CHICHESTER (Reuters) - “Customers don’t realize that one wedding ring weighs 10 grams and causes three tonnes of toxic waste,” says Greg Valerio, whose company aims to follow fair trade coffee with ethical gold jewelry.
A silver-haired anti-poverty and human rights campaigner, he is at the forefront of a fast-growing global market for gold and platinum jewelry which seeks to soothe consumers’ consciences and protect miners from danger and exploitation.
His jewelry shop in the southern English city of Chichester has formed a partnership with miners in a cooperative in Choco, an underdeveloped region in northeast Colombia, called the Green Gold (“Oro Verde”) project.
Together they are working with the Fairtrade Foundation — which backs farmers and workers from poor countries to develop their communities through fairer terms of trade. They aim to extend Fairtrade’s successful labeling to gold.
“Green gold” jewelry is a niche in a fast-growing wider market for ethical goods, ranging from day-to-day foodstuffs like tea, coffee and chocolate to designer fashions and travel.
Analysts say global sales of ethical gold jewelry are probably less than one percent of the total $56 billion gold jewelry market based on figures from London-based consultancy GFMS — and the Fairtrade label is a year or so away.
Although the ethical product is priced at a premium and gold is at record highs, the market has been ballooning. Among a plethora of online offers are companies including one called greenKarat that argues industrial mining methods damage the land and endanger ecosystems, so recycled gold would be better for society.
British fashion designer Katharine Hamnett includes a link to Valerio’s outlet, called Cred, on her Web site. He said ethics were a strong selling point in the jewelry trade: a woman would not want to receive a gift that was tarnished by exploitation.
Nor do some men want to give them. A customer of Valerio’s store, Stephen McIlhenny, 27-year-old deputy manager of an outdoor activities centre in Devon, said he ordered a bespoke white gold engagement ring with a round diamond in November for 800 pounds ($1,600).
“I wanted my engagement ring to have put labor and materials to good use rather than wrecking things,” he said by telephone. “I wanted my fiancee to know that the gift was very special and did not put people through hardship.”
The “Oro Verde” miners receive an income premium of roughly 10 percent over their peers in Colombia for their work, said Valerio, who has dual British and Canadian nationality and also helped found the independent, global Association for Responsible Mining (ARM).
With donors including the charity Oxfam, the ARM aims to expand the Green Gold initiative to develop a framework for responsible artisanal and small-scale mining and meet growing consumer demand for sustainable jewelry and minerals.
Mine owners in many parts of the world regularly flout safety regulations to meet demand that seems insatiable — gold has been in a bull market for seven years and on Tuesday prices were probing fresh all-time highs above $880 an ounce.
In South Africa, the world’s top platinum producer, more than 200 workers were killed in 2007, prompting a nationwide strike over safety that hit output. The National Union of Mineworkers has threatened more action as it urges the government to prosecute mining companies for the deaths.
The Fairtrade Foundation, which coordinates Fairtrade labeling in 20 countries including Britain, is working with the ARM to explore how to develop the concept of ethical gold.
“If we get a positive board decision to proceed with Fairtrade labeled gold, then depending on the outcome of the pilot studies to date, it would be likely that the first certified gold will be available during 2009,” said Fairtrade Foundation policy and producer relations officer Chris Davis.
“It is a partnership that seeks to bring our knowledge of Fairtrade standards and practice together with ARM’s knowledge of artisanal small-scale mining,” said Davis, who has visited the Choco cooperative, as well as mines in Bolivia and Peru.
Valerio started his store in 2004 and says it is one of the first jewelers in the world to sell ethical gold and platinum jewelry.
“We were helped by ‘Blood Diamond’,” he said, referring both to the Leonardo DiCaprio movie and to international efforts to stem the flow of conflict diamonds — rough diamonds used by rebel groups to finance wars, featured in that film.
The Kimberley Process, a joint government, industry and civil society initiative introduced in 2003, sought to help curb decades of devastating conflicts in countries such as Angola, Ivory Coast, the Democratic Republic of Congo and Sierra Leone.
Since Cred started marketing ethical gold and platinum jewelry, its sales have grown fast, with online orders flowing in from around the world, notably the United States, Valerio said.
“Bearing in mind that our certified gold sales at the end of 2004 were zero pounds, we have just posted over £200,000 ($400,000) (in sales) at the end of 2007,” he added.
Cred’s wedding or engagement rings typically cost about 10 percent more than average prices but are about 15 percent below the top luxury brands such as Tiffany.
A bespoke Cred 18-carat gold wedding ring might cost from 195 to 800 pounds ($390 to $1,600) depending on its size and design — the cheapest engagement ring one could expect to buy in a standard British store would cost about 80 pounds ($160).
“I think the idea of ‘fair trade’ jewelry will spread,” said Cred customer McIlhenny. “Whenever I talk to my friends about my fiancee’s ‘fair trade’ ring, they all really like the idea.”
Andrew Wade, a consumer goods analyst with Seymour Pierce, a London-based investment bank and stockbrokers, is less certain: “It is difficult to know how the end-consumer will respond to higher-priced ethical jewelry,” he said.
However keen the demand may be, the health of the global economy will ultimately drive sales: jewelers face the double challenge of soaring gold prices and a downturn in consumer confidence in Europe and the United States.
“But it makes sense to be in a business in a growing area,” Wade added.
Reporting by David Brough; Editing by Sara Ledwith