New Fairtrade Gold and Precious Metals Standards Published
Two models, expanded scope to benefit more artisanal and smallscale miners
Fairtrade International publishes its new Standards and Premiums for gold, silver and precious metals to help grow the market for small-scale miners around the world and deliver an ethical and responsible source of gold for the jewellery trade.
“The revised Standards create a landmark opportunity for the jewellery industry to show they are willing to do the right thing by sourcing from transparent and traceable supplies of gold," said Greg Valerio, gold program coordinator at Fairtrade International.
“It’s exciting that - for the first time - alloyed and fabricated gold will become more widely available and cost effective for licensees to buy. More availability means more sales of Fairtrade gold for miners, helping change lives. We are proud that Fairtrade is at the forefront of the responsible mining and jewellery movement and aims to address deeply embedded, long-term issues in the artisanal and small-scale gold mining. Only by working together will we be able to see the true value of gold, transform the livelihoods of communities that have been negatively affected by the injustices currently at work in the gold supply chain."
Worldwide 100 million artisanal and small scale miners work in harsh and dangerous conditions, caught in a vicious circle of exploitation, illegality, and poverty in unfair supply chains. It is often the poorest of the poor with no other options who turn to mining. Yet if managed responsibly, artisanal and small scale mining can provide a great opportunity for poverty reduction and sustainable development for millions of people.
Most mining communities lack basic sanitation and access to clean and safe drinking water. They often have poor housing, little or no access to education and healthcare, and are financially unstable. Lack of transparency in supply chains makes it virtually impossible for consumers to know where and under what conditions the gold in their jewellery was mined.
Development process yields two models
The new Fairtrade Standards were developed through lengthy consultations with 150 internal and external stakeholders including representatives from artisanal and small-scale mining organizations, local support organizations, National Fairtrade Organizations, traders, jewellery companies, NGOs and mining experts.
Fairtrade will promote two separate models for gold.
- Fully Traceable Gold - This will remain the core business model for Fairtrade gold. All operators are registered within the Fairtrade system and audited against the Standards. Final products are certified and punched with the Fairtrade Mark stamp after approval.
- Goldsmith’s Registration Scheme - The Goldsmith’s Registration Scheme model is for small micro-jewellers, using less than 500 grams of gold or 2 kg of certified silver, who would be too small to be licensees. Under the scheme, a master operator becomes the Fairtrade licensee and sells semi-finished Fairtrade certified gold or silver products to small jewellers. Sheets, wires, and other semi-finished products would be stamped with the Fairtrade Gold Mark by the master operator and sold to goldsmiths, who would be registered with Fairtrade but would not be subject to an audit or be required to pay license fees. The small operators would not be allowed to stamp products themselves with the Fairtrade Gold Mark, but they could use in-store messaging to consumers. This is scheduled to come into effect in early 2014.
New Fairtrade Premium
The Fairtrade Premium is now a fixed price of US$2000 per kilogram, instead of a percentage (10%) of the London Bullion Market Association (LBMA) on the day of trade. This helps to keep the price differential at a reasonable level and enable small-sscale miners to sell more Fairtrade gold, resulting in more tangible benefits for their communities to drive more benefits for miners. A wedding ring bearing the FAIRTRADE Gold Mark may now only cost an estimated $15-20 more than a non-Fairtrade ring at the retail level.
Wider geographical scope
The new Standard is applicable to all of the Global South instead of just Latin America, where all of Fairtrade’s currently certified mining organizations are based. The new Standard opens the way for the certification of mining organizations in Africa over the next few years.
Fairtrade CEO Harriet Lamb recently visited smallscale miners in Tanzania and Uganda working to come into compliance with the new standards and try for Fairtrade certification, read more on our blog.
Self-defined organizational set-up
One of the biggest challenges in small-scale gold mining is the various organizational structures that are used (cooperative mine, small company, entrepreneurial activity with hired labour, etc.). Until now, the Fairtrade Standard was prescriptive in terms of what form a small-scale mining organization could take. Under the new Standard, the organization is free to define itself legally. This reflects the fact that different countries have different legal frameworks (especially in Africa), and artisanal and small scale mining organizations need a degree of choice when it comes to these stipulations.
Additional responsibilities for the mining community
The new Standard includes an increased role for the mining organization in the local community. The mining community includes workers in the mine, in processing, and in the geographical region. This instils a sense of responsibility for issues beyond the immediate mining processes (such as raising awareness about mercury use). The mining organizations can involve local community groups in the Premium Committee. This can increase local involvement in Fairtrade Premium projects and will help in identifying and targeting specific needs in the community.
The increased role of the mining organization in the community will be under constant review by a Technical Advisory Group comprising experts in artisanal and small-scale mining, child labour and forced labour, environmental stewardship related to ASM among others, and a formal review will come in 2018.
Fairtrade has recently created a technical group that will be working closely with our mining partners with specific focuses on mercury eradication, the identification, remediation and elimination of child labour and the ongoing development and improvement of the Fairtrade Standard.