ASM Formalization

Artisanal and small-scale mining, or ASM, provides a vital livelihood for an estimated 45 million people around the world. At least 90 percent work informally, without the licenses or permits required by law and with poor mining techniques and environmental, social and governance practices. The informal nature of ASM presents challenges for all stakeholders, especially miners themselves. 

Artisanal miners are often unable to navigate the complex and costly processes of accessing land and obtaining licenses. This informality results in precarious livelihoods with miners having no legal rights or security of land tenure, pushing them deeper into the informal economy. Poor mining practices leading to low mineral recovery rates and earnings, and a lack of technical knowledge and access to finance, result in negative impacts such as dangerous, unhealthy working conditions and pollution, adding to the negative cycle of informality. 

The formalization of ASM is among the main ways that Pact is improving the sector in communities around the world. Our Responsible Mining practice brings together government, industry, miners and communities to make ASM safer, formal and more productive, while making the most of ASM’s contributions to development. Pact’s 2020 policy assessment with the University of Delaware outlines how ASM is directly connected to all 17 of the UN Sustainable Development Goals, making the case for holistic formalization processes.

We define formalization as strengthening ASM actors and governments to progressively improve practices and enable compliance with national regulations and international standards to facilitate access to responsible markets. 

WHAT WE DO

Drawing on Pact’s decade-long experience in market-based ASM formalization, we use a tested approach reflecting international best practice and our vision of thriving, resilient and engaged communities leading their own development. We also take into account academic literature, industry guidelines and UN guidance.

We directly engage communities and governments in formalization. Our holistic approach includes seven steps representing project interventions, outlined below. The steps do not need to be undertaken consecutively, and some can take place concurrently. 

We follow four guiding principles to ensure sustainability. 

Our efforts are data-driven, informed by an in-depth understanding of the ASM market system, its stakeholders, barriers and incentives to formalization, and regulatory frameworks through community, supply chain and markets assessments to inform interventions. 

We believe in locally led programming, as formalization is a shared responsibility of all local stakeholders. Development partners such as Pact, funding agencies and downstream companies should support specific formalization steps, but should not own the overall process.

Our work is integrated, due to the many interlinked ASM development challenges and opportunities. We leverage our broad expertise to support miners and communities in securing ASM licenses and land tenure, mercury-free mining and processing, economic empowerment, health, safety, peace and security, reducing child labor, addressing human rights, due diligence, sustainable and responsible practices and more. 

Our effort are market-based. To secure long-term formalization, we leverage market forces and incentives for sustainable business models that provide a route to market for responsible ASM production. This means engaging private-sector actors from the outset and facilitating mutually beneficial business agreements between ASM communities and private partners, including financial institutions and downstream companies seeking to improve our global ASM supply chains.