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Do consumers really care?

Is ethical jewellery another one of those buzz words, or is it a serious phenomenon that customers care deeply about? Naomi Levin investigates
For years, the industry has discussed ethical jewellery, but it has often been an issue relegated to the fringes. At times, media coverage – including films and documentaries – have shone the light on the jewellery industry. Terms like the Kimberley Process, blood diamonds and dirty gold are bandied around. However, what is really behind the term ethical jewellery and do ethical practices improve sales as well as consciences?

Brisbane-based jeweller Melinda Nugent set up Ethical Jewellery Australia in 2007 after signing Oxfam’s No Dirty Gold campaign, which supports the rights of communities based near gold mines to live safely and campaigns for the surrounding environment to be looked after.

The online manufacturer and retailer says three quarters of her customers come to her specifically searching for jewellery that has been sourced and manufactured in an ethical way. The qualified gemmologist says the more she learnt about practices within the industry, the more she felt she needed to respond.

“Initially it was a direct response to learning of Oxfam’s No Dirty Gold campaign, however the more I delved into it, the more I learnt of the extent of human rights abuses – particularly in the mining and processing of diamonds and coloured gemstones,” Nugent says.

She noticed a huge disconnect between the beauty of a piece of jewellery and the joy it brings to the wearer, and the misery or harm that same piece of jewellery cause the workers who sourced and prepared the components, such as the child labour being used in cutting factories.

“While I support initiatives that minimise harm to the environment – such as using responsibly recycled precious metals – my main concern is human rights and fair trade,” she explains.

Nugent may be a small player, but the larger companies are also getting in on the ethical act.

Pandora signed up as a member of the Responsible Jewellery Council (RJC) late last year. In doing so, it joined many other of the biggest and most high-profile jewellery companies in the world, including De Beers, Chopard, Cartier and Tiffany & Co and many more miners (such as BHP and Rio Tinto), polishers, traders, manufacturers and retailers. Pandora also joined two Australian retailers – Melbourne’s Holloway Diamonds and Perth’s Solid Gold, as RJC members.

When its RJC membership application was accepted, Pandora chief executive officer Mikkel Vendelin Olesen committed his company to ethical practices all the way along the supply line.

“We strongly believe in setting high common quality standards for the industry, and we look forward to actively working together with the Responsible Jewellery Council and its member organisations in order to encourage responsible practices throughout the jewellery industry,” Olesen said at the time.

In applying for membership, Pandora agreed to adhere to the RJC’s code of practices. That code encompasses business ethics; a commitment to uphold human rights across the company’s workforce; looks at environmental performance, including efficiently using resources and energy and preventing pollution; and requires members to put in place responsible management systems.

But why would a giant like Pandora care about ethics? Sales are strong and its product is loved the world over. Pandora vice-president for corporate social responsibility Claus Teilmann Petersen says customers want to know that the product they are purchasing has not hurt others in its production. “At the global level we do experience a clear and growing interest for responsible sourcing and production of jewellery,” Petersen explains. “We experience this through increased customer interest, genuine concern, as well as qualified knowledge on ethical issues.”

At the moment, the RJC is in the process of certifying all its members by sending accredited, independent auditors to ensure members adhere to the required standards of being responsible links in the jewellery sourcing, manufacturing and retailing chain.

Petersen tells Jeweller that in order to fulfil the auditor’s requirements, the global jewellery giant would have to make some changes to its practices. “Pandora is right now preparing our global organisation for the upcoming RJC audits in [the northern hemisphere] spring 2012 – and yes we do have to make changes in some markets,” he explains.

“We are not talking fundamental changes, but changes that mostly have to do with formalising procedures within occupational health and safety, such as implementing check lists for hiring processes, armed robbery procedures, etc.”

Petersen adds that in working toward compliance, Pandora is actually looking to its Australian operations for assistance. “You have some of the most detailed legal requirements on these issues,” he says of the local OHS standards.

Garry Holloway, from Melbourne-based Holloway Diamonds, agrees the process of certification is arduous. He describes the auditing process as “very complex and time consuming” but says that isn’t a deterrent.”I’ll keep on it [membership of the RJC] and I want to do a self-audit, I want to take it on,” he says, adding that at the moment, the lack of qualified local independent auditors means he cannot be externally audited.

The certification process means RJC’s Australian-based chief executive Michael Rae has his work cut out for him. Half way through 2011, there are 13 RJC certified members – by the end of the year, Rae says there will be 100.

However, it is not Rae or his staff who will be reviewing RJC’s members’ practices, it is specially trained auditors. “We’re at arms length from the auditing process,” he says. “We’ve adopted the mantra, ‘transparency is all’.”

Members have been provided with the criteria for certification and according to Rae, there are no surprises. “We encourage them to do a self-assessment. They look at their business and put together the evidence the auditor will require.” The auditors will then return to the RJC with their report and make a recommendation for how long the member should be accredited for.

Rae says the exercise is certainly not about comparing best practice or trying to work out the trade secrets of the companies working along the jewellery production line. “We’re not looking to amass a database on the jewellery industry,” he says. “All I get is a summary report from the auditors.”

But in the end, do customers care where their jewellery comes from or whether their diamond was cut by a Belgian artisan or an Indian child? In short, the answer according to industry experts is yes, most do.

“I came out of 17 years with the World Wildlife Fund where I was involved very strongly in certification issues,” Rae says. “I was told repeatedly by retailers around timber and fisheries industries, as I hear now from jewellers, that not many people come in asking for certified timber, or other products. But how many people might not go into a store at all because of concerns of provenance?

“No one comes in asking for unethical stuff, so why would you offer it.”

Last year, the CIBJO prepared a report Responsible Luxury, which found that any jewellery industry recovery after the Global Financial Crisis could not be sustainable without focusing on a new triple bottom line: people, planet, profit.

The report, which was based on roundtable discussions with members of the international, US-based, Luxury Marketing Council, argued strongly that consumers at the top-end of the market are taking more interest in where their money goes.

“In 2010, luxury consumers will shake off their past,” the report says. “They will update their sense of identity and citizenship, expressing their changing views through their most apparent and quantifiable action – their buying patterns.”

It continues that any company that does not have a global consciousness and behave according to ethical guidelines, “cannot be luxury in the affluent consumer’s psyche”.

Interestingly though, the report finds the days of talking about corporate social responsibility and ethics in luxury goods industries, such as jewellery, are numbered – but not for the reasons you might think. “There would be no talk about it because it would be in the fabric of every company – the management behaviour, the employee culture – not just a subject to debate endlessly.”

It seems Holloway agrees. Interestingly, the jeweller does not use his commitment to ethics as a marketing point. Despite the fact he has RJC membership, has made sure his diamond merchants include warranties for their products on their grading certificates and has also recently switched all his store lighting to energy efficient bulbs, he does not flaunt his credentials. “If people need to see the signage to know that you’re ethical, that is a problem,” he says. “It is something we should all be doing.”

It seems the debate is over, ethics matter in the industry – it is just a question of convincing all the customers.

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Naomi Levin
Contributor •

Naomi Levin is a journalist who knows a little bit about a lot of things. She has worked as a sports journalist and is currently a political and general news reporter, in addition to writing for Jeweller.
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