The Golden Promise: Making Sense of the Fair Trade Gold Market



Whether you know it as Fairtrade Gold or fair trade gold, ethically sourced gold is available—though jewelers in the United States may have a hard time buying or selling it

“Even within the fair trade movement,” sighs Marc Choyt, president of Reflective Images, a Santa Fe, N.M., retailer, “there are a lot of politics.”

When you’re referring to a metal that some call fair trade gold—and others, for reasons you will see, don’t—those politics tend to involve nomenclature.

No one doubts that the Fairtrade insignia holds considerable power, particularly in Europe. Sales of goods with that label hit $6.6 billion in 2012, according to Fairtrade International (FLO). And many in the jewelry industry have long felt that if you attached the fair trade brand to a jewelry product—especially with all the issues that surround jewelry materials (see sidebar, “The Brewing Conflict Over Conflict Gold”)—you’d have a winner.

The Bolivian mine Cotapata was the first to produce certified Fairtrade Gold in 2011. Now, two mines in Colombia and two in Peru also produce the product. All told, they deliver 250 kilograms of Fairtrade Gold annually, with sales last year topping $1 million. The Peruvian mines also produce Fairtrade Silver and the Colombian producers sometimes excavate Fairtrade Platinum.

The Fairtrade and Fairmined insignias hold considerable power at retail. Sales of goods with the Fairtrade label hit $6.6 billion in 2012.

Kenneth Porter, who handles supply chain management and producer support for the Alliance for Responsible Mining (ARM), says another 30 mining organizations have expressed interest in joining the system—including 14 in Africa and one in Mongolia.

But here’s where the labeling issues come in. The South American metals aren’t technically fair trade; their official names are Fairtrade and Fairmined. That’s because the project is officially a joint venture between FLO and ARM—FLO handles the marketing; ARM handles production—and the groups thought the “mined” label was needed, in part to distinguish it from traditional fair trade products, which involve agriculture. “There are some labeling organizations that didn’t want to get involved with mining at all, because of the connotations,” says Felipe Arango, CEO of Oro Verde, the Colombian nongovernmental organization that helped give birth to ARM. Still, some grumble there’s no point in two labels: “It totally confused the market,” says Greg Valerio, founder of Fair Jewellery Action UK.

Nigel Wright
Female miners in Peru, known as pallaqueras, are now represented by mining organizations thanks to the Fairmined initiative, a joint venture between Fairtrade International (FLO) and the Alliance for Responsible Mining (ARM). 

Then there are sublabels even within the Fairtrade and Fairmined categories. For example, Oro Verde produces gold from its Colombian mines under the label Fairtrade and Fairmined Ecological. The “Ecological” applies because the mine doesn’t use mercury and cyanide—opting for the extract of a local leaf—while regular Fairtrade Gold does use them (within environmental and safety standards). The distinctions are similar to what you’d find with fair trade coffee, says Arango, where a subcategory of “fair trade ­coffee organic” exists.

And then we get to the United States, where the label issue gets even messier. At the end of 2011, the American group Fair Trade USA severed its ties with FLO. So there is—for now—no way for American jewelers to become official licensees of Fairtrade Gold, as that requires checking for certain standards and no domestic monitoring body for gold exists. As a result, U.S. jewelers who want to sell the product can’t use the official Fairtrade name or logo, although some do call it fair trade (two words, no uppercase) and say it’s produced from a “fair trade certified mine.”

The lack of an American outpost also has made it difficult for jewelers here to source the product. “It has left a huge vacuum in the U.S.,” says Valerio. “That is why it has been slow getting off the ground. But the United States is eventually going to be the biggest market for this product.”

Even so, the jewelers and manufacturers active in the fair trade jewelry movement are a small but determined group, strongly committed to this cause (and seemingly others: ­Manufacturer Toby Pomeroy’s emails include the phrase Sent from a device I am pretty sure is not conflict mineral free).

Penelope oval amethyst ring in 18k Fairtrade and Fairmined Gold; £1,350 ($2,070); Cred Jewellery, London; 44-203-176-7836; credjewellery.com

Choyt, after what he calls a “really difficult process,” found a way to buy the raw gold from the United Kingdom branch of Cookson’s, and he now gets it refined by Pomeroy. “I really wanted to be a pioneer here,” he says. “I had to hustle but the next person doesn’t have to hustle.”

In addition, Ethical Metalsmiths, a College Corner, Ohio–based nonprofit, is organizing a cooperative of American ­jewelers to buy Fairtrade Gold and may eventually establish some sort of tracking system for U.S. jewelers. “We are just trying to fill the gap,” says executive director Christina Miller, who thinks the best-case scenario would be for Fairtrade International’s newly established U.S. office to do the licensing.

ARM says these issues are being worked out with the various organizations and the group hopes to launch its product in America later this year. Maya Spaull, Fair Trade USA’s director of new category innovation, however, seems a little more circumspect: “While we are not currently certifying fair trade gold, we are very excited about the market and we look forward to staying engaged.” And Fairtrade International spokeswoman Reykia Fick says only, “We do not have concrete plans for introducing Fairtrade Gold into the USA.”

For now, the metals’ main markets are the United Kingdom and Canada, although the product recently was launched elsewhere in Europe and South Korea. And like those markets, the responses have been all over the map.

Miners at Sotrami, one of two mines in Peru that produce Fairtrade and Fairmined Gold and Silver

Alan Frampton, director of CRED Jewellery, an English retailer that also wholesales the material, says that the category has gotten off to “quite a slow start,” but notes his store has been able to buck a nationwide drop in demand.

“In the high street, there has been a huge decline in gold buying, because of the price,” he says. “But we have seen a sharp increase. So the graph is definitely in the right ­direction. It is not for everybody, but we are feeling very optimistic.”

Valerio says others in Britain have done less well, because they are less committed to the concept. “We have had a couple of high street jewelers sell it but they haven’t been so successful,” he says. “They didn’t want to invest in the training.”

Ryan Taylor, founder of the Toronto-based retailer Fair Trade Jewellery Co., feels the key to selling is understanding. “You can’t just stick it in the showcase,” he says. “Everyone has to believe in it and then the passion becomes infectious.”

He says it’s such a unique product that it brings in unique customers. “It’s kind of a parallel industry. You are attracting a totally different kind of client, people who have never considered fine jewelry before. These are people who didn’t want a ring, couldn’t justify a ring. But maybe they wanted something for adornment and they got tired of just fair trade hemp beads. And that’s the beauty of fair trade: I can indulge, but I am not indulging selfishly,” he says.

© Guillaume Collanges/Oro Verde
Entire families engage in artisanal gold mining in Tadó, Colombia.

So far, the biggest barrier to sales, just about everyone admits, has been the products’ premium pricing. Fairtrade and Fairmined Gold costs 10 percent more than regular gold. Fairtrade and Fairmined Ecological products currently cost 15 percent more, although Oro Verde is moving to an auction model that could drive the price even higher. Arango admits that will cut most jewelers out of the market, but he hopes to attract “rock stars, queens, and high-net-worth billionaires who want to make a statement.”

Frampton says that when you add in the costs of the auditing and tracking as well as the additional manufacturing charges—since the jewelry isn’t produced in a low-cost country where it can’t be tracked—he’s selling the 10 percent–­premium material for 20 percent more than the cost of regular gold. And even regular gold isn’t exactly cheap these days.

“Not every consumer is willing to pay that much of a premium for a responsibly sourced product,” says Pomeroy. “When you get a 10 percent premium on coffee, that’s not a big deal. On gold, it’s noticeable.”

Agrees Choyt: “The premium might be a little bit too high to make it appeal to the mass market. A premium along the lines of 5 to 7 percent would be an easier entry point than 10 percent. If the market is saying the premium is too high, maybe the solution is to lower the premium and do more volume. It is about finding a sweet spot where everything clicks.”

And while plenty of consumers have heard of fair trade coffee, they are still getting their heads around fair trade gold. “It’s a radical concept,” says Choyt. “It appeals to deep green people, but a lot of the deep green consumers aren’t necessarily into jewelry.… Coffee is ­simpler. It’s not expensive and it fits right into the whole farm-to-table thing.

Kike Arnal
Oro Verde miner Belarmina Mosquera (plus her family in the background) at the end of a day’s work in Chocó, Colombia

“Recycled gold, consumers get right away,” Choyt adds. “But recycled isn’t really going to change anything as far as mining. This, even if it gets to be only 5 to 10 percent of the market, could make a difference in the lives of hundreds of thousands of miners.”

For that reason, those who believe in fair trade gold think they eventually will see a bright, shiny future if only because consumers are showing greater awareness of what goes into the products they buy.

“It’s the best story our industry has ever had to tell,” says Pomeroy. “We are so proud of our jewelry. We stand behind our cases and hold up these beautiful things. But we hope consumers don’t ask where it came from, or if they do, we just try and sweep it under the rug.

“But people are going to start asking,” he says. “This lets us tell a story the industry has never been able to tell before.”

UPDATE: In the latest twist in the fair trade gold story, as JCK went to press, ARM, the group behind the Fairmined label, said it was ending its partnership with Fairtrade International, though it was unclear what this would mean for the product’s availability in the United States.

To Learn More
fairgold.org
ethicalmetalsmiths.org
communitymining.org