Fairtrade gold Gold News & Press Small-Scale Mining

Purity of Fairtrade Gold at Risk

I am writing to all the subscribers of my blog to ask them to download and sign (see bottom of blog post for link) an open letter from Ethical Metalsmiths and Fair Jewellery Action in support of the purity of the Fairtrade Fairmined chain of custody on the gold from certified mines.

Currently the Alliance for Responsible Mining and Responsible Jewellery Council are moving towards a partnership that MAY lead to the mass-balancing of certified Fairtrade Gold to RJC members (refiners, jewellery brands etc).

Mass balancing is endemic in the gold industry, a process where by you can mix different sources of gold so that the origin of that gold becomes lost. Currently this practice is not permitted within the spirit of the Fairtrade Fairmined standard.

Ameriko is one of the Oro Verde Fairtrade Fairmined certified miners

The strength of the Fairtrade Fairmined Gold standard has been its purity from source, the excellent standards created by ARM and FLO and minimum price and premium paid to the miners to secure community development. In just one year SOTRAMI, one of the Peruvian certified mines received in excess of £70000 in FT premiums that has gone to education and the creation of a community co-operative store.  The system is working, albeit still small, but growing. For example we are currently putting the finishing touches to a UK and Ireland Fairtrade Fairmined gold campaign that over its three year duration is targeting one ton of FT Gold into the UK by 2015. Fair Jewelry Action and Ethical Metalsmiths are actively working on introducing the certified gold to the USA, as well as Sweden and Holland being the latest countries to adopt the product.

The risk to the system lies squarely in the lack of clarity and transparency around the deal that ARM and RJC are about to do on (the potential) mass balancing of gold from certified sources. As things stand at the moment (and they could change) RJC members could buy from a certified source, call it responsible (which it would be) mass balance it with gold from other large-scale or recycled sources (to increase volumes) and NOT pay the Fairtrade premium. They big companies would benefit from everyone’s hard work and not reward the miners.

Let us be clear and honest. Not all the gold currently being mined from certified sources is being sold into the Fairtrade Fairmined system. This is true. What is also true is that all the certified sources are selling their gold into the normal supply chain regardless. So no miner is stock piling their gold, it is all being sold. The real issue here is not sales of gold, it is that the volume of Fairtrade sales needs to climb and that is a market issue not a gold sales issue.

As the open letter states very clearly;

We actively encourage RJC members to become a part of the FT/FM certification system by purchasing FT/FM gold, paying the FT Premium, and thereby making a positive contribution to future development and security of the certified communities.

If RJC members do this, all is good, volumes increase, miners are rewarded for their diligence in becoming certified and consumers will benefit from being able to buy Fairtrade gold in their jewellery.

If this does not happen and mass balancing takes place through RJC members, the miners will not benefit from premiums, (they will just have different customers), the traders will make more money as they benefit from the volume game, the consumer will be denied choice in the gold jewellery purchase and the possibility of a heavy weight corporate company buying up all the production and denying others the possibility of paying the miners a premium and having access to certified production, becomes a very real possibility.

Therefore I am asking every jeweller, jewellery company, Fairtrade Fairmined license holder, industry activist, NGO and concerned consumer, (if you have not done so already) to sign the Open Letter by downloading it here and then emailing Marc Choyt directly at reflective@cybermesa.com and he will add your name to the growing list (54 jewellers in the first 4 hours) of jewellers from around the world who have a different vision for the future of our industry.

ARM-RJC_Community_Letter_FINAL (Download here).

I want to thank you for your support in this. Rome was not built in a day, but to quote Ervin Renteria a small-scale miners from Colombia and one of the co-founders of ARM, alongside myself, ‘We will keep walking’.

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    David Crump
    July 2, 2012 at 8:06 am

    Thank you for highlighting this issue.
    Is there a public source for anyone wanting to read more about the plans of ARM and the RJC?
    As you say, it is critical that the integrity of the current system is preserved. Whilst we are all impatient for progress to be made as quickly as possible, it should not be at the expense of compromising our existing standards. Over the past year and a half Vipa has been fortunate enough to work with nearly half of the 40 or so licencees, and the dedication and commitment they all show has been very evident. Whilst volumes remain modest in absolute terms, we have seen a steady increase in the size and frequency of shipments received from Oro Verde, and are just about to order our first batch of certified platinum. We have also noticed a steady increase in the number potential licencees contacting us to find out more about fairtrade fairmined and fairtrade fairmined ECO gold. We need to have the patience to keep building on this base, and to achieve growth the right way.

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      Greg Valerio
      July 3, 2012 at 6:17 pm

      Hi David, the truth is ARM and RJC have not published anything apart form a few corporate statements and a press release with no detail that amounts to anything. This way of communicating is constricted to a corporate culture and the command and control convergent thinking of a one size fits all model. The rationale (albeit unpublished) behind it is that the miners need a market, but the truth is the miners have a market for non-fairtrade sales, they are all selling. What we lack is a Fairtrade market, and on that point we are all agreed. If RJC members buy under Fairtrade terms and pay the premium all is well, if they do not, they deserve to be exposed as doing so and let the public decide what to make of those companies and brands. Lets see what happens. No one will better pleased than me if this move brings more FT customers.

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    July 24, 2015 at 5:21 am

    thanku writer for publishing such a great article.
    i wanted to raise another topic here
    we would love if the writer could enliten us on gemstone mines conditions of africa.
    for some reason i believe they need more attention now
    waiting for another informative article

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