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ICA Congress in Brazil Focuses on Fair Trade Values

May 6, 2011 1:03 PM   By Jeff Miller
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RAPAPORT... The International Colored Gemstone Association’s (ICA) congress in Rio de Janeiro this week, was an opportunity for industry leaders to share insights and success stories that highlighted how the colored stone industry can advance fair trade concepts across the pipeline.

ICA acknowledged that challenges the diamond industry face are not completely foreign to the colored stone pipeline. Several years ago, for example, the tanzanite industry faced scrutiny whereas in recent years attention has been placed upon rubies from Myanmar.

But unlike diamonds,  Jean Claude Michelou, ICA vice president, said there is no centralized marketing and market price control for colored gemstones. Plus, a variety of gems come from hundreds of countries with myriad of cultures and standards, 80 percent of production is erratic at best and lacks investment capacity, and  most of production is carried out by artisanal miners in third-world countries.

Yet, despite those issues,  there are many initiatives underway that are making a difference in the colored gemstone industry. Tanzanite is an example of one success story after the industry  established protocols and dealer warrantees in 2002  through a coalition of representatives of the tanzanite trade, in partnership with government and NGOs.

Douglas Hucker, chief executive of the American Gem Trade Association, shared   steps undertaken to fortify export documentation and create a set of policies to ensure the legitimacy of the supply chain. He noted that what made the task easier for tanzanite, than say for rubies, was the fact that it is only found in Tanzania.

According to Gemfields International's chief executive Ian Harebottle, success can also be found by being "green" socially, environmentally and transparently.

“Gemfields says the true beauty of gems lies in the manner in which they’re managed,” said Harebottle. Referencing its Kagem emerald and Karibam amethyst mines in Zambia, he also cited the importance of localized partnerships, noting 25 percent of Kagem and 50 percent of Karibam are owned by the government.

Gemfields strives to ensure local communities at its mines grow with a focus on sustainability and by supporting  schools, medical clinics, and local organic farming. Moreover, the company  works to minimize the mining impact on natural surroundings and conserve the environment by planting trees and filling old mining pits with water and fish.

Harebottle added, ''We live by the motto that when you keep secrets, the only person you’re fooling is yourself. As a publicly listed company, Gemfields sees significant benefit in being fully transparent. Our doors are always open. We continuously publish our results and corporate strategies. We’ve initiated and support a process of warrantees throughout the pipeline. And, we encourage and support certification.”

Marcelo Ribeiro, director of the Belmont Group, which operates an  emerald mine in Brazil, stated, ''In mining, more money can go into the ground than come out of it. So, you should not act as a treasure hunter, but as an investor, managing risks in pursuit of profitability.” He advocated for investment in geological surveys, mining feasibility and environmental preservation, as well as building infrastructure for the mining community, and forming coops by consolidating small-scale operations.

From a retailer’s perspective, Steve Bennett, president of Color Rocks Limited and GemsTV, believes that the more you tell the more you sell.  GemsTV sold 7.5 million gems in 2010, representing 287 different kinds of stones from 31 countries and he attributed strong sales to being transparent with consumers.  Bennett buys gems directly from miners whenever possible and he said that technology allows his company to gauge spikes in spending to determine buying triggers. What he has found is that mine safety, certification, local mining community projects, and information on suppliers all resonate with consumers.

But Bennett added that not everyone can wear the same hat when it comes to expectations, noting that he doesn’t want to see small miners regulated out of business. Similarly to Gemfields, Bennett is working to create cooperatives to help small to medium mining operations bring goods to market through organized auctions at major trade fairs to ensure fair trade and better exposure to potential buyers.

Speakers at the ICA congress also note the value of local education and training in gem identification and cutting at the source add value downstream. ICA ambassador Tom Cushman cited Madagascar as a winning example in the establishment and successful growth of a lapidary school and gemological laboratory.

Eli Izhakoff, president of the World Diamond Council, summed up the importance of a clean pipeline by saying, ''When consumers buy jewelry, they should know that not only is it an expression of value, beauty and emotion, but they have contributed to making a better life for people who need it most dearly.”

 

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Tags: fair, Gemfields, GemsTV, Jeff Miller, ruby, tanzanite, trade
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