1. Fair Trade Minerals Opportunities, Challenges and Finding a Way Forward for Sustainable ASM
Estelle Levin
Minerals and Sustainability Consultant
9th September 2007
CASM’s 7th ACC, Ulaan Baatar, Mongolia
I believe we are at a critical moment in deciding what Fair Trade minerals will actually be able to achieve in terms of enabling sustainable development.
It is therefore my aim to present to you some of the opportunities for meeting the goals of Fair Trade, as well as some of the challenges that are likely to disrupt the path to Fair Trade. I will also give a brief overview of what to expect in the Fair Trade workshop happening later today.

2. Ethical Branding
FT is one of several potential ethical branding opportunities for jewellery minerals:
Peace / conflict-free
Sustainable
Green
Development
Ethical
Responsible
Regional
Fair Made
Fair Trade
Fair Trade is one of several brands that could have been pursued for artisanal mining communities, in response to growing consumer interest in Western countries in ‘ethical’ products.
This model was considered in response to negative publicity surrounding conflict minerals and artisanal mining in particular, in combination with the successes of the GreenGold scheme, run by Corporacion Oro Verde in Colombia.
At the CASM conference in Brazil in 2005, participants from across the spectrum of stakeholders and supply chain operators discussed how best to set up a process for certifying minerals as somehow ethical or responsible. This discussion was carried forward by the Association for Responsible Mining, which consequently developed a technial committee tasked with deciding how to make certified artisanal gold possible. It was in these conversations that the decision was made to pursue the path to Fair Trade Certification.
Qualifiers that are either being used already or have been considered by various actors in the supply chain include the following.
I do not intend to explain each of these possible categories and how they differ. But I want to remind you that we look at Fair Trade not because it is the only option for artisanally mined minerals, but because it was decided that it offers the most in terms of stimulating local development in artisanal mining communities.

3. Which Fair Trade?
5 organisations using FT to define their ‘ethical’ minerals.
Target Resources
Columbia Gem House
Rapaport Group
Third party certified:
Thomas Siepelmeyer (University of Aachen)
Association for Responsible Mining (FLO)
5 different efforts to produce FT minerals. With this in mind, you should be aware of the proliferation of efforts to produce fair trade, responsible, green, ethical, peace etc. minerals.
In just Fair Trade alone, there are at least 5 organisations that I can identify that are either developing FT schemes, or who call their product ‘fair trade’.
Three do self-assurance; the two others use 3rd party. Thomas siepelmeyer has the University of Aachen do 3rd party cert.
However, ARM is the only one who has based their standards on FLO’s general standards and is the only one working with FLO, which will do the 3rd party cert.
It is also the only one doing a multi-stakeholder dialogue on developing the stanrdas and the process.
This is why I’m going to use ARM’s process as the benchmark here for explaining what FT is.
But there is still debate as to who should FT be run by and who should it be for.
This and other issues related to the certification of minerals is to be discussed at the MADISON DIALOGUE SUMMIT in Washington D.C. in October.
Both ARM and CASM are partners in the Madison Dialogue.

4. Background 1: Definition and Goals
From ARM’s website,
“Fair Trade is a trading partnership based on dialogue, transparency and respect that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers - especially in the south.”
Fair Trade is a vehicle for
stimulating local development in mining communities, particularly in the developing world
stimulating continual improvement in the sustainability of supply chains as operators compete to attract ‘ethical’ buyers
providing conscientious consumers with suitable products which uphold their values
ARM defines FT as follows:
“Fair Trade is a trading partnership based on dialogue, transparency and respect that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers - especially in the south.”
This definition is basically the same as the definition FLO uses, except that it is made relevant to artisanal mining communities.
In view of this, the goals of FT are to:
stimulate local development in mining communities
stimulate continual improvement in the sustainability of supply chains
provide conscientious consumers with suitable products which uphold their values.

5. Background 2: How does it work?
Standard setting (minimum & progress requirements)
labour practices
economic relations
social conditions
ecological health
Certification (third-party)
Producer support (enabling compliance)
***
Scoping studies
Pilot projects (pre-certification of eligible communities)
FT certified producer organisations
ARM: Standard-setting and producer support
FLO: Certification
Fair Trade is operationalised through
assuring that producers meet minimum standards in relation to
labour practices,
social conditions,
economic relations,
the environment,
and providing support where they do not yet comply.
Other operators in the chain, such as buyers, must also meet certain standards in terms of ensuring traceability and operating fairly.
Find the communities, assess them against the standards, assess the insitutional relationships necessary to take the FT process forward (including institutional capacity), and then work to help communities come to compliance with the standards.
The process ARM is following, broadly speaking, is:
developing standards, including global and local consultations
finding communities
testing standards in communities
conducting scoping studies to identify possible partner organisations,
conducting pilot projects
to test the standards more profoundly
to help communities work towards compliance, and
ultimately then to certify communities.
In its relationship with FLO,
ARM is the standard developer and provides support to the producer organisations (miners);
FLO is the certifier

6. Background 3: Which minerals?
JEWELLERY-RELEVANT
precious metals: gold, silver platinum
diamond
precious stones: sapphire, ruby, emerald, etc.
semi-precious stones: amethyst, beryl, citrine, aquamarine
alloy metals: copper, cobalt (?)
OTHER INDUSTRIES?
base metals? coltan, copper, cobalt, tin, lead
industrial materials? gypsum, sand, granite, marble
ARM’s FT process is starting with artisanal gold and its associated precious metals, i.e. silver and platinum found alongside the gold.
Looking to set it up for diamonds: talk of technical committee.
Columbia Gem House is doing things with stones.
Most attention for FT minerals has been directed to those minerals used in the jewellery industry. This is because the story of FT is a powerful way to appeal to individual consumers.
However, for industrial minerals, the end market is other companies. The FT market for industrial minerals is therefore a different type of market. But this does not mean that it is not possible.
Ethical Coltan for the defence industry
Move towards ‘green building’ could create demand for ethical construction materials
Large companies wth a CSR agenda have ‘ethical sourcing policies’. This could apply to responsible manufacturing companies using industrial minerals.
And participants have told me a nuber of candidates, e.g. in Uganda and in India.

7. Background 4: Who can participate?
Any mining organisations that have demonstrated:
successes in achieving the socio-economic and/or environmental development of the miners and/or their communities,
that they operate legally or are in a process for formalising their activities,
that they consider it desirable to participate in the FT process.
Any ‘ethical’ traders, refiners, and jewellers who wish to participate.
Any artisanal and small-scale mining organisations, including public (government) bodies.
ARM considers that any community-based mining organisation that
have demostrated successes in achieving the socio-economic and/or environmental development of the miners and/or their communities,
who operate legally or are in a process for formalising their activities, and
who consider it desirable to participate in the FT process.
This means that in Mongolian mining organisations which fit these criteria are eligible to participate. I would encourage any Mongolians working on GOLD who fit this criteria to participate in the FT workshop.
Any ‘traders, refiners, and jewellers who wish to participate.
Any artisanal and small-scale mining support organisations, including NGOs, companies and public (government) bodies.

8. Goals Fair Trade is a vehicle for
stimulating local development in mining communities, particularly in the developing world
stimulating continual improvement in the sustainability of supply chains as operators compete to attract ‘ethical’ buyers
providing conscientious consumers with suitable products which uphold their values
I set out the goals for FT before and you can see them again here.

9. Opportunities? stimulating local development
stimulating continual improvement in the sustainability of supply chains
providing conscientious consumers with suitable products
But these goals can also be seen as opportunities, as this slide shows.
I will look at each of these opportunities in detail.

10. Opportunity 1: Stimulating local development?
Fair Trade aims to help miners and their communities:
escape the vicious circle of subsistence economy;
gain access to education, healthcare, and sustainable human development;
benefit from better exchange terms;
gain better access to markets
strengthen their position in the supply chain;
improve environmental, labour and social conditions
Based on ARM’s Standard Zero.
The first goal is stimulating local development in mining communities, particularly in the developing world.
Fair Trade is a project in GRASSROOTS EMPOWERMENT.
It aims to help miners and their communities:
escape the vicious circle of subsistence economy;
gain access to education, healthcare, and sustainable human development;
benefit from better exchange terms;
gain better access to markets and strengthen their position in the supply chain;
improve environmental, labour and social conditions that lead to enhanced quality of life

11. Opportunity 2: Sustainable Supply Chains?
Production (extraction & processing)
Refining
Manufacture (materials)
metal sheets, wires, chains;
cut & polished stones
Manufacture (jewellery)
Retail
The second goal: stimulating continual improvement in the sustainability of supply chains as operators compete to attract ‘ethical’ buyers.
Here you’ll see the supply chain in terms of sites of transformation of the gold into the finished jewellery product.
Though the mienral moves down the chain, as the arrow shows, pressure for FT comes more from the retail end of the chain than from the producers. It is market-stimulated.
There are many jewellers, few manufacturers, and few producers operating in the ethical sector.
I’m now going to go over some of the key initiatives and actors in the supply chain.

12. Yes, in partnership with ARM
Actors in the world of ‘ethical’ jewellery: Initiatives for Assurance, Standard- setting and Process Development
INITIATIVES
Gold & precious metals
Coloured Gems
Diamonds
ASM
Large-scale
Principal Interests
ARM
(Association for Responsible Mining) 
()
Yes No
CASM
(Communities and Small-scale Mining)
DDI
(Diamond Development Initiative)
Yes (as partners)
&
Retail
FLO
(Fairtrade Labelling Organisation)
Yes, in partnership with ARM
Ongoing debate
ASM, (LSM?) &
CRJP
(Council for Responsible Jewellery Practice)
LSM & retail
IRMA
(Initiative for Responsible Mining Assurance)
LSM
Here you see the principal organisations working towards producing ‘ethical’ jewellery.
These are ARM, CASM, the Diamond Development Initiative, the Fair Trade Labelling Organisation, the Council for Responsible Jewellery Practice, the Initiative for Responsible Mining assurance.
The last two work mostly for the interests of LSM, the first two are concerned principally with ASM, whilst the middle two work across the spectrum, including with retailers.
Others: Rapaport, Madison Dialogue, Earthworks

13. Actors in the world of ‘ethical’ jewellery: Producers
Region
Countries
NGO/ Initiative / Company involved
Latin America
Peru
Colombia
Bolivia
Argentina
Guatemala
Ecuador
ARM
Africa
Uganda
Tanzania
Mozambique
Lesotho
Ethiopia
Madagascar
Malawi
Thomas Siepelmeyer
CRED
Urth Solution
Columbia Gem House
Asia
Nepal
Lao PDR
China
Afghanistan
Countries where ethical jewellery - minerals, including diamonds and gems, are being mined.
You’ll see there are many in Latin America and Africa, but not so many in Asia.
Yet.

14. Actors in the world of ‘ethical’ jewellery:
Actors in the world of ‘ethical’ jewellery: Suppliers of raw or manufactured ethical, artisanal minerals
Brokers / suppliers
Gold & precious metals
Coloured Gems
Diamonds
BRAND / MARK
Columbia Gem House 
‘Fair Trade’
CRED Jewellery
‘Fairtrade’ (ARM)
De Beers (Mwadui Community Diamond Project)
‘Mwadui diamonds’
Finesse Diamonds
The Eighty-Eight ®
Greenkarat
 (recycled)
‘Greenkarat’
Rapaport Group
‘Peace diamonds’
‘Fair Made’
Thomas Siepelmeyer
‘Fair Trade’ (University of Aachen)
Target Resources, plc. (PRIDE Diamonds)
 (industrially-mined)
‘Fair trade’
Urth Solution
‘Ethical’
This slide presents the main organisations and individuals seeking to supply ethical minerals to the jewellery industry.
Only ONE of these is sourcing their gold from members of ARM’s project for FT gold and associated minerals, though ECOANDINA
Also: Ethical Metalsmiths, S & P Trading, various refiners, etc.

15. Actors in the world of ‘ethical’ jewellery: Jewellers
Gold & precious metals
Coloured Gems
Diamonds
Sources
Brilliant Earth 
“Fair trade diamonds” from Target Resources (Sierra Leone)
“conflict-free diamonds” (Canada)
“True Blue sapphires ®” from own mine (Australia)
CRED Jewellery
Fair trade (ARM, COV, and own sources in Colombia, Peru, Ethiopia, Tanzania, India, Nepal)
Fifi Bijoux
Fair trade (ARM, COV),
EcoAndina, Thomas Siepelmeyer
Finesse Diamonds
Own supply
Ingle & Rhodes
Thomas Siepelmeyer, EcoAndina
Pippa Small
Own supply (Panama, Bolivia, Rwanda, Kalahari)
Rapaport Group
Peace Diamonds, Madagascar gold, etc.
Here you will see a selection of the jewellers who are attempting to use FT and other certified minerals in their jewellery collections.
One, Vivien Johnston of Fifi Bijoux, here today. Presenting in FT session.
Others: Simmons Jewelry Company, Ocean 1700, Reflective Images (all USA); Flamingo (Netherlands)

16. Opportunity 3: Enabling Conscientious Consumption
GROWING MARKET for FAIR TRADE
Consumption of Fair Trade products grew by 40% in 2006
Increasing demand for ‘ethical’ jewellery in the UK, USA, and Europe
Enormous and expanding markets for jewellery in China and India
The third goal is providing conscientious consumers with suitable products which uphold their values.
There is a massive opportunity here. On average, consumption of Fair Trade products grew by 40% in 2006.
At the same time, there is increasing demand for ‘ethical’ jewellery in the UK, USA, and Europe
This is due to
The Rise of Green Politics
Growing media attention on ‘ethical’ issues, such as climate change, conflict minerals, including events like Live Earth
Advancement of ASM on the agendas of development institutions
Cris: the market is certain. But at this point, supply is not. This is a serious challenge, which I’ll turn to later.
Furthemore, Chinese and Indian markets for jewellery are enormous and expaninng rapidly. Is there a potential ‘ethical’ market there?

17. Challenges
I will now turn to some of the challenges associated with achieving each of thes goals as well as general challenges.

18. Challenges 1: Development of ASM communities
Universal vs. local
Compatibility between universal system for FT and local and regional diversity of ASM.
Finding ethical sources!
OVERDEMAND for FT or ethical metals and gems (time/space gap)
DIVERSE CAPABILITIES / COMPLIANCE GAP
COMMUNITY-BASED only
Expanding Fair Trade into non-jewellery minerals.
Finding ethical sources!
OVERDEMAND for FT or ethical metals and gems.
How should we ramp up supply in a way that doesn’t compromise ‘ethical quality’?
What system should be put in place to make the purchase of metals from pre-certified communities possible?
Would the expansion of FT to non-artisanal sources be a threat or an opportunity?
DIVERSE CAPABILITIES / COMPLIANCE GAP
Where communities are strong in one area, e.g. child labour or women’s issues, they’re often poor in another, e.g. environment.
Would it be desirable to have an intermediary stage between conventional ASGM and FT ASGM that can allow communities and businesses to capitalise on progress?
If so, how should we structure that intermediary stage?
Are FT standards too ambitious?
COMMUNITY BASED ONLY
ARM’s FT standard designed for miners who are organised. It doesn’t apply in rush mining situations or where mining remains highly individuated and/or informal.
Opportunity for other certification efforts to help develop these more difficult, less advanced communities. (ref. Mr. Khuldorj’s 4 stages of evolution towards for sustainable mining communities)? E.g. companies enter as buyers, but reinvest profits in development projects? This is the model of Urth Solution, an ‘ethical jewellery’ supplier.

19. Challenges 2: Sustainable Supply Chains
From ethical production to ethical supply chain
 PARTIAL vs. COMPREHENSIVE compliance
Traceability & assurance
How to prevent conventional gold from entering the FT chain.
Batch refining, exporting, manufacturing
ARM’s FT standards are developed for mining only. Other operators have to meet certain standards too, but these refer mostly to ensuring the integrity of the process and ensuring trading is actually fair rather than requiring performance in terms of labour, environment and so on.
This is what you could call partial FT.
Comprehensive FT would be when EACH operator in the supply chain works according to standards requiring minimum levels of performance in social, environmental, economic, and labour issues.
Is this desirable? How would we go about this? Who should be involved in developing this?
One of the biggest challenges is ensuring that conventional gold doesn’t enter the FT chain at any point.
For this reason traceability and assurance are essential to protecting the integrity of the gold.
To do this, ethical jewellers use refiners and manufacturers who are willing to work separately with the FT gold and develop security systems to prevent tampering and abuse.

20. Challenges 3: Conscientious Consumerism
Proliferation of ‘ethical’ buyers and retailers.
Producer (ASM) control / input on language of commercialisation, e.g. marketing, promotional materials, ‘branding’ of the mineral
Different consumers have different values
Proliferation of ‘ethical’ actors, especially at the retail end.
e.g. “Kimberley Process Certified diamonds are ethical.” But what about…?
This proliferation threatens to compromise the integrity of the FT label if the people calling their product ‘FT’ operate according to different standards. This could create consumer confusion and jeopardise people’s trust in the FT and other ‘ethical’ labels.
In UK: BEJA
If people want multiple models of FT, should there be a universal set of VALUES which these various efforts adhere to, but that each is allowed to develop its own STANDARDS under those values?
supplier control / input on commercial language
should suppliers have a say on how jewellers market and promote their products, in terms of the label used, the story told?
How can you ensure this happens in a way that is fair?
different consumers have different values.
Can products be marketed as partially ethical, or ethical in particular ways?
E.g. children’s gold, GreenGold, peace gold etc.

21. Conclusions Multiple stakeholders across sectors and cultures
FT as the ‘catch-all’ ethical category in the minerals sector.
FT offers much in terms of helping develop ASM communities and thus countries. It is a vehicle for converting a threat into an opportunity for sustainable development.
But many challenges remain. The biggest one of all, which I haven’t mentioned yet, relates to the multiplicity of stakeholders across diverse sectors and cultures.
These actors have different ideas of what should be part of the FT standards, who should be involved, etc.
They have different attitudes as to how the FT process should be done. And there are competing efforts to develop certification processes, be it for FT or other things.
This makes for an extremely challenging environment for constructive dialogue, on the one hand, and for making progress in a spirit of harmony and shared vision, on the other.
There needs to be continued dialogue between the diverse stakeholders as to how to proceed in a way that does not violate anyone’s interests and which especially promotes those of the vulnerable communities we are aiming to assist.
The other thing I want to raise is there is a tendency for people to see FT as the only viable ethical category. It has become the catch-all category, with some parties seeking to apply it to large scale mining production as well. But it doesn’t have to be this way. Other labels can exist, labels which help the consumer in so far as they are more specific to what development goods they deliver and thus which values they serve, and also which help the producer in so far as they offer a multitude of options for artisanal miners to take advantage of the potential of minerals certification for ‘ethical’ products to bring extra income, better living standards, and thus development.

22. Fair Trade Session Objectives
To contribute to ARM's FT process.
To produce recommendations on how to tackle several of the challenges related to building sustainable ASM communities through FT certification.
To consider what CASM’s role should be in implementing these recommendations and in the FT movement generally.
Before I finish, I’d like to set out how we’re going to do the workshop.
The session objectives are as follows:
To contribute to ARM's FT process.
To produce recommendations on how to tackle several of the challenges related to building sustainable ASM communities through FT certification.
To consider what CASM’s role should be in implementing these recommendations and in the FT movement generally.

23. Fair Trade Session Questions
FT gold in Asia?
Where are possible pilot sites in Asia?
What are the specific opportunities and challenges?
What are the challenges and opportunities for expanding Fair Trade into other minerals?
jewellery relevant
non-jewellery relevant
How do we deal with overdemand without undermining the FT process?
What are the possible models for ramping up supply? e.g.
Is there a way of buying from pre-certified mines?
What about separate certification of communities who aren’t FT compliant, but who demonstrate strengths in one area or another?
Could consumers pay an ethical surcharge on conventional gold, to fund work in pre-certified communities to bring them to compliance?
Should Fair Trade be for artisanal mining only, i.e. should large-scale mines be allowed to produce Fair Trade Gold? Is this a threat or an opportunity?
What role should CASM have in these efforts?
The main questions we’ll be considering after the presentations are:
Where can we find potential sites for producing FT gold in Asia? And what are the challenges and opportunities for FT gold in Asia?
What are the challenges and opportunities for expanding FT into other minerals?
How do we deal with overdemand in a way which protects the interests of artisanal mining communities and the goals of FT?
What role should CASM have in all these efforts?

24. contacts Estelle Levin, Cambridge, UK estellelevin@hotmail.com;