Senate Finance Reform Bill Heralds A Brighter, More Ethical Future For The Jewelry Industry
Jewelers of America Opposes The Amendment.
The passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act contained a provision that requires third party validation, tracing back to source, gold and diamonds coming from ten African countries. The law demands transparency. Much of the impetus for this legislation came from the current situation in the Democratic Republic of Congo.
The DRC is rich in natural resources, and is a classic example of the resource curse. One study estimates that 5.4 million people have died in the Congo from conflict. Perhaps as much as 45,000 people continue die every month in the DRC.
The legislation has impact for other industries outside of the jewelry sector. The DRC has many rare metals that are critical to our electronics industry. Obtaining them from the DRC is considerably cheaper than other mines in developed nations. According to an article entitled, The Genocide Behind Your Smart Phone, Apple and HP may be inadvertently getting the rare metals to make their products from the Congolese militia.
The passage of the bill not only brings attention to these atrocities, but also provides the beginning of a real solution. It’s likely that every NGO working for the betterment of Africa is also in support. Earthworks, which has been particularly active in hard rock mining issues in the jewelry sector, issued a statement in its support.
Opposition From Jewelers of America
Right before the final vote in the US Senate, Jewelers of America (JA) issued an urgent appeal asking their network of about 10,000 jewelers to contact their senators urging them to block the bill. In their talking points, I was surprised that JA issued their appeal so late. Apparently, at least in terms of their interest, they were asleep at the wheel.
JA made the distinction that while they support the overall objective of this bill to eliminate conflict minerals, government legislation was not the right way to do it.
Robert Hadley, COO of JA, issued a statement published in JCK online that the bill, “would put an incredible burden on jewelry businesses if enacted, essentially requiring suppliers to determine the source of ALL their gold inventory…the idea of certifying a particular region of any of those countries as completely conflict free—as defined in the legislation—would appear to be difficult to do.”
Indeed, gold that is sold on the open market often comes from multiple sources. Diamonds are also a commodity that is consolidated, graded and polished across borders. Traceability and transparency are indeed difficult.
Yet, from the perspective of Fair Jewellery Action, there is no question that traceability and transparency are the cornerstones of any ethical platform.
Jewelers of America Opposes the Legislation
To those who are not familiar with the business/politics of sourcing issues, it might seem that the legislation would be supported by JA. Jewelers of America is a key member of the Responsible Jewellery Council, whose stated mission is “Reinforcing confidence in the diamond and gold supply chain.”
Harley also points in the JCK article that, “Legislators are asking business to solve a political problem, and while we fully support efforts to stop the trade in conflict minerals, we don’t agree that this legislation is the right approach.”
Natural business interests are opposed to any efforts to block their objective of making as much money as possible in developing countries. Mining products are grouped together. Just as a hamburger at McDonald’s can be made up of 100 cows, the gold on a ring can be from 100 mines. Traceability and transparency would expose the impact of these products on some particularly “resource cursed” African producer communities.
If the impact on these communities was ethical, the trade would welcome the legislation. We could proudly point out that the jewelry business is truly good from mine to market. But JA’s stance implies that the impact on these communities is negative.
The legislation is designed to support corporations operating in these conflict areas to act in a manner that does not kill people in producer communities. Harley’s argument is that the political and the business interests are independent and not linked. Last I looked, politics and business were in the same, king size bed. If there was no market for these conflict minerals, then the wars would not be funded by money that goes into the jewelry produced in the US and EU.
Secondly, there is plenty of traceable and recycled metal available to supply all the jewelry needed in the US and EU. Cutting out conflict metals will not raise the costs in the production of jewelry. The new legislation will not hurt the independent jeweler who wants to source ethically, as there is already plenty of product available.
In an interview published on this site, Micheal Rea, CEO of the RJC, stated that the RJC standards will not prevent dirty gold from entering the supply chain. I do not doubt that RJC wants to create real standards that anchor their stated intention. The legislation supports the stated intention of RJC to be transparent and traceable in their mineral extraction. RJC members can still use dirty gold mined by child labor in Peru, but at least they will not be able to use conflict gold from Africa legally.
A Major Step Forward
According to NGOs, the jewelry sector is responsible for the death of three million Africans through the purchase of diamonds funding wars in the nineties. If this legislation had been in place in the nineties, much of this carnage may not have happened. We do not know how much conflict gold from the Congo has ended up in our supply chain. For me, one ounce of conflict gold and one blood diamond entering the US market is too much.
In context to recent history, JA’s position is out of step with the public and is morally bankrupt and irresponsible. It says, money and business first, and ethics (so long as they support money and business) second. It undermines the stated position of the Responsible Jewellery Council. It also weakens the entire jewelry sector, because our business is based upon our public reputations. The most important trade group in the jewelry sector should understand that in context to ethical stances, action must be in alignment with speech.
JA’s position is also out of step with our times. Consumers today, particularly the upcoming generation of buyers, are becoming more and more sensitized to environmental and human rights issues. The fact that conflict gold is currently in our supply chain makes our entire industry more vulnerable. It is utterly unacceptable and immoral that any conflict gold should be used in the making of jewelry.
Those in the ethical sourcing community, including we at Fair Jewellery Action, consider transparency and traceability as foundational to any ethical sourcing platform. We consider the passage of this bill as a major step forward.
