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‘Fairtrade & Fairmined’ – what is behind the new fair trade standard for gold?

Fairtrade Fairmined Gold

Logo of the new 'Fairtrade and Fairmined' standard

On February 9th 2011, the Fairtrade Labelling Organisation (FLO) very successfully launched the Fairtrade Gold Standard, with the UK being the first country where the Fairtrade certified gold is available to jewellers, with other European countries to follow later.
The first piece of Fairtrade/Fairmined jewellery was worn by Livia Firth, wife of 2011 Oscar winner Colin Firth, at the occasion of the Oscars ceremony on February 27th, 2011.

The new standard is in fact a novelty in a number of aspects. To start, for the first time in their history, the FLO has ventured away from agricultural commodities such as coffee, tea or cotton, and ventured into a completely new industry: mining.
Second, the standard correctly is called ‘Fairtrade and Fairmined’, since it was elaborated in close collaboration with the Alliance for Responsible Mining (ARM). The ASM as an organisation works with artisanal and small-scale miners and has long-standing expertise in standard setting, producer support, communications and applied research.

Resources to learn in more detail about the new standard and its background:
- List of jewellers in the UK that have committed to working exclusively with Fairtrade and Fairmined gold from now on.
- The full Fairtrade and Fairmined Gold Standard at FLO or ARM
- Background report on the conditions faced by artisanal and small-scale mines (PDF 7.3MB).

There is a relatively wast amount of information available with respect to environmental damage and sub-human working conditions in the mining sector. See also our previous blog posts about ethics in jewellery: Post 1 about the environmental and human impact, Post 2 about the Kimberley process that (partially successfully) tried to remedy the issue of blood diamonds.

To summarise the numbers:
Globally, over 100 million people depend on Artisanal and Small-scale Mining (ASM) for survival. The 15 million ASM miners work in harsh and dangerous conditions to produce just 10-15 percent of global gold supplies, but they make up 90 percent of the global work force in gold extraction. (Source)

The benefits for the communities producing fairtrade gold are, according to the UK Fairtrade Foundation, as follows (Source):

  • They receive a guaranteed Fairtrade Minimum Price: This is set at 95% of the London Bullion Market Association's (LBMA's), fixing at the FOB export point (Wikipedia definition of FOB = Freight on board)
  • They receive a Fairtrade premium payment, which is democratically reinvested in community projects and improving miners' operations. This is calculated as 10% of the applicable LBMA fixing
  • For Ecological Gold (gold extracted without the use of chemicals) this is calculated as 15% of the applicable LBMA fixing
  • Develop long term business relations with their commercial partners
  • The miners have developed democratic and accountable organisations and formalised all their operations
  • The minders are using safe working practices including the management of toxic chemicals, such as mercury and cyanide, used in the gold recovery process
  • The miners are respectful with their environment
  • The miners recognize the rights of women miners

The assumption is that all the mines that produce certified gold are audited by FLO-CERT to ensure standard compliance.

FLO Fairtrade/Fairmined gold standard promo video.

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