Fairtrade and Fairmined Gold

Introduction.

The new gold standards launched by FLO and ARM mark a major milestone in the fight for fair trade in the jewellery industry.

The partnership between Fairtrade Labeling Organisation (FLO) and The Alliance for Responsible Mining (ARM) was officially signed in January of this year. Both organizations have worked very diligently to create this ground-breaking partnership and it is hoped the results will create real developmental opportunities for the small-scale miners.

Why we need Fairtrade & Fairmined Gold.

Artisanal and small-scale mining (ASM) faces huge challenges in every area. Firstly small-scale miners are the forgotten majority in the mining sector. It is now estimated that over 100 million people globally are dependent on ASM for their livelihoods. ASM is a poverty driven activity with the average daily wage being an estimated $2. Politically national legislators have ignored ASM because it is usually a difficult sector to regulate and control, so advocacy for good legislation is very important to maximize the economic opportunity that ASM presents for southern governments. Also due to the economic vulnerability of miners they are open to exploitation on price by disreputable traders who take advantage of their geographical remoteness and lack of knowledge on pricing to buy cheap gold. Couple all this with the poverty in the sector, the irresponsible use of chemicals like mercury and cyanide in the extraction of the gold, lack of health and safety in ASM and gender inequality, it really is a sector that has been screaming out for fairtrade intervention for many years.

The Alliance for Responsible Mining (ARM) and Fairtrade Labeling Organisation (FLO) have created a strong and robust system that can deliver a solution to some of the difficulties that ASM faces. The priority in developing the standards was to make sure that the real challenges mentioned above could be met head on, whilst delivering a process that the mining groups could understand and work with.

The Benefits.

Key areas of focus are traceability of supply, social and environmental improvements, labour standards that include the high profile issue of child labour as well as minimum prices and trading standards from mine to retail so that we could remove the economic exploitation from the supply chain. Also the democratic structure of the small-scale mining group is very important as it is these groups that will handle the premium payments once we go live within 12 months.

For the detail of what this means for miners I would encourage everyone to read the Fairtrade and Fairmined gold standard,

In headline terms in will mean the following improvements for miners.

• Health & safety requirements
• Gender equality standards
• Organisational transparency and democracy.
• Labour standards
• Environmental standards
• Minimum price of 95% of LBMA daily fix
• Premium paid to mining groups of 10% fairtrade & fairmined and 15% for fairtrade fairmined ecological.
• Transparent supply chains
• Independent third party certification
• Producer support for monitoring progress of groups.

Each of these headings are broken down into more detail and then into two sections, minimum requirements that must be complied with to achieve certification and progressive requirements so that each group is focused on making continual improvements over a period of time.

It is expected that this whole evolution in the gold trade will have huge impacts on the ground for the mining communities as the premium payments will be invested into their own community development projects that impact beyond their immediate coops or family groups. For the consumer of gold jewellery, it will mean an increase in consumer choice, a new market sector that is fairtrade certified and a brand new industry opportunity to continue to demonstrate its desire to be as ethical as possible.

Who it involves.

The benefits of Fairtrade Fairmined gold will positively affect everyone for the good.

In short retail brands and jewellers are license holders and will be able to use the marketing collateral of the Fairtrade & Fairmined gold label on their point of sale.

Traders, refiners, fabricators and manufacturers need to register with FLO-Cert to ensure that the trading standards are being adhered to.

Small-scale miners are the certified producers who mine the gold and associated precious metals.

This chain of custody approach to jewellery is very different from how the industry has worked in the past, however the mine to retail story for jewellers gives a very real marketing opportunity that has never been available in the gold sector before. A truly unique opportunity for everyone.

In conclusion.

I am of the conviction that this is a very significant development for the movement as a whole. For the first time fairtrade has migrated away from agricultural products and is now operating in the exclusively luxury market of gold and fine jewellery. This will present a new set of challenges to us in the movement, but these challenges are the bedrock of what makes fairtrade such a dynamic and entrepreneurial movement. Gold is the oldest market in the world and it demonstrates how fairtrade has moved from being caricatured as a niche movement and is now swimming in the mainstream of global economics and all areas of commerce. Adam Smith would be proud of us.

From a personal point of view this is the culmination of a dream that I have had since 1996 that led me to becoming an activist within the sector following a visit to an exploitative mine in India and setting up CRED Jewellery. We needed to prove the fair trade business model would work. In 2005 I became, alongside a small group of others, a founding board member of ARM. That same year I met Harriet Lamb from Fairtrade Foundation who invited me to present the idea of fairtrade gold to the FLO Board in Bonn. I was also involved with the creation of the fairtrade fairmined gold standard as a committee member and I am now working with Fairtrade Foundation in London to assist with the broad industry adoption and launch of certified gold and to help the market communications team in their strategy. In short I’ve been there since the beginning, but there is still much to do.

For us in the Fair Trade movement this is just the starting point, we have a long way to go yet, but we have every intention of staying the course for the long term.

For more information on how to become a license holder please contact me at  greg@gregvalerio.com or  Victoria Waugh gold@fairtrade.org.uk at Fairtrade Foundation on +44 (0)207 440 7674

For press interviews on Fairtrade Fairmined gold please email Martine Parry martine.parry@fairtrade.org.uk