P1246990920HlyJr

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A PRACTICAL APPROACH TO FAIR TRADE AND ETHICAL
MINING CERTIFICATION
Jean Claude MICHELOU Imperial Colors Resources
Corp. ICA Director of Communication
ICA Congress Panyu, China May 5-11 2009
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47 MAIN GEMSTONE SUPPLIER COUNTRIES
AFRICA ASIA

AMERICAS EUROPA
OCEANIA


East Africa Ethiopia Somalia Madagascar Kenya
Uganda Tanzania Mozambique Zambia Zimbabwe
Malawi Rwanda
Central Africa Congo Angola West
Africa Nigeria Mali South Africa Namibia
South Africa
Czech Rep. Russia
Australia
Middle East Iran Turquey
Central Asia Afghanistan Tajikistan Kazakhstan
Pakistan Eastern Asia China India Sri
Lanka Burma Vietnam Thailand Cambodia Laos
North America USA Canada Greenland Mexico
Central America Dominican Rep. Guatemala
Honduras South America Colombia
Uruguay Peru Chile Bolivia
Argentina Brazil
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FACTS

• 80 of Colored Stone Supply comes from Artisanal
  Small Scale Mining (ASM)
• 90 of ASM is located in Developing and Emerging
  countries
• Development expectations limitations
• Lack of investment capacity
• Lack of professional capacity or mining
  techniques
• Low potential of deposit yield
• Extreme nature conditions and limited
  accessibility

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Hundreds of Countries with a myriad of cultures
and standards.
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ASM ISSUES

• Human rights
• Youth
• Wages Conditions
• Safety conditions
• Chemical pollution
• Landscape scarring
• Trees
• Wildlife
• Corruption
• Terrorism
• Money Laundering
• Smuggling
• Disclosure

• Labor issues
• Environmental issues
• Who receives the returns
• Treatments

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• Human rights
• Youth
• Wages Conditions
• Safety conditions
• Displacement of communities

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Child Labor in Mining

• Human rights
• Youth
• Wages Conditions
• Safety conditions
• Displacement of communities

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OPEN PIT EMERALD MININGHigh level damage to the
environment
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SPESSARTITE ASMDangerous work conditions
TOURMALINE ASM Damage to the environment
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JEWELLERY SUPPLY CHAIN
?
What makes a mining operation Ethical?
First Tier
Large Scale Miners-Small Scale Miners
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FLUX OF ASM ROUGH SUPPLY CHAIN
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CERTIFICATION OF SOURCES

• Based on certification of country of origin
• Establishment of 3 simple criteria
• Development of value chain
• Formal and certified exports
• Sustainable poverty reduction and social
  responsibilities initiatives

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DEVELOPMENT OF VALUE CHAIN
GOVERNMENT AND PRIVATE SECTOR INITIATIVES

• Establishment of local mining and trade
  Association
• Gemstone identification and value awareness
• Gemstone mining capacity building
• Gemstone lapidary and processing
• Formal trade and export facilitation

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IMPACT

• Formalization of National Industry concept
• Improves awareness of gem material
• Creates management skills and improves yields
• Creates skilled labor force
• Increase market value of gemstones
• Establishment of commercial links from mine to
  market

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FORMAL AND CERTIFIED EXPORTS

• LEGAL PROCEDURES CERTIFIED BY PRODUCING EXPORTING
  COUNTRIES
• GOVERNMENT CERTIFIED DOCUMENTS
• TRANSPARENCY IN REMITTANCE OF EXPORT PROCEEDS
• EXPORT INCENTIVES
• ACCOUNTABILITY
• IMPACT
• ALLOWS RELIABLE STATISTICS
• MONITORING OF THE SUPPLY CHAIN
• PROVIDES GOVERNMENT REVENUE INCREASE
• VALUE ADDITION TO EXPORTED GEMSTONES
• ELIMINATES SMUGGLING
• ELIMINATES MONEY LAUNDERING
• ELIMINATES CORRUPTION

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SUSTAINABLE POVERTY REDUCTION AND SOCIAL
RESPONSIBILITIES

• INITIATIVES WITH LOCAL GEMSTONE MINING
  COMMUNITIES
• Government facilitation for technical education
  and training programs
• Simple mixed private and Government initiative
  for
• Health care improvement
• Primary and secondary schooling
• Hygiene and sanitary basic structures
• Improvement of road communication in mining areas

OBA or KING OF COMMUNITY
COMMUNITY ELDERS
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IMPACT

• Improves treatment of
• health and first aid
• conditions
• Improves security of
• working on mine sites
• Children go to school
• instead of working
• at the mine
• Reduces decease in
• contamination factors
• improves business and
• exchange opportunities
• Reduces cost of basic
• supplies

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MODEL OF CERTIFICATION FOR GEMSTONE PRODUCING
COUNTRY

• COUNTRY NIGERIA
• PARTIES INVOLVED
• PROMINENT MINE OWNERS AND COMPANIES
• LOCAL COMMUNITIES
• FEDERAL GOVERNMENT
• WORLD BANK IDA

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SUSTAINABLE MANAGEMENT OF MINERAL RESOURCES
PROJECT

• World Bank - IDA 2004-2010 Credit USD 120
  Million
• Mining Governance and Institutions
• Geological survey and airborne mapping
• Gemstone ASM development
• Legalization and formalization of the supply
  chain from mine to market
• Establishment of gemstone exchange and buying
  centers with export facilities
• Master Training initiatives for
• Field mining techniques and management
• Gemstone lapidary/processing school
• Practical gemology and gem testing

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SOCIAL REPONSIBILITY MODEL INITIATIVE

• Construction of a secondary school near mine
  camps, in Komu Oyo State
• Construct living quarters for teacher
• Construction of power plant with solar and wind
  energy simple technology
• Paving of 10 K between Komu and main highway
• Construction of one water well
• Expansion of first aid and health center
• Secure living quarter for medical personnel

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PROGRAM PARTICIPATION

• FOREIGN TRADE/INDUSTRY COMMUNITY- Intl.
  INSTITUTIONS
• Donations towards predetermined elements- like
  solar and wing energy, logistics- teaching and
  learning school books, etc
• STAKEHOLDERS PRIVATE SECTOR
• Financial investment
• Lend bulldozers and equipment
• Construction of missing infrastructures
• LOCAL COMMUNITIES
• Local hand labor, existing buildings
• GOVERNMENT
• Civil servants- Teachers- Medical Doctor

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ICA PRESENT IN 44 COUNTRIES
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PROBLEMS ASSOCIATED WITH IMPLEMENTING ETHICAL
TRADE
Each of the previously mentioned issues will vary
according to

• Different Products- Gemstones Metals
• Different Supplier Countries
• Different Cultures
• Different Economic Structures
• Different Labor Standards

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MANUFACTURING CHAIN
2nd Tier

• Environment
• Treatments
• Safety Issues

• Labor Conditions
• Chemicals
• Treatment disclosures
• Accurate Descriptions

• Full Disclosure
• Harmonization

• Disclosure
• Safety

Health risk/Silicosis reduction
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THIRD FOURTH TIERS
Third Tier
Fourth Tier

• Integrity-Deal only with Ethically Trading
  miners manufacturers
• Guarantees
• Full Disclosure of treatments

• Integrity
• Honesty
• Buys from a source he believes is ethical
• Guarantees
• Discloses Treatments

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The World Bank
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RESPONSIBLE JEWELLERY COUNCIL MEMBERS

• Trade Associations
• The American Gem Society
• British Jewellers Association
• Jewellers of America
• Manufacturing Jewelers and Suppliers of America
  Inc.
• National Mining Association
• The National Association of Goldsmiths
• World Gold Council

• Mining
• AngloGold Ashanti
• Arslanian Freres NV
• Bonas Co. Ltd
• Dalumi Diamonds
• Diarough N.V.
• Dimexon Diamonds
• HRA Investments Ltd
• I.Hennig Co. Ltd
• Lazare Kaplan International Inc.
• Overseas Diamonds NV / Isee2
• Rosy Blue N.V.
• Rothschild Diamonds Ltd
• Sima Diamond NV
• Steinmetz
• Suashish Diamonds

• Service Industries (inc. financial institutions)
• Int. Diamond and Jewellery Group ABN-AMRO
• The Assay Office

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RESPONSIBLE JEWELLERY COUNCIL MEMBERS

• Jewellery Manufacturing or Wholesale
• DN Gems Corp
• Gabriel Co
• Jaeger-LeCoultre
• J.B. Jewelry
• Leo Schachter Diamonds LLC
• Libman Company Ltd
• Kristall Inc.
• Regal Imports Ltd
• Robertso Coin
• Stubbs and Co

• Gold Refining Hedging or Trading
• Argor-Heraeus SA
• Metalor Technologies SA
• PAMP SA
• PX Precinox SA
• Valcambi SA

• Jewellery Manufacturing or Wholesale
• AR AR Jewellery Inc
• Aurafin LLC
• Baume Mercier
• Boite DOr Gioielli S.R.L.
• Carrera y Carrera
• CJ Jewelry
• CendresMetaux SA
• Christian Bernard
• Colormasters Gem Corp
• Cristofol Paris

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RESPONSIBLE JEWELLERY COUNCIL MEMBERS
Current membership is approximately 90
organizations.
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But there are 100s of thousands of businesses
involved
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Rules Regulations are extremely complex.
Rules Regulations are complex.
Rules Regulations are moderate and rules for
Ethical Trade already exist.
Rules Regulations are simple and rules for
Ethical Trade already exist.
WANTS ETHICAL TRADE!
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(No Transcript)
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Codes of Ethics contain rules by which members
must abide.
Examples of Industry Codes of Ethics at work

• International Colored Gemstone Association
• Thai Gem Jewellery Traders Association
• Gemological Association of Australia
• Jewellers Association of Australia
• Japan Jewellery Association
• American Gem Trade Association
• The Gemological Association of Great Britain
• British Jewellers Association
• ETC

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The local organization can administer the running
of the Ethical Trade system within its country or
region. CIBJO-world jewellery confederation, can
oversee the local approved organizations and also
arrange third party verification through
responsible auditors.
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1200 Members
If one third of members agreed to join CIBJOs
Ethical Trade System, then it would raise
200,000 revenue annually if the cost of joining
was 500 US per business.
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?
World Jewellery Confederation
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Rules Regulations are extremely complex.
Rules Regulations are complex.
Rules Regulations are moderate and rules for
Ethical Trade already exist.
Rules Regulations are simple and rules for
Ethical Trade already exist.


WANTS ETHICAL TRADE!
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Rules Regulations are extremely complex.
Rules Regulations are complex.
Rules Regulations are moderate and rules for
Ethical Trade already exist.
Rules Regulations are simple and rules for
Ethical Trade already exist.
WANTS ETHICAL TRADE!
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The people who suffer on the mines cant afford
to wait too long -lets work together to try and
make Ethical Trade and mining a reality.