Sunday , March 29 2020
Home / Lead 1 / The hidden cost of jewelry
The hidden cost of jewelry

The hidden cost of jewelry

Human Rights in Supply Chains and the Responsibility of Jewelry Companies
Jewelry and watches denote wealth and status, as well as artistry, beauty, and love. Gold and diamond jewelry in particular are frequently purchased as gifts for loved ones and for special occasions. Globally, about 90 million carats of rough diamonds and 1,600 tons of gold are mined for jewelry every year, generating over US$300 billion in revenue.The purchase of bridal jewelry, including engagement and wedding rings, has particular emotional and financial significance. In India, for example, weddings generate approximately 50 percent of the country’s annual gold demand. For Valentine’s and Mother’s Day, Americans spend more on jewelry than any other type of gift, purchasing nearly $10 billion of jewelry for the two holidays in 2017.
For millions of workers, gold and diamond mining is an important source of income. But the conditions under which gold and diamonds are mined can be brutal. Children have been injured and killed when working in small-scale gold or diamond mining pits. Indigenous peoples and other local residents near mines have been forcibly displaced. In war, civilians have suffered enormously as abusive armed groups have enriched themselves by exploiting gold and diamonds. Mines have polluted waterways and soil with toxic chemicals, harming the health and livelihoods of whole communities.
Jewelers and watchmakers typically rely on complex supply chains to produce each piece of jewelry or watch. Gold, diamonds, and other minerals and gemstones are mined in dozens of countries around the world, and are then typically traded, exported, and processed in other countries. Processed gold and polished diamonds are then transformed into jewelry in manufacturing plants and artisan workshops, before reaching retailers. By the time a piece of jewelry is offered for sale, it may be very difficult to know the origins of the gold or diamonds it contains, or whether they are tainted by human rights abuses or environmental harms.
Despite this complexity, jewelry companies have a responsibility to ensure that their businesses do not contribute to human rights abuses at any point in their supply chains. Under the United Nations Guiding Principles on Business and Human Rights, an international standard on human rights responsibilities of companies, businesses have to put in place “human rights due diligence”—a process to identify, prevent, mitigate, and account for their own impact on human rights throughout their supply chain. The Organisation for Economic Co-operation and Development (OECD) has developed this approach further in its “Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas,” the leading due diligence standard for minerals.
Consumers increasingly demand responsible sourcing too. A growing segment of younger consumers are concerned about the origins of the products they buy, and want to be sure that the jewelry they purchase has been produced under conditions that respect human rights.
In this report, Human Rights Watch scrutinizes steps taken by key actors within the jewelry industry to ensure that rights are respected in their gold and diamond supply chains. The report focuses on the policies and practices of 13 major jewelry brands, selected to include some of the industry’s largest and best-known jewelry and watch companies and to reflect different geographic markets: Boodles (United Kingdom), Bulgari (Italy), Cartier (France), Chopard (Switzerland), Christ (Germany), Harry Winston (United States), Kalyan (India), Pandora (Denmark), Rolex (Switzerland), Signet (United States-based parent company of Kay Jewelers and Zales in the US, Ernest Jones and H. Samuel in the UK, and other jewelers), Tanishq (India), Tribhovandas Bhimji Zaveri Ltd. (TBZ Ltd.)(India), and Tiffany and Co. (US). Collectively, these 13 companies are estimated to generate over $30 billion in annual revenue.
Human Rights Watch first contacted these 13 companies with letters and requested meetings with each company. Ten companies responded. Nine sent written responses. Of those, six companies agreed to meet with Human Rights Watch. Another company met with Human Rights Watch without sending a letter. Three companies did not respond, despite repeated requests. Human Rights Watch analyzed the actions taken by the jewelers based on information provided directly by the companies, as well as publicly available information from company websites and other public sources. We also assessed the governance, standards, and certification systems of the Responsible Jewellery Council (RJC), an industry-led initiative with over 1,000 members, including jewelry manufacturers and retailers, refiners, and mining companies.
Our research found that most of the 13 jewelry companies we contacted directly recognize their human rights responsibilities and have made some efforts to responsibly source their gold and diamonds. However, their practices differ significantly.
Some of the companies scrutinized for this report have taken important steps to address human rights risks in the gold and diamond supply chain. For example, Tiffany and Co. can trace all of its newly mined gold back to one mine of origin and conducts regular human rights assessments with the mine. Cartier and Chopard have full chain of custody for a portion of their gold supply. Bulgari has conducted visits to mines to check human rights conditions. Pandora has published detailed information about its human rights due diligence efforts, including on noncompliance found during audits of its suppliers and steps it is taking to address them. In addition, two companies we contacted have pledged to take specific steps to improve their practices going forward. Boodles has pledged to develop a comprehensive code of conduct for its gold and diamond suppliers, and to make it public. The company has also pledged to report publicly on its human rights due diligence from 2019, and to conduct more rigorous human rights assessments. Christ has pledged to publish its supplier code of conduct and other information on its human rights due diligence efforts in the coming year.
While these are promising signs, we found that most companies still fall short of meeting international standards. While some companies are actively working to identify and address human rights risks in their supply chains, others rely simply on the assurances of their suppliers that their gold and diamonds are free of human rights abuses, without rigorously verifying these claims. Some have made no commitments to responsible sourcing at all. Almost none can identify the specific mines where all of their gold and diamonds originate. Few provide comprehensive public reports on their efforts to responsibly source gold and diamonds.
Based on information provided to us by the companies directly and publicly available information, we assess the company’s responsible sourcing policies and practices as follows:
Excellent (Companies that fulfill all of the criteria for responsible sourcing:)
Strong (Companies that have taken significant steps towards responsible sourcing): Tiffany and Co.
Moderate (Companies that have taken some important steps towards responsible sourcing): Bulgari, Cartier, Pandora, Signet
Weak (Companies that have taken few steps towards responsible sourcing):
Boodles, Chopard, Christ, Harry Winston
Very weak (Companies for which there was no evidence of steps towards responsible sourcing): Tanishq
No ranking due to nondisclosure (Companies that provide no information regarding responsible sourcing): Kalyan, Rolex, TBZ Ltd.
Our research also found that many companies are over-reliant on the Responsible Jewellery Council for their human rights due diligence. The RJC has positioned itself as a leader for responsible business in the jewelry industry, but has flawed governance, standards, and certification systems. Despite its shortcomings, many jewelry companies use RJC certification to present their gold and diamonds as “responsible.” This is not enough.
While the industry has a long way to go, some exciting initiatives have emerged in recent years to show that change is possible. The Canadian jeweler Fair Trade Jewellery Co. has recently started to import fully-traceable gold from artisanal mines in the Democratic Republic of Congo. A growing number of small jewelers in the UK and elsewhere are sourcing their gold from artisanal mines in Latin America that are certified under the Fairtrade or the Fairmined gold standard. And a Canadian diamond company, the Dominion Diamond Corporation, has introduced a line of traceable diamonds called CanadaMark, which are independently tracked at every stage from the mine to polished stone.
To move forward, all jewelry companies need to put in place strong human rights safeguards—otherwise, they risk contributing to human rights abuses. In particular, companies should:
Put in place a robust supply chain policy that is incorporated into contracts with suppliers;
Establish chain of custody over gold and diamonds by documenting business transactions along the full supply chain back to the mine of origin, including by requiring suppliers to share detailed evidence of the supply chain;
Assess human rights risks throughout their supply chains;
Respond to human rights risks throughout their supply chains;
Check their own conduct and that of their suppliers through independent third-party audits (a systematic and independent examination of a company’s conduct);
Publicly report on their human rights due diligence, including risks identified;
Publish the names of their gold and diamond suppliers;
And source from responsible, rights-respecting artisanal and small-scale mines.
To be credible, the Responsible Jewellery Council should become a true multi-stakeholder body by giving civil society and industry representatives equal decision-making power at all levels and strengthening its standards and auditing practices to set a higher bar for responsible sourcing practices by the industry.