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Does Fair Trade Jewelry Exist?

15 june 2009

This article, by Marc Choyt, publisher of fairjewelry.org, is an update on an earlier article that he wrote in 2007 on the same subject, www.diamonds.net writes introducing the author.

Search Google for “fair trade jewelry” and you will find extensive listings of jewelry lines from small producers in the developing world. What exactly companies, mostly resellers, mean when they call jewelry “fair trade,” however, is not so clear.

Fair trade jewelry as a product category is recognized by some fair trade organizations, such as the Fair Trade Federation (FTF). Jewelry is also listed as a product category in the World Fair Trade Organization (WFTO) website.

The mainstream jewelry sector is also slowly emerging into the fair trade jewelry market. Some first movers like Columbia Gemhouse have developed their own criteria for fair trade. From a cross-sector initiative, inspired by a World Bank fair trade jewelry meeting in October 2007, activists are also creating working groups to create fair trade principles and standards from diamonds to manufacturing.

The expansion into the mainstream sector is a significant development that has huge potential, given that jewelry is an emotional purchase. The jewelry marketed as “fair trade” now is minuscule compared to the potential business in precious metals, diamonds and gemstones.

We are also seeing some convergence between mainstream jewelry and institutional fair trade organizations. The international Fair Labeling Organization (FLO), which is the most prominent fair trade labeling group, does not certify finished jewelry products. But FLO is currently exploring fair trade gold with the Association of Responsible Mining (ARM). Also, a fair trade diamond feasibility study by TransfairUSA (a part of FLO), was funded by the Tiffany Foundation.

The essence of fair trade, which is to bring greater economic opportunity and justice to producer communities, also exists outside of a fair trade institution between businesses. Companies selling fair trade jewelry are making their own independent claims.

Essentially, with so much going on in so many different areas, we have a very chaotic market space. What, exactly, fair trade jewelry constitutes is still being worked out.

Investigating the Self-Proclaimed Fair Trade Jewelers

In the initial research for a previous article I wrote on this subject in the fall of 2007, I contacted one of the largest “fair trade jewelry” sellers, which at the time was number one on Google. The Transfair logo at the bottom of the company’s website would lead a shopper to believe that its jewelry, like the coffee it sells, is third-party fair trade certified.

I emailed this company, asking about the sourcing of its precious metals and the environmental safeguards for its manufacturers — proper ventilation and disposal for toxic chemicals used in the manufacturing of their “fair trade” jewelry. Company representatives responded that production was done in small villages and they could not answer questions about the sourcing of raw material or the environmental practices of manufacturing.

Fair trade manufacturing of jewelry is usually not linked to fair trade sources. As the person spearheading an international committee that is working to develop fair trade manufacturing principals and standards, I find this understandable. The supply chain is too spotty. Yet issues of labor, worker safety and a plant’s environmental practices are critical, and very often lax with small producers.

Also in 2007, I interviewed Carmen Iezzi, the executive director of FTF, one of the most prominent fair trade institutions. Her interview helped me to understand that while FTF businesses agree on overarching principles, the true, on-the-ground standards may vary — a subtle distinction lost on the average person buying “fair trade” jewelry on websites.

I have also been contacted by producers, in confidence, who complain that fair trade jewelry products are often sourced from distributors. I have not found published online studies that show how fair trade jewelry has positively impacted producer communities, which leads me to want to know more about the actual benefits of so called “fair trade jewelry.”

For example, a fair trade company with revenues of USD 1 million might spend about three hundred and fifty thousand on “fair trade” crafts, including jewelry. They are not on the ground, so they rely upon distributors in host countries. Of that, perhaps half might go to the distributors. Since producers generally net a thirty percent margin, they may only end up with fifty thousand dollars out of a million dollars of marketed “fair trade” sales. I do not have the resources to pursue these concerns, and even if I did, I know producers need any business they can get.

The Difficulty of Fair Trade in the Mainstream Jewelry Industry

Taking the concept of “fair trade” jewelry out of the village and into the mainstream global jewelry market is like banging that old square peg into a round hole. At present, the industry is totally commodity-based and price-driven, somewhat like lumber or oil.

Within the mainstream jewelry sector, those attempting fair trade sourcing of the raw materials that are needed to make jewelry tend to be focused on the high end. They manufacture within their host countries. Just exporting gold and gemstones to a potential fair trade manufacturer can be a major logistical challenge, involving such issues as export free zones. These requirements are difficult hurdles for a small producer.

On the raw materials side, a small segment of passionate, dedicated people in the mainstream jewelry industry are attempting to develop at least the groundwork for future third-party Fair Trade jewelry certification. A wide range of programs, from the Diamond Development Initiative to Oro Verde to the Tanzania Women Miners Association (TAWOMA), all have potential as fair trade sources.

The small-scale artisan mining sector, which comprises between fifteen and twenty million people and supports up to one hundred million people, is the obvious target for fair trade sourcing. The ethical sourcing movement has attracted the interest of governments, NGOs and the World Bank.

The huge difficulty is in the organization of these groups and supporting their responsible practices to create a strong supply chain. Many of these producers operate in poverty, with marginal economic and political support systems. And once the supply chain exists to create a fair trade piece of jewelry from fair trade sourced materials, mainstream jewelry manufacturing in small producer communities faces potentially huge initial investment in equipment and raw materials.

One South African project, Vukani-Ubuntu, essentially trains people from local townships in the mainstream jewelry trade, providing training, mentoring and equipment. It is heavily supported by the government and NGOs. But according to Lorens Mares, chief executive officer (CEO) of the South African Jewelry Council, one of the most difficult challenges is bringing the product to market.

Overall, the notion of fair trade jewelry is still just in its initial stages. The “fair trade” designation remains too ambiguous. The consumer interested in fair trade jewelry is advised to look for detailed information about sourcing, labor and environmental practices. At present, transparency is often more valuable to the consumer than any “fair trade” designation.