Fair Jewellery Action

The San Jose Project
By Ed Williams

In 2006, the Mexican government ceded over 143,000 acres of indigenous land to a Canadian mining company. When Vancouver-based Fortuna Silver Mines celebrated the grand opening of its first Mexican mine in September, communities on the ground felt some familiar impacts. “We felt a ‘boom’ come from the ground and then there was this crack in the wall,” said Bernardo Vásquez. The cracks would appear, sometimes suddenly, sometimes over time as the ground quivered from explosions as the mineshafts were being hollowed out below.

One of over 60 damaged buildings in the Zapotec village of San José del Progreso, Oaxaca, the Vásquez home is a modest one-room dwelling typical of the area, with a dirt road in front and a milpa, or small cornfield, in back. A menacing, jagged crack splits the mud brick wall next to a makeshift clothes rack. Above, the trunk of a pine tree serving as a roof beam is buckling.

Vásquez points to a discolored spot in the corner of the room where water seeps from another crack when it rains. “We built this house 25 years ago,” he said. “I hope my house doesn’t fall down, but the cracks keep getting bigger. If the walls give way, where will we go? We live in extreme poverty. There’s no future for us.”

Like most Oaxacans, Bernardo Vasquez never made it past the sixth grade. Income is irregular and sometimes dries up completely, so the family relies on its small cornfield in hard times. With no running water, the springs that quench the crops and animals are all that stands between the Vásquez family and nutritional disaster.

(The Indigenous here are poor and have no recourse)

“The mine is a death sentence,” said Bernardo’s brother Hilario. “They poison our corn and our cattle. They dry up our water. They bring in pistoleros to push us around. But everyone knows what happens when the foreigners come. We will shut down the mine, cueste lo que cueste,” whatever the cost. A dozen heads nod agreement.

The family patriarch, Abuelo, or grandpa, mutters from under his cowboy hat that the Canadians’ industrial slurry pond—dug just a few hundred yards from the village’s freshwater reservoir—will contaminate the groundwater like so many other mines have done across Mexico.

“God knows how many microbes I’ve drank in my day,” Abuelo says, “but these chemicals, well that’s a different question.”

Talk turns to the nearly 12 million tons of waste the company predicts it will produce, as well as the villagers’ acquaintances from neighboring towns who ended up with nothing to eat and nowhere to go after gringo corporations finished with similar mining projects.

Seven miles away in San Jerónimo Taviche, toxic byproducts from older mining projects poisoned the soil and groundwater. After losing their farmland, many residents moved to urban slums in the capitol city.

“For years animals were dying in Taviche and the people didn’t know why,” said José David, a veterinarian in the nearby urban center of Ocotlán de Morelos.

When a peasant’s cow took ill in 2008, he knocked on David’s door and asked if he would come take a look. “But when we got to the village, the cow was already dead.”

David took tissue samples from the cow and water samples from nearby streams for analysis. The results confirmed the animal died after ingesting dangerous amounts of arsenic, cadmium, and mercury. Lead levels in the streams were well above Mexico’s health standard.

“We don’t know the extent of the contamination because the government and the companies ignore us. We’re probably contaminated ourselves,” he said.

At another mine site 45 miles to the north, Fortuna’s former partner on the San José Project, Continuum Resources, contaminated the soil with heavy metals and dried up 13 of the 20 springs in the indigenous village of Calpulalpan de Mendez.

Fortuna Silver has opted not to make its environmental impact study available to the Vasquez’s or the hundreds of other concerned residents from nearby villages, insisting that environ-mental concerns are unfounded. With little oversight in Mexico and no disclosure requirements in Canada, Fortuna is the sole arbiter of information. The company’s keeping quiet and the fallout has come in the form of roadblocks, sabotage and all-out raids on the mine’s headquarters.

Mining on Public Land

A few decades ago this kind of project would have been illegal in San José del Progreso. Part of an ejido—communally held indigenous land constitutionally protected by the land redistribution programs of the Revolution of 1910—the land around San José del Progreso was reserved for agricultural use by the community.

But in 1994 President Carlos Salinas repealed those protections to open up the countryside to foreign investors under the North American Free Trade Agreement. Today ejido dwellers are still afforded some measure of control over their land—any industrial project taking place there must have written approval from the ejido council—but the land is no longer viewed as sacrosanct by government or business, even if it remains so in the eyes of indigenous peasants like those in San José del Progreso.

Canadian corporations run 70 percent of the mines currently operating in Mexico. As gold and silver prices reach record highs, the companies are jostling for even more. Amid poor oversight and enforcement by the Mexican government and no accountability laws in Canada for its mining companies operating internationally, cost cutting at the expense of local communities is all too common.

Fortuna never made an agreement with the ejido council, nor did it bother to fill local communities in on its plans before showing up with the rights to a swath of public land five times the size of Paris. But in the six years of construction leading up to the mine’s grand opening in September, the company has enjoyed the full support of the municipal, state, and federal governments.

(Mining is undermining Native homes)

“Native people have the right to be consulted before this kind of project takes place,” said Bernardo Vásquez Sánchez, resident of San José and leader of the Coordinadora de Pueblos Unidos del Valle de Ocotlán, a local anti-mining group. “We make our own decisions about our lands and our communities.”

In 2009, Vásquez Sánchez and other ejido residents passed a referendum calling for the mine’s closure. If the mayor didn’t make the company leave, residents warned, then they would. The mayor didn’t budge. Hundreds of residents from San José and a handful of nearby municipalities set up roadblocks and sent the miners packing—peacefully, but not without ruffling a few feathers. Authorities soon restored order with a full-scale police raid.

Such a brazen challenge of authority irked local politicians. “The mayor walked around with a sawed-off shotgun like in the wild west movies,” said a former soldier who drives a taxi in San José. Right-wing civilian strongmen soon showed up in San José to back the municipal government.

Human rights groups have charged Canadian mining companies with violating laws relating to everything from workplace safety to forced child labor. But with plenty of spare change for the occasional fine from regulators and little media scrutiny, companies are often able to continue mining. In Oaxaca, dissenters tend to be the ones who go to jail. “These conditions allow the companies to get away with almost anything,” said Jen Moore, Latin America Program Coordinator for Mining Watch Canada.

“The majority of the population has supported us from the beginning,” said Manuel Ruiz-Conejo, who runs community relations for Fortuna’s subsidiary, Minera Cuzcatlán. “We’ve been working in relative tranquility, because the population sees the opportunities this investment provides them in development, education and work.”

But residents say Fortuna uses these “community relations” programs to buy support for the project. “People who back the mine and the government are poor just like everyone else,” said a local community radio reporter. “But somehow they can afford new cars and nice houses. Their kids go to private schools in the city. The businessmen offer these things as incentives to people they think are sympathetic. Now those people will fight their neighbors to keep their nice things,” he said.

The Cost of Dissent

“The padre always liked to listen to the Beatles,” said Sergio Perez, the priest’s personal assistant. It was Sunday evening and the old mission-style church should have been bustling with activity, but a sign taped to the sanctuary door read “No Service Today.” Across the highway in San José del Progreso, police stood guard at the vacant city hall. Both buildings were without their masters—the priest in handcuffs at the hospital and the mayor and his health minister in the morgue.

Father Martin’s office was just the way he left it the Sunday before, when he rushed out with Perez for evening mass in San José. “We were running a little late because we had to pick up two women for the choir,” said Perez. As they turned on the exit to San José, a crowd of people blocked the road. “I didn’t recognize any of them,” Perez said. A group of masked men with guns rushed to Father Martin’s car, demanding he get out. One of the men pistol-whipped the priest, shouting that he was going to pay for what he had done. “We didn’t know what they were talking about,” said Perez.

Earlier that day, a group of villagers had stumbled upon members of San José’s municipal government on the outskirts of town. The local officials were armed and flanked by civilian bodyguards. An ensuing argument over the government’s support of the mine culminated in a shootout that left five villagers wounded and the mayor and health minister dead. Mine supporters fingered Father Martin—who preached environmental stewardship and organized forums of scientists and mining experts—as the instigator of the violence.

Now Perez watched in horror as the priest lay curled on the ground, taking kicks from the masked assailants. “I got out of the car and shouted for the crowd to help, but everyone just watched. It was as if they all knew in advance.”

The men dragged Father Martin into a pickup truck and drove to a house down the road. As the crowd dispersed, Perez called the police: “Two officers came an hour later. I told them what happened, that they were holding the padre in that house down the street. But they wouldn’t do anything. They just left.”

After tying Father Martin naked to a chair, beating him senseless, and threatening to set him on fire, the kidnappers drove him to a hospital in Oaxaca City where the police were waiting. The kidnappers handed Father Martin to the officers, who cuffed him and led him to the infirmary. There Father Martin learned he was being charged with instigating the violence that took place earlier. Police moved the priest to a jail cell downtown after his condition stabilized.

Faced with public outrage over the incident, the state dropped the charges against Father Martin and released him. The Church quickly whisked him to an unknown diocese for his safety. There was no investigation into the incident. Though the identities of the kidnappers are widely known, they have never been charged.

(The Fortuna Mine in Oaxaca, Mexico)

In Oaxaca, decisions come from the top down, explained Flavio Sosa, leader of the 2006 teacher strike that paralyzed the state for nearly a year. Barring a democratic revolution, he said, we can expect impunity for businesses and repression for dissenters to continue into the future. “Sixty percent of the land in Oaxaca is public property. The government cannot continue governing this way, supporting this type of project, without running up against resistance,” Sosa said. What the future holds for the company and for the villagers remains to be seen.

This article first appeared in Z Magazine and was reprinted with permission of the author.

Ed Williams is a reporter at KDNK FM in Carbondale, Colorado. His work has appeared on national Public Radio and in Texas Monthly, the Austin American-Statesman, and other media outlets. Photographer unknown.?

Tags: activism, Corruption, Environment, Ethics, Indigenous Rights, Mining, Rad Transparency, Spin, Transparency, Trends // Add Comment »

Hi Everyone, reflecting on the Kimberly Process. in the light of the below:

I have been invited to attend a meeting at the Foreign Office (UK) on Monday to discuss the status of the Kimberly Process.

Issues for discussion:

1) Should the KPs definition of conflict diamond be expanded to include Human Rights?
2)If the KP is not able to address Human Rights issues are there other mechanisms that could address these issues in the diamonds supply chain (i.e. RJC Chain of Custody scheme /OECD guidelines / NAG/BJA plans)
3)Time Permitting
Other industry concerns/views about the KP/System of warranties/consumer confidence etc

Your thoughts as jewellers would be valuable so I can take this into the meeting.

Greg

Tags: Diamonds // Add Comment »

A FJA Interview with Ed Williams conducted by Marc Choyt, Director, FJA USA

FJA: First, let’s start with your background as a journalist. Who have you worked for and where are you working now?

Ed: I work mainly in public radio—I wrote my first story for NPR in 2006, on U.S. coca eradication policy in Peru. I’m currently working as Senior Reporter and Public Affairs Director for KDNK, an NPR station in Carbondale, Colorado.

I’ve also written for Texas Monthly, the Austin American-Statesman, and others. My story on the Oaxaca conflict ran in the October 2011 issue of Z Magazine.

FJA: What initially brought you down to Mexico?

Ed: I was researching indigenous communications networks in the 2006 Oaxaca uprising for my MA thesis at UT Austin. The mining conflict happened to erupt while I was there, so my focus changed to that issue.

FJA: What were your findings?

Ed: They weren’t pretty. NAFTA opened up Mexico’s mineral resources to Canadian mining corporations, which are some of the most powerful in the world. Mexico’s lax environmental and labor enforcement mean that those Canadian companies can reap enormous profits by skirting on pollution control and safety standards. The state government suppresses protesters with police and plainclothes paramilitary operatives.

Oaxaca has a very large Zapotec and Mixtec demographic. They are mostly rural, living on the same communal land they fought for in the Revolution of 1910. Many of them are subsistence farmers, which makes them much more vulnerable to contamination from mining operations like the one in San José del Progreso.

When the Fortuna Silver Mines arrived there, they secured the permits to a huge swath of indigenous land in secret meetings with Mexican officials. The population didn’t realize the mine was coming until they saw the heavy equipment arriving; by that time Fortuna had the rights to mine their land as they saw fit.

FJA: How are the indigenous people being affected by the silver mining? Can you give specific examples and locations?

Ed: The San José mine just went into operation, so it will take a little more time to gauge what the environmental effects are, and who knows if there will ever be a scientific analysis—one concerning thing, though, is that the company built the tailings pond (to store slurry and waste) just a few hundred yards from the village’s only freshwater reservoir.

There are many examples of similar projects turning out very bad for the communities, though. One is San Jerónimo Taviche seven miles from San José. Toxic byproducts from older mining projects poisoned the soil and groundwater there, and after losing their farmland, many residents moved to urban slums in the capitol city. I was able to get toxicology reports from cattle in that area that died from cadmium, mercury, arsenic and lead poisoning. Losing a cow is devastating for a subsistence farmer.

At another mine site 45 miles to the north, Fortuna’s former partner on the San José Project, Continuum Resources, contaminated the soil with heavy metals and dried up 13 of the 20 springs in the indigenous village of Calpulalpan de Mendez.

Fortuna has not made the environmental impact statement available for the San José project.

Aside from environmental questions, the mine has created severe social conflict in the community. Secret meetings between mining reps and local politicians, alleged payoffs to mine supporters, and the manipulation of indigenous government have created tensions that have erupted into violence on several occasions.

FJA: Have the people organized in any way to oppose the mining?

Ed: Anyone familiar with Oaxaca will tell you that the peasants there don’t take abuse quietly. An organized resistance movement developed there in the early stages of the mine’s development, due largely to the local government’s complicity in the operation and its refusal to address the community’s concerns.

There have been several uprisings—one, in 2009, shut the mine down completely (a violent police raid returned the property to the mining company). There have been intermittent attacks against the mine since then, all of them nonviolent as far as I’m aware, such as sabotaging the pipeline the mine uses for water.

The indigenous anti-mining activists have organized themselves into a group called the Coordinadora for short, and have aligned themselves with the teachers’ movement that shut down the state after the violent repression of a peaceful protest in 2006. The Catholic Church has also come down on the side of the indigenous activists, though one outspoken priest was kidnapped and tortured by mine supporters and later arrested by police under the false charge of inciting violence.

FJA: Do they have any recourse with either the government or Fortuna?

Ed: Technically they could. Mexico is a signatory to the Universal Declaration of the Rights of Indigenous People, which many believe to be violated by the mining company. There are other legal questions that could potentially come down on the side of the protesters—for example, the mining company was legally required to get a written agreement from the indigenous ejido council before their permit could be valid. That never happened, so many think the mine is operating illegally.

But historically it’s been very difficult for poor Mexicans to take this kind of issue to court. The people affected by the mine are among the most marginalized in the country. Step one would probably be a qualified law firm that would take the case pro bono, and who knows if the Mexican court system would hear the case, through.

FJA: Do you know where Fortuna sells its silver?

Ed: I wish I did, but it’s very tough to track the silver once it leaves the mining site. The raw materials get sent off to smelters in Northern Mexico, then the refined ore goes on to buyers in China, the U.S. and anywhere else you can imagine. There’s so little transparency with the system that it would take a lot more resources than I have to find out the places the silver and gold end up.

FJA: What can we in the jewelry world do to help?

Ed: Tell your friends—one of the biggest problems with conflicts like this one is a lack of awareness on the part of the international public. If people begin to become aware of the abuses taking place, maybe the mining companies will start to work with less impunity.

________________

Tags: Indigenous Rights, Interviews, Mining, Rad Transparency, Transparency // 1 Comment »

By Marc Choyt, Director FJA USA

Canadian diamonds mining companies have done everything they can to position Canada as the truly “conflict free” alternative to African diamonds. In the market, they demand a premium. The issues related to Canadian diamond mining are not as pristine as their marketing suggests.

Different mines have different issues. Back in 2009, I conducted this interview with Tracy Williams on how Canadian diamond mining impacts the Northwest. The notion of “conflict free” does not extend to environmental destruction.

More recently, I covered the issue of blockades at the DeBeer mine. I became aware of the terrible living conditions of the Cree community that lives next to the mine. I interviewed activist, Mike Koostachin, who said of his current situation: “They (DeBeers) have our tribal government. Instead of cutting off your arms and feet like they did in Africa, they are cutting off our land, our food from the land. The people are the land.”

Because of FJA coverage of the issues at the Victor Mine, Jackie Hookimaw contacted me about this story in the Canadian news, which exposed DeBeers’ dumping sewage in their community. She wrote, “So abusive! My poor parents- to this day; nothing was done for their home! I hope they still see justice!”

Here are some addition quotes from Jackie in the story:

“My father, he noticed at three in the morning there was a big awful smell and there was something leaking into the basement,” said Hookimaw.

A sewage backup flooded the dirt basement floors of several homes in the community, including Hookimaw’s parent’s home.

“The sewage backup happened around the same time that De Beers, the international diamond company currently operating a mine 90 kilometers from the community, disposed of their sewage sludge by dumping it into the community’s lift station, said Hookimaw.”

You can read the full story here.

Tags: activism, Diamonds, Editorial, Environment, Ethics, Green Issues, Health & Wellbeing, Indigenous Rights, Interviews, Mining, Rad Transparency, Spin, Transparency // Add Comment »

By Beth Gerstein

Brilliant Earth, a leading provider of ethical jewelry, is involved in a skirmish with the World Diamond Council, the organization representing the global diamond industry, over the accuracy of industry statistical claims on conflict diamonds.

The WDC states on its web site, www.diamondfacts.org, that “more than 99% of diamonds are now from conflict free sources.” The web site similarly claims that “considerably less than 1% of diamonds” are conflict diamonds. Many jewelry retailers repeat these statistics to the thousands of diamond jewelry shoppers who visit jewelry stores daily.

But Brilliant Earth argues in a series of blogs, begun November 28, that diamond industry statistics mislead jewelry consumers into believing that the diamond supply is basically ethical, when in fact more than 10% of the diamond supply is tainted by grave human rights violations including torture, rape, and killings. The jeweler calls the notion that conflict diamonds make up less than one percent of the diamond supply the “1% myth.”

“It is time for the diamond industry to stop feeding retailers and consumers a statistic that glosses over brutality that most consumers would find shocking,” said Gerstein, co-founder of Brilliant Earth. “The one percent myth should be exposed for what it is – a promotional gimmick designed to keep consumers from asking hard questions.”

For its part, the WDC has offered a rebuttal to Brilliant Earth’s November 28 blog. “The World Diamond Council stands by its statement that only a small fraction of 1 percent of the rough diamonds sold today can be qualified as conflict diamonds,” writes the WDC in its lengthy response to Brilliant Earth, available on the Brilliant Earth Blog.

The main area of dispute is over how to classify diamonds from countries such as Zimbabwe and Angola. Citing media reports and human rights investigations, Brilliant Earth calls attention to torture, rape, and killings tied to diamond mining in these countries. Together, Angola and Zimbabwe exported 11.5% of all rough diamonds in 2010, according to statistics released by the Kimberley Process, the international diamond certification scheme.

The most serious violence may be taking place in Zimbabwe, where President Robert Mugabe is believed to be looting the country’s diamond wealth to fund his political party and maintain his grip on power. Since 2008, Mugabe’s military has been deployed in valuable diamond fields in eastern Zimbabwe. The military has massacred civilians, enslaved adults and children in the mines, and run camps where disobedient miners are tortured and raped, according to reports.

However, the WDC does not count diamonds from Zimbabwe in its statistics on conflict diamonds. Nor does it include diamonds from Angola, where the military is suppressing unlicensed Congolese diamond miners using torture, rape, and killings.

Brilliant Earth also observes that diamond industry statistics do not account for other serious issues such as extreme poverty or the widespread use of child labor in diamond mining. According to rights group Global Witness, over a million diamond diggers in Africa earn less than one dollar a day.

“For years, the diamond industry has tried to sweep under the rug problems like killings, torture, sexual violence, child labor, corruption, and extreme poverty,” said Gerstein. “Only by excluding almost every diamond tied to violence can the diamond supply be said to be 99% conflict free.”

In its rebuttal, the WDC acknowledges the range of ethical problems in diamond mining and does not dispute that diamond mining in Zimbabwe has been plagued by violence. However, it defends its statistics as accurate.

The WDC relies on the meaning of “conflict diamond” used by the Kimberley Process, the international diamond certification scheme, and approved by the United Nations.

That definition limits the term’s meaning to diamonds used by rebel groups to finance civil wars. It therefore does not include diamonds tied to violence by governments, like the violence in Angola and Zimbabwe. Brilliant Earth responds that the Kimberley Process’s definition is unnecessarily narrow and that it is deceptive for the diamond industry to promote the statistic at all. When consumers hear that the diamond supply is more than 99% percent conflict free, they assume that it is also more than 99% violence-free.

“It makes no difference to consumers whether diamonds are tainted by abuses by rebel soldiers during a civil war, or by despotic militaries that plunder and torture,” Brilliant Earth writes in a December 7 response to the WDC. “And it’s wrong for the diamond industry to hide behind a technical, bureaucratic definition that produces a misleading statistic.”

The gap between industry statistical claims and what Brilliant Earth believes is a more accurate statistic, is only expected to grow wider in the coming years.

Until recently, diamonds from Zimbabwe have been partially banned by the Kimberley Process, the international diamond certification scheme, due to the serious human rights violations in the country’s diamond fields. However, in a controversial decision, the Kimberley Process decided in November to allow Zimbabwe to export most of its diamonds with “conflict free” certification.

Brilliant Earth is a leading U.S. jeweler dedicated to advocating for a more ethical diamond industry. For the Brilliant Earth Blog home page, visit http://blog.brilliantearth.com/. For more information on Brilliant Earth, visit www.brilliantearth.com.

Tags: activism, Corruption, Diamonds, Editorial, Ethics, Mining, Rad Transparency, Spin, Transparency, Trends // 5 Comments »

Press On The Sourcing Of Jewelry Strengthening Our Cause – Editorial Comment

By Marc Choyt

Brian William December 5th feature on “The Price of Gold” showed footage of children from Mali digging for gold and breathing in mercury vapors. Greg Valerio, visiting Santa Fe as part of the Ethical Jewelry Summit, was interviewed in my Santa Fe shop. I also had the opportunity to speak a few words in a posted article on the MSNBC site.

This is the second consecutive year that a major national magazine has chosen to focus on gold sourcing issues at the peak of holiday season.

Last year, 60 Minutes put out a special on conflict gold from the Congo. (In that segment, Greg was paid as a behind the scenes consultant by 60 Minutes.) Jewelers of America put out an entire newsletter to their members in response to the expose, offering help on how to spin the issue of conflict gold. I responded to this letter with my own letter to consumers on a post last November.

Jewelers generally do not view this press favorably. A JCK post was headlined, “NBC Newsmagazine Takes Aim At Gold Mining … If consumers are suddenly asking you where you source your gold.”

Excuse me, Mr. and Mrs. Jewelry Sector! Is it a bad thing that someone buying a wedding ring (which happens to represent their most noble and heart felt sentiments) is not made from mercury poisoned child labor? I do not feel that ignorant jewelry buyers who use their money to perpetuate environmental and social atrocities is in the best interest of civil society.

Overall, however, the reaction from the trade was more muted. The difference between this year and last year is illustrative of how far our movement has traveled. In the past, the jewelry trade could lambast NGOs and “the press” for exposing these issues. Now, it is jewelers leading jewelers.

In February, fairtrade and fairmined gold was released in the UK and by all accounts it is a major success. In fact, leading the trade groups of jewelers in the UK are major proponents of ethical sourcing, based upon traceability and transparency. Retailers in the US are following suit and also offering fair trade gold. By this time next year, fair trade gold will be widely available for North American jewelers.

In our ethical jewelry summit held at my house last October, the most difficult challenge was how to get the consumer to become aware of the issues.

Journalistic investigation, such as the Brian Williams piece, supports the market that is the future of the trade that I and other members of Fair Jewelry Action are working to build. I celebrate it.

Marc Choyt is founding Director of Fair Jewelry Action, USA . He is president of Reflective Images, which produces artisan fair trade gold wedding rings and engagement rings at Artisan Wedding Rings.

Tags: activism, Announcements, Editorial, Environment, Ethics, Fair Trade Jewelry, Gold, Rad Transparency, Spin, Transparency // 1 Comment »

Julius contacted me via this blog back in January of this year. A Kenyan born activist, Julius had grown tired of the endless fundraising form filling you need to undertake when you work with an NGO. As a local Migori County man he had grown up surrounded by artisanal small-scale miners and was familiar with the lifestyles, environmental impact and social conditions that the many thousands of miners endured in order to to pay there daily way in the world. So I was delighted when Julius showed a considerable amount of interest in how Fairtrade Gold could work in his locality. We talked throughout the year and planned. One of the biggest reasons why Julius approached the Fairtrade process, was because the local miners wanted ‘to be free of the economic slavery forced on them by the Asian traders in the region’.

Migori County (MICA) Artisanal Mining COOP was established to allow the local miners and traders to come together and to formalise their relationships in such a way as they could move forward to achieve Fairtrade status and begin exporting their production directly to the international market. Additionally by removing themselves from the economic controls of the bigger traders they would be able to increase their prices and begin lifting themselves out of the poverty that this form of gold trading creates.

Illustratively, the local gold business works through networks of local traders, linking with the artisan miners and then selling their production back to central processing  hubs were the production is weighed, tested for purity and then smelted into simple ‘doray’ bars (unrefined gold bars)  before it is moved to Nairobi and then sold to refiners in Dubai. This system is funded at the front end by money from the traders, who due to their financing, control and monopolise  the entire region.  They buy the gold at discounted rates as much as -28% as I discovered and then adjust for purity. Many miners complain of dodgy scales and purity testing. For example, I had one local processor boast about his cheap PC computer that could scan gold and give a 100% accurate reading on the purity. The genius of this system is it keeps everyone in debt. The local trader may make an average commission as little as KSH 80-100 per gram that he buys on behalf of the Asian buyers with their money. Everyone owes money to these monopoly traders and therefore you have an effective and very efficient form of economic slavery. Any deviation from the proscribed process meets with a swift response as we were to find out.

Over the course of the year, I and others had worked with MICA to see them formalise into a COOP, secure a direct export license and then create a traceable supply chain that would link transparently the miner to the end purchaser of their gold. This in an of itself is progressive as we had to work our way through the myriad of prejudice that exists towards small-scale miners from the refiners, shipping companies and potential financiers and business men, all whose lives are linked to risk mitigation and protecting their investments. Although understandable to a degree, it becomes untenable when in the name of ethics and justice people expect the poor to underwrite their risk with personal guarantees etc.

Anyway with MICA at one end and CRED Jewellery stepping up to the plate to act as the buyer, we booked the trip with a view to enabling the first direct export of gold from a small-scale mining coop from Kenya in the history of the country. The simple aim to enable the COOP to export it first shipment and thereby open up a supply route that would give the COOP access to the international market as well as lay the foundations for a vital part of their becoming a Fairtrade certified mining operation.

However, and this is where it came unstuck, the financial, social, cultural and indentured relationships that have governed this area for so long were not happy with the idea of the local miners being free to export directly, as this would be an erosion of the power they have in the region. Traders have all the power in these artisanal relationships and the COOP discovered that the wrong trader in the mix can kill a process by simply using the economic leverage they have to dictate price, pre-finance behaviour and loyalty. As we came to the day of the trade, it became increasingly obvious that the big traders had a plant in the COOP who simply killed the opportunity, withheld a part of the services needed and prevented the COOP from delivering. That same evening certain members of the COOP were visited by local bully boys and everyone got the message that this movement towards economic independence was not going to be tolerated by the invisible status-quo.

It is a strange thing knowing that you are so near, yet so far. I literally watched the gold disappear in front of my eyes. It was all there, yet the COOP could not bring it all together and deliver and of course this all happened on the same day as the money for the shipment arrived in the COOP account. Also I was now being advised to get out of the area for awhile as things were heating up and the COOP were not happy about the deteriorating security situation. So with driver and passport to hand I jumped into a car and drove to Mwanza to visit some friends there, while the COOP waited for the situation to calm down.

I learned a very valuable lesson on this trip. Traders have the potential to create problems in a way that anyone in the fair trade movement must never underestimate. The Gold mafia are a very real obstacle to change and we must have a strategy for dealing with them. And also that a quality relationship is often forged in adversity, as opposed to success. In many ways the COOP needed to fail on the first trade so that they could fully understand the scale of the mountain they want to climb and how much work they will have to put into their dream.

The COOP I am pleased to say as we parted company with them having transferred the money back to the UK, were very clear of their continued commitment to becoming a Fairtrade COOP. They are now much clearer as to what the obstacles are and also the relationships that prevented their first shipment. In truth we stress tested the system and in doing so all have a greater understanding of what not to do in the future.

Is there a future? Yes there is, and I hope to be able to update everyone on our progress early in the New Year as CRED and MICA seek to facilitate Kenya’s first export from a local COOP.

Tags: Fairtrade Fairmined Gold // 3 Comments »

by Ian Smillie

Early this week, Global Witness announced its withdrawal from the Kimberley Process, saying “The Kimberley Process’s refusal to evolve and address the clear links between diamonds, violence and tyranny has rendered it increasingly outdated… Despite intensive efforts over many years by a coalition of NGOs, the scheme’s main flaws and loopholes have not been fixed and most of the governments that run the scheme continue to show no interest in reform.”

Global Witness, with Partnership Africa Canada, has been a leader in the campaign to end conflict diamonds for more than a decade. The utter frustration that these organizations and other members of the Civil Society Coalition have felt within the Kimberley Process is not new. I left the KP myself two and a half years ago because despite the best efforts of some governments and industry leaders, I could no longer tolerate the hypocrisy and inaction on its most glaring problems.

Internal controls in some of the countries most badly affected by conflict diamonds – DRC, Angola, Liberia, Sierra Leone – remain so weak that their governments cannot say with any assurance where as much as half their exports really originate. The KP knows this. NGOs, the media and the KP’s own review teams have reported on this time and again. The KP issues polite recommendations and then moves on. Nothing changes. The KP has a terrific data base on rough diamond production and trade, but some of the statistics make no sense. Liberian, Guinean and Lebanese statistics, for example, are so far out of line with reality that even a March Hare would notice. The KP has done little or nothing about it.

When it became apparent in 2006 that 100% of Venezuela’s diamonds were being smuggled out, the KP argued and dithered, and then accepted Venezuela’s lie that diamonds would no longer be mined (or smuggled). For years now, the KP – a body set up to stop smuggling, has actually condoned it.

And then Zimbabwe. For three years the KP again dithered and procrastinated on the violence and human rights abuse in that country’s diamond fields. It has ignored the fact that the industry in Zimbabwe operates under an almost complete absence of the rule of law, and that vast qualities of diamonds are smuggled across the border into Mozambique on a daily basis, with the active connivance of government officials and armed forces.

The Civil Society Coalition boycotted the KP Plenary last month in Kinshasa where Zimbabwe was given a green light, and now Global Witness has decided that enough is enough. As a regulatory body, the Kimberley Process has become a laughing stock. It does not guarantee or protect anything where diamonds are concerned.

Can anything be done? Some jewellers and some industry bodies, like the British Jewellers Association and the National Association of Goldsmiths have issued statements of concern, setting up ethics committees and the like.
This is not enough. Industry bodies and industry leaders – from mining companies through to the retail end – must tell the Kimberley Process in no uncertain terms that the time for equivocation is over. The industry is represented in the Kimberley Process by the World Diamond Council, which has for years been too quick to make a deal, to compromise, to try to smooth things over, to promise that “it is getting better” when it clearly is not.

The Civil Society Coalition (now minus Global Witness), has this week issued a new demand for reform. Their ideas have been discussed and rejected many times by the Kimberley Process. Most have had little or only lukewarm support from industry. Have a look and see if you think they are unreasonable:

• Respect for human rights in the diamond industry must be made part of the KP standards;

• There must be independent monitoring to complement the KP’s own, often shoddy peer review mechanism;

• There must be inclusion of the cutting and polishing industry in the KP chain – a loophole that currently invalidates the KP imprimatur on virtually every diamond at the retail end of the chain;

• An end to the KP’s ridiculous “consensus” decision making, which gives every one of the body’s 55-odd member states a veto, blocking almost every reform proposal over the past seven years;

• Transparency: publication of all KP monitoring reports, participants’ annual reports and statistics. Sunlight is the best disinfectant;

• A system of standardized and graduated penalties, along with a formal technical support mechanism, to remedy issues of non-compliance. There are absolutely no penalties at the moment;

• Greater attention to the developmental challenges faced by countries where diamonds are mined artisanally;

• A small, professional secretariat to manage the process properly.

The Civil Society Coalition intends to work with the highest bodies of the United Nations, human rights and transparency organizations, to inform them and the public that the KP certificate is meaningless until these demands are met. The industry should do the same.

The Civil Society Coalition is also talking about a “Cleaner Diamond Initiative”:

“Until there are clear indications of serious KP reform, we intend to pursue with immediate effect, with interested governments and industry, a parallel diamond regulatory body that will include all of the existing KP standards and those included in the many reform proposals that have been discussed over the years. This initiative aims to create a higher level of certification for consumers – a ‘Triple-A Rating’ that will build confidence and greater value in the diamonds of those countries and companies that participate.”

The time for statements of concern has passed. The Kimberley Process has teeth and it can be made to work. If it is not, something else – probably much more draconian – will replace it. There will be no return to the chaotic, bloody free-for-all of the 1990s. If nothing else, 9/11 guarantees that Western governments will not allow unregulated rough diamonds to become a vehicle for the money laundering that is already beginning to re-emerge.

The Global Witness critique of the Kimberley Process was 99% accurate. Their one mistake was in saying that the KP is “outdated”. It isn’t outdated; it’s ineffective. The problems that it seeks to address are as timely today as they were when the KP began. In case anyone needs a reminder, the budget for UN peacekeeping operations in Côte d’Ivoire, Liberia and DRC between July 2011 and June 2012 is US$2.4 billion (that’s $2.4 billion) — and they are barely keeping a lid on the violence.

The Kimberley Process was a remarkable initiative, showing other extractive industries what could be done to halt and prevent conflict, adding lustre to a commodity that is important to the economies of many poor countries. The Kimberley Process can still work, but for that to happen, everyone with a stake in diamonds must understand that the cost of failure will be high, that there is very little time left, and that business as usual is not an option.
The Civil Society Coalition communique is available at
www.pacweb.org/Documents/Press_releases/2011/KP_CSC_Brussels_Communique_Dec2011-fra.pdf

Learn more about Ian Smillie here: http://www.themarknews.com/authors/1255-ian-smillie

Tags: activism, Announcements, Corruption, Diamonds, Editorial, Ethics, Rad Transparency, Transparency, Trends // 1 Comment »

For release 7^th Dec  2011

With yesterdays announcement that Global Witness has removed itself form the Kimberley Process, UK jewellers are seeking answers to why contentious diamonds remain at the forefront of news as they enter the critical festive retail period.

The decision in November by the KP to allow exports of diamonds from certain mines in Zimbabwe rocked the international diamond industry. UK jewellers expressed concern over the decision and subsequently many have sought more assurances from their dealers on the provenance of the goods being imported.

Global Witness were among the founding bodies of the KP and their departure from the dialogue marks a significant shift in confidence that the KP may not be ‘fit for purpose’ in current global politics.

In May of this year, Global Witness met with the UK’s largest trade bodies; the National Association of Goldsmiths who represent over 2500 jewellery retailers and the British Jeweller’s Association, who’s 1000 members belong to manufacturing, trade and wholesale within the industry. The NAG and BJA formed a specialist Ethics Committee in March 2011, tasked with consulting between key UK and International trade and NGO bodies, as well as with the UK Government.

Global Witness gave valuable information about the current crisis in Zimbabwe and discussed the Kimberley process objectives. They expressed frustration that finding representatives of the artisanal miners was proving particularly difficult and it was clear that ensuring a balanced outcome for the diamond miners of Zimbabwe was going to be extremely challenging.

However, despite the withdrawal of Global Witness from the KP, the Ethics Committee maintains that the UK jewellery industry will continue to seek resolutions from the World Diamond Council on the matter and in the meantime recommend jewellers and retailers remain cautious about the origin of their diamonds.

Michael Hoare, CEO of the National Association of Goldsmiths said

“It’s important to retain consumer confidence in British made jewellery .The creation of the Ethics Committee is a commitment to effecting positive changes for the jewellery industry and ensuring that a regular dialogue between all parties is maintained”.

The BJA and NAG have long advocated their memberships take every reasonable precaution in diligently checking the provenance of the diamonds used in British made jewellery. Today, the Ethics Committee announced an evaluation of the  UK response to the recent developments and will assess concrete steps which UK jewellers can take to protect their integrity from the Zimbabwe stones which have attracted the ‘Blood Diamonds’ label by KP critics .

The value of understanding the intricate supply chains in UK jewellery manufacture extends into all aspects of diamonds, coloured gems and precious metals.

In recent months the Ethics Committee have met with the Fairtrade Foundation and the London Bullion Market Exchange, where current standards to ensure best practice in both newly mined and refined or recycled gold were examined.

Simon Rainer, CEO of the British Jewellers Association said

“The UK industry is at the forefront of traceability; working towards the creation of recognisable standards to define transparency in jewellery supply chains”.

-Ends-

Notes to Editors

CONTACT VIVIEN JOHNSTON    vivien@fifibijoux.com, 07789224705

The British Jewellers’ Association has united with The National Association of Goldsmiths to support access to ethical supply chains and chain- of- custody objectives for their members.

Realising that many small businesses are faced with substantial challenges when trying to break down the components of their supply chains and assess ethical credentials, the BJA and NAG have committed to take the lead for UK jewellery manufacturers and retailers.

The committee wish to build a concrete policy and guidelines that meet the high standards required for responsible and transparent  trading in the UK market

Both associations have connections with RJC and CIBJO and are mindful of their contribution to the debate, but act in the best interests of their respective members.

The NAG & BJA‘s ethics working committee will assess the feasibility of a system of auditable standards covering the following areas:

• Mining
• Metals
• Diamonds
• Gemstones
• Manufacturing
• Retailing.

The Ethics Committee will tackle each field and call on experts for an open and frank information exchange in order to develop a robust system in the UK jewellery industry. Vivien Johnston, founder of ethical jewellery brand Fifi Bijoux, has been appointed to steer the project.

Greg Valerio, winner of the Observer Ethical Campaigner Award for his work to bring Fair Trade gold to market, has pledged his support for the realisation of the standards.

Photos of  Simon Rainer, CEO of BJA; Vivien Johnston; founder of Fifi Bijoux and Chair of Ethics Committee; Michael Hoare, CEO of NAG, Greg Valerio, founder of CRED Jewellery & Fair Jewellery Action, available on request.

Tags: Diamonds, Press Release // 1 Comment »

The jewelry community, with the encouragement from Earthworks, has focused heavily on the Pebble Bay mine in Alaska. However, Mine’s Management proposal for a silver and copper mine in NW Montana, 18 miles from Libby, would destroy another ecologically sensitive, pristine mountain and recreational area for forever.

An article in the Missoulan details the environmental destruction of this mine which would have a pre-tax income of over a billion dollars. Among the most damaging issue is the impact to critical waterways:

“Mines Management Inc. of Spokane, plan to use both the groundwater and the surface water – including numerous streams, springs, and alpine lakes – in these protected areas for processing the ore. These waterways would never fully recover, but after an estimated 1,172 years, according to the supplemental draft statement, the base flow of water in the area would reach a “steady state.”

According to the Earthworks Website, the mine would degrade the East Fork of the Bull River, the most important bull trout stronghold in the region, generate 13 million gallons a year of polluted mine water in perpetuity, and destroy 27,000 acres of grizzly bear habitat.

Montanore Mine acquired the rights to this environmental atrocity from another company, but ultimately it comes back to the 1872 mining law. This act which basically gives rights to mines away for free is a blatant form of corporate welfare. Unfortunately, there is little chance of changing this archaic law so long as Senator Harry Reid (D: Nevada) is majority leader in the senate. Reid is beholden to mining and gambling interests.

Recently the National Resource Defense Council NRDC has attempted to raise the profile of what is taking place in this section of Montana. They put out an appeal to write to the forest service about Montanore. Our concerns, again, are jewelry sourcing — much of this silver will end up being worn by people who have no idea that their ornamentation is destroying another pristine ecosystem.

We often consider the Resource Curse, as a phenomenon that effects mainly a developing country. Companies such as Mine Management and Anglo American prove that the US can be just as susceptible to this phenomena as Ghana.

TAKE ACTION NOW, supporting the NRDC’s recent campaign to highlight this issue.

Tags: activism, Announcements, Corruption, Editorial, Environment, Ethics, Mining, News, Transparency, Trends // 1 Comment »