<i>[intense music]</i> <i>♪ ♪</i> REPAIR PERSON: [speaking foreign language] <i>NICHOLAS: What’s the relationship in Colombia</i> between criminal groups and—and gold? <i>JEREMY: What we find here in Colombia is, gold is a massive criminal economy.</i> <i>♪ ♪</i> <i>There is violence and there is blood</i> and there is illegality flowing through the veins of this industry. <i>♪ ♪</i> <i>It’s the Wild West out there.</i> <i>[droning music]</i> <i>[pensive electronic music]</i> <i>♪ ♪</i> <i>[solemn music]</i> <i>NICHOLAS: The illegal mining of gold</i> <i>has wrecked rainforests throughout Latin America,</i> <i>destroying the trees,</i> <i>polluting the air,</i> <i>poisoning the water.</i> <i>In Colombia, this illicit trade is so lucrative</i> <i>that gold has replaced cocaine as the main source of income for organized crime.</i> <i>So who’s the number one buyer of Colombian gold?</i> <i>The same country that buys the most cocaine:</i> <i>the United States.</i> <i>♪ ♪</i> The question is, “Where does this gold go?” And the answer might just be that it’s been here in my hand the entire time. iPhones use gold, but the route from miner to consumer is an extremely complicated and cloudy one, but that’s what we’re gonna try to find out. <i>[dramatic piano music]</i> <i>♪ ♪</i> <i>[eerie electronic music]</i> <i>Apple isn’t the only big American company</i> <i>using Colombian gold,</i> <i>but it’s probably the most profitable.</i> <i>Much of its revenue comes from the iPhone,</i> <i>a device containing lots of mined minerals.</i> <i>After a series of scandals involving its supply chain,</i> <i>the company declared it would closely monitor</i> <i>how its products were made and what goes into them.</i> <i>On its website, the company says,</i> <i>“We hold ourselves and our suppliers to the highest standards</i> <i>to ensure everyone is treated with dignity and respect.”</i> <i>Being a good corporate citizen has become a central part of the Apple brand.</i> <i>[curious music]</i> <i>♪ ♪</i> <i>PERSON: [speaking native language]</i> <i>We know from legal documents and export records</i> <i>that some of the gold Apple uses comes from Colombia.</i> <i>NICHOLAS: I’ve been a correspondent in South America for years,</i> <i>and I’ve covered Colombia’s unrest</i> <i>caused by paramilitary groups and guerillas.</i> <i>That’s why I’ve come here to a remote region in Colombia’s state of Antioquia</i> <i>to figure out if Apple is using gold</i> <i>from regions controlled by these violent factions.</i> <i>NICHOLAS: Many of the people in and around El Bagre</i> <i>are poor even though vast riches lie just beneath the soil,</i> <i>thick deposits of gold ore.</i> <i>Here the economy is gold.</i> SALESPERSON: [speaking foreign language] NICHOLAS: [speaking foreign language] NICHOLAS: Wow. <i>Most of Colombia’s gold comes from illegal mining.</i> <i>We know this because the country exports more</i> <i>than its legal mines declare they produce.</i> <i>These unregulated mines are known</i> <i>to use toxic chemicals and child labor,</i> <i>and various armed groups take a cut of the illicit profits</i> <i>by extorting the miners and the middlemen.</i> <i>[somber music]</i> <i>We hear that one of these illegal mines</i> <i>has recently opened in the nearby mountains.</i> - [speaking foreign language] - [speaking foreign language] GUIDE: [speaking foreign language] NICHOLAS: <i>Bueno.</i> <i>[ethereal music]</i> <i>It’s a three-hour ride through fields and jungle</i> <i>far from any government presence.</i> <i>♪ ♪</i> <i>The man who invited us is Pedro Ramirez, better known as Chilapo.</i> - [speaking foreign language] - [speaking foreign language] <i>NICHOLAS: He agreed to talk with us</i> <i>because he wants to show how miners like him,</i> <i>those operating without a permit,</i> <i>are just trying to make a living.</i> <i>But Chilapo has been tied to rebel and criminal groups.</i> <i>According to his criminal record,</i> <i>he should be under house arrest</i> <i>for trafficking firearms.</i> <i>NICHOLAS: Instead, Chilapo’s here running an illegal goldmine,</i> <i>a criminal who says he’s being extorted by bigger criminals.</i> <i>CHILAPO: [speaking foreign language]</i> [machinery whirring] <i>NICHOLAS: On a good month, Chilapo says his machines extract</i> <i>about 20 pounds of gold worth nearly 1/4 of a million dollars.</i> <i>But that’s before expenses,</i> <i>expenses that he says include thousands of dollars</i> <i>in extortion money paid to two armed groups.</i> NICHOLAS: [speaking foreign language] <i>[solemn music]</i> <i>♪ ♪</i> <i>NICHOLAS: The two armed groups extorting Chilapo are the ELN,</i> <i>a revolutionary leftist army known for its kidnappings and car bombs,</i> <i>and the Clan del Golfo, a former paramilitary group</i> <i>that’s become Colombia’s most powerful criminal enterprise.</i> <i>The U.S. Justice Department recently named Clan del Golfo</i> <i>as one of the top five multinational crime organizations</i> <i>threatening the United States.</i> - MS-13, the Sinaloa Cartel, the Clan del Golfo. <i>NICHOLAS: The ELN and Clan del Golfo</i> <i>are among the many armed factions</i> <i>contributing to decades of violent conflict in Colombia.</i> <i>This conflict used to be funded primarily through drug trafficking.</i> <i>That changed when gold prices picked up in the 2000s,</i> <i>creating a boom in illegal mining.</i> JEREMY: The criminal economies are more lucrative than they have ever been in Colombia’s history. <i>NICHOLAS: Jeremy McDermott has been tracking the link between gold</i> <i>and organized crime in Latin America for over a decade.</i> JEREMY: What we find here is the that some of the greatest gold deposits are in areas where the government has the least presence, and this has opened the way for illegal groups to involve themselves in the gold trade in many of the different links in the chain of gold production. NICHOLAS: Do you have an estimate for how big this industry is of just extortion? JEREMY: I think we can comfortably start talking in hundreds of millions. Gold is a massive criminal economy. But until such time as the state is able to exercise control over its territory, then criminal actors are going to swarm around these criminal economies seeking to benefit and profit it. <i>NICHOLAS: So if violent crime is contaminating Colombian gold,</i> <i>worth hundreds of millions of dollars,</i> <i>could Apple’s gold also be tainted?</i> <i>[ethereal music]</i> <i>♪ ♪</i> <i>[dramatic music]</i> <i>The gold in your iPhone has had to pass through many, many hands.</i> <i>Here’s how the supply chain often works:</i> <i>first, an illegal miner sells his gold to a middleman.</i> <i>The middleman is supposed to provide the government with documentation</i> <i>of where that gold comes from, documents that Apple relies on for its audits.</i> <i>The middleman sells the gold to a local foundry, which melts it into bars.</i> <i>The bars are then exported to refining companies,</i> <i>where the gold is mixed and purified.</i> <i>This purified gold is sold around the world</i> <i>for use in electronics, jewelry, banking.</i> <i>It’s also in the components used to make an iPhone.</i> <i>Those components are shipped to China, where the phone is assembled.</i> <i>Then the finished device, containing less than two dollars’ worth of gold,</i> <i>is shipped to an Apple Store near you.</i> [band playing upbeat Latin music] NICHOLAS: [speaking foreign language] LUIS: [speaking foreign language] <i>NICHOLAS: Luis Alvarez is one link in that supply chain,</i> <i>a small-time middleman who buys and sells gold in El Bagre.</i> <i>NICHOLAS: Gold workers aren’t the only ones being threatened.</i> <i>Many community leaders have been murdered</i> <i>after daring to stand up to these armed groups.</i> <i>One human rights activist, William Castillo,</i> <i>received death threats after calling attention</i> <i>to the violence linked to gold mining.</i> <i>He was gunned down in 2016.</i> <i>His murder made international news.</i> <i>NEWS REPORTER: [speaking foreign language]</i> <i>NICHOLAS: The man convicted of his murder</i> <i>was identified by police as a member of Clan del Golfo.</i> - [speaking foreign language] <i>NICHOLAS: Castillo’s close friend and colleague Mauricio Sanchez</i> <i>has been in hiding ever since.</i> NICHOLAS: [speaking foreign language] <i>NICHOLAS: In my conversations with El Bagre’s miners</i> <i>and middlemen, one name kept coming up,</i> <i>the name of perhaps the biggest gold trader in Colombia,</i> <i>a name I can now link to Apple:</i> <i>Fundicion Gutierrez.</i> <i>NICHOLAS: Medellin.</i> <i>Most of Colombia’s gold is exported from here.</i> <i>It’s home to a company called Fundicion Gutierrez,</i> <i>one of the country’s largest gold exporters.</i> - [speaking foreign language] <i>NICHOLAS: Leonardo Guisa investigates</i> <i>gold supply chains for the Colombian government.</i> <i>NICHOLAS: But was Gutierrez even aware that its gold was tainted?</i> <i>When I contacted the company, its spokesman replied with a text</i> <i>and a stunning admission about Gutierrez’s top executives.</i> They didn’t want to appear on camera because of their own security. Any topic related to illegal mining is just way too complicated. <i>Los están extorsionando y demás.</i> They are being extorted and more. <i>If true, this means that armed groups are taking a cut</i> <i>at every level of Apple’s supply chain in Colombia.</i> [speaking foreign language] <i>One way to find out if Gutierrez is being extorted?</i> <i>To speak with those doing the extorting.</i> NICHOLAS: Okay. <i>Sí, sí.</i> <i>[tense music]</i> <i>♪ ♪</i> <i>NICHOLAS: An hour after our interview, the gangster and his bodyguard</i> <i>drove our Colombian producer to an ATM</i> <i>to demand payment for their travel expenses.</i> <i>They were armed. </i>Times <i>editors decided to pay.</i> <i>♪ ♪</i> <i>NICHOLAS: In 2018, Apple received gold</i> <i>from 101 suppliers in more than 30 countries.</i> <i>The company claims to have audited</i> <i>every one of these suppliers for illicit activity,</i> <i>but those audits don’t give a full picture of the supply chain.</i> <i>If Apple had gone just one layer deeper,</i> <i>its audits would have shown another supplier:</i> <i>Fundicion Gutierrez.</i> I think Apple’s gonna be learning a lot about its own supply chain in Colombia. Awhile back, I was able to get a list of who Gutierrez was exporting its gold to, and the list had a name called Asahi Refining USA, where it sold, between 2016 and 2017, 11,000 kilograms of gold. That’s—that’s—that’s a lot of gold. This is a legal disclosure that Apple has to file each year under the Dodd-Frank Act, and right here is Asahi Refining, same company that Gutierrez sold 11,000 kilograms of gold to. So when you look back here, you can see how the chain looks. It starts with someone like Chilapo. It goes to intermediaries. Those intermediaries are selling it to Gutierrez. Gutierrez is selling it to Asahi. Asahi is selling gold to Apple. And with those links in the chain, you can see that you are linking an illegal goldmine to a company that is producing consumer electronics. <i>While we were looking into the Asahi-Gutierrez connection,</i> <i>Colombian police arrested three Gutierrez executives on money laundering charges.</i> <i>The government said Gutierrez created fictitious businesses</i> <i>to hide transactions of illegal gold worth about $740 million,</i> <i>including illegal gold from the El Bagre region.</i> <i>Apple wouldn’t discuss our findings on the record,</i> <i>but after we’d told them what we’d found,</i> <i>the company’s CEO met in person with the president of Colombia</i> <i>to discuss, among other things, mining.</i> <i>In a statement to the Times, Apple said,</i> <i>“Without cooperation from the government in improving conditions,</i> <i>we would no longer allow Colombian-mined gold in our products.”</i> <i>Meanwhile, Asahi, the Salt Lake City refinery and Apple supplier,</i> <i>said that less than 1% of its gold comes from Gutierrez</i> <i>and that it continues to work with them.</i> <i>But here’s the thing: it’s not just Apple.</i> <i>Samsung and Lenovo also use gold from Gutierrez,</i> <i>as do Ford, GE, Tiffany’s, and a host of other American companies.</i> <i>When I asked these companies about Gutierrez,</i> <i>they either didn’t respond or admitted</i> <i>that they had never heard of the Colombian supplier.</i> <i>[curious music]</i> <i>♪ ♪</i> <i>Apple talks of social responsibility,</i> <i>but the problems we found were glaring and obvious.</i> <i>The company continues to rely on a flawed audit system</i> <i>that allows Apple to avoid inconvenient facts about what’s inside its products.</i> <i>♪ ♪</i> <i>If Apple and others examined their entire supply chain,</i> <i>they would’ve found what we found,</i> <i>that from the moment the ore is unearthed</i> <i>to the moment it leaves Colombia,</i> <i>there’s extortion, violence, even murder.</i> <i>They failed to see the reality on the ground.</i> <i>[dramatic music]</i> <i>They saw only gold.</i>