Ninth Principle in the Manufacturing Standards Discussion: Closure
Introduction:
This is an ongoing documentation of a series of dialogs between members of our Manufacturing Group, charged with the task of developing exceptional standards for jewelry manufacturing. Follow this link for full review of past discussions.
In this principle, we discuss the issue of plant closure. Below, you can read what was considered. In the end we slightly modified the final standard.
~ Marc Choyt, Publisher, Fairjewelry.org
Marc Choyt wrote:
Our next principle, the 9th, is closure. Do any of you have any comments or suggestions for improvement on what I have drafted below?
Thanks for your ongoing consideration.
9th Principle: Closure
Principle:
Companies will design and plan operations so that adequate resources are allocated to meet legal, social, ethical and environmental closure requirements. These closure requirements will then be carried out on closure of the facility.
Standards:
Minimum Requirements
9.1: In the event of plant closure, the company will adequately safeguard the local environment. Employees shall be given at least three months notice.
Vivien Johnston Wrote:
I have no further comment on this standard and am happy to proceed to the next.
Greg Valerio wrote:
Agreed
Flavia Aarden Kilger wrote:
Are there explicit closure requirements? For the workers? Plant closures; are the minimum requirements for the environment set in stone? Each country has different environmental laws and requirements, the same goes for how workers are treated.
Do we leave it to local laws?
Marc Choyt wrote:
Flavia, thanks for your comment.
In the principle, legal and environmental requirements are mentioned and they would be determined by the local laws. So I would say, yes, leave it to local laws. Do you have a specific suggestion that would allow us to strengthen the principle or standard? Or do you feel that as it is written, our bases are basically covered?
Flavia Aarden Kilger wrote:
Not sure I like the local laws! Many South American laws are not that great when it comes to dumping mercury or other toxic chemicals into the rivers and China doesn’t have very good environmental laws either…
I don’t mean to be difficult, but I’m not sure the local laws are adequate. I’d like to hear your and others opinions on this.
Marc Choyt wrote:
Flavia, the first sentence of the minimum standard reads: In the event of plant closure, the company will adequately safeguard the local environment.
Companies that would be part of our initiative would already have a high level of integrity that they would be maintaining throughout.
I can see your point that local laws would not be enough, but there is also a matter of trust and integrity involved here. We can start getting specific if you want, mentioning that toxic liquid etc should be cleaned up. But if the company is in compliance throughout, then there should not be anything extraordinary that needs to be done. We’re not talking about mining here, but jewelry making. Much of the material remaining in a plant has value and would be sold off.
I know in my company, we keep everything that comes off the floor. We dry our liquids and do not put anything down the sink because there is gold and silver in our liquid. We evaporate it and send it off to a refiner and get a check. We do not have a casting operation, where the issues get a lot more complex. But a fair made jewelry company would have sensible methods of dealing with these issues in progress, and particularly if there is a period before a shut down where plans can be made.
For me, safeguarding the environment covers what is essential. But there seems to be some further concern. Can you or anyone else in our group suggest something more specific that makes sense and would strengthen our standard?
Thanks, Flavia, for slowing us down and allowing us to consider this issue more thoroughly before moving on.
Flavia Aarden Kilger wrote:
I have gone through a few of the standards already set. I agree you with Marc when you write, that if a company is already willingly complying to fair trade and these standards, there should be more trust and integrity.
I trust that this standard covers that what is essential.
Marc Choyt wrote:
Given what Flavia has stated, can we say that this standard is sufficient? It seems that there were no other people immediately concerned. I propose that we move on to the next standard next week.
Patrick Schein wrote:
Sorry to come up late to the discussion but I was away for a while.
The only way to be sure that the closure costs are contemplated is to create a fund or to give collateral
This standard is very important in mining as rehab costs are huge. EU just passed a law obliging companies to give BANK collateral for the closure costs.
In our case two cases can occur:
The company closes the plant and does not have another fabrication activity: the standard is useless because the company is not anymore concerned with “fair made” label. Only a collateral can assure compliance in that case
The company has other plant or as no interest to loose the fairmade label, then it will comply
I do not think that asking a fund or a collateral is realistic at this stage so let’s keep it as you suggested.
On the environmental part I would this part in red
In the event of plant closure, the company will adequately safeguard the local environment and conduct appropriate rehabilitation if necessary in order to comply with national laws
Marc Choyt wrote:
Patrick, thank you for your input. Taking into account your proposal for change, the principle and standard would now read:
Principle (unchanged): Companies will design and plan operations so that adequate resources are allocated to meet legal, social, ethical and environmental closure requirements. These closure requirements will then be carried out on closure of the facility.
Minimum Standard:
In the event of plant closure, the company will adequately safeguard the local environment and conduct appropriate rehabilitation if necessary in order to comply with national laws. Employees shall be given at least three months notice.
Patrick’s wording would replace the original language, which was:
“In the event of plant closure, the company will adequately safeguard the local environment. Employees shall be given at least three months notice.”
I believe that Patrick’s suggestion is stronger than what we had before. Do we have agreement on this?
Flavia Aarden Kilger wrote:
I agree with the wording of this principle.
Thankx Patrick & Marc.
Ben Morice wrote:
Greetings from Bali
I am in agreement with you here, I think the issue is not making the mess in the first place! (Platers are the most prominent polluters in jewellery manufacturing here).
When companies are closing plants its a bit like closing the gate after the horse has bolted, Closure usually means not being viable and owners are generally more reluctant to spend money on a losing endeavor, during this part of a business life cycle even the best intentioned owners under financial duress may back track on principles.
Labour laws and practices at closure are much easier to measure and control, but environmental issues are not. I think we need some consideration on this.
Vivien Johnston wrote:
Agreed
