Too few jewellery companies embrace opportunities for responsible gold

The report “The Hidden Cost of Jewellery” by Human Rights Watch (HRW) clearly demonstrates that the world’s largest jewellery brands have collectively taken limited steps to implement responsible sourcing practices for their gold. The opportunities to directly support better practices where they are needed most–at mine sites–and to source responsibly mined gold from small, medium and large-scale mines, have increased significantly over the past decade. However, there are only a few companies making serious investments in the uptake of and support for responsibly mined gold.

The HRW report further highlights the need for improvements in the structure and operation of the Responsible Jewellery Council (RJC). Solidaridad acknowledges and supports the recommendations made by the HRW report, and calls on all companies that purchase gold to invest in much-needed improvements in the supply chain and to source verified responsible gold.

Mine workers of the Aurelsa Mine in Peru

Opportunities for sourcing responsible gold

The report published today by HRW points to significant differences in the human rights and corporate social responsibility practices at 13 of the best-known global jewellery and watchmaking companies. Currently, only a few of these companies are able to trace their gold back to the mines of origin, a prerequisite for managing risks in the supply chain.

There is a glimmer of hope: although the report signals major weaknesses for the industry in general, a number of companies have actively supported better policies and practices upstream in their supply chains, including at mines sites. As initiatives for responsible mining expand, an increasing number of mines are on their way to using best practices (interactive mining map). Solidaridad facilitates new opportunities on a regular basis for the industry to source gold from more responsible mines.

Jennifer Horning, global programme manager for gold at Solidaridad, said: “Managing risks through a rigorous due diligence process is essential for all companies. However, a focus by gold buyers on risk management alone will not help miners understand and apply good practices. It is also no guarantee for gold buyers of a secure future supply of verified responsible gold. Gold buyers will remain exposed to reputational risk as human rights abuses continue. For real impact, jewellery, electronics, automotive and financial companies need to more broadly invest in initiatives for better practices in their supply chains, especially at mine sites. This includes joining multi-stakeholder dialogues and demanding responsibly-sourced gold from their suppliers.”

Support for artisanal and small-scale mining

Following the increase in mineral prices, the artisanal and small-scale mining (ASM) sector has seen a surge of growth over the past few years. The Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development has concluded that 20% of the global gold supply is produced by the ASM sector. It is estimated that 20 to 30 million people work in ASM gold mines and as many as five times that amount depend on these mines for their livelihoods, such as the local populations in the surrounding communities.

Boukje Theeuwes, senior policy advisor at Solidaridad in Europe, said: “The jewellery industry should ensure that their efforts do not lead to a de facto boycott on sourcing gold from small-scale mines. Frontrunner jewellery companies are now moving beyond managing reputational risks and starting to support improvement programmes for more responsible mining regardless of the size of the mine. A typical example of an ASM programme in Ghana is shown in this video.”

Jennifer Horning added, “Almost weekly, the media report on human rights abuses in the gold supply chain, at both small-scale and industrial mines, as well as conflicts between small and industrial miners. There is another story that needs to be told but receives far less attention: the miners who commit to good practices. One example is Peruvian company Minera Yanaquihua, which supports small-scale miners living on its land to mine more responsibly and then buys their gold under fair terms. As a result, the company saw a boost in its bottom line. Gold buyers can play an important role by doing business with these companies and helping to replicate their positive examples but to date, very few of them have. This is a lost opportunity.”

Watch the short documentary above about progress at the Minera Yanaquihua mines

Multi-stakeholder initiatives are stronger

Many companies rely on the standards and guidance developed by the Responsible Jewellery Council (RJC). Solidaridad believes that RJC certification can be a valuable tool to change mining practices and has thus supported mines in achieving RJC certification as part of our responsible mining programme. However, we agree with the conclusion of Human Rights Watch that to remain credible, the RJC must become a truly multi-stakeholder initiative. This means including non-industry partners–in particular civil society organizations–at all levels of its governance structure. Our work in other commodities has taught us that a true multi-stakeholder approach offers the most effective platform for creating and sustaining a responsible and inclusive sector. Importantly, many companies that participate in these multi-stakeholder initiatives in other sectors report a net benefit from the constructive dialogue. Further, members have jointly developed tools that add value for all participants, and most importantly, that result in greater positive impact in the supply chain.

Learn more about Solidaridad programmes for responsible gold on the interactive mining map.