Jeweller - May 2022

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Artisanal gold miner, Burkina Faso. High altitude artisanal gemstone miner, Karakorum Range, Northern Pakistan. the large-scale mining companies are typically looking for higher levels of education and training than most of these miners could ever dream of possessing. So artisanal miners and their families can learn how to be vendors, butchers, accountants, and even microfinance providers. The list of occupations within larger artisanal mining communities is large. Artisanal mining operations are thriving and vibrant economies where almost all of the money earned by the workers stays within local communities and ‘incountry’ with some location-specific exceptions. For example, the ‘narcos’ using illegal mines to launder dirty money from drug sales into the US. There was a very public example of this out of Miami recently. Contrast this to the multinationals, which enter a country, pay a small amount of taxes, employ far fewer people and then repatriate most of their profits to their country of origin and the home countries of their shareholders. As you are starting to see, the concept of responsible sourcing is a minefield (pun fully intended!) and one which consumers will find almost impossible to navigate, let alone understand the complexity. I have worked in the field for more than 16 years and I have trouble understanding it, so what hope has the consumer? Fork in the road Back to you, as a jewellery retailer who wants to do the ‘right thing’ for your customers and your business: what should you do? The first decision is how do you find your responsibly sourced jewellery? Whether you source it directly, or whether you buy from local or overseas wholesalers, you then have to decide whether you will advertise and promote the products as being responsibly sourced. If not, why would you bother? Assuming your aim is to promote your own CSR values, then you will most likely promote your business – or at least some of the products – as responsibly sourced. This leads you to another fork in the road. Will you rely on your own values and definitions, or will you rely on a supplier having third party accreditation? The Australian Competition and Consumer Commission (ACCC) enforces the Australian Consumer Law of which section 18 provides that “a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”. Now, considering there is no single, unilateral definition for ‘responsible sourcing’ and it can mean different things to different people – I think it would be impossible for a consumer to be misled or deceived – however, I would encourage you to seek your own legal advice in that regard. Artisanal mining operations are thriving and vibrant economies where almost all of the money earned by the workers stays within local communities and ‘in-country’ with some location-specific exceptions. But let’s say you choose to pursue some assurance from an external, third party before making claims that your jewellery is responsibly sourced. You might look to a body such as the Jewellers Association of Australia (JAA) or the Responsible Jewellery Council (RJC). The JAA promotes itself as, “Advancing the Australian jewellery industry through representation, unity and consumer confidence” while the RJC tells us that it is “the world’s leading standard setting organisation for the jewellery and watch industry. We promote standards that underpin people’s trust in the worldwide jewellery and watch supply chain.” How does any of this help you as the jewellery buyer or decision-maker to decide whether your precious stones and jewellery are responsibly sourced? These two ‘official’ organisations should set your mind at ease, right? Well, a review of the JAA’s Industry Code of Conduct 2022 doesn’t engender great confidence. Three issues often talked about in the context of responsible sourcing are mentioned without much more, requiring Code Signatories (local retailers or suppliers) to: 1. Implement the procedure provided by the CIBJO and the World Diamond Council’s “System of Warranties” to prevent trade in conflict diamonds; 2. Implement procedures recommended by the JAA to prevent trade in conflict gemstones and precious metals; and, 3. Make every effort to deal only with companies that do not exploit children or use child labour, provide adequate occupational health and safety conditions and respect the environment. CIBJO and the World Diamond Council’s (WDC) ‘System of Warranties’ will be addressed below but I could find no procedures recommended by the JAA to prevent trade in conflict gemstones and precious metals. Moreover the provision on child labour is so ambiguous as to be meaningless. There is no mention as to what child labour means specifically. What ages are included? What occupations? What even constitutes OH&S or respecting the environment? All these details are left undefined. In other words, it appears to me that its mere virtue signaling, designed to make the JAA look as though people actually care or that organisations are honourable. It’s window dressing, form over substance. For anyone who might be unscrupulous or for someone that doesn’t care about the substance and importance behind these issues, it’s conceivable that JAA membership could be used to present a veneer of responsibility by promoting a company as 42 | May 2022
High altitude artisanal gemstone miner, Karakorum Range, Northern Pakistan. Artisanal coal scavenger, India. ‘responsible’ by being a signatory to the Industry Code of Conduct. In other words, the JAA’s Code is a waste of time for someone that genuinely cares about ‘doing good’. Responsible Jewellery Council This brings us to the RJC, which has been recently hammered in the international media over its association with Alrosa, the Russian diamond mining company which is one third owned by the Russian government, and which has been accused of helping finance Russia’s recent war on Ukraine. The RJC Code of Practices (COP) was last amended in 2019 to bring it into alignment with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (the “OECD DDG”). This updated system is much tighter than the previous system and applies to gold, silver, PGM, diamond and gemstone supply chains. However, no matter how tightly regulated a system may appear, it always seems possible to find gaping holes. Sadly, we usually find these imperfections after the fact, when a breach has already been committed. Gemfields and Montepuez This is where the entire concept of responsible sourcing gets murky. For example, in 2009, a local farmer discovered a massive ruby deposit in the north of the country, in Montepuez. The find became the world’s richest ruby discovery and currently accounts for about 40 per cent of global supply. Within months of the discovery, it’s reported that a local army General is alleged to have moved to expropriate the land and over which he subsequently acquired prospecting rights. The local farmer received nothing for his land or for the ruby discovery and was too poor to assert his legal rights. Within the space of two years, the General formed a joint venture company called Montepuez Ruby Mines (MRM), which was split 75:25 with a large-scale mining operator, Gemfields Group. Gemfields Group is incorporated in the tax haven of Guernsey. It is listed on the Johannesburg and London Stock Exchanges. In recent years activity at the MRM has seen increasing controversy, which has been reported widely by the world press. Regional Protection Police and members of Mozambique’s elite military unit were engaged together with a private security firm allegedly hired by Gemfields to provide security on the mine’s concessions. There have been allegations of murder, torture and beatings of local villagers and miners working on those concessions by nacatanas (machete gangs) and private security personnel associated with the General and Gemfields. Leigh Day, a British legal firm that began litigation against Gemfields in the UK on behalf of scores of plaintiffs. Its cases rarely, if ever, seem to get to trial, and that is what also transpired with the Gemfields case. Gemfields settled out of court in early 2019 for the piddling amount of $US7.8 million, in a no-fault settlement. I gather the company realises that the MRM controversies refuse to go away. Know your Gemfields 258 million US dollars, the revenue generated by Gemfields in 2021 133 million US dollars, Gemfields profit in 2021 230,500 carats of emeralds at Kagem mine in 2021 3.3 million carats of rubies mined at Montepuez mine in 2020 Source: Gemfields Annual Report, December 2021 Until further updates, watch that space! Third party certification This brings me back to the RJC. While it’s clear that many of the artisanal miners and villagers were illegally operating on MRM concessions, they have received much worse than a raw deal by none other than one of the world’s largest gemstone producers. While all this is on-going, these same Montepuez rubies are being marketed to global consumers as ‘responsibly sourced’ by Fabergé, a subsidiary company of Gemfields. Interestingly, Fabergé is a certified member of the RJC, however Gemfields is not, even though a major component of Fabergé jewellery is the gemstones and rubles mined by Gemfields. Its website states: “Today, Fabergé is a member of the Gemfields Group – a world leading supplier of responsibly-sourced gemstones”. Therefore, the obvious question that arises is: how can gemstones that do not seem to be sourced responsibly within the context of the RJC’s COP somehow then be responsibly sourced by its wholly owned subsidiary? It raises many more questions around the meaning of the word ‘responsible’ and leaves us wondering how product sourced by Faberge from the MRM concessions can be considered to meet the COP requirements for certification if the circumstances under which its parent company Gemfields came to own a share in the mine has so many ethical issues – and controversies - hanging over it? For example, is it not correct to question the manner in which the largest ruby discovery May 2022 | 43
Page 1: VOICE OF THE AUSTRALIAN JEWELLERY I
Page 4 and 5: Australia is enriched with amazing
Page 6 and 7: FINE JEWELLERY MANUFACTURERS availa
Page 8 and 9: Diamond Set Studs $1695 Earrings Go
Page 11 and 12: Editor’s Desk Veritas odit moras
Page 13 and 14: Quality Findings Discover the ultim
Page 15 and 16: News Positive indicators continue i
Page 18 and 19: News Istanbul Show draws record cro
Page 20 and 21: News Diamonds and jewellery to bene
Page 22 and 23: News Luxury jeweller reports strong
Page 24 and 25: 10 Years Ago Time Machine: May 2012
Page 26 and 27: WORLD RANKINGS OF JEWELLERY INDUSTR
Page 28 and 29: On The Market 1 2 3 4 5 MAY Product
Page 30: Post Pandemic Pearls | PEARL FEATUR
Page 33 and 34: Producing more than 550,000 pearls
Page 35 and 36: PEARL FEATURE | Post Pandemic Pearl
Page 37 and 38: Pearls Part II: South Sea & Tahitia
Page 39 and 40: FORMERY Mt Cook Lily Set Metal: Ste
Page 41: GEMSTONE FEATURE | Responsibly Sour
Page 45 and 46: Underground silver miner, Cerro Ric
Page 47 and 48: ewards in that form. However, retai
Page 49 and 50: BUSINESS Selling Fuel and friction:
Page 51 and 52: BUSINESS Management Entrepreneurshi
Page 54 and 55: OPINION Soapbox Strengthen customer
Page 56: Australia is enriched with amazing

Jeweller - May 2022

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