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Responsible Gold
The ethical, social, human rights and environmental practices of gold miners was a key topic at a two-day conference in New York.
By Peggy Jo Donahue
Gold: Substance, Symbol and Significance,” an Initiatives in Art and Culture conference held on April 8 and 9, 2011, covered gold from every angle, including its role in history, fashion, jewelry, numismatics, monetary policy and geology. But it was the sessions covering gold mining and the responsible practices challenges it faces that drew the greatest number of questions from attendees, who ranged from collectors and scholars to industry and civil society representatives. “There is increased geopolitical risk in the very complex areas where we mine today,” acknowledged William R. Williams, vice president, environment, for Barrick Gold Corp., a Canadian miner with 25 operations on five continents, making it the world’s largest gold producer. Barrick’s gold mines yielded nearly 8 million ounces in 2010. “There’s greater stakeholder scrutiny and we have a stronger focus on the environment, as well as community and human rights issues. Having a social license to operate is critical to us.”Williams detailed Barrick’s achievements, including three years on the Dow Jones Sustainability World Index, which entails a third-party independent review of the miner’s responsible mining practices. It was also a founding member of the International Cyanide Management Code (ICMI) and has been through two third-party audits of its practices in the responsible use of cyanide in gold mining. Williams acknowledged that Barrick continues to face challenges in countries such as Papua New Guinea, where a Human Rights Watch (HRW) report recently alleged sexual violence abuses at the company’s Porgera Joint Venture (PJV) mine. In response, Barrick detailed how it investigated the allegations at PJV in coordination with HRW and the government, which conducted its own investigation. In connection with the alleged abuses, Barrick terminated employees for violations of its Code of Conduct and improved security at the mine. The mine also has improved internal and third-party grievance mechanisms, so that victims of crime or people who have information about crimes feel more comfortable coming forward.Ed Opitz, vice president of corporate responsibility, Kinross Gold Corp., also spoke at the conference. Kinross is another Canadian gold miner, with mines in eight countries that produced 2.3 million ounces of gold in 2010. It launched a companywide corporate responsibility strategy during 2008-2009. Opitz detailed the company’s “challenges in moving from policy to implementation.” He also addressed community issues at length, and said the three key areas that gold miners need to manage are: ensuring that the benefits of mining are shared locally, engaging respectfully and substantively with local people on issues and being transparent about the side effects that occur when a mining operation moves in. Kinross was named to the Dow Jones Sustainability Index for North America in 2010, indicating progress toward its goals. DRC AND CONFLICT MINERALSSeveral speakers addressed the long-standing war in the eastern region of the Democratic Republic of Congo (DRC). The International Rescue Committee (IRC) estimates that 5.4 million have died from war-related causes there since 1998, with brutal sexual assaults against women and girls occurring at an alarming rate. Stephen D’Esposito, president of Resolve and the Earth Solutions Center, spoke at the conference about the detailed work his nonprofit organization has facilitated among major electronics companies to address the issue of tantalum, tin, tungsten, and gold — which they use in their products — being mined and sold to finance the DRC conflict. “The quickest move to avoid the problem would have been to just stop sourcing these minerals from the DRC region in Africa, but that would have cut off sustainable development there,” said D’Esposito. Countless artisanal, small-scale miners who are engaged in mining nonconflict minerals in DRC need the income the work provides. So instead, the companies are working with Resolve to set up localized pilot programs that will build supply-chain tracking systems for nonconflict minerals in the region.Robert Headley, chief operating officer (COO) of Jewelers of America (JA), also addressed the DRC conflict. He explained the provisions in the 2010 Dodd-Frank Act, which require publicly traded companies to disclose whether or not their products contain conflict minerals from the DRC or adjoining countries. Under the Securities and Exchange Commission’s (SEC) proposed rules to implement the act, companies would be required to submit reports that describe their due diligence measures to determine if their minerals came from conflict regions. For those companies that source from the DRC or adjoining countries, the reports would be independently audited, filed with the SEC and posted on the companies’ websites.Headley spoke about industry comments recently submitted to the SEC by JA, the Jewelers Vigilance Committee (JVC), the American Gem Society (AGS), the Manufacturing Jewelers & Suppliers of America (MJSA), and the Fashion Jewelry and Accessories Trade Association (FJATA). The comments stated that while industry “strongly” supports the objectives of the law and is fully committed to the responsible sourcing of gold, it wants implementation phased in over time. The reason? The infrastructure needed to track conflict minerals through a complex, world-spanning supply chain is not yet in place — though various viable global initiatives are making progress on implementing it. The SEC announced on April 11 that its final decisions on implementation of the conflict minerals law would be announced between August and December 2011. BRISTOL BAY UPDATEOn the environmental side, Bonnie Gestring, Northwest circuit director for Earthworks, gave an update on the nongovernmental organization’s (NGO) effort to halt plans for Pebble Mine, a proposed copper, molybdenum and gold mine that would be sited at Alaska’s Bristol Bay watershed. Earthworks believes large-scale mining is not appropriate in the Bristol Bay area because of its high ecological importance, said Gestring. She reported that 55 jewelry companies have now pledged not to use gold from the proposed mine — to see the list, go to www.ourbristolbay.com.The Pebble Partnership proposing the mine — a 50-50 partnership owned by global miner Anglo American and Northern Dynasty Minerals Ltd. of Canada — claims that “modern mining operations can positively coexist within Alaska’s unique ecosystem.”Gestring reported at the conference that the Environmental Protection Agency (EPA) agreed in February 2011 to conduct a watershed assessment to evaluate the suitability of large-scale mining in Bristol Bay. The objective study will explore whether the mine “would have an unacceptable adverse impact on... fisheries, wildlife, municipal water supplies or recreational areas.” If an adverse impact is determined, Section 404(c) of the Clean Water Act authorizes the EPA, after holding public hearings, to prohibit a permit from being issued for mine waste disposal. This would effectively stop Pebble Mine from moving forward. The EPA should conclude the study by the end of 2011, says Gestring, after which public hearings will be held and the agency will make a final decision.After contemplating so many of the serious issues surrounding gold mining in many parts of the world, the conference audience seemed ready for some feel-good news on the topic. It got its wish with Jon Rudolph, founder and president of Canada’s Mammoth Tusk Gold. The organization has developed environmental and socioeconomic performance standards for placer mining operations in the Yukon. Placer mines are alluvial, meaning gold is mined in streambeds and extracted from sand and gravel using water, with no chemicals needed. Mammoth offers gold for sale that has been third-party certified as ethical according to its standards. It also provides certification services, technical support and a chain-of-custody program to gold placer mines, in cooperation with Johnson Matthey, which refines the gold at its precious metals refinery in Salt Lake City. Mammoth sells the gold as bullion, and also works with partners who produce Mammoth Gold products and maintain the group’s chain of custody.Article from the Rapaport Magazine - May 2011. To subscribe click here.
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