Gold: symbol of love, power and wealth. But look behind the glitz and the reality is not so glamorous.
Below you can find out about:
- Problems facing gold miners
- Benefits of Fairtrade for miners
- Fairtrade certified miners
- Buying and selling Fairtrade gold
- Fairtrade Standards for gold
Problems facing gold miners
The global jewellery market is big business. Around 50% of the global demand for gold is for jewellery. A staggering $137.5bn was spent on gold jewellery in 2010, making it one of the world’s largest categories of consumer goods. But for the 100 million people globally who depend on artisanal and small-scale mining (ASM) for their livelihood, the reality is exploitation, hard working conditions, and unfair prices for their products.
Some 90 percent of the labour force involved in gold mining is made up of artisanal and small-scale miners. They produce 200-300 tonnes of gold each year, around 10% of the global gold supply. The poor and vulnerable in Africa, Asia and Latin America are driven into artisanal and small-scale mining (ASM) because it can offer an alternative way to earn a living where agriculture or other activities are simply not viable. Fifteen million people work in harsh conditions to scrape a living and their number is growing, attracted by the recent increases in gold prices. However, the miners and their families face a multitude of challenges as they struggle to survive.
Complex and non-transparent supply chains
Artisanal and small-scale miners are at the sharp end of a long and complex supply chain over which they have little control. ASM organizations are unable to benefit from the profits made on their gold by traders who can purchase large volumes and wait for prices to be high. The lack of transparency also makes it virtually impossible for consumers to know where and under what conditions the gold in their jewellery was mined.
Hazardous working conditions
Most mining laws are geared towards large-scale industrial mining and governments tend to give the large scale industry preferential mining rights. This increases the vulnerability of small-scale miners who find it hard to access legal mining rights, pushing them into operating informally and illegally. Working conditions are hazardous and health and safety measures insufficient. The unskilled handling of toxic chemicals such as mercury and cyanide poses severe risks to miners, their communities and the natural environment.
Benefits of Fairtrade gold for miners
Fairtrade International has brought the first-ever Fairtrade certified gold jewellery to market. This groundbreaking initiative offers a lifeline to economically disadvantaged artisanal miners and their communities.
As is the case for other Fairtrade certified producer organizations, Fairtrade offers mining organizations and their communities a better deal. Miners develop long term business relationship with their commercial partners and get a fair price for their gold, along with the Fairtrade Premium for investment in economic, social or environmental improvements.
Fairtrade Minimum Price and Premium
Miners will get a fair price for their gold through the safety net of the Fairtrade Minimum Price. The Fairtrade Minimum Price for the pure gold content in unrefined gold is set at 95 percent of the London Bullion Market Association’s (LBMA) fixing at the export point. This recognizes the additional value other members of the supply chain add to the gold.
Miners will also receive the Fairtrade Premium. This is calculated as 10 percent of the applicable LBMA fixing. For Ecological Gold (gold that has been extracted without the use of chemicals and with strict ecological restoration requirements) an additional ecological premium, calculated as 5 percent of the applicable LBMA fixing on top of the Fairtrade Premium must be paid.
Fairtrade Standards for gold
The Standards ensure that the Fairtrade gold has been extracted, processed and traded in a fair and responsible manner. This means:
- Strengthened miners organizations - Miners have the opportunity to empower themselves through their organization. They form groups to give themselves better bargaining power with traders, to get a fairer return for their produce, and gain greater control over the jewellery supply chain.
- Improved working conditions - Fairtrade certification requires mandatory use of protective gear and health and safety training for all miners.
- Freedom of association and collective bargaining - Certified miners’ organizations must recognise the right of all workers to establish and join trade unions and collectively negotiate their working conditions.
- Responsible use of chemicals - Certified miners must use safe and responsible practices for management of toxic chemicals in gold recovery, such as mercury and cyanide. Chemicals have to be reduced to a minimum, and where possible eliminated over an agreed time period.
Fairtrade certified miners
Fairtrade gold miners are organized in cooperatives or associations which are owned and democratically governed by the miners. You can read case-studies of Fairtrade gold miners at the Fairtrade Foundation websitehttp://www.communitymining.org/.
To find out which gold mining organizations are currently Fairtrade certified, you can check the database available on the FLO-CERT website.
Find Fairtrade Minimum Prices and Premiums