Jewellery industry takes steps to eliminate “conflict gold”

Major US jewellery companies and retailers have started to take substantive steps to eliminate the presence of “conflict gold” from their supply chains, according to the results of a year-long investigation published Monday.

Rights advocates, backed by the United Nations, have been warning for years that mining revenues are funding warlords and militia groups operating in the Great Lakes region of Africa, particularly in the eastern part of the Democratic Republic of the Congo (DRC).

In 2010, such concerns resulted in landmark legislation here in the United States aimed at halting this trade, and those laws have since spurred similar legislative proposals in the European Union and Canada.

Three of the most problematic of these “conflict minerals” – tin, tantalum and tungsten, collectively known as 3T – are used primarily by the electronics industry. In recent years, that sector has made notable progress in certifying and otherwise regulating its use of these materials.

Yet forward movement has been slower on the fourth conflict mineral from the Great Lakes region – gold.

“Over two-thirds of the eastern Congo’s 3T mines are conflict-free today,” a new report from the Enough Project, a Washington-based watchdog group, states.

“Gold, however, remains a major financial lifeline for armed actors. Ninety-eight per cent of artisanally mined gold … is smuggled out of the country annually, and much of that gold benefits armed commanders.”

Last year, the report estimates, some eight to ten tonnes of gold were smuggled out of eastern DRC. That would have been worth more than 400 million dollars.

Much of this smuggling is thought to take place through Congo’s neighbours, particularly Uganda and Burundi, and onwards to Dubai. From there, most of this gold is able to anonymously enter the global marketplace.

The jewellery industry, meanwhile, is the largest user of global gold supplies, constituting slightly less than half of worldwide demand. “Conflict gold thus taints the industry as whole,” the report warns.

Pledging to stay

According to the Enough Project’s new rankings, however, the industry is starting to respond to these concerns. Researchers looked at both past and pledged actions by 14 of the largest jewellery companies and retailers in the United States – part of an industry worth some five billion dollars a year – and found a spectrum of initiatives already underway.

On the one hand, some companies appear to have undertaken no conflict minerals-related initiatives whatsoever, at least as far as the new report’s metrics were concerned. Three companies scored zero points, while others – including major retailers such as Walmart, Sears and Costco – scored very low.

On the other hand, the researchers found a few key companies that have undertaken particularly notable responses. They say there is reason to believe that these leaders could now influence the rest of the industry.

“We really wanted to focus on the leading jewellery retailers in the US because of their leverage over the industry – we wanted to take lessons from our experience with the electronics industry, that leading companies can move an entire industry,” Holly Dranginis, a policy analyst with the Enough Project and the lead author on the new report, told IPS.

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