October 29, 2020

The Power of Gold Buyers Engaging with Artisanal and Small-scale Mining

A joint call to the Industry to include Artisanal and Small-scale Mining in your gold supply chains.

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Call to Industry

The Alliance for Responsible Mining recently initiated a call to the gold industry which was signed by more than 30 organisations to raise awareness about the importance of including responsible artisanal and small-scale mining in global mineral supply chains.

The reason for this call to action were announcements by big companies in the jewellery and technology industry that communicated their sustainability and sourcing strategies which include switching to 100% recycled gold and banning newly mined gold from their supply chains.

To many, this may seem a responsible decision which may even cause a sustainability trend within the industry. While the intentions of the switch to recycled gold are in line with global trends such as circular economies and ecological footprint reduction, we need to take into account that the recycling of gold is not the same as recycling plastic or paper.

While the recycling of plastic or paper intends to and achieves to diminish the production of new plastic or paper, this isn’t the same for gold. Gold would be recycled anyway because of its worth, still this won’t curb new mining. Elena Fadul, a member of the Fairmined community, in a discussion on recycled vs mined gold said that:

“As long as gold is the most valuable commodity out there and it is linked to our financial systems, there will always be someone ready to risk their life to dig a few grams out of the earth.”

Apart from that, it is important to take into account that:

A) recycled gold also has its shortcomings and there are differences in how “responsible” different types of recycled gold are, and
B) there are also other economic, social and environmental issues to be addressed in mineral supply chains which aren’t resolved through buying recycled gold.

Instead of detailing the challenges with recycled gold, I’d like to refer to other blogs already written on this topic that summarise the situation pretty well:

Transparent Communication Strategies

For an organisation such as the Alliance for Responsible Mining which has been promoting and working with responsible artisanal and small-scale mining for more than 15 years, it is important that the shortcomings of recycled gold are taken into account and that recycled gold is also questioned and not taken for granted to be the most responsible practice.

We don’t agree with recycled gold communications strategies that claim to halt irresponsible mining or reduce the demand for newly mined metals. This claim is simply not true and can cause damage in the industry, as well as all those that have been working hard for decades to improve mining practices and create positive impacts in mining communities.

We welcome that responsible sourcing has become an important trend in the gold industry and that today there are various possibilities for companies to choose from, from recycled gold to ASM gold to certified gold from large-scale mining.

What’s important is that responsible sourcing strategies should go along with transparent communications strategies and instead of globally tagging all kinds of gold as “ethical” or “sustainable”, we should start communicating transparently about the pros and cons of the different alternatives on how to approach this topic.

Our proposal to the industry is to face the multitude of challenges that exist in today’s mineral supply chains and develop diversified sourcing strategies that address the highest possible number of challenges in the economic, social and environmental sense, taking care of all three pillars of sustainability.

ASM – a challenge and opportunity in global mineral supply chains

As it is already well-known, one of the big challenges in mineral supply chains are the economic, social and environmental issues that artisanal and small-scale mining is facing and which reflect on the industry as a whole, as around 15% of the gold mined comes from this sector. Artisanal and small-scale mining can cause significant negative impacts, but there is a huge potential to mitigate them down to an acceptable level and turn the positive impacts into a lever for development and wellbeing in remote and marginalised mining communities around the world.

Artisanal and small-scale miners generally don’t have the knowledge, resources, access, capacities and vision to take this journey towards more responsible practices on their own - they generally struggle with much more basic needs and livelihood challenges. Education and external support are needed, and although people in Western countries often think that this should be provided by their governments, unfortunately the reality in lower and middle-income countries is different and outside support is needed to assist in this transformation.

Unfortunately, we have also seen public announcements of big gold industry players who have decided to completely disengage from artisanal and small-scale mining due to the high risks and difficulties in controlling them. Again, this is not the solution, as this will not stop mining and ignores a problem instead of facing and resolving it.

Even worse, disengagement of the formal gold sector may drive channeling artisanally mined gold towards illicit buyers which often find creative ways to incorporate this gold into formal supply chains, so, in the end, the disengagement doesn’t really work out as intended and even worsens the situation. Furthermore, it is not the approach recommended by the OECD Due Diligence Guidance, which is the framework adopted by most responsible mineral sourcing strategies today.

I recommend this blog by Global Witness that summarises very well why disengagement from artisanal and small-scale cannot be considered as responsible sourcing.

The power of gold buyers to drive change

Gold market actors can be an important driver and promoter of responsible mining practices by proactively engaging with artisanal and small-scale mining, meaning: buying their gold, as well as incentivising and financially supporting the progressive adoption of more responsible practices. There are already various responsible gold sourcing programmes facilitating these links between market actors and the ASM sector, including the Alliance for Responsible Mining with the Fairmined Initiative and its new Sustainable Mines Programme, which will be launched soon.

Our hoped outcome of the call to action was that companies in the gold industry reflect on their sourcing policies and assure that they critically question the origin of the gold, not accepting plain and superficial claims, but seriously dig in deep until they have a real understanding of the origins of their products and their impacts.

We propose that every company should have a responsible sourcing mix that includes gold from responsible artisanal and small-scale mining. Companies should address all the aspects of corporate social responsibility and sustainability, which are comprised of economic, social and environmental considerations. We urge companies not to disregard the social aspect, which is so important – especially in this sector.

We also encourage companies to be very transparent and clear in communicating about their gold sources and try to avoid generalising or polarising towards broad concepts of what is “responsible”, “ethical” or “sustainable gold” without clearly explaining what sustains this claim. We invite all stakeholders to collaborate, engage, to be empathic with their counterparts, trying to understand the challenges of the other actors in the supply chain and work together on positive solutions that will contribute to a better future for everyone.

We invite you to watch this video in which we show how artisanal and small-scale mining organizations, companies and consumers can benefit from positive engagement.

For more information, please contact arm@responsiblemines.org.

Conny Havel is Markets and Supply Chain Manager at the Alliance for Responsible Mining (ARM), a Colombian non-profit organization established in 2004 that works with the artisanal and small-scale mining (ASM) sector worldwide in improving its legal, technical, organizational, social and environmental practices.

ARM is the developer of the Fairmined initiative and led the development of the CRAFT Code, standards that aim to facilitate more responsible gold supply chains. Within her role, Conny promotes the gold industry’s engagement with responsible ASM and connects responsible miners with responsible businesses. She assists companies in the jewelry, financial, electronics and coin sector in developing fair and responsible gold products to create positive impact in mining communities in Latin America, Africa and Mongolia, while responding to growing consumer expectations about the origin of their products.

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The Power of Gold Buyers Engaging with Artisanal and Small-scale Mining

Call to Industry

Transparent Communication Strategies

ASM – a challenge and opportunity in global mineral supply chains

The power of gold buyers to drive change