A Supreme Court judge backed a government move to crack down on illegal gold mining in Brazil, suspending a legal practice of buyers accepting the origin of the precious metal with paper receipts based on the “good faith” of the seller.
The injunction by Justice Gilmar Mendes gave the government 90 days to adopt a new regulatory framework for the gold trade to stop the sale of gold mined illegally from indigenous lands and other environmentally protected areas.
“This spurious consortium formed by illegal miners and criminal organizations must be stopped as soon as possible,” Mendes said in his ruling late on Tuesday.
The decision, which goes into effect immediately but needs approval by the full court, gives support to leftist President Luiz Inacio Lula da Silva, who is facing pressure from right-wing politicians to drop a crackdown on wildcat gold miners.
The presumption of “good faith” in the gold supply chain since 2013 helped to obscure the true origins of Brazilian gold exports, roughly half of which are now estimated to be mined illegally.
The previous government of President Jair Bolsonaro eased environmental protections and encouraged wildcat mining in the Amazon rainforest. A surge in illegal mining on the Yanomami indigenous reservation caused disease and malnutrition that led the Lula government to declare a humanitarian crisis.
The government has moved to establish stricter rules for the gold trade, proposing to end the “good faith” practice and new legislation that would require electronic tax receipts for the buying and selling of the metal.
Learn more: Reuters 