Dirty Gold: The Next Conflict Diamond?

It is not what Fifth Avenue retailers wanted days before Valentine’s Day—a 15-foot-tall puppet named “Miss Goldzilla,” carrying bags of fake jewelry, striding the streets in front of their stores, warning consumers off “dirty gold.”

Miss Goldzilla’s pamphlets called gold mining “one of the most destructive activities in the world” and accused miners of a variety of sins, from environmental hazards to human-rights abuses. They told consumers to ask their local jeweler “where the gold in their products comes from … [and] to support our call for reform of the mining industry.”

“Miss Goldzilla” is the latest stunt from the No Dirty Gold campaign—a so-far haphazard affair run by a grab bag of nongovernmental organizations including Earthworks, Oxfam America, and Greenpeace. The campaign, launched a year ago, seems to have generated more interest in the industry than from the media or consumers, but there are signs it’s increasing the volume. The campaign recently sent a letter to 50 high-volume retailers, asking them to commit to purchasing gold only from “responsible sources.” It has organized No Dirty Gold educational tables at colleges and has persuaded over 10,000 people to sign its No Dirty Gold pledge posted at www.nodirtygold.org.

Like the campaign over conflict diamonds, many worry dirty gold could be a public-relations headache for the industry that throws a spotlight on some of the less-glamorous links in the jewelry production chain. It also raises the question of what responsibility jewelers have for what they sell.

And as with conflict diamonds, the industry is determined to work with the NGOs before things get worse.

Conflicts Noisier. It’s unlikely that the No Dirty Gold campaign will reach the noise level of the fight over conflict diamonds, which attracted widespread media attention with its shocking pictures of African children with amputated limbs.

“We don’t sense the environmental issues are getting the same degree of media coverage,” said Michael Barlerin of the World Gold Council, who now represents the Council on the Responsible Gold Task Force, a group that mining companies formed in response to NGO concerns. “That being said, we are looking at it as if it were comparable.”

One thing the industry learned from conflict diamonds is that it’s best to cooperate early. Tiffany, which had conflict-diamonds protests outside two of its stores, recently surprised NGOs—in a positive way—when it placed an ad in The Washington Post expressing concern about the environmental impact of the Rock Creek Silver Mine in Montana. Tiffany’s ad is now cited approvingly on the No Dirty Gold site.

So far, the charm offensive is working; the NGO campaigners say they are happy with what they’ve heard from the industry. “We are in the preliminary phases of entering into dialogue,” says Oxfam spokeswoman Helen DaSilva. “Many retailers have expressed support for the objectives of our campaign. They are essentially on the same page. It’s a great starting point for us, and we look forward to continuing our dialogue with them.”

The latest NGO release specifically notes that “Tiffany & Co., Cartier, Helzberg Diamonds, and Harry Winston have voiced support for the campaign’s objectives.” The campaign “is looking for more retailers to join those leaders,” says Payal Sampat, co-director of the No Dirty Gold campaign for Earthworks.

Dirty Goals. Still, support for goals is one thing. Carrying them out is another. And for now, the NGOs are vague on what they want the industry to do.

“We believe that jewelry retailers have the responsibility to ensure to their consumers that their products were produced ethically,” says Sampat. “We are looking for a commitment from retailers to look at their supply chain, track their current sources for gold, and inform their suppliers that they are committed to sourcing gold from responsible sources.”

The letter sent to the 50 retailers is more specific, asking for commitments that their gold has not been responsible for “forced displacement of communities,” environmental damage, and human-rights violations, among other things. It wants them to have assurances for 30 percent of their gold products by 2006, 50 percent by 2008, and 75 percent by 2010. The letter says a forthcoming ad “will identify companies that have made commitments to help accomplish this as well as companies that have not.”

The problem is that it’s difficult—some say impossible—for retailers to make any kind of commitment about the gold they source. Tiffany has been increasing the amount of metals it buys directly from mines, but not many jewelers have Tiffany’s buying power. “Most companies buy gold from a bank that buys it from multiple sources,” notes Jewelers of America executive director Matthew A. Runci, whose job increasingly involves social and political issues. “There are so many layers where the product is not just passed on, but melted, refined, and then mixed with other gold.”

Could there ever be a Kimberley Process for gold—or at least some “chain of custody” to identify where gold comes from? Barlerin says it won’t be as easy to do as it was with diamonds—which wasn’t exactly a cakewalk, taking several years and numerous meetings, laws, and United Nations resolutions.

“You are talking about a fragmented and highly complex supply chain,” Barlerin argues. “Gold can be melted down and put back in the industry. The ring I’m wearing could be from Cleopatra’s time, or could have been mined recently.… We shouldn’t say a chain of custody can’t be done. I am a believer that anything can be done. It’s just a question of is it economically feasible and who would bear the cost.”

The NGOs say they are taking this into consideration. “We believe that over the next few years there will be a chain of custody and independent verification,” says Sampat. “Though it won’t happen overnight and we are very much aware of that.”

Even so, some retailers feel the campaigners are aiming at the wrong target. “What is really required is a focus on the mining processes and what constitutes best practices at the mine level,” says Runci.

Sampat says the NGOs are working with the mining industry but it “is not necessarily going to get the message that it needs to clean up its act without hearing from its biggest consumers, U.S. jewelry retailers.”

For their part, the miners say they are more than willing to talk. “The mining industry is in the process of engaging in dialogue with the NGO community,” says Barlerin. But he contends that the miners are being tainted unfairly: “A lot of the NGOs’ information is dated and not necessarily reflective of current practice. The primary players are adhering to rigorous standards, more than the NGOs are aware of.”

Carol Raulston, senior vice president of communications for the National Mining Association, says the miners need to talk more not just with the NGOs but the rest of the industry. “We would all benefit from learning more about each other’s businesses,” she says, and adds that jewelers who want to hear the miners’ point of view should go to www.responsiblegold.org.

No Boycott. As with conflict diamonds, the NGOs behind dirty gold stress they aren’t calling for a boycott—although the difference between a boycott and a negative “consumer education campaign,” is somewhat academic. A message like “The more you know, the less gold glows” may not explicitly tell consumers not to buy gold, but some will get that message regardless.

Which is why the stakes remain high. So far, though, the industry seems to be making the right moves. And Sampat says jewelers should not look at them as the enemy.

“This could be a real opportunity for retailers,” says Sampat. “As things stand, this is an industry that is hurting people and the environment. And it doesn’t need to be that way.”