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Stemming the blood behind the diamonds

Financial Times (London, England)

Pg. 18 -With a US embargo on Burmese diamonds, horror stories of “dirty gold” and the forthcoming film Blood Diamond, in which stones are the currency of war, shopping for a trinket this Christmas could be tricky for the well-intentioned.

Unlike chocolates or coffee, there is to date no “fair trade” certified jewellery.

But the good news is that the industry has been working hard to improve its social, ethical and environmental impact.

This is not easy with a product with a supply chain ranging from large-scale mining operations to “one man, one pan” outfits, often in the poorest parts of the world, and which takes in a complex web of dealers, cutters, sorters and traders.

Fair Trade announced this summer that TransFair USA, a Fair Labelling Organisation member, is undertaking a feasibility study for Fair Trade certifying jewellery and working on a pilot scheme for gold.

The single most important step is the Kimberley Process (set up by NGOs, the diamond industry and governments of diamond producing nations adopted since November 2002) that certifies that batches of diamonds are conflict-free, perhaps the most alarming issue for the jewellery industry.

There is a clear demand for jewellery with a certified seal of approval, says Martin Rapaport, founder of the Rapaport Diamond index, in his paper, Fair Trade Jewels. “The combination of jewellery and social responsibility in one product is a luxury market category killer. My thesis is that fair trade jewellery has the potential to become the ultimate luxury product of our century.”

Several small operations at grass roots level are providing “green” though not yet Fair Trade certified gold and coloured gemstones.

Pioneer Greg Valerio, founder of Cred Jewellery, is working with co-operatives such as “Oro Verde” in Colombia that pan or mine gold with minimum impact on the environment and a fair divvying up of profits. Mr Valerio aims to have on the market a third party certified “green gold” by 2009. Early adopters such as Katharine Hamnett are using his gold for her jewels.

Coloured gems are a more complex issue. Marcia Lanyon, the London-based dealer explains: “Diamond mining is a higher value industry with fewer people involved, so it’s easier to trace. (With coloured gems) we are dealing with so many different materials and places that it is virtually impossible to guarantee everyone in the chain is getting a fair deal.”

Ms Lanyon cautions against a simplistic approach. “Low wages are probably the biggest problem for the miners,” she says, “but they are probably not lower than the national average of the countries they work in.”

But she says it is also not ethical, to, for example, avoid Burmese rubies: “I have been to Burma and seen how poor these people are, so not buying their rubies, even though a percentage goes to the generals, will make it worse . . .”

Eric Braunwart, based in Vancouver WA, founder of Columbia Gem House, the largest suppliers of “fair trade” coloured stones (the company is not Fair Trade certified) is working on ways to improve the supply chain.

Ohio-born Tom Cushman, adviser to the Institut de Gemmologie de Madagascar and consultant to the World Bank, has spent the past 17 years working to help the Malagasy better understand and price their resources by educating them to classify, sort and cut stones rather than simply export rough.

London-based jeweller Pippa Small encourages indigenous communities in dire straits. Her most recent project has helped the Kanu tribe in Panama create jewellery for sale in chic European boutiques.

And it is not all small-scale attempts. The Council for Responsible Jewellery Practices was founded in London two years ago with the aim of promoting responsible, ethical, social and environmental practices.

By January 2008, there will be for the first time a set of global industry standards. “It is a challenge, as the jewellery industry is so fragmented, but we are going to make it work,” says CRJP spokeswoman Peggy Jo Donahue.

One notable case is Tiffany & Co, whose commitment to knowing where its materials come from is the result of good management and circumstance. When the company went public in the late 1980s, the expansion of business sense meant it to produce most of its jewellery internally. The resulting vertical integration gave more control of the process, from mining to smelting.

The overall direction towards “fair trade” seems clear, even if progress is faster among retailers than further up the supply chain.

“I see this as a mega-trend that will become mainstream in five to 10 years,” says Vivien Johnston, founder of Fifi Bijoux in Edinburgh, which makes and sells “ethical” jewels.

“The retailers get blamed but they are powerless. Once the big mining companies are behind it, things will really be different.”

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