Information to Stakeholders on the Outcome of the
First Round of Consultation
Review of Fairtrade and Fairmined Standard for Gold and Associated Precious Metals
To: / Artisanal and Small-scale Miners, Local Support Organizations, Producer Networks, Labelling Initiatives, Jewellers, Traders, External Partners and Experts
Consultation Period: / 07.08.2012 – 07.10.2012
Project Contact Details: / Marcin Piersiak, Alliance for Responsible Mining – ARM andAaron Tepperman, Fairtrade International
TABLE OF CONTENTS
PART 1 Introduction
1.1. General Introduction
1.2. Executive Summary
1.3. Way Forward
PART 2 Consultation
2.1. Consultation Process
2.2. Organizations
2.3. Consultation Synopsis
Part A - Producer Section
Part B - Trading and Processing Section
PART 1 Introduction
1.1. General Introduction
Fairtrade International and the Alliance for Responsible Mining – ARMwould like to thank all stakeholders for participating in the consultation on the Fairtrade and Fairmined Standard for Gold from Artisanal and Small-Scale Mining, including Associated Precious Metals. The consultation concluded on 07.10.2012 with a total of approximately 150 stakeholders (individuals and institutions) thatcontributed their views and perspectives through written comments and throughparticipation in workshops. Thanks to these replies, there is a solid understanding of the critical issues and concerns, including potential solutions. Together with the results of the research carried outand the results of the planned second round of public consultation, this information will form the basis for future recommendationsto Fairtrade International’s Standards Committee and to ARM´s Fairmined Standard Committee. The decision on the final Standardwill be taken in full knowledge of stakeholders’ comments.
This document aims to present the outcome of the first consultation in the most transparent way possible, without disclosing confidential stakeholder information. The subsequent recommendations will be included in the second round of public consultation.
Should you have any queries or remarks concerning this report, pleasecontact the Marcin Piersiak at or Aaron Tepperman at
1.2. Executive Summary
Our long term vision is to extend the market share of Fairtrade and Fairmined Gold to an equivalent of5% of the gold jewellery market in key consumer markets (USA and Europe) over a 15-year period to create sustainable development opportunities for 100,000 - 200,000 miners and for 1.4 million dependents. Today, 4 mining organizations are certified against the Standard and the product is on sale in Canada, South Korea and across 5 European markets, with plans to expand that further in the coming two years. Work has also begun with miners in Africa and Asia in order to extend the miner level impact of Fairtrade and Fairmined certification. The review and improvement of the Standard for Fairtrade and Fairmined certification of artisanal and small-scale miners’ organizations (ASMOs) and gold traders was undertaken to make the system more accessible to them and in line with their realities. The proposed amendments to the trading section of the Standard are in line with the strategic intent of the partnership. After almost threeyears of implementation (2010 to 2012) the Fairtrade and Fairmined Standard for Artisanal and Small-scale Mining has proven validity in its core principles and in many technical details, however, the feedback confirmedthe need for changes to the structure and to the content to bring more supply into the system and to ensure that the rising price of gold does not stop the market from expanding.
The proposals for theStandard revision were developed by ARM’s and Fairtrade’s technical team, through a pre-consultation workshop held with Latin American miners, and through feedback provided by producer networks, labelling initiatives (LIs), traders, other NGOs and through local support organizations familiar with the Standard and its application. Desk research was also used to strengthen rationales for change.
In this first round of consultation written comments were received from 60 stakeholders, in addition toaround 90 stakeholders being consulted in 4physical workshops held in Africa (Kenya), Latin America (Colombia), and Europe (the UK) as well as 2 teleconferences. The stakeholders consulted included miners, traders, jewellers, producer networks, local producer support organizations, LIs, industry bodies, human rights and environmental NGOs, government representatives and responsible artisanal and small-scale mining experts.
The issues which received the most attention in Section A (Standard for Artisanal and Small-Scale Mining) were: the new system of production concept and its application, the exclusion areas and its consistency with international guidance on issues related to environmentally protected areas and to conflict gold, ASMO governance and miners empowerment, mercury use and handling, alluvial mining, child labour and health requirements.
As for Section B (Standard for Trading and Processing) the main issues discussed were: the inclusion of requirements for manufacturers, trading relationships (Premium invoicing and payments), Fairtrade and Fairmined Premium, traceability exemptions and product composition (especially the proposal of different levels of dilution of FTFM gold content to fit different market needs).
1.3. Way Forward
As next steps, the Standard Committees of ARM and Fairtrade will analyse the feedback received and identify issues where there is consensus, issues on which further investigation is needed and issues which need further discussion.The next steps also includethe plan to establish a market advisory group (MAG) to support informed decisions for the trading section of the Standard, and to further develop requirements in the producer section of the Standard, based on the suggestions received, in order that more miners can enter the Fairtrade and Fairmined system. A second round of consultation is anticipated in early 2013.
The table below shows the project’s next steps:
Date / ActivitiesNovember 2012 – February/March 2013 /
- Preparation of a proposal and presentation for ARM’s and Fairtrade’s Standards Committees for discussion/decision
March 2013 - May 2013 /
- 2nd Public Consultation Round for stakeholders
May - June 2013 /
- Compilation of responses from the consultation process
- Preparation of a proposal for Standard Committee discussion/decision
June 2013 /
- Final proposal presented to joint Fairtrade International/ARM Standards Sub-committee and Standards Committees of ARM and Fairtrade International for approval
July - August 2013 /
- Revision of Compliance Criteria
July - August 2013 /
- Publication of the revised Standard and other revisions to the compliance criteria
August - October 2013 /
- Implementation of the revised standard.
PART 2 Consultation
2.1. Consultation Process
The proposals for the 1st Consultation Round of the Standard were developed by the technical team of ARM and Fairtrade on the basis of documented experiences with the implementation of the Standard during the first two years, in addition toa pre-consultation workshop with Latin American miners and producer support organizations, and with feedback from marketing teams, traders and jewellers.
The proposal was emailed to all potentially interested or affected stakeholders known by ARM and Fairtrade International, totalling more than 900 institutional and individual contacts, and was available on the websites of Fairtrade and ARM during the consultation period, both in a form of a summary of principal changes proposed and in a more specific document, which compared the current version of the Standard with the proposed revisions, point by point, including rationales for the changes.
Several internal and external workshops, physical and virtual, were also held to discuss the issues with miners and support organizations, as well as with gold supply chain representatives (jewellers, traders, industry representatives) and other stakeholders (NGOs, experts, etc.):
- 26-29 March 2012, pre-consultation at ARM´s Latin American regional network workshop (Colombia)
- 6 - 7 August: African Responsible ASM Network Regional Workshop (Kenya)
- 4,5 and 7September: ARM Stakeholder Alliance Guardian Committee and guests (duplicate sessions in Spanish and English)
- 10. September: Fairtrade-UK workshop for NGOs
- 13. September: Fairtrade-UK workshop for traders and jewelers
- 03. October: ARM Workshop for Fair Jewelry Action (FJA) and Ethical Metalsmiths (EM) (FJA and EM decided participation of executives only)
The comments on all the points of the Standard have now been collated and are being reviewed by ARM and Fairtrade, in order to provide their respective committees with sufficient evidence and elements of judgment to provide guidance on proposals for the second round of consultation. The consultation synopsis that follows gathers the principal issues and comments raised that were most often expressed.
2.2. Organizations
During the consultation written comments and recommendations were received from 60 individualsrepresenting:17 NGOs and independent researchers, 11 jeweller firms and industry bodies, 3 traders/retailers, 4 LIs, 5 local support organizations working with miners, 7 renowned ASM experts/consultants, 2 consumers and 1 government agency.
In order to consult important stakeholders that may have not responded in writing 4 physical workshops were held (in Colombia, Kenya and the UK) as well as 2 virtual workshops. Including the Latin-American pre-consultation meeting,a total of around 90 stakeholders participated in the workshops, representing: 17 Artisanal and Small-scale Mining Organizations (ASMOs), 9 local support organizations, 3 LIs, 1 producers network, 5 traders, 10 jeweller firms, 10 mining/jewellery industry bodies and firms, 3 NGOs and10 ASM experts.
Apart from the above processes an open letter by FJA and EM, undersigned by 140 jewellers, retailers and designers, was received as a part of the consultation.
The following countries were represented in the consultation: Bolivia, Peru, Colombia, Ecuador, Senegal, Burkina Faso, Kenya, Tanzania, Uganda, Mozambique, Ghana, the DRC, Mongolia, Canada, Austria, Germany, the UK, USA, Switzerland, France, the Netherlands, Australia, Belgium and Denmark.
Thanks to the experience of several world-class Artisanal and Small-Scale Mining experts who participated in the consultation, the realities of other countries where ASM is present were indirectly taken into consideration.
2.3. Consultation Synopsis
The below synopsis reflects the compiled feedback received in the first round of consultation. Based on this feedback and supported by the standards team/unit of ARM and Fairtrade, the joint Standards Sub-Committee will adopt, modify or reject amendments to the Standard, decide to clarify questions in explanatory documents, request further investigation where needed and identify issues on which sufficient agreement has not yet been achieved, thereby requiring alternative proposals and further consultation. The proposal for consultation round 2 will reflect this guidance.
Part A - Producer Section
Purpose, Vision and Principles
- It was suggested to extend the scope of “other associated metals” to include copper, and other metals.
- A possibility of phased compliance was proposed to lower the entry barrier for ASM organizations.
- Review the types of ASM which FTFM targets to avoid the risk of excluding newer community-mining sites, and to help manage migratory fluxes in established community mining areas.
ASMO and its Scope as “System of Production”
Proposal:
- New definition of an ASMO (Artisanal and Small-Scale Miners Organization) aims to recognize the diversity of ASM set-ups on all continents, and to include them within the scope of the certification in the extended geographical scope. The proposals recognize the miners’ choice for an organizational set-up considered by them as most appropriate, and does not prescribe a member-based organization. This makes the ASMO an umbrella organization and the certificate holder, which can accommodate many different realities under it, and all producers within the ASMO’s scope are defined as miners, as defined by the System of Production of the ASMO.
Feedback:
- Most of comments supported the wider and more generic organizational scope of the ASMO’s System of Production, finding it flexible enough to cover a range of ASM configurations, applicable to different contexts.
- The definition of the System of Production requires more precision, especially the relation between the ASMO and its System of Production: is it possible to have miners belonging to the ASMO, but not to its certified System of Production? If so, how can we assure there is no double standard between the “business as usual” ASMO and its FTFM certified System of Production? This also spurs concerns about ensuring traceability in the supply chain: how to prevent gold from non-certified ASMO miners to the FTFM System of Production?
- Some comments suggest that the definition is not clear in terms of where the line is drawn between ASM and industrial mining. In addition, several comments encouraged the Standard to define ASM, and to be more specific about what type of ASM the FTFM Standard targets (especially with the System of Production approach opening-up the scope).
- Comments suggested that the “reference scheme” mechanism to avoid industrial mining operations might not be appropriate because of its subjectivity and because it opens the field for third party pressures.
- The proposal to broaden the responsibility of ASMOs over surrounding communities to include areas, entities and people not part of the system was supported by the majority of the respondents, but explicit guidance and clarification for definitions is required. On the other hand, voices were raised that this is too much to be expected from ASMOs in the process of formalization and that this should rather be a “development requirement” (e.g. Year 3).
- A need was expressed to make sure that vulnerable groups are not excluded from the System of Production, in cases where their exclusion presents an easier option for compliance with the Standard. Guidance is needed for the inclusion & exclusion from the System of Production, to avoid it becoming a source of conflict.
- It was suggested to include tailings reprocessing in the scope of ASMO´s activity.
- Definitions suggested to be amended;
- Registered Miner: Several comments asked for clarification of this definition, how it is different from “miner”
- Workers: Take into account and use the term “temporary” and/or “casual.”
Geographic Scope and Exclusion of Areas
Proposals:
- To extend the geographical scope to the Global South and to maintain the already existing exclusion of areas where conflict between the agricultural activity and artisanal and small-scale mining activity occurs, and of environmentally protected areas (and in analogy archeologically protected areas).
Feedback:
- There were mixed views on whether the geographical scope should be opened at this point, especially given concerns around needing to extend market demand. On the other hand, the formalization is a long process and the sites in Africa will not be ready for certification for least a couple of years.
- Stakeholders feel the Standard must be as harmonized as possible with the OECD guidelines. Several respondents suggested following the ‘red flags’ approach used by the OECD when identifying areas that may be conflict-affected or high-risk.
- Risk of “victimizing the victims” was highlighted in blanket-exclusion of conflict zones.
- Discussion on allowing traditional ASM in environmentally protected and sensitive areas: Why 10 years? Is proving the 10 years of mining activity realistic and demonstrable? Proposals for setting a fixed date to exclude newcomers from mining in protected areas.
- A more specific and universal definition/ demarcation of Environmentally Sensitive and Protected Areas (or PACE – Protected Areas and Critical Ecosystems as suggested by ASM-PACE partnership) is needed, as national legislation in developing countries is not always reliable.
Democracy, Participation and Transparency
Proposal:
- That the section on Democracy and Participation within the ASMO is deleted, as the organizational scope is no longer limited to exclusively member-based organizations.
Feedback:
- Some stakeholders felt that rather than delete the section it should be reworded to fit non-members organizational set-ups.
- A need was expressed for assuring most disadvantaged workers’ empowerment and capacity building (also in core operations, not only in the context of Premium Governance). Whatever the organizational set-up, the ASMO should be managed in a transparent and participatory manner.
- It was suggested that the Standard must assure that the workers are aware of the principles of Fairtrade and Fairmined and are empowered enough to identify themselves with the Fair Trade movement and its ideology.
Premium Governance
Proposal:
- The modification recommended aims to simplify the Premium Governance. It proposes to empower the Premium Committee through representation of all social groups of the ASMO and its miners, while maintaining responsibilities at ASMO level. The Fairtrade and Fairmined Premium Plan would be democratically approved by the Premium Committee and proposed for adoption by the ASMO, which would assume the legal responsibility over its implementation.
Feedback:
- Further clarity on Premium Committee membership and representation is needed.
- Importance of accountability and communication of investments funded by the Premium, both within ASMO internally, and to consumers and the general public through Fairtrade International/ARM.
- It was suggested that more focus should be put on long-term development, including diversification of income and planning for mine closure.
Environmental Protection
Proposal:
- This modification aims to minimize the negative impact of ASM in environmentally protected and environmentally sensitive areas. Fairtrade and Fairmined excludes mining operations in protected areas and may exclude mining in environmentally sensitive areas on request from the Fairtrade and Fairmined certification scope, according to the procedure for Temporary Excluded Areas (TEA). The Standard neither supports nor endorses newcomer ASM (operating less than 10 years) in such areas.
Feedback:
- Comments indicated that the timeline and means for the ASMOs to go mercury-free in the future should be made more specific.
- Stakeholders prioritized strengthening the requirements on safe mercury handling in the community.
- It was proposed that a more specific policy on alluvial mining is developed.
- Some points were proposed to be reorganized for better consistency.
Standards for Labour Conditions