Category Archives: Fair Jewellery Action

Conflict Gold to Peace Gold – part 3


In my early two posts I explored the comedy of arriving in the DRC and the real on the ground challenges the small miners face in making a living out of gold mining. In my final instalment I want to focus on the Organisation for Economic Cooperation and Developments (OECD) due diligences for removing conflict gold from the global supply chain. A process being held up as a solution to the problem.

Crushing and mercury processing of gold in a small roadside hut.

Crushing and mercury processing of gold in a small roadside hut.

In this region of Ituri I am talking directly to small-scale gold miners who are ex-combatants, who want to use gold mining as a means of building peace, not punishment. Their idea cannot be any worse than the top-down proscriptive process the OECD has recently run in the region regarding conflict minerals. From the very beginning of the OECD process I could never understand how their rules for governing the export of designated conflict minerals (Tin, Tantalum, Tungsten and Gold), that they refer to as ‘due diligences in supply chain management’ was going to lead to a reduction in the use of gold as a conflict mineral. Ostensibly because their process does not address the root causes of what, according to CRC is an ethnic conflict in which gold can easily be used to fund the violence. As if to prove this point Henri tells me that the previous evening he had received a call from a local militia leader in the bush who had ten children with two guns that he wanted to demobilise and have rehabilitated back to their families. Why this sudden act of clemency had taken place I never learned, but this is typical of the kind of work that Henri and CRC undertake all the time. Henri explains that the children will be placed with specially trained families for the first few months, while their families are contacted and prepared for their return to village life. Their weapons are then decommissioned at the UN HQ in Bunia. To take the guns to the FARDC (Congolese Army) would mean they would just be recycled back into the conflict as many soldiers sell the guns to get extra cash. Henri is very clear, children end up in the militia because they and their families are poor. Therefore they make easy targets for militia leaders looking for new recruits for a simple USD payment to the family.

None of the miners have ever heard of the OECD, or transparency or supply chain management. Never mind have the ability to read a complex UN styled report written by University graduates. All they know is that they currently sell their gold to traders and its final destination is Bunia.

The OECD conflict gold process is the politically correct tragedy that is unfolding before us. If through our sense of moral outrage at the appalling conflict that has to date claimed 5.5 million lives we remove the population’s ability to earn a living in an honest fashion, then these same people are forced by necessity to militia activity or illegal smuggling to earn a daily crust. As another mining leader in North Kivu once wrote to say in response to the Enough Projects call to boycott eastern DRC minerals ‘We will die by the bullet or die of starvation’. The OECD conflict minerals process deals with the fruit, not the root of the problem. It is the band aid on the festering wound and sold to the market a cure. The root of the problem is poverty and it has created a set of recommended procedures that only corporate mining companies can afford to follow, rather than address the majority employed by the gold trade, namely the small-scale miners and their poor communities.

It is little wonder then that the vast mineral wealth of the DRC will not benefit the DRC people through this process. A UN Security Council report dated 21/6/12 highlighted that since the introduction of the measures by the OECD to stem the flow of conflict metals being smuggled into the global supply chain, the report states ‘In the eastern DRC official export figures seem to have been falling rather than increasing’. Clearly, however well intentioned the OECD Due Diligences on conflict minerals may be, at this stage smuggling is on the increase which in turn will only lead to more insecurity and violence. It is not the idea of conflict free gold that is the problem. Everyone wants that’s, none more so than the exploited miners. It is the way that corporately influenced OECD top-down guidelines have framed the solution that seems to be adding to the already highly complex problem rather than making it better. The same UN report talks about the estimated 3 tonnes of gold sold to the international market in 2010 illicitly. Uganda being the principle destination for this gold, that ends up in the Dubai refineries and eventually onto India and China. China is the world’s biggest jewellery manufacturer with several of the UK’s leading high street jewellery brands manufacturing their collections there. There is no doubt in my mind given the lack of enforceable traceability in the gold supply chain that smuggled gold that currently funds conflicts is making its way onto the high streets of the UK, EU and USA in the form of gold jewellery.

It remains to be seen if the OECD due diligences on conflict minerals will work, but what is clear at the moment is they have given the World Gold Council, London Bullion Market Association and the Responsible Jewellery Council’s corporate members another CSR badge to add to their collection.

Members of the newly formed Initiative of Artisanal small-scale miners for peace and sustainable development

Members of the newly formed Initiative of Artisanal small-scale miners for peace and sustainable development

The sufferings of Job that have been meted out on the people and land of the DRC remains a festering wound on the conscious of humanity. But as Job rightly said, ‘The light is very near the darkness’, and it is this light of hope that burns brightly in the aspirations of the people I have met on my trip that gives me such huge encouragement. People like Henri of CRC and the Hima and Lendu ex-combatants who agreed to form a new Association of Responsible Small scale miners for peace and justice, that demonstrates despite the huge obstacles they will face, they are not burdened down with cynicism about their future, but they are like the countless nameless and faceless majority in the DRC who want nothing more than peace and non-violence to triumph in their country. But this is the DRC and the metaphorical mountain that this fledgling Association of small miners must climb will be bigger than the literal mountain that their large–scale mining cousins blow up and crush to satisfy the greed of the so called moral stock markets and bank vaults.I for one will follow with great interest as they attempt to build their future using gold as the means to build peace not conflict.

Greg Valerio muses on Gold and Diamonds at International Jewellery London 2012


As jewellers we don’t want to be caught wearing fur coats with knickers.

Regarding current trends in the gold industry, there is a general move towards traceability in the supply chain. This has been precipitated by the Dodd Frank bill passed in the USA requiring certain raw materials including gold, to be fully declared conflict free through a traceability declaration on the materials origin of denomination. This has created the establishment of the OECD due diligence’s on conflict minerals. Following this, the London Bullion Market Association (LBMA), World Gold Council (WGC), and Responsible Jewellery Council (RJC) have all in recent months issued protocols to their members on how to comply with the OECD due diligence’s for conflict free supply chains.

What is interesting about this is that these protocols all cover the same type of companies. RJC, WGC and LBMA companies are all big corporations and many of them hold membership with more than one of the above bodies such as Metalor, Rio Tinto, Anglo Gold Ashanti for example. All these groups in real terms employ very few people on the ground and the way the OECD has constructed the due diligence framework it has been shaped to protect the financial integrity of the big companies, not the welfare of the communities on the ground. This it would appear is a reflection of the consultation process that was held. Without a corporate CSR budget or supporters money via campaigning NGO’s, being heard by the law makers was virtually impossible. It appears that the OECD principle outcome will be the protecting of the vested interest of corporate companies.

Communities in central Africa bear the real brunt of any violence that may emerge. These communities should be the real beneficiaries of the mineral wealth in their land. Instead due to their poverty they are exploited by big companies, who promise much by way of up front CSR promises and local employment, yet in case after case do not deliver. If they are not being exploited by corporate mining companies then they are subject to militia, violence and the resource curse. The real reputational risk we face as jewellers from conflict material is not being addressed by OECD as those that are vulnerable to exploitation are only going to be unduly penalised by OECD, which will lead to more smuggling and illegal activity than before. People need to eat, regardless of what the UN says. As a Congolese miner friend of mine once said in regards to the Dodd Frank legislation, ‘We can die by the bullet or die by the starvation’.

It would now appear that platinum can be added to the list of controversial metals with the growing violence surrounding the Anglo American owned Lonmin mine in South Africa.

Regarding diamonds, the landscape is as bias to the rich and powerful as in gold, with the added complexity of the existing legal framework called The Kimberley Process. Diamonds are a human rights issue and are deeply political. The current disconnect between the politics, human rights issues and the consumer idea that diamonds are a pure product is perhaps one of the most disingenuous elements in the entire jewellery suppl chain. As I alluded too in an earlier blog post, The Kimberley Process (KPCS) is an inter governmental customs procedure to monitor the flow of rough diamonds from one country to another. It was not set up to be a certification mark on diamonds that could be used with customers. However, it is sold by the industry  as a consumer assurance system to bolster confidence in the diamond value chain. The crisis precipitated by the KPCS allowing exports of diamonds from Marange has highlighted the deep faulty lines emerging on the diamond supply chain. Fault lines around its definitions to include human rights in its core considerations when determining if a diamond is a blood diamond. Also the deep levels of mistrust between the countries represented in the KPCS. Western countries want human rights in, China, India, and the African Diamond Producers do not.  It would seem that from the following quote from Gillian Milovanovic the current Chair of the KPCS that human rights will not make it into the definitions

Progress on human rights/human security, financial transparency and development related matters should be part of “best practices” and other positive efforts to foster concrete results through mutual assistance amoug KP participants and observers but would not form bases for certification.

(taken from a letter to KPCS dated 7th August 2012)

And worse still she throws the responsibility of the diamond supply onto the retail jeweller.

If consumers want to know more about the diamonds they purchase – for example, whether the diamonds were associated with violence or human rights abuses, or have been used to fund corruption or suppression of democracy – they need to ask tough questions of retailers.

(taken from discussion between KP Chair and Greg Valerio 16 August 2012)

Because there is no traceability in the diamond supply chain, from mine to retail these words should cause the backbone of the industry to shudder. The KPCS is not going to reform and not going to protect us from dodgy stones entering the supply chain. A classic illustration of this is as follows. Stones are mined by embargoed Zimbabwe companies in Marange, they are shipped to China as conflict free, they are cut and polished and set into jewellery, with untraceable precious metals, and then end up on the high street in the UK and USA as precious aspirational products. Moral people uncorrupted by the politics will see this as a joke. Why should jewellers trust the KPCS and the people who govern such a ridiculous system.

In conclusion we await the outcomes of the November plenary meeting of the KPCS to see what will happen in the industry. if as we currently expect it fails to deliver a reform agenda (please be assured if it does I will eat humble pie and offer my genuine congratulations) we may well end up with a two tier KPCS, one for the Chinese and Indians and another with higher standards of due diligence for the western consumer nations.

What is clear though is we need pressure from consumers to move the industry to greater levels of public accountability over blood diamonds.

Ethical Jewellery Materials


A short post to say that the ethical jewellery educational materials entitled The Red & Green Book written by Cally Oldershaw and myself are now available in PDF downloads from my site and the Fair Jewellery Action site.

The aim of this material is to kick-start those who want to begin the exploration of what it means to be an ethical jeweller. With a basic introduction to the mining sector, these modules will explore the issues, the supply chains and recommend actions that jewellers can take to improve their ethical performance.

The Red & Green Book will cover Mining, Gold, Diamonds and Gemstones as well as a glossary on industry initiatives that are seeking to address the ethical and Fair Trade uplift of our industry.

They are free to download and have been sponsored by National Association of Goldsmiths, Company of Master Jewellers, Birmingham Assay Office and CAFOD (Catholic Overseas Development Agency).

To view the download page please click here.