Fair Trade Minerals Opportunities Challenges and Finding a

Fair Trade Minerals Opportunities, Challenges and Finding a Way Forward for Sustainable ASM Estelle Levin Minerals and Sustainability Consultant 9 th September 2007 CASM’s 7 th ACC, Ulaan Baatar, Mongolia

Ethical Branding n FT is one of several potential ethical branding opportunities for jewellery minerals: n n n n n Peace / conflict-free Sustainable Green Development Ethical Responsible Regional Fair Made Fair Trade

Which Fair Trade? n 5 organisations using FT to define their ‘ethical’ minerals. n n n Target Resources Columbia Gem House Rapaport Group Third party certified: n n Thomas Siepelmeyer (University of Aachen) Association for Responsible Mining (FLO)

Background 1: Definition and Goals From ARM’s website, www. communitymining. org: “Fair Trade is a trading partnership based on dialogue, transparency and respect that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers - especially in the south. ” n Fair Trade is a vehicle for n n n stimulating local development in mining communities, particularly in the developing world stimulating continual improvement in the sustainability of supply chains as operators compete to attract ‘ethical’ buyers providing conscientious consumers with suitable products which uphold their values

Background 2: How does it work? n Standard setting (minimum & progress requirements) n n n labour practices economic relations social conditions ecological health Certification (third-party) Producer support (enabling compliance) *** n n n Scoping studies Pilot projects (pre-certification of eligible communities) FT certified producer organisations *** ARM: Standard-setting and producer support FLO: Certification

Background 3: Which minerals? A. JEWELLERY-RELEVANT n n n B. precious metals: gold, silver platinum diamond precious stones: sapphire, ruby, emerald, etc. semi-precious stones: amethyst, beryl, citrine, aquamarine alloy metals: copper, cobalt (? ) OTHER INDUSTRIES? n n base metals? coltan, copper, cobalt, tin, lead industrial materials? gypsum, sand, granite, marble

Background 4: Who can participate? Any mining organisations that have demonstrated: n n n successes in achieving the socio-economic and/or environmental development of the miners and/or their communities, that they operate legally or are in a process formalising their activities, that they consider it desirable to participate in the FT process. Any ‘ethical’ traders, refiners, and jewellers who wish to participate. n Any artisanal and small-scale mining organisations, including public (government) bodies.

Goals n Fair Trade is a vehicle for n n n stimulating local development in mining communities, particularly in the developing world stimulating continual improvement in the sustainability of supply chains as operators compete to attract ‘ethical’ buyers providing conscientious consumers with suitable products which uphold their values

Opportunities? n n stimulating local development stimulating continual improvement in the sustainability of supply chains n providing conscientious consumers with suitable products

Opportunity 1: Stimulating local development? Fair Trade aims to help miners and their communities: n escape the vicious circle of subsistence economy; n gain access to education, healthcare, and sustainable human development; n benefit from better exchange terms; n gain better access to markets n strengthen their position in the supply chain; n improve environmental, labour and social conditions Based on ARM’s Standard Zero.

Opportunity 2: Sustainable Supply Chains? Production (extraction & 1. processing) Refining Manufacture (materials) 2. 3. n n 4. 5. metal sheets, wires, chains; cut & polished stones Manufacture (jewellery) Retail

Actors in the world of ‘ethical’ jewellery: Initiatives for Assurance, Standardsetting and Process Development INITIATIVES Gold & precious metals ARM (Association for Responsible Mining) CASM (Communities and Smallscale Mining) Coloured Gems DDI (Diamond Development Initiative) Diamonds ( ) ASM Yes Largescale Principal Interests No ASM Yes Yes (as partners) ASM & Retail Yes, in partnership with ARM Ongoing debate ASM, (LSM? ) & Retail FLO (Fairtrade Labelling Organisation) CRJP (Council for Responsible Jewellery Practice) No Yes LSM & retail IRMA (Initiative for Responsible Mining Assurance) No Yes LSM Others: Rapaport, Madison Dialogue, Earthworks

Actors in the world of ‘ethical’ jewellery: Producers Region Countries NGO/ Initiative / Company involved Latin America Peru Colombia Bolivia Argentina Guatemala Ecuador ARM ARM ARM Africa Uganda Tanzania Mozambique Lesotho Ethiopia Madagascar Malawi ARM ARM Thomas Siepelmeyer CRED Urth Solution Columbia Gem House Asia Nepal Lao PDR China Afghanistan CRED ARM Columbia Gem House

Actors in the world of ‘ethical’ jewellery: Suppliers of raw or manufactured ethical, artisanal minerals Brokers / suppliers Gold & precious metals Columbia Gem House CRED Jewellery Coloured Gems Diamonds BRAND / MARK ‘Fair Trade’ ‘Fairtrade’ (ARM) De Beers (Mwadui Community Diamond Project) ‘Mwadui diamonds’ Finesse Diamonds The Eighty-Eight ® Greenkarat (recycled) Rapaport Group Thomas Siepelmeyer Target Resources, plc. (PRIDE Diamonds) Urth Solution ‘Greenkarat’ Also: Ethical Metalsmiths, S & P Trading, various refiners, etc. ‘Fair Trade’ ‘Peace diamonds’ ‘Fair Made’ ‘Fair Trade’ (University of Aachen) (industrially- ‘Fair trade’ mined) ‘Ethical’

Actors in the world of ‘ethical’ jewellery: Jewellers Gold & precious metals Brilliant Earth CRED Jewellery Fifi Bijoux Coloured Gems Diamonds Sources “Fair trade diamonds” from Target Resources (Sierra Leone) “conflict-free diamonds” (Canada) “True Blue sapphires ®” from own mine (Australia) Fair trade (ARM, COV, and own sources in Colombia, Peru, Ethiopia, Tanzania, India, Nepal) Fair trade (ARM, COV), Eco. Andina, Thomas Siepelmeyer Own supply Finesse Diamonds Ingle & Rhodes Thomas Siepelmeyer, Eco. Andina Pippa Small Own supply (Panama, Bolivia, Rwanda, Kalahari) Rapaport Group Peace Diamonds, Madagascar gold, etc. Others: Simmons Jewelry Company, Ocean 1700, Reflective Images (all USA); Flamingo (Netherlands)

Opportunity 3: Enabling Conscientious Consumption GROWING MARKET for FAIR TRADE n n n Consumption of Fair Trade products grew by 40% in 2006 Increasing demand for ‘ethical’ jewellery in the UK, USA, and Europe Enormous and expanding markets for jewellery in China and India

Challenges

Challenges 1: Development of ASM communities n Universal vs. local n n n Compatibility between universal system for FT and local and regional diversity of ASM. Finding ethical sources! n OVERDEMAND for FT or ethical metals and gems (time/space gap) n DIVERSE CAPABILITIES / COMPLIANCE GAP n COMMUNITY-BASED only Expanding Fair Trade into nonjewellery minerals.

Challenges 2: Sustainable Supply Chains n From ethical production to ethical supply chain PARTIAL vs. COMPREHENSIVE compliance n Traceability & assurance n n How to prevent conventional gold from entering the FT chain. Batch refining, exporting, manufacturing

Challenges 3: Conscientious Consumerism n n n Proliferation of ‘ethical’ buyers and retailers. Producer (ASM) control / input on language of commercialisation, e. g. marketing, promotional materials, ‘branding’ of the mineral Different consumers have different values

Conclusions n n Multiple stakeholders across sectors and cultures FT as the ‘catch-all’ ethical category in the minerals sector.

Fair Trade Session Objectives n n n To contribute to ARM's FT process. To produce recommendations on how to tackle several of the challenges related to building sustainable ASM communities through FT certification. To consider what CASM’s role should be in implementing these recommendations and in the FT movement generally.

Fair Trade Session Questions 1. FT gold in Asia? 1. 2. What are the challenges and opportunities for expanding Fair Trade into other minerals? 1. 2. 3. Where are possible pilot sites in Asia? What are the specific opportunities and challenges? jewellery relevant non-jewellery relevant How do we deal with overdemand without undermining the FT process? n What are the possible models for ramping up supply? e. g. n n 4. Is there a way of buying from pre-certified mines? What about separate certification of communities who aren’t FT compliant, but who demonstrate strengths in one area or another? Could consumers pay an ethical surcharge on conventional gold, to fund work in precertified communities to bring them to compliance? Should Fair Trade be for artisanal mining only, i. e. should large-scale mines be allowed to produce Fair Trade Gold? Is this a threat or an opportunity? What role should CASM have in these efforts?

contacts Estelle Levin, Cambridge, UK estellelevin@hotmail. com +44 1223 241 042; +44 78 76 74 3587