Rapaport Magazine

RJC Revealed

Watchdogs of the industry, who is the Responsible Jewellery Council and what exactly does it do?

By Brian Bossetta
Across the many links in the jewelry supply chain, there are significant issues regarding human rights and the environment with which the industry must grapple, especially in light of increasing demand among consumers for ethically sourced products. And while there is no easy panacea for human rights abuses or harmful environmental practices, the Responsible Jewellery Council (RJC), a not-for-profit organization based out of London, promotes a climate of social responsibility that works to mitigate and eliminate harmful, negative practices within the industry.
   It does so by establishing standards to advance responsible ethical, social and environmental priorities throughout the diamond, gold and platinum group metals jewelry industry and by admininistering a system of certification that monitors RJC members’ performance against those standards. Since its founding in 2005 with 14 members, RJC has grown to a membership of 500.
   To join RJC, members must undergo an independent audit to prove they meet the standards of ethics outlined in RJC’s Code of Practices (COP). Once a company becomes a member, it has two years to complete and pass the audit in order to become a “certified” member. To retain certified membership status, the company must be re-audited at least once every three years. Members pay dues based upon a percentage of their total annual jewelry sales. Higher percentages are charged to producers and retailers at the ends of the supply chain — $45 per million dollars of annual sales — compared to those in the middle of the chain, who pay $30 in dues per million of annual sales. Catherine Sproule, RJC interim chief executive officer (CEO), describes the organization as “a church for all sinners” with the mission of enhancing the ethics of the jewelry trade from mine to retail and at every stop along the way.

RJC Standards
   In 2009, RJC established its first COP, its blueprint for socially responsible business practices across the diamond, gold and precious group metals jewelry supply chain. It was divided into four sections: Business Ethics, Human Rights and Social Performance, Environmental Performance and Management Practices (see Code of Practices, 2009 at end of story). Then, in 2013, after an 18-month stakeholder review, the COP was updated to include major revisions with a particular focus on human rights, which stakeholders had cited in the review (see Expanded Code of Practices, 2013 at end of story). Changing demographics and growing consumer awareness played a significant role, Sproule says, in the enhanced codes. “Nobody wants a piece of jewelry that a 12-year-old made,” she adds.
   In Sproule’s view, establishing a global umbrella to organize and unite corporations and companies throughout the jewelry sector is one of RJC’s most significant accomplishments. David Bouffard, vice president of corporate affairs for Signet Jewelers Ltd., one of RJC’s founding members, agrees. “Going back to 2005, there were a lot of issues concerning working conditions and human rights in general,” Bouffard says, “and there wasn’t a unified international body to address these types of issues.”
   Uniformity, or what Bouffard prefers to describe as “harmonization,” has also had a practical effect on the industry, according to Mark Hanna, chief marketing officer of the Richline Group, an RJC member since 2011. “There are so many legislative directives, so many things for companies to have to keep up with and know about to do the right thing,” Hanna says. “RJC brings an understanding of all of these factors and provides direction.”

   Not everyone in the industry is equally convinced of RJC’s success. For Jennifer Krill, executive director of Earthworks, a nongovernmental organization (NGO) based in Washington, D.C., RJC is more shine than substance. “RJC could be doing good in terms of corporate social responsibility, especially in the mining sector,” Krill says. “But they aren’t.”
Krill’s chief complaint is that RJC, in her view, is influenced too much by industry voices and doesn’t hear enough from those outside of the jewelry trade. “RJC was created by industry,” she says. “Civil society does not have a role in its standards and enforcement. There’s a big disconnect.” Krill also believes RJC’s standards are too weak and lack the necessary teeth to positively impact the industry. One example Krill cites is mercury emission, a hazardous condition of all mining, especially artisanal mining, that Krill believes RJC doesn’t adequately address.
   But RJC’s work in the mining sector, including with artisanal miners, has been mostly positive and is improving, according to Lina Villa Cordoba, executive director for the Alliance for Responsible Mining (ARM), a global initiative based in Envigado, Colombia, that supports artisanal and small-scale miners. “It’s helpful for NGOs to exert pressure on the industry,” Villa Cordoba says, “but also helpful for them to acknowledge when progress has been made.”
   Building a bridge between artisanal and large-scale mining is a goal, Sproule says, which RJC is working toward — and one, she adds, that is necessary not just for the environment, but for the miners. In Villa Cordoba’s view, RJC flexing its muscle to influence large mining companies to contractually allow small-scale operations to harvest sites for more than just a year or two could be a cornerstone in building that bridge. Short-term contracts, currently the norm, are detrimental to the local miners, she says, adding that a year or two is not adequate time for the miners and local community to reap the economic benefits of their access to the natural resources.
   Eric Braunwart, president of Columbia Gem House, a gemstone mining, cutting and marketing company based in Vancouver, Washington, that is not an RJC member, says he has mixed feelings about RJC and shares some of Earthworks’ concerns. The organization “is very much focused on the big corporate level,” Braunwart says, adding that, in his estimation, the verification system to become a member is more costly for smaller companies than for larger ones equipped with more resources.
   But Bouffard says the idea that the auditing process presents a financial hardship for smaller companies is “one of the myths about RJC.” The other, he adds, is that membership is expensive. “The cost of an audit is low — intentionally low — in order to reduce that barrier to members,” Bouffard says, adding the cost can run anywhere from $2,000 to $10,000, depending upon the size of the company, the management systems already in place and the company’s level of compliance.
   Hanna, however, acknowledges that the auditing verification process “is a bit of an Achilles heal” for RJC and is the biggest obstacle to growing membership, as much because of its cost in time as in money. In line with RJC’s theme of “harmonization,” Hanna says he would like to have a system in which all of the audits a company does — including internal and government audits — could be done in one shot, noting that “The money and time that would save would unquestionably help attract more members.”

The Road Ahead
   Having just reached one of its goals of 500 members, Sproule says she would like to see RJC increase its footprint in India and open doors in Hong Kong and China. Part of the strategy of its global outreach involves encouraging members to “go out and talk” to others in the trade and spread the word about RJC across the industry. “This is all a journey,” Hanna says of RJC’s mission. “What’s important is to get everyone pulling in the right direction, and to set honest standards that are possible and stick to them.”

   “Business Ethics” sets provisions to prevent companies from engaging in bribery, money laundering and financing terrorism, as well as trading in conflict diamonds as outlined by the Kimberley Process.
   “Human Rights and Social Performance” establishes standards to prohibit forced labor and child labor, such as not employing children less than 15 years of age, and to guarantee employee freedoms, such as allowing collective bargaining and prohibiting discrimination in hiring. This section also creates a framework for workplace health and safety requirements, such as defining chemical hazards and proper ventilation, fire prevention and adequate escape routes, the proper use of industry tools and machines, and regulating the length of employee shifts, as well as overtime compensation. The Human Rights section also provides direction for workplace security, the rights of indigenous peoples and local miners.
   “Environmental Performance” sets benchmarks for minimizing negative impacts on the environment — such as controlling hazardous substances, waste and emissions — as well as guidance for efficient use of natural resources and limiting the use of fossil fuels.
   “Management Practices” identifies the specific requirements for compliance with all applicable laws. This section also advises members to adopt policies endorsed by their senior management in order to conform to the COP and to encourage mining facilities to engage with local communities and provide impact assessments and sustainability reports.

   The updated COP mandates that members observe the “United Nations Guiding Principles on Business and Human Rights,” including a policy commitment to respect human rights, a due diligence process to identify, prevent, mitigate and account for addressing impacts on human rights and a remediation process for any negative impacts on human rights.
   Members making provenance claims must now, under the updated COP, have systems in place to ensure those claims are valid, including documented criteria or requirements compatible with such claims, record-keeping procedures that such criteria are met, controls to maintain the integrity of the materials covered by the claims, training so employees understand provenance claims and can articulate them and mechanisms to allow concerns about the veracity of the claims to be voiced.
   The revised COP also requires members that generate independent grading and appraisal reports to identify synthetic or treated diamonds and not to use price-inflated reports as a strategy to mislead consumers.
   The amended code also addresses “Indigenous Peoples and Free Prior Informed Consent” in the mining sector by obligating members to respect the rights of native groups as defined by local laws as well as their social, cultural, environmental and economic interests and to obtain and document broad support of affected indigenous peoples in mining operations.
   Members in the mining sector must also, under the new COP, engage with artisanal miners and participate in initiatives that advance the professionalism, recognition and organization of artisanal and small-scale miners.

Article from the Rapaport Magazine - September 2014. To subscribe click here.

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