent of Sudan’s exports in 2011, that figured had skyrocketed to 42 percent by 2012.

Yet Darfur’s gold is not just financing these militias and the human rights violations they commit; the search for gold and efforts to consolidate control of gold mines are also a cause of conflict. A report by the Enough Project outlines the government of Sudan’s “strategy of economic plunder of the periphery through violence and forcible demographic change.” The discovery of new gold mines in the area has even led to harassment of Arab groups traditionally exempt from attacks by government-sponsored militias.

Given the role of gold in funding and spurring conflict in Darfur, especially the egregious instances of sexual violence and ethnic cleansing reported by Human Rights Watch, international consumers and traders should take steps to ensure the gold they purchase is not sourced from conflict-ridden areas. As a February New York Times op-ed suggests, “International banks, gold refiners, and associations like the Dubai Multi Commodities Center and the London Bullion Market Association should raise alerts for Sudanese gold and initiate audits to trace it all to its mine of origin to ensure that purchases are not fueling war crimes in Darfur.”

A similar campaign has been started for gold originating in the Democratic Republic of the Congo (DRC). The Enough Project’s #CongoGold “Look Who’s Getting Engaged” campaign highlights major jewelry retailers that have taken steps such as establishing supply chain controls and supporting communities affected by mining and violence. While the DRC gold campaign is not as extensive as the Kimberley Process for certifying diamonds, an agreement between governments and the diamond industry that requires participating states to pass legislation and export and import controls, it is an improvement over the lack of any such system or movement targeting Sudanese conflict gold. Human rights organizations have proposed steps in Sudan including United Nations’ investigations into major Sudanese gold traders, U.S. legislative action to curtail trade in conflict-affected gold, and greater gold industry due diligence.

Though sometimes criticized, the Kimberley Process serves as a good model. It is credited with reducing the percentage of conflict diamonds reaching international markets from 4 to 1 percent. The Kimberley Process also walks a fine line: it works with governments—which are necessary to efforts to control gold supply chains in their respective nations—while ensuring that the organization does not become too bureaucratic or politicized. Any approach to supply chain management of conflict-affected resources should similarly incorporate both governmental and nongovernmental action, as the Enough Project’s proposal for Sudan does. To generate economic pressure on Sudan, governments and international organizations should work with private sector and other nongovernmental actors.