Gold free of guilt: What Fairtrade Certification can do

When was the last time you gifted your wife that unique piece of jewellery she always romantically pummelled you for? Given, cool jewellery is the easiest way to a woman’s heart; you would have done it many times, irrespective of the relationship status: committed or married!

So far, so good!

But the wedding ring on your finger—which both of you are proud of—can be tainted by the tears, trials and tribulations of the poor miners, of which you may have little knowledge of!

In January 2009, National Geographic carried the story of Juan Apaza, a mine worker at La Rinconada Gold mines in Peru, under the title: The Real Price of Gold. The miners there, including Juan Apaza, works 30 days a month with nil pay, chewing coca leaves to defy hunger and fatigue, battling terrible working conditions and dodging death.

At the end of the month, the miners are put into a shift with the freedom to fill a sack of earth, which may or may not contain a nugget of gold that can be taken home.

Every 31st day, the miners go in with a lot of hope and come out with a sack of earth as much as their weary shoulders could bear. This ancient lottery system known as the cachorreo keeps the mining community ticking.

Of course, a sack of earth cannot have more than a few grams of gold—and that too sparsely--and only some terrific luck could fetch a person something like a nugget.

Needless to say this cannot go on forever!

Enter Fairtrade and Fairmined gold, a certification system that can clear your guilt.

Fairtrade and Fairmined certified gold comes from artisanal and small-scale mining (ASM) organisations meeting the Fairtrade and Fairmined gold standard.

“This means the gold has been responsibly mined and that the miners have received a Fairtrade minimum price and premium which assists in their communities' social, environmental and economic development.” says the Fairtrade website.

Fairtrade and Fairmined gold certification is the result of a joint effort between Fairtrade International (FLO) and the Alliance for Responsible Mining (ARM), to enable artisanal and small-scale miners (ASM) to improve their livelihoods.

Fairtrade advantage

The website www.fairtrade.org.uk explains that by achieving the certification, the miners:

--Receive a guaranteed Fairtrade Minimum Price: This is set at 95% of the London Bullion Market Association's (LBMA's), fixing at the FOB export point

--Receive a Fairtrade premium payment, which is democratically reinvested in community projects and improving miners' operations. This is calculated as 10% of the applicable LBMA fixing. For Ecological Gold (gold extracted without the use of chemicals) this is calculated as 15% of the applicable LBMA fixing

--Develop long term business relations with their commercial partners

Currently, the certified ASM come from Bolivia, Colombia, Ecuador and Peru. Certain reports suggest that the initiative is having ASM miners queued up for the certification.

This process can very well push the gold prices up the ladder. But listen to Stephen Webster, creative director of Garrard:

“Even though the cost to us for such gold is over 10 percent higher we will be absorbing this premium,” he says. “We don’t want price to be the reason not to choose a more responsible product.”; reported professionaljeweler.com.

Supply shortage

It is difficult to source the fair-trade gold given supply constraints as the certification warrants establishing of transparent supply chains.

As of now, only 400 kg of Fairtrade gold is available with 20 designers having access to the same. You may need to get in touch with these designers and buy wholesale from them. To sell the certified gold as a retailer, a license is issued so that the seller can use the Fairtrade mark, which amounts to about 1.7 percent of the wholesale price of the jewellery.

But the future looks promising: Provided jewelers are ready to undergo an audit by Fairtrade Foundation, and if they are ready to comply with the strict rules floated by the foundation--no mixing of fair-trade gold with ‘other’ gold and no gold plating with the certified gold—a niche market can be expected.

The challenge before the foundation is to bring into fold, gold miners from other regions as well, including Asia and especially Africa.

While ASM miners employ 90% of gold mining workforce, they produce a meager 15% of the total gold mined. The big miners, who account for 85% of gold, are yet to come into the fold.

With the idea of ecological mining gaining foothold, miners like Juan Apaza can be expected to have a better future. And you can wear that pride of wedding ring with nil guilt!

As published in: http://www.commodityonline.com/news/Gold-free-of-guilt-What-Fairtrade-Certification-can-do-41114-3-1.html