Valentines special: All that glitters is not gold
Are you considering buying a piece of jewellery for someone close to you this Valentines day? Gold and diamonds are frequently bought as gifts on special occasions. It is reported that Americans spend more than $10bn dollars on jewellery on Valentines Day and Mothers day.
There is usually a financial and emotional significance attached to buying jewellery. But does anyone consider where the gold and diamonds come from? Would your emotional responses change?
The history of the jewelry sector is tainted by human rights abuses. We have seen an increase in the number of children involved in child labour reported by the ILO, a vast majority of them being in Africa and 12% involved in mining. The ILO states that an estimated 1 million and possibly more children work globally in artisanal and small scale mining in violation of international human rights law.
In the past six months the jewelry sector has come under more scrutiny in respect of its impact on human rights in their supply chains. Human Rights Watch has just released its report: The Hidden Cost of Jewelry. Last year, the CORE Coalition reported on the sector’s modern slavery statements in their report ‘Risk Averse’ and Ardea International released a report in December :“All that Glitters is not Gold’ analyzing the impact of the Modern Slavery Act on the reporting practices of the UK jewelry sector.
Human rights Watch highlights that whilst for millions of workers, gold and diamond mining is an important source of income, the conditions under which gold and diamond is mined can be brutal.
The recently published Ardea report analysed the impact of the Modern Slavery Act on the reporting practices of the UK jewelry sector, including eight of the major jewellers in the UK: namely the Signet Group (and the companies under its control), Tiffany & CO, Goldsmiths, Links, F. Hinds, Beaverbrooks, Boodles and Cartier.
There are some interesting similarities and conclusions that were drawn between the reports, emphasising that what companies are reporting on is relevant to how they are addressing human rights and modern slavery in their supply chains.
For example, both reports highlight the practices by Tiffany & Co and the significant steps taken towards responsible sourcing. However the Ardea report expressed surprise at how weak their modern slavery statement was, failing to highlight the work they have undertaken. CORE’s report highlighted that no information was given on risk and due diligence procedures in their modern slavery statement which does raise the question on why their reporting practices are not reflecting the work they are doing.
In both of the reports the role of the Responsible Jewelry Council (RJC) was scrutinised. The Human rights report states that membership of the RJC does not guarantee that a company’s jewelry is responsibly sourced. They state that the RJC governance, standards and system of audits is flawed allowing companies to be RJC certified even if they fail to meet basic human rights standards.
In a similar vein, the Ardea report recognised the role that the RJC and Kimberly Process play in addressing a number of the issues concerning the impact of human rights abuses, but that the loopholes in these organisations protocols and practices do not provide for complete supply chain transparency. The RJC is currently updating its Code of Practice so it will be useful to keep an eye on developments and whether they will address ongoing concerns about the limitations on audits as a sole mechanism to address modern slavery risk.
There is also a recognition in both reports that companies with global supply chains have a challenge in ensuring that their practices are transparent, and that issues such as modern slavery and forced labour cannot be resolved overnight. The growth in mandatory reporting and transparency in supply chains is evidenced by the implementation of the UK Modern Slavery Act, the California Transparency in Supply Chains Act and the new French Vigilance law. Whilst the UK Modern Slavery Act seems to have encouraged some leading companies to take steps to trace the impact of their operations on their supply chains, there is still appears to be very little impetus to provide transparent disclosure. The Human Rights Watch report states that despite the complexity of their supply chains, the jewelry companies have a responsibility to ensure that their business does not contribute to human rights abuses at any point- this is as much about ‘doing the right thing’ as it is about compliance.
How should the jewelry sector be responding to this benchmarking?
Drawing on the conclusions of the Human Rights Watch and Ardea report we suggest 10 key steps:
- Board buy in is key!
- Ensure compliance with the law as a benchmark. For some companies this means ensuring they meet the disclosure legislation such as the Modern Slavery Act or the California Transparency in Supply Chains Act. As more countries are considering passing similar legislation, companies should have a system in place where they are tracking changes to legislation
- Put in place a robust Human Rights policy, setting out the company’s approach to managing negative impacts on human rights in their organisation and supply chains
- Map supply chains and assess human rights risk
- Undertake a gap analysis of current policies and processes
- Develop robust due diligence procedures
- Ensure that auditing forms part of a broader responsible business programme with measures in place to track and respond on issues
- Ensure that remediation plans are in place
- Report on human rights risk and issues
- Train and educate staff and suppliers