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We are increasingly seeing consumer and stakeholder interest in responsible supply chain – Fiona Solomon, RJC

03 february 2014

Fiona Solomon, Director of Standards Development at the Responsible Jewellery Council, talked to the Editor in Chief of the American Bureau of Rough&Polished about the new code of practices, growing importance of social responsibility in the jewelry supply chain and big plans for 2014 RJC.

Please tell us about your role as the Director of Standards Development at the Responsible Jewellery Council?

My role is to oversee and develop the standards that our members are required to implement; the compulsory standard that we have is the Code of Practices. We also have a Chain-of-Custody Standard for precious metals, but that is a voluntary standard. Over the last couple of years, we have been very focused on doing a first review of the Code of Practices. We launched the new version in November 2013. The other part of my role is to oversee the implementation of that standard, through rolling out of training, providing support to members, communicating it to the industry and to stakeholders as well.

In November 2013, the RJC announced the launch of its new Code of Practices. What does it mean to the industry?

I think it is a significant step forward. We have incorporated some new issues in there that have become more prominent since we released the first Code of Practices in 2009.

Some of the issues that we have addressed are around Provenance Claims. We are increasingly seeing, because of the impact of legislation, consumer and stakeholder interest in responsible supply chain. We are seeing a growing interest amongst our members and amongst the industry generally to understand what sort of practices apply in the supply chain to make claims about origin and to talk about sources, such as recycled or synthetics, for example; to help communicate to customers exactly what it is that they are supplying.

There is a growing trend for due diligence around conflict minerals, particularly for gold. We are seeing the development of both industry-wide programs, such as audits of refiners, around their due diligence practices, but also company efforts, such as that by Signet Jewelers to reach back through their supply chains and have assurances for their customers about who they are sourcing from. Audits are becoming much more important in a B2B context, and so these kinds of new provisions are helping to provide a common approach to that.

What exactly is a Provenance Claim? Could you give us a few examples of such claims?

A Provenance Claim is a claim about origin, where something has come from, the country of origin, like Canadian diamonds. It is about a source, a jewelry product or even about a standalone material that is in the supply chain. It is also about practices, which might be about that certain standards have applied during the supply chain. An example might be that this is conflict-free gold or that this pack of diamonds does not contain synthetics or that these are Canadian diamonds or that this is recycled gold or that this bracelet was made in an RJC-certified factory.  Or that the purchase of this ring is contributing to community development projects, the mine of origin or around where the manufacturing has taken place.  It is that kind of claims that are either made B2B or at a consumer level, where this now has the facility for those claims to be audited.

It is really important where customers are relying on those claims particularly for regulatory purposes, such as Section 1502 of Dodd-Frank Act relating to gold or around things like synthetic diamonds, for example.

Contractual conditions are being increasingly put into sourcing relationships to ensure and to place responsibility on ensuring that synthetics are not included in orders for natural diamonds, for example.

What are the most important changes introduced in the new Code of Practices?

Apart from the one I just discussed, Provenance Claims, another important change relates to human rights. This is another macro issue for the industry. We have already seen concerns around the Kimberley Process, for example, not addressing that human rights dimension within the way it was initially structured. The UN has released a very important document in 2011 called the UN Guiding Principles on Business and Human Rights. These principles are applicable to all types of businesses in every country of every size.

What we've done for the Code of Practices is incorporate key aspects of those UN Guiding Principles For Business And Human Rights into our standards and we've developed some tools for our members to be able to carry out a due diligence process and understand what human rights means in a business situation. It can be things like how employees are treated, but it can also be things like if you have security staff, how they liaise with employees or visitors to a retail store, privacy issues, things relating to supply chain ordering and so on.

We have developed the human rights due diligence toolkit, which is on our website, and some introductory training on it. We are going to be forming a human rights working group this year, where we encourage members to get involved and to be part of the dialog with other members about how they are implementing these aspects, what sort of issues they might be finding. We are doing that in collaboration with some external civil society groups, who are involved in our Standards Committee and are interested in these issues at a supply chain level.

It took approximately 18 months to review and develop the new Code of Practices. In your opinion, what was the biggest challenge?

We work with the Multi-Stakeholders Standards Committee, which I think is a real strength of the RJC because it helps us to understand civil society perspective, industry perspective and the industry perspective in each part of the supply chain. Our Standards Committee has elected representatives from mining companies, from diamond traders, cutters and polishers, refiners, manufacturers, retailers and trade associations, and the service industry.

The challenge is processing and understanding the wide variety of input that we get in, trying to distill that into some proposals on provision languages o changes and then developing consensus on that within the Standards Committee.

Does the new code require companies to look beyond their immediate suppliers to find out where they get the gold or other materials in the first place?

No, it does not require, but we have always had in the old Code of Practices, and the current one, a requirement around business partners, to work with them to promote responsible practices. 

We do have some new provisions that relate to specific kinds of sourcing. One relates to if you are sourcing directly from artisanal or small scale miners, you need to have a look at particular risks, such as child labor, forced labor, use of mercury, environmental impact and so on.

Quite a few industry initiatives are aimed at responsible gold mining. Would you say that the RJC's Chain-of-Custody Standard is the “gold standard”, that is the most reliable and recognized industry standard that allows to credibly demonstrate that gold comes from a certified, socially-responsible source?

There are a few around and they are aimed at different things, so there are a couple of standards that are specifically for the artisanal and small-scale mining sector. That is Fairtrade and Fairmined Gold Standards. Basically, in terms of responsible practices and having the opportunity to integrate a Chain-of-Custody through their supply chain, at the moment there is really only RJC, where it applies to jewelry materials. There is the Initiative for Responsible Mining Assurance (IRMA), which is supposed to be developing a standard. They have been doing that for seven or eight years, and it still has not come out. They are planning to do so in 2014.

RJC's approach is to look to work with other initiatives and to harmonize where we can. The nice thing about the Chain-of-Custody standard is that we can recognize other standards as requiring similar kinds of responsible practices and that just enlarges the core for everybody.

What is the RJC's position regarding synthetic diamonds?

We have always had a requirement that synthetics be disclosed. What we are looking to do with this new Provenance Claims initiative is provide a tool for people that look to exert due diligence through their supply chain in the same way it is exerted around issues of conflict gold. Conflict, at the mining end, cannot be controlled via a downstream entity or a refiner, but you can exert due diligence to understand what systems are in place by that supplier to control those issues.

We think the same kind of model can be designed for synthetics, where companies will be looking at ways that they are getting assurances from their suppliers that synthetic diamonds are not being mixed with natural diamonds because it creates risks for everybody through the supply chain. What we have tried to do is create that sort of tool, and this is an issue that we would like to continue work on in 2014.

Can you tell when a new CEO is going to be formally appointed after Michael Rae stepped down in November 2013?

The board is looking at the process at the moment.

What are your plans for 2014?

We are very focused on rollout of the new Code of Practices. There are these new areas and issues that we want to communicate to members and stakeholders. We want to put on a lot more debate and dialog among members and externally around those key issues, so we are going to be ramping up our training and webinar program this year.

We will have a big focus on India this year. We are starting up a working group there to look at rollout and implementation of the COP, general issues in the sector in India, issues around synthetics, and how we might be able to collaborate on some of these new tools and approaches.

We are also looking at a strong focus for us on monitoring and evaluation. More than 300 certifications have been done. We have 460 members and that is continuing to grow. We would certainly like to continue to grow the membership, continue to improve our outreach and our messaging about the benefits of the RJC and the positive impacts that certification has had for our members.

In 2014, we are going to focus on three particular parts of the supply chain. We will be looking at mining in Latin America and a few case studies of some new methods there that are involved in responsible sourcing initiative. One is called Yanaquihua, which is part of the Solidaridad project. Another one is Eurocantera, which you might be aware is in a sourcing relationship with Cartier. 

The second area we want to look at is India, looking at the cutting and polishing sector.

The third one we want to look at is small to medium enterprises, SMEs. As you know, a lot of the jewelry supply chain historically is comprised of a huge number, whether that be family retail businesses or specialist workshops. We are interested in understanding amongst our membership the experience of SMEs in applying the standard and potential barriers to participation because of scale. 

These are the main three areas that we want to look at this year. We will be producing a report around mid-year, to put together some of our data, analyze that and research some of these case studies over the next six months.

Olga Patseva, Editor in Chief of the American Bureau, Rough&Polished