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Overcoming Challenges to Fair Trade Certification

Discussions during the ICA Congress in Brazil focus on how the
colored gemstone industry can be successful in fair trade initiatives

Rio de Janeiro, Brazil, May 4, 2011 An impressive lineup of speakers, during the International Colored Gemstone Association’s Congress in Rio de Janeiro, shared insights and success stories that highlighted how the colored stone industry can advance fair trade concepts for the benefit of everyone along the supply chain.

The types of challenges faced by the diamond industry are not completely foreign to the colored stone business. Several years ago, the tanzanite industry faced scrutiny. In recent years, concerns surround rubies from Burma, embargoed by the United States to create economic pressure on the military junta there.

But unlike diamonds, tells Jean Claude Michelou, ICA vice president, there is no centralized marketing and market price control; a variety of gems come from hundreds of countries with myriad cultures and standards; and 80% of production is erratic at best, lacking investment capacity, and performed by artisanal miners in third-world countries.

Yet despite these trials, there are many initiatives underway that are making a difference. One success story in establishing protocols and dealer warrantees, however, was achieved for tanzanite in 2002, by a coalition of industry groups and representatives of the tanzanite trade, in partnership with government and NGOs, to address industry issues.

Douglas Hucker, CEO of the American Gem Trade Association, shared the steps undertaken to fortify export documentation and create a set of policies to ensure the legitimacy of the supply chain. He notes that what made the task easier than it might have been for a gem like ruby is the fact that tanzanite is only found in Tanzania.

Other great examples can be found in the efforts of Gemfields, a leading colored gemstone producer headquartered in London. According to company CEO Ian Harebottle, it is all about being green socially, environmentally and transparently.

“Gemfields says the true beauty of gems lies in the manner in which they’re managed,” says Harebottle. Referencing its Kagem emerald and Karibam amethyst mines in Zambia, Kagem and Karibam, he also cites partnerships as critical, noting 25% and 50% of the mines respectively, are owned by the government. The producer strives to ensure local communities around its mines grow with a focus on sustainability and supporting things like schools, medical clinics, and local organic farming. Moreover, it works to minimize its impact on the natural surroundings and conserve the environment as in planting trees and filling old mining pits with water and fish.

Transparently, Harebottle says: “We live by the motto that when you keep secrets, the only person you’re fooling is yourself. As a publicly listed company, Gemfields sees significant benefit in being fully transparent. Our doors are always open. We continuously publish our results and corporate strategies. We’ve initiated and support a process of warrantees throughout the pipeline. And, we encourage and support certification.”

Aptly put, Marcelo Ribeiro, director of the Belmont Group, emerald mine in Brazil, says: “In mining, more money can go into the ground than come out of it. So, you should not act as a treasure hunter, but as an investor, managing risks in pursuit of profitability.” He advocates investment in geological surveys, mining feasibility and environmental preservation, as well as building infrastructure for the mining community, and forming coops by consolidating small-scale operations.

From a retailer’s perspective, Steve Bennett, president of Color Rocks Limited and GemsTV based in London, believes that the more you tell the more you sell.  He must have something right, as GemsTV sold 7.5 million gems, 287 different kinds from 31 countries in 2010. In fact, Bennett buys gems directly from miners whenever possible. He says technology allows his company to gauge spikes in spending to determine buying triggers. What he has found is that stories including safety improvements at the mine, mine certification issues, local mining community projects, and information on miners all resonate with consumers.

But Bennett notes that not everyone can wear the same hat when it comes to expectations, noting that he doesn’t want to see small miners regulated out of business. He, like Harebottle, is working to create cooperatives to help small to medium mining operations bring goods to market via organized auctions at major trade fairs to ensure fair trade and better exposure to potential buyers.

Speakers also note the value of local education and training in gem identification and cutting to add value downstream, citing Madagascar as an example in the establishment and successful growth of a lapidary school and gemological laboratory, spearheaded by the country’s ICA ambassador, Tom Cushman.

“When consumers buy jewelry, they should know that not only is it an expression of value, beauty and emotion, but they have contributed to making a better life for people who need it most dearly,” advocates Eli Izhakoff, president of the World Diamond Council.  

ICA Congress presentations will be available online at www.gemstone.org.
For more information, contact:
Barbara Wheat, ICA Executive Director
This e-mail address is being protected from spambots. You need JavaScript enabled to view it , This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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