ICA Tackles Tough Issues

RAPAPORT… How the global colored gemstone industry can promote fair trade practices and assure the legitimacy and responsibility of its products through the supply chain was the focus of discussions at the International Colored Gemstone Association’s 14th Biennial Congress, held in Rio de Janeiro, Brazil, from April 30 through May 4.
 
A diverse range of speakers  —  representing trade groups, mining companies, gem labs and wholesalers and retailers of colored stones — shared insights into what is being done and assessments of what remains to be done to fortify the fair and transparent trade of gemstones.

Diamond Connection

Eli Izhakoff, president of the World Diamond Council(WDC), drew parallels between the diamond and gemstone industries, noting that they face common challenges. He recalled how several years ago the tanzanite industry faced scrutiny when the Tanzanian gemstone was identified as a commodity that may have financed terrorist groups. In recent years, gems from Burma, including ruby, have been under embargo by the United States to create economic pressure on the military junta there. Time and again, allegations link drug cartels and the emerald trade in Colombia to money-laundering schemes.

But, unlike the diamond trade, the gemstone trade is made up of a wide range of stones, originating in hundreds of countries. About 80 percent of global gemstone production is erratic at best — lacking stable capital investment — and most of it is performed by small, artisanal miners in third-world countries. There also is no centralized marketing or market pricing control for gemstones. In light of these obstacles, achieving something similar to the diamond industry’s Kimberley Process Certification Scheme (KPCS) for colored gemstones is intimidating.

Yet, despite the challenges, there has been some progress, as well as some notable successes. Douglas Hucker, chief executive officer (CEO) of the American Gem Trade Association (AGTA), shared the steps taken to vindicate tanzanite, fortify its export documentation and create policies to ensure the legitimacy of its supply chain. A coalition of industry groups and representatives of the tanzanite trade, in partnership with government and nongovernmental organizations (NGOs), early on addressed accusations that the gem was funding terrorist activities. The result was a system of protocols and dealer warranties established in 2002, developed after consultation with miners, traders and exporters in Tanzania. What made the task easier than it might have been for a gem like ruby, Hucker said, is the fact that tanzanite is found only in Tanzania.

Jean Claude Michelou, International Colored Gemstone Association (ICA) vice president, told the audience he was optimistic that gemstone certification is possible industrywide. His optimism is partly based on successful experiments in origin-and-export certification systems that can serve as case models. Virtually all of the successes involve partnerships with the private sector, local communities, trade groups, NGOs, international agencies like the World Bank and governments in producing countries. Brazil, Colombia, Denmark, Greenland, Nigeria and Kenya already are participating in the development of model systems and Michelou said he expects nine additional countries to join the effort in the short term, with nine more invited to participate after that.

Caution

Steve Bennett, president of Color Rocks Limited and London-based GemsTV, works directly with miners and is adamant about not wanting small miners regulated out of business. To protect them, Bennett is a member of Gem-C, a group examining the formation of an ethical mining cooperative. The cooperative would hold several auctions a year to raise the visibility of fair trade gemstones in the market and with consumers. A portion of sale proceeds would be earmarked to educate and train locals.

Whether or not the colored gemstone industry will be able to achieve a global certification scheme, the message among speakers at the congress was clear: Do what you can now! Cited as an example of moving in the right direction was Gemfields, a leading colored gemstone producer headquartered in London. Referencing its Kagem emerald and Karibam amethyst mines in Zambia, Kagem and Karibam, Ian Harebottle, Gemfields CEO, pointed out the importance of partnerships in implementing fair trade practices. He noted that 25 percent of the emerald mine and 50 percent of the amethyst mines are owned by the government, which helped to initiate and supports a system of warranties for its products throughout the pipeline.

Working with the local communities around its mines, Gemfields supports projects like schools, medical clinics and organic farming. Moreover, to minimize its impact on the natural surroundings and conserve the environment, the company plants trees and fills depleted mining pits with water and fish.

Robert Weldon, manager of photography and laboratory publishing, Gemological Institute of America (GIA), cited other examples of pioneering efforts. Eric Braunwart of Columbia Gem House, Vancouver, Washington, established detailed protocols identifying governments, miners and NGOs as his partners. Eric and Mark Saul of Swala Gem Trading built and run a school near their tsavorite mine in Lemshuko, Tanzania, so local miners can bring their families to the region and educate their children. Marcelo Ribeiro plants and reforests the land and reclaims and purifies water at his Belmont emerald mine in Itabira. Brian Cook encourages sustainable farming among local mining families at his claims in Brazil. Ramiro Rivero focuses on worker well-being, offering reasonable work hours, equitable pay and company-provided meals, entertainment and a clinic at his ametrine mine in Anahí, Bolivia.

Establishing Origins

Members of the gemological community also weighed in on the issue of establishing gemstone origins, which is complicated by the extensive variety of gem types, by the large number of origins for each gemstone and by the role labs play in identifying gem footprints. “Origin identification not only provides historical reference and value basis, it’s becoming increasingly more important for traceability,” said Thomas Hainschwang, managing director, GGTL GEMLAB, Geneva, Switzerland. He reported greater demand for determination-of-origin services, which have shifted from a purely commercial goal to establish a gemstone’s monetary value to an ethical one.

Dr. Dietmar Schwarz, research manager for the Gübelin Gem Lab in Lucerne, Switzerland, concurred: “As consumer awareness has increased in recent years, geographic origin reports have also become more important for those wishing to avoid politically or ethically challengedproducer countries.” In fact, Hainschwang noted that by proving goods originate from ethically responsible sources, gems get added value, which translates into greater demand and acceptance in the market.

“Origin determination is possible because the properties of ruby and sapphire are measured in the lab,” Schwarz explained. “Based on these properties, gemologists can relate the unknown gem to a specific genetic environment, like sapphire from basalt-environment or ruby from marble-type host rock.”

Hainschwang noted that extensive gem databases from known geographic localities and specific geological environments are vital to tracing origin. Wilawan Atichat, director of the Gem and Jewelry Institute of Thailand (GIT), said her institute has amassed a comparative database of chemical analysis and gem mapping for corundum deposits in Thailand, Sri Lanka, Madagascar, Vietnam, Burma, Tanzania and Cambodia.

Atichat believes country-of-origin gemstone certification would benefit the supply chain. It would, she said, increase the reliability and value of a gemstone and its origin, and provide a tracking vehicle that could be incorporated into a broader certification scheme. Among the disadvantages, she noted the lack of consensus on origin among labs, which is why she advocates industry standardization of gemstone identification and certification.

The payoff for such efforts is product integrity. “When consumers buy jewelry,” said Izhakoff, “they should know that not only is it an expression of value, beauty and emotion, but they’ve contributed to making life better for people who need it most.”