Report From The October 2013 Fair Trade Gold Round Table London Meetings
In early October, I attended roundtable meetings in London that brought together miners, and a select group of Fairtrade jewelers, manufacturers and trade organizations from the EU, USA and Switzerland. We were there to review changes designed to maximize the commercial opportunities for Fairtrade gold and streamline the Fairtrade gold program.
Harriet Lamb, CEO of Fairtrade International, placed the meeting in context with her welcoming remarks. Only a few weeks earlier she had visited small-scale miners in Tanzania and had never witnessed such horrific conditions in any producer community she has ever worked with. Her vision of the child miners, mercury contamination, the squalor and exploitation fueled her intensity and unwavering commitment to ensuring that Fairtrade gold becomes an international success.
At the meeting representatives flown in by Fairtrade from Macdesa and Sotrami from Peru, Oro Verde from Colombia and Cotapata from Bolivia gave accounts of how they began their projects. Each of their stories were a stark reminder as to why we were all there—why this work is so important.
“We were slaves to mining, I was six years old when 80% of my family died because of mining, ” explained Aristarco Mosquera a community leader who was representing the Oro Verde miners. The cooperative is under tremendous pressure from illegal encroachment of small-scale miners, pressure from multinationals who want to mine the rain forest, and even community assassinations for those who speak out against the interests.
“In Colombia through battles we were able to gain landholder rights. We had to prove to the Colombian government that our practices were sustainable, to prove that our technology was environmentally sound. After emancipation from slavery, we have had to administrate the land. Given the history there are people that threaten the environmental issues — the multinationals are not interested in the lives of the people. have put together activities that guarantee sustainability. We can only sustain our dream with our allies– we want awareness on the part of the consumer- that is why we want your support– we need technology to support our system.”
Everyone acknowledges at this point that the historic Fairtrade Fairmined gold project has not been as successful as we all initially hoped it would be. Less than ten percent of the Fairtrade Fairmined gold was sold since the launch in the first two years.
“Were the miners discontent or wavering in their commitment to the Fairtrade process?” I asked. After all, they had been subject to developing and debugging a principle and standard document that even now could be difficult to implement.
In fact, the miners, each of the representatives from their communities expressed unwavering in their commitment to Fairtrade, and were proud of their achievements to uplift their communities. There was solidarity among them. They saw their efforts as examples of what is possible to other small-scale mining communities around the world.
Transparency
During the meeting there was total transparency around difficult issues. Bureaucracy, paper work, entry level cost, premiums, barriers to entry, the auditing system, were all up for discussion and debate. Jewelers were highly concerned about the additional costs. Previously, the Fairtrade Fairmined premium of 10% was tied to spot when gold was at about $800. As gold rose in price, the premium rose with the cost of goods, making it more difficult for jewelers to sell the gold. Miners naturally wanted as much premium as possible.
For Fairtrade gold to work, everyone at the table has to get enough organizational support and margin to be commercially viable—a balance that requires time and market feedback. No one can receive too much or too little and market heavily dedicates what is possible. The new Fairtrade premium of $2000 per kilo was accepted by everyone as being a cost that all would gain an advantage from.
Harriett put this issue in context. “All successful Fairtrade products had faced tremendous struggles early on,” she explained. Mining was a particularly challenging new initiative. It requires close attention to the market and a common cooperative vision among everyone in the system to achieve success.
The new commercial system, with the new Fairtrade premium, will add between $15 and $30 on the cost of goods for a wedding ring.
Another critical changes is that there will no longer be cost barrier to enter the system for small jewelers. It will be free. This scheme called the Goldsmiths Registration scheme will be launched early in 2014.
I left convinced that the new framework unrolled at this meeting was designed to maximize the chance for success of Fairtrade gold, catalyzing the commercial opportunity for passionate ethical jewelers, and the support the small scale miners and their communities so clearly said they needed.
At the meeting we learnt that a kilo of gold brought to market by small-scale miners will generate and average of 45 jobs. The same kilo through large-scale mining will only generate .2 jobs. Millions of small-scale miners depend upon the illegal or informal mining of gold, a dollar a day economy which is the greatest contributor of global mercury contamination.
The value of gold to the global economy is estimated by The London Bullion Market Association (LBMA) to be worth $290 billion USD. Approximately 65% of the gold output every year generated by World Gold Council which generates approx. 600,000 jobs globally in a system designed to export as much wealth as possible from local economies to international shareholders.
The View From North America
The scale of economic injustice that the current gold supply chain underpins is an atrocity against producer communities and the ecosystem. Clearly it needs to change. The biggest driver of this injustice and therefore the greatest opportunity rest in the US jewelry market.
In the UK, major trade operations such as the British Jewellers Association, National Association of Goldsmiths and Company of Master Jewellers have lined up behind Fairtrade gold, which is poised to become a mainstream choice over the next few years. Switzerland, another country where the Fair trade brand and the ethical jewelry movement is strong, are next in line for a robust Fairtrade gold roll out in 2014.
In the US, we are perhaps two or more years away from where the UK is right now. We lack support and leadership from large trade associations. The leadership is coming from artisan jewelers who are able to see the connection between the sourcing, craftsmanship and symbolism of their product. I was the only American jeweler at the meeting, joined by Christina Miller, ED of Ethical Metalsmiths, who is leading sourcing efforts of small ethical jewelers pioneering the movement in North America.
Though it is possible to purchase Fairtrade gold from Cookson’s Precious metals, American jewelers need a supply house in country. Conversations are currently underway that we are all hoping will deliver a systemic solution to the entire US market. In the meantime, it is possible to purchase fairtrade gold directly from England. In fact, I have been successfully selling fairtrade gold wedding rings for almost two years. Recently the price went down, based upon the new premium system.
Currently Fairtrade Gold licensing is available in the UK, Japan, South Korea, Hong Kong, Australia, Belgium, Netherlands, Denmark and Sweden. This excellent commercial platform and proven auditing system based upon decades of proven experience. I expect to become a license holder by the early next year, if not sooner. Clearly, it is time for jewelers in the US to join the Fairtrade movement and take advantage of this powerful global brand. Global scan recently reported that 26% of people in the US recognize the fairtrade label. If you want to join me in pioneering this across the USA please email me directly.
The 15 year vision is to sell 15 tons (15,000 KG) of certified gold per annum, which in turn would create an annual premium of 30 million dollars going back into small scale mining communities. Who needs aid and charity when you have trade like that? One thing for certain: Fairtrade gold is not bananas.
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Marc Choyt is Director of Fair Jewelry Action and President of Reflective Images, an designer jewelry company that sells fair trade gold and unique artisan wedding rings and designer Celtic jewelry.
