Fair Trade Workshop Standard Zero for Ethical Gold

1. AN INTRODUCTION TO THE PUBLIC CONSULTATION WORKSHOP STANDARD ZERO FOR FAIRTRADE ARTISANAL GOLD AND ASSOCIATED SILVER AND PLATINUM Cristina Echavarría Secretary General 7th Annual CASM Conference Ulaanbaatar, Mongolia 7-12 September, 2007

2. MAIN POINTS • Who is ARM? • What conceptual principles underpin the Fair Trade certification scheme for ASM? • Why Fair Trade? • How reliable is the market for fair trade goods, especially for precious metals, gems and minerals? • How is Standard Zero for Fair Trade Gold and Associated Silver and Platinum being developed? • Some examples of the requirements

3. ARM’s goal is to improve equity, well being and quality of life in mining communities through the implementation of economic incentives that induce more responsible mining practices in terms of the social, economic, labour and environmental performance of ASM • Driven by increasing consumer awareness regarding the potential that buying jewels certified with green or fair trade labels, can have to reduce poverty and promote restoration practices in ecosystems inhabited by ASM communities.

4. Emerged from the opportunity created by the Certified Green Gold Programme in Colombia As an international and multi-institutional organisation to bring credibility, transparency and legitimacy to the development of a framework for responsible production and trading of minerals, applicable to ASM..miners, jewellers, NGOs, traders, consumers It proposes to work in partnership with organised ASM, committed practitioners and support organisations, governments and international cooperation In response to consumer demand for ethical jewellery and minerals, whose production demonstrably contributes to poverty reduction To take advantage of fair trade and green markets as incentives for improved social and environmental performance of ASM ARM proposes a process through which key stakeholders can reach agreements to define universal standards and criteria for the certification of responsible and environmentally friendly community mining practices

5. QUIRAMA VISION • ASM is a formalized, organized and profitable activity, that uses efficient technologies and is socially and environmentally responsible; • it progressively develops within a framework of good governance, legality, participation and respect for diversity; • it increases its contribution to the generation of decent work, local development, poverty reduction and social peace in our nations, • stimulated by a growing consumer demand for sustainable minerals and jewellery

6. PRINCIPLES FOR RESPONSIBLE ASM • Framed within the Millenuium Development Goals and the Declaration of Sustainable Development • Rights based approach • Decent labour based ILO guidelines • Legality • Quality of life and sustainable human development • Environmental protection • Gender equality • Multicultural approach • Based on organization and integration of ASM • No to illicit activities nor armed conflict

7. WHY FAIR TRADE? • Exclusive label for small scale producers • Involves improvement through a process: minimum and progressive requirements • Based on long term partnerships between producers and traders-jewellers • Includes pre-financing schemes that allow for long term business planning to achieve sustainable production by the business unit • It is an integrated approach addressing social, economic, labour and environmental challenges, that also includes traders and jewellers • Pays a fair trade premium to producers and a fair price

8. HOW RELIABLE IS THE FAIRTRADE MARKET? • Today over 7 million people- including farmers, workers and their families - from some 59 countries around the world benefit from the international fair trade system. • Consumers worldwide spent 1,6 billion Euros on Fairtrade Certified Products in 2006, according to Fairtrade Labelling Organizations International (FLO). • This is a 41% increase on the previous year, directly benefiting over 1,4 million producers and workers worldwide. • Impressive growth figures can be seen: cocoa has increased by 93%, coffee by 53%, tea by 41% and bananas by 31%. Fairtrade Cotton Farmers too have seen how the demand for their produce has more than doubled in just one year. • http://www.fairtrade.net

9. SO WHAT IS THE POTENTIAL FOR FAIRTRADE JEWELLERY? • Around 3 emails weekly to ARM requesting responsibly produced gold. • Green Gold has a high record of lost sales due to limited supply • Jewellers wanting to buy from pre-certified pilot sites to support the process • USA jewellery market is US$45 - $50 billion per annum* • International gold jewellery consumption in 2005 was US$39 billion, with US$16 billion for gold jewellery consumption in the US market* • If just 1% of gold was Fair Trade = $400 million.* * From Chris Sheldon, CASM FT Session, 2006.

10. PROCESS TO DEVELOP STANDARD ZERO • February 2006: ARM forms the technical committee to develop fair trade artisanal gold standards • February-May 2006: Building on the FLO generic standards for producers the committee adapts them to ASM • May-July 2006: Colombia meeting, the committee finalises the draft standards • August-January 2007: Public consultation at local, national, regional y global meetings and via Internet • January 2007: Technical committee meeting to incorporate comments from public consultations and visit potential pilot testing sites in Peru • November 2007-March 2008: Pilot testing standard zero in Latin America • 2007-March 2008: Scoping studies to identify potential pilot sites and teams in Africa and Asia. (Funded by CASM). • June 2007: ARM and FLO-FTF sign MoU to jointly develop Standard Zero.

11. PROCESS TO PILOT TEST STANDARD ZERO • Pilots are based on existing partnerships between organised miners and a support organisations – they involve hands on learning • ARM to coordinate and technical committee to follow up and support the network of pilot projects • Exchange of experiences within and between continents will be reinforced to enable the formation of miner’s organisations • End 2008: Technical committee to incorporate lessons from pilot testing in Latin America to produce standard one for fair trade artisanal gold and associated silver and platinum • 2009: First certified fair trade gold and associated silver and platinum is launched and first miners are certified

12. MAIN POINTS ABOUT STANDARD ZERO • Standard Zero is a VOLUNTARY standard. It does not replace the law. • Includes only primary, not recycled gold. Both alluvial and hard rock gold extraction and processing in contemplated. • Includes silver and platinum produced through the same extractive and processing method as the gold. • It is a long term alliance between responsible miners and jewelers • ARM is not an intermediary, but it will help in matching • Participation in the public consultation process is open to all interested parties: miners, processors, traders, jewelers, support organizations, government officials • ARM is already in dialogue with key organizations to develop fair trade standards for diamonds, gems, colored stones and other minerals. • There are environmental, labour, social, economic and trader standards in Standard Zero, they are expressed as minimum and progressive requirements…some examples:

13. LABOUR DEVELOPMENT • Prohibition of any kind of forced labour • Elimination of discrimination against women miners and other disadvantaged groups • Abolition of child labour • Health and safety conditions in the workplace • Social protection

14. The organisation will recognise that the worker’s widow/widower has the right to occupy the position and prerogatives held by the deceased miner in the mine and in the organisation, with the object of preventing her/his abandonment and that of her/his family. The organisation will make efforts to ensure that all associates and mine workers benefit from some kind of social security In the event of death of occasional or migrant workers, reparation should be given to the widow/widower and heirs, if there were any. E.G. LABOURMINIMUM AND PROGRESSIVE

15. ENVIRONMENTAL DEVELOPMENT • Management of toxic substances, such as Hg and Cn • Ecosystem health and ecological restoration • Green Premium ASM Gold

16. The use of retorts or alternative mercury recovery devices by members of the miner’s organization is to be considered a minimum requirement for continued certification after the first year. If mercury is used for mineral processing, the organisation makes progress in mercury recovery from concentrated tailings and mercury recovery from amalgam burning, making emphasis on the general acceptance of recovery technologies within the community. Amalgamation burning must not take place in domestic residences. Amalgamation tailings and cyanide waste solutions must not be discharged into water, or where they can reach the water bodies. Nitric acid for dissolving mercury from the amalgamation should not be used Any residual cyanide solution must be neutralized before responsible discharge E.G. ENVIRONMENTALMINIMUM AND PROGRESSIVE

17. SOCIAL DEVELOPMENT • Fair trade adds development potential • Members of the organisations are community based artisanal and small scale miners • Democracy, transparency and participation within the organisation

18. The organisation works towards transparent planning of the business. The organisations are encouraged to make periodic business plans, annual cash flow predictions and longer term strategic plans. Such plans will be approved at the Annual General Meeting. A legal, transparent and democratic organizational structure is in place The annual report and accounts are presented in an understandable and clear manner for all, approved at the Annual General Meeting, and made publicly available. Adequate administration is in place E.G. SOCIALMINIMUM AND PROGRESSIVE

19. ECONOMIC DEVELOPMENT • Trading capacity • Fair Trade Premium • Economic strengthening of the organisation • Improved productivity and economic efficiency of ASM

20. The organization has an established accounting system in place. Miners’ organizations identify optimal mining and metallurgical technologies to improve their level of mineral recovery. The organisation will work towards the strengthening of its business related operations. This could for example be through the building up of working capital, implementation of quality control, training/education and risk management systems, etc. Production Efficiency: Miners invest in cleaner and more efficient technologies to improve the level of mineral recovery. E.G. ECONOMICMINIMUM AND PROGRESSIVE

21. TRADER’S STANDARDS • Buying from certified producers • Pricing and premium • Long term trading relationship • Pre-finance • Quality definition and claims

22. Write your name in the group where you want to work and join that group Draw an animal with which you identify yourself and say why you like that animal to the rest of your group. Put your name on the card. Write the names and organisations of all group members in the yellow circle Leaves: write 3 expectations you have about this workshop Petals: write 3 priority problems of ASM Stems: write questions or doubts you have about fair trade Each person reads to the group what they have written, first the leaves, then the petals, then the stems Build a common flower among the group and give it a name. WORKING GROUPS

23. ANALYSING STANDARD ZERO IN EACH GROUP • Choose a rappoteur • The coordinator reads the whole section • Coordinator goes back to first standard of the section and reads each requirement, and asks: • Does everyone understand? • Do you agree with this standard? • Are there any changes, suggestions or comments to include in the minutes for the rappoteur for this requirement? • The rappoteur takes the group contribution on a paper and reads through the comments to the plenary • At the end a common minute is written and everyone who agrees signs the results of the consultation

24. WE ARE READY TO WORK • PLEASE WRITE YOUR NAME IN ONE OF THE GROUPS • THANKS VERY MUCH!