The Amazon’s gold rush is a threat to law and order

Carolina Andrade, Melina Risso and Robert Muggah are the Igarapé Institute’s senior adviser, research director and co-founder. Mac Margolis is an editor and advisor.

Tearing down the rainforest for short term gain is a time-honored racket.

Look no further than the lands of the Yanomami, the 30,000-strong indigenous community on the Brazil-Venezuela border who have the misfortune of living atop some of the most coveted alluvial gold deposits in the world. 

But the ruin spills far beyond the cratered soil, fouled ground water, and serial outbreaks of infectious disease and violence that waves of wildcat miners leave behind.

The less visible scourge for the nations of the iconic river basin is rainforest money laundering.

The scramble for Amazon gold primes the pump of a sophisticated criminal enterprise that sluices untold millions of ill-gotten dollars from the shadows into the legal economy– a scheme so nuanced that governments, communities and consumers are none the wiser. 

Laundering proceeds from illegal mining turns the Amazon gold rush into a threat to regional law and order.

It is also another reason why Brazil has become one of the most crime-compromised nations in the Americas, ranking 6.5 on the Global Organized Crime Index’s 10-point scale (10 being the most susceptible), compared to 4.88 for the hemisphere. 

Just how much tainted money the assault on Yanomami lands reaps is a matter of much debate.

One study found that 32 tons of gold were extracted illegally from the Brazilian Amazon in 2021 alone. With gold breaching $2,000 an ounce following the collapse of Silicon Valley Bank, the frenzy over Amazon riches will only grow. 

Scrubbing all that profit takes a mighty laundromat, with many hands in the wash from the jungle mine pit to the jewelers vitrine. And gold is only the most lustrous asset in the green crime spin cycle which cleanses cash for goods from tropical timber to exotic fish.

Stopping the dirty money machine will take an equally dedicated network of public and private institutions, across the Amazon and beyond, the Igarapé Institute, a think tank, concludes in a forthcoming study.

Pillaging natural resources for profit is as old as the market economy. What to do about the money that green crimes generate is a more recent dilemma.

Most international protocols for fighting criminal profits focus on terrorism and international narcotics. Only in 2021, when the European Union published its sixth Money Laundering Directive, did the minders of world finance add environmental crime to the A-list of “predicate offenses” tied to cleansing ill-gotten gains.

It was about time.

Environmental crime is a global business, reaping $110 to $281 billion a year, according to the Financial Action Task Force. And most of this is easy money at low risk for illegal operators.

Once relegated to the back pile of police work, nature crime now ranks third as an illicit money maker, behind only drug trafficking and smuggling. And the haul from natural resources plunder is expanding at two to three times the rate of the global economy. 

Yet as late as 2018,  only 7 of 17 member nations of the region’s top financial crimes watchdog (GAFILAT) had recognized illegal natural resource extraction as a money laundering threat.

Tired of playing whack-a-mole, authorities from Brazil, Colombia and Peru recently gathered in the historic river port Manaus – at the invitation of Igarapé Institute, INTERPOL, and the Ibero-American Public Prosecutors Association – to make common cause against the rainforest’s industrious outlaws.

Regional police, prosecutors, and crime experts from the United Nations Office on Drugs and the Jaguar Network  also leaned in.  

They know that despite regional pledges going back to the 1995 Amazon Cooperation Treaty Organization, efforts to stanch money flows from such ruinous industry remain piecemeal, regulations patchy, and strategic planning a work in progress.

Following the dirty money from mines to the mall is crucial to rebooting strategic planning, upgrading prevention and bringing violators to account. So is engaging the private sector by compelling investors to scour their supply chains for scofflaws, opportunists and blind spots.

None of these strategies stands a chance unless regional authorities agree to agree.

To get there, South American neighbors must look beyond national agendas to cross border cooperation, intelligence sharing and co-sponsoring investigations and command and control.

Amazon outlaws long ago caught on to the transnational logic of plunder, where many interests conspire to extract, ship and hawk purloined natural riches.

They know that their business model depends on sleight of hand and a veritable circular economy of crime and complicity, from the despoiled rainforest to the canopy of finance. 

This was the message from the compact in Manaus. Environmental crime cannot be contained unless authorities stop the money-go-round that sustains it.

Rainforest criminals know the script. It’s time that the nations of the Amazon wrote their own.