FACT Policy Fellow Sofia Gonzalez interviewed Ricardo Soberón, former president of Peru’s DEVIDA. This is their conversation, edited for clarity and length. FACT does not necessarily endorse the policies reflected in this discussion.
The interview below follows and expands upon interviews conducted during the development of FACT’s latest report, “Dirty Money and the Destruction of the Amazon: Uncovering the U.S. Role in Illicit Financial Flows from Environmental Crimes in Peru and Colombia.” The full report, including recommendations for U.S. policy makers, can be found here.
Can you give us a brief introduction about yourself and your work?
I am a Peruvian lawyer and one of the funders of the Center for Research on Drugs and Human Rights. I was recently the president of the Peruvian Government’s National Commission for Development and Life without Drugs, or DEVIDA. I have committed my career to combating drug trafficking and money laundering associated with narcotics. After one encounter in 2001 on the Colombian border, I pivoted my career to focus on the parallel and entwined industries of illicit gold and cocaine.
My analysis has revealed the inextricable link between illicit gold and cocaine production, whether in investigating the political repercussions of drug trafficking in the Peruvian Amazon, or conducting diagnostics on the Colombia-Peru border. My working hypothesis as an academic and consultant reflects on the differing natures of illegality between cocaine and gold. For instance, the coca itself is not illegal, but the product becomes illegal once it is transformed into cocaine. Thereafter, there is no mistaking it for what it is. However, in the case of gold, it’s the nature of the mining that makes it illegal. Once it enters licit markets, we lose any ability to trace whether the gold is legal or not. This discrepancy is pivotal in understanding the symbiotic relationship between gold trade and cocaine trafficking. Traffickers rely on both products to make and launder money.
What patterns and methods have you observed in terms of moving funds from illegal mining, logging, and money laundering in the Amazon to other countries, such as the U.S.?
As the eighth-largest global gold producer, Peru draws much attention, especially for the licit and illicit gold industries’ extensive environmental impact on the Amazon. Approximately 22 rivers are polluted yearly by the activities of illegal miners in the Peruvian Amazon. Environmental efforts focus heavily on gold mining and production – emphasizing mercury usage, deforestation, and river pollution – yet it is equally crucial to identify environmental risks in all stages of the gold supply chain, from extraction to transportation, storage, and export. This expansive industry involves thousands of licit and illicit actors including companies, some individual and others legal entities, that operate in a gray area between legal and illegal gold processing. Notably, foreign involvement intensifies during the export phase, mirroring patterns observed in drug trafficking. The financial aspects, influenced by gold’s value in Lima, present challenges, especially in the context of international transactions involving offshore companies, creating a gray space facilitating substantial money flows.
In 2018, environmental crime ranked as the third most profitable criminal activity globally, trailing only behind drug trafficking and smuggling. Nevertheless, our research highlights that environmental crime and associated illegalities are still regarded as “second class” crimes. We conducted various case studies in different countries, including Brazil, Colombia, and Peru, spanning various sectors such as illicit gold mining, livestock supply chains, wood, and soybeans. Notably, in Colombia, money laundering from illegal mining has proven more lucrative than the cocaine market.
During your tenure at DEVIDA, did you come across any connections among armed groups, illegal deforestation, mining, and illicit financial flows to the U.S.?
My observations in the field revealed a perfect storm brewing—an alignment of drug trafficking, armed actors, and gold mining providing coordinated services. Notably, gold exports from Peru in 2020 found their way to Canada, the U.S., Switzerland, and India. This points to potential links between illegal mining activities in Peru and the U.S. market. Unlike cocaine’s maritime transport preference, gold leans heavily towards air transport , suggesting potential flights to destinations like the United States, particularly from cities such as Leticia, Florencia, and Iquitos. While the scale in Peruvian Putumayo is currently smaller than in Madre de Dios, historical patterns indicate potential expansion.
How can the NGO and government sectors best support local civil society in Amazon countries to combat illegal mining, logging, and other environmental crimes?
Given the challenges posed by gold, cocaine, and other illicit activities and the inherent weaknesses in the Colombian and Peruvian states, I recommend advocating for a more effective law enforcement strategy. Rather than targeting the miners themselves, who often are local people seeking economic opportunity, law enforcement emphasis should shift to companies, their directors, and exporters. Empowering the miners to exercise their own political and economic rights could be a more nuanced solution. Additionally, it is essential to leverage databases such as those from Peru’s Financial Intelligence Unit (FIU Peru), but we need additional resources to mitigate risk in the mining sector. This could include better efforts to cross-reference information on buyers, dealers, and machinery suppliers as a means to better identify suspicious activities.
Is there any additional information you’d like to share regarding the research and reports you’ve been involved with on environmental crime and illicit financial flows?
I’d like to share more on the role of beneficial ownership registries and bilateral cooperation. I believe strongly in the utility of beneficial ownership registries to prevent and investigate illicit finance driving crimes that affect the environment. At the same time, I think that the U.S. should go a step further to develop a comprehensive audit of international refiners in the United States to complement the new U.S. beneficial ownership directory. Further oversight is key to developing a clearer understanding of the legality of certain gold purchases.
Furthermore, bilateral cooperation is key. We saw the U.S. work with several governments in Latin America during the 2018 Operation Arc Stanton, a counternarcotics investigation that cracked down on illicit gold and its associated ill-gotten gains that found their way into U.S. markets. But these investigations need to be inclusive and collaborative. Information sharing between countries should be conducted with the goal of supporting the origin country, such as Peru or Colombia, in their own prosecutions, rather than pursuing a unilateral U.S. prosecution without the consultation of local law enforcement. In conclusion, the intricacies of gold, cocaine, and illicit flows in the Amazon demand a multifaceted approach, ranging from targeted law enforcement and political empowerment to international cooperation and comprehensive audits of key players in the gold trade.
Ricardo Soberón is a Peruvian lawyer and was the former president of Peru’s National Commission for Development and Life without Drugs, or DEVIDA.