April 30th, 2010
The Fair Trade Labelling Organizations International (FLO) and the Alliance for Responsible Mining (ARM) developed the first-ever third-party independent certification for gold to bring about social, environmental and economic development in artisanal and small-scale mining communities. This partnership enables both organizations to meet shared strategic objectives, creating a system designed to ensure that artisanal and small-scale miners can earn better prices for their gold. The partnership will be indicated on the products via a co-labeling hallmark that utilizes both the “FAIRTRADE” and “FAIRMINED” hallmarks.
FLO estimated that more than 100 million people depend directly or indirectly on artisanal and small-scale mining, but they are trapped in unfair supply chains, where they struggle to obtain a fair price for the gold they mine.
Rob Cameron, the chief executive of FLO, said, “The Fairtrade and Fairmined standards will help alleviate poverty by offering miners a genuine alternative to exploitation and unbalanced markets. The new standards are an important development tool that will help reduce the environmental impact of mining and make gold more traceable. This significant partnership is a chance to make a real difference to miners, their families and their communities.”
These new gold standards enable businesses to use the FAIRTRADE and FAIRMINED marks on certified gold products, such as jewelry, commemorative coins, ingots, medals, trophies and religious artifacts. FLO reported that artisanal and small-scale miners produce 15 percent of global gold supplies each year, but comprise 90 percent of the labor used in gold extraction. Through this new certification, however, miners will have the opportunity to improve their economic, social, labor and environmental conditions.
The fair trade minimum price for the pure gold content in unrefined gold is set at 95 percent at the Free on Board (FOB) export point. Miners will receive a fair trade social premium, which is calculated as 10 percent of the applicable LBMA fixing. For ecological gold — gold that has been extracted sans chemicals, based on strict ecological restoration requirements — an additional ecological premium must be paid in the amount of 5 percent of the applicable LBMA fixing.
Miners can empower themselves by organizing and forming groups in order to better bargain with traders and gain greater control over the jewelry supply chain. Fair trade and fair mined certification will provide miners the chance to ask for pre-financing from prospective buyers, as well as a minimum price for their product, creating more competition in local markets and thereby, improving trade relations to the benefit of the miners.
Certified miners must employ safe and responsible practices to manage the toxic chemicals involved in gold recovery, such as mercury and cyanide. Chemicals have to be reduced to a minimum and, where possible, eliminated over the years. Miners earn an additional ecological premium when they recover gold through gravity only.
Harriet Lamb, the executive director of the Fair Trade Foundation, said, “Companies and consumers will embrace this golden opportunity to make a real difference to miners’ lives. The launch of Fair Trade and Fair Mined standards for gold provides a lifeline for communities who find themselves at the mercy of unbalanced markets, when agriculture and other livelihoods are not viable. Many face exploitation from middle men who pay below market prices and cheat them on weight and purity of the gold content.
“Mining community members lack basic sanitation, clean and safe drinking water, poor housing, little or no access to education and healthcare and are financially unstable,” Lamb continued. “The Fairtrade and Fairmined standards are an important development tool and will complement other development interventions. Our research shows that customers believe buying jewelry for a special occasion holds greater value and significance if it carried the Fairtrade and Fairmined hallmark. People said that the label reassures both the giver and receiver that the miners are getting a better deal.”
This standard was piloted by ARM in conjunction with nine legally established mining organizations in Bolivia, Colombia, Ecuador and Peru. Applications are now also open to all small-scale and artisanal gold mining organizations in Latin America, so more producer organizations from Latin America are expected to join the system in 2011 and beyond. From 2010 forward, ARM will establish a network of pilot projects in Africa and later, Asia.
Manuel Reinoso Rivas, the president of the Association of Artisanal Miner Producers of Central and Southern Peru and an ARM board member, said that Fair Trade and Fair Mined certification “motivates all artisanal and small-scale miners, men and women alike, to press for better working conditions and above all improved health and safety.”
“We need to learn how to use clean, nonpolluting technologies that will not only preserve our environment but also help us recover increased quantities of metals,” Rivas noted. “We are determined to cut the number of accidents and reduce the impact of occupational disease and help our workplaces and our communities to provide our fellow miners, our families, our wives and our children with a secure quality of life and an environment free from major risks and able to coexist with ours and others productive activities. In fulfilling this responsibility, we are contributing to a better quality of life and setting an example to our own children and to future generations.”
Fair trade and fair mined gold will be initially launched in the U.K. and then rolled out to other countries with a long-term vision of capturing 5 percent of the gold jewelry market in the next 15 years, or a total of 15 tons of the fair trade and fair mined gold produced annually.
U.K.-based Ingle & Rhode welcomed the arrival of the certification.
“Everybody knows about fair trade food because of its consistent availability in supermarkets and cafes, but not many know that the fair trade label will extend to gold mining as well,” said Tim Ingle of Ingle & Rhode. “This will give many miners the chance to empower themselves and get fairer deals. It will afford a measure of fairness and traceability. The customer will also benefit, too, knowing that ethical jewelry displaying the Fairtrade logo has been mined fairly and that their money isn’t funding a war on foreign soil.”
Ingle & Rhode noted that it only works with material suppliers who pay fair wages, maintain good health and safety standards and do not use child labor.