Blood from Stone

Blood_in_the_stone_1If you’re about to buy a diamond, then you don’t just have your credit card bill to worry about. At the forefront of many people’s minds, after seeing the recent Hollywood blockbuster Blood Diamond (right), are questions such as, where has it been sourced, who has mined it and who has profited from its sale?

The same goes for the gold or platinum in which your sparkler is set. Gemstones and precious metals are some of the most valuable commodities to come out of the earth. To the developing countries in which they’re mainly found, this mineral wealth provides enormous riches. The only question is, for whom? The supply chains along which these precious metals travel from the mines to the twinkling lights of the jeweller’s shelf can be destructive, exploitative and dangerous to those who work at the rough end of the industry.

The issues facing gold and diamond mining are similar – blood diamonds and dirty gold both fuel conflict, destroy communities and can devastate the environments from which they’re extracted. However, there are two separate processes taking place to try to ensure that their respective industries both come clean about the problems, and also sort out their act.

But neither the Kimberley Process for diamonds, established in 2003, or the embryonic fair trade standards for gold, are quite there yet. And so, despite the recent media hullabaloo in Britain around the ethics of where your engagement ring has come from, it is currently impossible to guarantee that the rock is conflict-free. Neither can you be sure that your wedding band isn’t tainted with the misery of exploited miners.

Sonya Malder, policy analyst at CAFOD, which is currently campaigning against so-called ‘dirty gold’, illustrates the point. “One process is called heap leeching, when cyanide is poured over the ore to get the gold to bond with it. In the San Martin mines, in the Siria valley of Honduras, from stone a government study found dangerous levels of cyanide in the water,” she explains. “Gold mining is also a water-intensive industry, and in the same area, which is already prone to drought, local people are now having to buy in their water because thousands of litres are being used by the mines. And there’s the environmental impact too – one gold ring produces 18 tonnes of waste.”

Communities can be displaced when mining companies want to explore an area and may not be adequately compensated, but most alarmingly, gold extraction can precipitate social conflict and even war. “In the Democratic Republic of Congo, there is evidence of different militia trying to control areas where gold is mined,” says Malder. “This kind of thing can escalate with devastating consequences.”

Greg Valerio, founder of the Chichesterbased fair trade jewellers Cred, claims to be absolutely certain that there is “conflict gold coming out of Columbia.”

Blood_in_the_stone_2“A British company is trading there, selling gold back here through the jewellery fabricators, and that money is funding the drug habits of the paramilitaries That very gold,” he adds, “ends up on our jewellers’ shelves, and nobody, at the moment, has a way of tracing it back.”

But more and more customers are now demanding guarantees that their expensive purchase isn’t hurting poor communities. “We’re seeing our business double year on year, so I know the appetite is there,” Valerio says. Having just collaborated on an ethically sourced engagement ring collection with designer Katherine Hamnett, and now taking calls from luxury jewellery houses wanting to buy his wedding bands, he feels that the consumer mood has irrevocably changed.

Greg Valerio is a prominent campaigner in the Association for Responsible Mining (ARM), currently fighting for the rigorous gold-mining standards he has helped develop to be adopted by the international Fairtrade Labelling Organisation (FLO). He is clearly frustrated at the slow pace at which ethical certification is moving. This, he says, keeps small-scale miners in South American and African communities desperately poor and with no control over the market in which they must trade.

“Around 80-85% of global gold extraction and revenue is produced by the smallest number of people, because the big international mining companies like Rio Tinto have vast economies of scale,” he explains. “But small-scale mining represents 80% of the world’s gold workforce. These are poor communities who will often focus on agriculture for six months of the year, and it’s these people who will benefit from formal standards, auditing and accreditation.”

Blood_in_the_stone_3But as the members of FLO sat down at the start of this year to discuss the standards ARM had proposed, a fly began buzzing loudly in the ointment. Should the standards be applicable only to small-scale miners, or also to industrial extractors?

One point of view is that in order to service the low value mass jewellery market, major jewellery retailers such as Walmart will source most of their gold from big mining companies. Why shouldn’t their customers be able to buy fairly trade products?

Certain FLO members wanted the big boys to be given the option. Most of the others didn’t. A stalemate ensued.

“My argument for only small-scale operations being allowed to be certified is that as an idea, Fairtrade was always founded on the principle of working with marginalised small producers,” says Valerio passionately. “Fairtrade is an economic response to a development requirement. And the premium was always designed to be used by these co-operative groups to improve their communities. If you introduce international, stockmarket listed companies, you’re asking a philosophical question about what Fairtrade is all about. And who does the premium go to then? The company’s shareholders? I don’t think so. The employees who can be laid off at a moment’s notice?”

It all came to a head at a FLO meeting on 22 May: ARM had earlier stated that if the Memorandum of Understanding was not signed by this date, they would set up an independent fair trade gold label. This would have made it virtually impossible for FLO members later to establish their own jewellery certification scheme, meaning they were out of that market for good.

After “vigorous discussion” among FLO’s members, the MOU has now been signed by FLO, the UK Fairtrade Foundation and ARM. ARM is already piloting its proposed Fairtrade standards in four mines in South America. Three African mines are about to start trying them out. It is hoped that officially certified Fairtrade gold will be available to consumers by the end of 2008, putting an end to a situation in which customers have no idea of what they’re buying.

That was gold. Now for diamonds. You might think that with the international, government-endorsed ‘Kimberley Process’ having been established in 2003, you’d be on safer ground when it came to buying a conflict-free diamond. Fortunately, you probably are, but the Kimberley Process is still not an absolute guarantee that ‘a girl’s best friend’ won’t have been smuggled out of a conflict area.

Blood_in_the_stone_4What you should get now when you buy a diamond is a stamp on your retailer’s invoice stating that it has been purchased from legitimate sources, and guaranteeing that the stone is conflict-free. But there is rarely any independent verification of this assurance. Campaigning organisation Global Witness says that until third party audits are embedded into the way jewellery retailers operate, that guarantee isn’t worth the paper it’s written on.

Having just brought out their second survey of UK jewellery retailers, Global Witness campaigner Annie Dunnebacke says she is disappointed at the lack of progress on transparency. Implementation of the industry-formulated minimum standards on diamonds is much higher than it was in the 2004 survey Global Witness carried out, she says, “but our position has always been that those minimum standards aren’t high enough.

“77% of UK respondents this time round didn’t have any type of auditing procedure in place – though Tiffany’s had both internal and independent external auditing – so yes, we are disappointed.”

Dunnebacke points out that few diamond retailers tell customers anything about their sourcing policies on their websites, and notes increasing instances of online jewellery retailers saying they sell conflictfree products while simply inventing a spurious logo to ‘endorse’ their claim.

“They’re trying to sell diamonds after all, not talk about conflict,” she says wryly, “but another way of looking at this is as an opportunity and as a marketing tool. Retailers could choose to be very open with consumers who are increasingly ethically concerned, but then that only works if they can back it up.

“A lot of the retailers I’ve spoken to say the problems are at the African end of the chain, with the rough diamonds. At the polished end, when there have been so many intermediaries, they don’t have much control and have to trust that the Kimberley Process is working. But, you know, they are sourcing their diamonds from somewhere, so they have a responsibility.”

There is currently no such thing as a fair trade diamond: the closest you’ll get are the diamonds used by Cred, which are mined, cut and polished and certified in Canada, where the mining company must offer the government a deposit returnable only when they have restored the mined land to its virgin state.

Gold and diamonds have complex supply chains that will be hard to influence and harder to regulate. But just as increasing numbers of people refuse to buy eggs from battery chickens, or products made with slave labour, Greg Valerio says he wants to get the consumer to the point where it is unacceptable to buy jewellery that isn’t independently verified and certified as coming from conflict-free zones. “It’ll take 15 years to do it I reckon,” he says. Best start saving up.