Property Rights Theory and the Reform of Artisanal and Small-Scale Mining in Developing Countries

Abstract

Artisanal and Small-Scale Mining (ASM) is a global economic phenomenon that is widespread especially in developing countries. It provides livelihoods for millions of people, yet is often primarily associated with environmental and social problems. A key obstacle to reforming this sector is the fact that most ASM takes place in the informal sector, outside legal regimes. This paper discusses creation and reform of legal regimes governing ASM from the perspective of property rights theory. The particularly relevant law and economics- justification of property rights is revisited in detail and the strengths and weaknesses of this theory are highlighted in the context of development. The application of other theoretical justifications of property law provides further valuable insights into how the formalization of the sector could be approached.

Formalizing artisanal and small-scale mining: Whither the workforce?

“…The situation in the DRC is slightly different, as existing ASMpolicies -which are severely hampered by weak state capacity-are geared in the first instance towards the certification of ASM-operators (through so-called cartes d'exploitant artisanal), who then become authorized to operate inside artisanal mining areas (zones d'exploitation artisanal) (Geenen & Radley, 2014). This now widely shared view that ASM-operators require strong mineral tenure rights as a basis for their emancipation harks back to economic theories of property rights (Clausen et al, 2011;Geenen, 2012), which were most famously articulated in a developing country context by Peruvian economist Hernando de Soto (2000). According to these theories, private property is the most efficient way of allocating resources: in addition to providing people with incentives to invest and develop (mineral) resources, private property can act as a collateral for loans, thus improving people's access to credit markets.…”

“…Building on broader academic debates on formalization and land titling (for overviews see Sjaastad & Cousins, 2008;Bromley, 2009), other authors have developed a more farreaching critique of the "formalization canon" in the ASM-sector (for overviews see Clausen et al, 2011;Geenen, 2012). Particularly relevant for our purposes is the observation that existing formalization frameworks erroneously assume "that artisanal miners are a homogeneous group with similar licensing requirements."…”

Safeguarding livelihoods or exacerbating poverty? Artisanal mining and formalization in West Africa

“…It is against this background that some commentators have argued that the main barrier in addressing these problems stems from the fact that the sector is unregulated and operates outside of the legal sphere (Clausen et al ., 2011). Hentschel et al .…”

“…It is against this background that some commentators have argued that the main barrier in addressing these problems stems from the fact that the sector is unregulated and operates outside of the legal sphere (Clausen et al, 2011). Hentschel et al (2002), who suggest that 90% of ASM operators in sub-Saharan Africa operate informally and illegally, argue that the first step in tackling the sector's problems is to create adequate legal regimes that address the specific characteristics of the industry.…”

Deforestation and Social Resilience: A Case Study of Gunung Mas District-Central Kalimantan

“…In the course of time, 2001 became the starting point for the people of Gunung Mas to mine gold using machines. If the time to pan for gold must be done in river channels, then gold mining with new machines or this new technology [12] can be done on dry land (land) and beach of river as well. There are two types of mining with this new system, namely the lanting system and the broomstick system.…”