60 Minutes, Conflict Gold from the DRC, and Jewelers Of America Panic Letter
“Jewellers should be putting pressure on their Trade Associations to make sure they are being represented in these debates.” — Sonya Maldar of the Catholic Agency for Overseas Development (CAFOD)
~ Opinion by Marc Choyt, publisher
The latest public relations crisis in the jewelry world is an upcoming segment on 60 Minutes on “conflict gold”, funding wars in the Democratic Republic of the Congo (DRC). The images, according to Jewelers of America (JA), are “harrowing”
JA wrote a letter to its members and other jewelers warning that 60 Minutes will, “attempt to call the integrity of the entire gold jewelry supply chain into question.” JA’s urgent alert has talking points for jewelers to quell their customer’s concerns.
60 Minutes apparently was concerned about being able to pin down Matt Runci, head of the Responsible Jewellery Council (RJC) and Jewelers of America (JA), who was interviewed in the segment. No one is more experienced in dealing with this type of bad publicity toward the jewelry industry than Runci. As a front person for the jewelry sector for the past several years, he is extremely smooth with the press.
In preparing for the interview, 60 Minutes consulted with at least one activist in the ethical jewelry community (who wishes to remain unnamed). They wanted strategies in how to interview Runci.
In the end, according to my sources, the advice was simple enough. 60 Minutes only needed to ask a simple question, “Can you, Mr. Jewelry Sector, guarantee that the gold in your stores does not come from exploitative sources?”
The answer is, “NO.”
According to an interview with Michael Rae, CEO of the RJC published on this blog this past June, the RJC (and JA) will continue to accept dirty gold, with it’s ties to environmental atrocities and human rights abuses into the supply chain of their members. The RJC takes this approach while claiming on their website to, “…be reinforcing confidence in the diamond and gold supply chain…”
Unfortunately, supply chain double-speak is entirely consistent. From the support of the discredited Kimberley Certification Process, to the Burmese ruby boycott (which is ineffective and penalizes the artisan mining community), to their current certification efforts, the RJC, it is plain to see, is protecting their membership’s current business models.
These are, after all, are the same people and companies who profited from the killing of nearly four million Africans during the blood diamond crisis, for which not one person in the RJC or the entire jewelry sector has ever been held accountable.
This callousness in regard to the lives of Africans and the artisan mining sector, world wide, extends to many jewelers who believe that anyone who gets in the way of their Christmas season isn’t worth the dirt they live on. These jewelers are, once again, “the victims.” Read their comments from this National Jeweler article on the 60 Minutes story.
Diamond dealer “I wear Nike shoes, and some 5 year old makes them. I also drive a car that runs on gas, supplied by terrorist. Why dont they do a story on the oil industry?”
Christopher “…just remember…something like 85% of all the gold ever mined has been recycled back into use…over and over and over. Relatively green if you ask me!”
Eric writes “…It is plausible that misguided attempts to regulate these markets actually serve to increase the levels of human suffering in the affected regions.”
unclesam007 “Nobody could believe the main stream media much longer with all the crap they ARE reporting. there not credible at all they are just jerks! Just hang in, and dont even watch it. if they get low enough ratings maybe they will gooff the air. until Obamma bails them out.” — “to big to fail”
Richard Bush “What is the fuss, some of Nancy Pelosi’s fortune is a Napa Valley vineyard worth $25 million that she owns with her husband. Hires only nonunion workers and illegal’s to harvest. Think about it, are we going to stop consuming wine? Let us get on with the real business at hand.”
It is true that the DRC “conflict gold” is a minute part of the supply chain. But there are environmental and human rights associated with gold mining issues all over the world. The jewelry sector is widely contaminated with dirty gold.
If 60 Minutes is able to make even a small percentage of jewelry consumers outraged enough to raise the issue with jewelers like the ones who commented above, the sector will change. These guys care first and foremost about making money.
For ethical jewelers, the 60 Minutes program as a marketing opportunity, allowing us to differentiate our companies from the multitudes.
In my next post, I’ll write my own letter to jewelers telling them how to handle this 60 Minutes crisis, which is also a crisis in moral leadership by JA and RJC.
I feel sort of on the outside looking in with the industry these days, but I really think that this story will be the same big bust that the blood diamond story was.. I remember all the fear and hand wringing, and not a single person that shopped in our store that year asked the question.. Not one..
I think this will be even less of an issue.. People have FAR too much on their minds these days than to worry about what is going on in the DRC..
This doesn’t mean that I condone what is going on, and it would be wonderful to see the industry be even more pro-active than it has been, but there are shining examples like Hoover and Strong’s HARMONY program that show that the industry if making progress.. I wonder if that will be mentioned as well..
Steve,
I celebrate the shining examples of best practices on this site. I covered Hoover and Strong’s Harmony metals initiative early on, and posted multiple times on their programs. Just do a search on the site. There are other many other positive examples of responsibility that I’ve written about as well.
But the supply chain remains terribly tainted, and the issue not just about what takes place in the DRC, but the real cost of gold to communities and the environment.
How much these things effect sales is debatable, but I will say that with my company, a high percentage of our customers find us and order from us because of our ethical platform… which probably lends itself better to the internet than a brick and mortar model. Yet Jeff Corey of Day’s Jewelers http://www.fairjewelry.org/archives/1145 thinks that the trade has vastly underestimated the impact of blood diamonds. Read what he says in the interview.
To me, the jewelry trade is massively vulnerable because of its sourcing, and it is only a matter of time before the public wakes up to these issues. Think about fair trade coffee in the seventies.
Today is not the same as it was two or three years ago. The public’s awareness of these issues is increasing all the time, and 60 Minutes coverage is just one more bit of information that will go out there and find its way into people’s thoughts.
I would say we are still in the infancy, but the ethical sourcing niche has definitely been born.
Cheers,
Marc
First of all: all the gold for the jewellery comes from refined gold= 100%green. The electronic industry use more gold than anyone. Then recently gold is purchased as an investment (gold bar or coin or pure) China, india, middle east. Then there is the paper gold which is speculation. May be 60 minutes should do a bit more research . They are a bunch of clunkers
Dear Stephen,
I think there is a confusion here. Of course all the gold for the jewelry is refined but a gold refinery processes gold coming from mines (what is called primary sources) and gold from scrap jewelry, reformed ingots or coins, electronic scrap,etc..(secondary sources). Refining is just a stage in the process. It does not validate wether the unrefined gold coming in is from a “green” or responsible origin or not; it just take the unrefined gold and transforms it in fine gold suitable for any use. So refined gold or fine gold does not mean “green”.
Regarding the electronic industry gold use, the numbers from the WGc (World Gold Council) are very clear. In 2008 the electronic gold demand (WGC) accounted for 1,7M ounces in the US and 9,4M worldwide. Compared to the jewelry consumption, its represents 30% of the jewelry demand for the US and only 14% worldwide.
So gold use in the electronic industry is far from being the first use. In 2008 jewelry demanded 69M ounces of gold and the mining output produced 78M ounces. So the jewelry world demand is quite similar to the mining offer. Coming down to the US the mine production in 2008 was 7,5M oz for a jewelry demand of 5,8M meaning that mining sources could cover 130% of the jewelry consumption.
Lastly, the paper gold is in fact named ETF (Exchange Traded Funds) (see: http://en.wikipedia.org/wiki/Gold_exchange-traded_fund) . This “paper” is in most cases backed with physical gold. In fact, the certificate has a physical collateral in a safe. It’s a practical way for investing in gold. In 2008 the total twelve biggest funds grew by 10M ounces. this represents only 8% of the total physical gold offer for the same year and only 0,2% of the total above the ground stocks of gold.
To conclude, we could say that the main demand for gold is jewelry and its main offer is mining. So if you want to buy an ethical gold jewel to your beloved, you must make sure that the gold was produced in a responsible manner. Regarding DRC, I agree there are problems in that country and everybody is aware of it ( see: http://www.artisanalmining.org/UserFiles/file/Beyond_Conflict_RCS_CASM.pdf ). So if you do not want that gold in your jewelry, don’t buy from them (this does not mean that it will prevent the mining to occur). But let’s have a positive approach. In every country you have positive and responsible initiatives and if not, you can always find an organization that has the willingness to change things. So let’s support them and encourage their action because artisanal mining can be responsible. To be convinced see: http://www.communitymining.org
All the best and special thanks to Marc for his great job
Patrick SCHEIN
S&P TRADING
precious metal trader & refiner
With regards to the comment by Stephen — Perhaps it would be better to actually see the piece by 60 Minutes first before passing judgment.
Since it has not aired as of the time of this comment, we can but speculate with educated guess what, exactly, is in the final cut…
And as stated time and again, not all refined gold is ‘Green’ gold…