MILAN, ITALY: DECEMBER 17, 2012 – CIBJO President Gaetano Cavalieri addressed the 3rd International Gem and Jewellery Conference GIT 2012 in Bangkok, Thailand, on December 12, 2012, outlining a comprehensive doctrine for Corporate Social Responsibility in the greater jewellery industry. The following is the transcript of his address.
I begin with a standard 18-Karat yellow gold ring set with diamonds or coloured gemstones. The precious metal component comprises of about 60 per cent gold, 20 per cent silver and 20 per cent copper.
It is not what we consider a complex jewellery construction, but in terms of its provenance it is anything but simple. The gold might have been mined in South Africa, Australia, Mali, Ethiopia or Nicaragua, to mention but a few of the potential sources. The silver may have been produced in Mexico, Peru, China, Russia, Poland or any one of another 50 or so countries. The copper could have been sourced in Chile, the United States, Canada, Zambia, the Congo or elsewhere. The metals may have been refined in any number of different facilities in Africa, Europe or the United States. The diamonds may have been mined in Botswana, Namibia, South Africa, Angola, Lesotho, Guinea, Tanzania, the DRC, Zimbabwe, Sierra Leone, Russia, Canada or Australia. The coloured gemstones, which could well have been pearls, may have mined or farmed in more than 100 countries. The stones may have been cut and polished in India, China, Vietnam, Israel, Thailand or South Africa. They may have been sold loose in Antwerp, Tel Aviv, New York, Dubai, Shanghai, Mumbai or Bangkok. The ring could have been designed in France, Italy, Germany or Japan, but actually created in Thailand, India or China.
Every single individual or company who that in some way is responsible for the manufacture of that ring, from the miner to the refinery worker, to the diamond cutter and the jewellery designer, depends upon the work and the integrity of those came before them, as well as those who come after them in the supply chain.
If only one component in that ring is ethically challenged – let us say, for example, the gems were polished in a factory where the worker’s lungs were damaged as the result of poor ventilation – then the integrity of the entire product is threatened. In other words, if the consumer will not buy the ring because of only one small gemstone, then everybody else who was involved in creating that piece of jewellery will also pay the price.
We deal in what commonly are considered luxury items. In other words fine jewellery is non-essential, unlike food, energy or pharmaceutical products. Consequently, in the big scheme of things, there is a tendency to view our industry as having limited significance.
But that is not the case. On a global scale the number of individuals directly and indirectly employed by the greater jewellery industry runs into millions, and there are entire countries whose economic wellbeing is dependent upon the products we produce and sell. Jewellery may not be an essential item, but the jewellery business most definitely is, and it is in this context that I would like to consider our position concerning Corporate Social Responsibility.
The World Business Council for Sustainable Development, in its publication “Making Good Business Sense” by Lord Holme and Richard Watts, used the following definition for CSR: “Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce and their families as well as of the local community and society at large.”
As businesspeople we behave ethically through the quality of our management of people and processes, as well as the way in which we impact upon society. And because we have the ability to make a difference to those around us – both negatively and positively – outside stakeholders take an interest in our activity. They may be consumers, but they also may be unions, the government, NGOs, the financial sector, community leaders, opinion makers and the mass media.
The official history of Corporate Social Responsibility in the jewellery and gemstone business is popularly traced to the start of the conflict diamond crisis in Africa at the end of the last century. But social investment programmes and strict environmental policies were features of gemstone mining and jewellery manufacturing long before then. Still, it is fair to say that it was in 2000 that we began to consider the subject of CSR together as an industry.
What triggered this collective response was what became known as the conflict diamond crisis in Africa. Already in 1999 it was becoming apparent that rebel groups in Sierra Leone and Angola were seeking to gain control over alluvial diamond fields in those countries. They were doing so in order to finance military uprisings. Reports began trickling out of these regions about atrocities being carried out against civilian populations living in the area of the diamond fields.
In July 2000 the World Diamond Council was established with the express purpose of coordinating the jewellery industry’s campaign against conflict diamonds. CIBJO was one of the founding members, and I have served as the organisation’s chief financial officer since 2000.
In helping establish a coalition of governments, NGOs and the greater jewellery industry, the World Diamond Council played an absolutely critical part in the establishment of the Kimberley Process Certification Scheme in 2003. It involved the creation of an international regulatory system, legislated and applied in all the member countries, which essentially prevents diamonds from non-authorised sources from entering the legitimate market.
What our industry agreed to, and in fact proposed and designed, was a system by which it voluntarily agreed to be subject to strict regulation, in order to resolve a humanitarian crisis for which it was not directly responsible. There are few, if any examples of this in the history of commerce and business.
The industry-wide perception of Corporate Social Responsibility that developed as a result of the conflict diamond experience predominantly involved the creation of defensive systems like the Kimberley Process, all of which were designed to ensure that jewellery and its components do no harm, or as the ancient Romans said: “primum non nocere.”
Other defensive measures were implemented to regulate against money laundering, and to ensure that proper health, safety, labour and environmental standards are maintained.
The issue of money laundering was raised after the September 11 attacks upon the United States, following which a multinational Financial Action Task Force intensified its efforts to enact international anti-money laundering laws as part of the campaign against terrorism. The Patriot Act in the United States and similar laws in other countries placed the onus on the diamond, coloured gemstone, precious metals and jewellery sectors to monitor and reports suspicious transactions, and failure to do could result in legal action, as well as damage to our products’ reputation.
In China, for example, CIBJO has been involved in increasing industry awareness about silicosis, which is a devastating lung disease, prevalent in poorly ventilated factories. In the diamond industry, cobalt and diamond dust is a perennial problem, but, there too, in properly established workplaces it has been largely eliminated through the installation of modern ventilation systems. In jewellery production a variety of dangerous chemicals are used, and strict safety standards must be employed.
Environmental damage is rarely a concern in the gem-cutting and the jewellery manufacturing sectors, but at the mining end – and particularly gold mining – this is a real issue. Generally, risk is at its highest in the developing world, where the regulatory systems are often less developed, and the incidence of small-scale and independent mining is more prevalent.
We have to be aware of our extraordinary status and develop tools and systems of dealing with whatever social challenges and ethical problems that may arise. The Kimberley Process Certification Scheme is one these and is designed to protect our chain of distribution. There are other systems that aim to do the same thing.
In CIBJO we support all such efforts in principal, but with one important condition. No such system should create an unfair business advantage, especially if it is restrictively expensive to implement. What unfair systems do is imply that all those who are financially or logistically unable to adopt them are not responsible corporate citizens, at least in comparison to who have the means to implement them. Systems that defend the chain of distribution should be inclusive, and not restrictive.
Around 2004 we began discussing within CIBJO an expanded vision of Corporate Social Responsibility, by which the jewellery industry would seek not only to NOT impact negatively on society and the environment, but also to serve as a positive economic and social force, especially in the countries in which we were active.
It was this new understanding which inspired us to initiate contact with the United Nations, eventually leading to CIBJO’s becoming the jewellery industry first and only member in the UN’s Economic and Social Council, or ECOSOC, in 2006.
In 2007 the annual CIBJO congress took place in Cape Town, and it was the first time that such an industry event was held in Africa. In the presence of the South African deputy president and ministers from governments throughout the region, our General Assembly ratified a statement that has since become known as the Cape Town Declaration. It noted the role of the world jewellery industry in promoting Corporate Social Responsibility, and recognised “that the jewellery industry, as a member of the international business community, shares a responsibility toward the greater society in seeking practical solutions towards the eradication of extreme poverty and hunger, as well as to developing a global partnership for development.”
In my opening speech at the congress in South Africa I made the following call: “Let the word go out from Cape Town that, while jewellery may described as a luxury product, the industry that produces it is an essential item-certainly when it comes to economic development. When consumers buy jewellery, 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.”
In July 2007, I attended the annual session of ECOSOC with several members of CIBJO’s Executive Council. There we had the honour of meeting with UN Secretary-General Ban Ki-moon, and we discussed with him the important role that the world jewellery industry can play in improving the lives of people in developing countries.
In October 2007, we organised a day-long conference at the United Nations headquarters in Geneva. Conducted in part by senior representatives of the UN Development Programme, it was at this event that we laid out an initial action plan for the development of a comprehensive CSR training programme for the international jewellery sector.
The following year the World Jewellery Confederation Education Foundation, or WJCEF, was established to manage the programme. Our goal, together with the United Nations, is to provide members of our industry with the knowledge and the tool they need to be better corporate citizens, and to make a positive difference in the countries that they are active.
A goal of the CIBJO and WJCEF strategy was the creation of what the United Nations refers to as a “Centre of Excellence,” which serve as the academic incubator for sustainability programmes. That goal came to fruition in 2011, with the establishment of such a Centre of Excellence in Antwerp, Belgium. To manage the centre, CIBJO and its partners created an International Centre for Corporate Opportunities, or ITCCO, which provides training to the young generation from developing countries, in order to help them adapt to the new business environment, to improve their skills and to create jobs which can compete in the global market.
When it comes to sustainable development, there is no one, single programme that our industry must undertake, but rather a variety of programmes. Involved should be major and junior mining houses, industry organisations, jewellery and gemstone companies and NGOs that are financially supported by our industry. The programmes should range from gem cutting and jewellery craftsmanship training courses in Africa, to tourism projects in areas where the mines are reaching the end of their productive lives, to programmes that support the health and wellbeing of our industry’s employees, especially through the prevention of HIV-AIDS.
The official title of this presentation is: “Responsible business practices in the 21st century: a comprehensive approach for the global jewellery industry.” I have already addressed the subject at length, but my intention is not simply to recount history, but to provide what we could refer to as a doctrine for CSR in the jewellery industry, which is pertinent for the times in which we live.
When we talk about Corporate Social Responsibility it is essential to qualify exactly to whom are responsible. I would define three main groups:
(1) Our business community, which includes all the executives and employees along the entire length of the chain of distribution, or as they say, from the mine through to the jewellery retailer.
(2) Our consumers, who buy jewellery for its beauty, heritage and its ability to express human emotion, and who rely upon us to protect its value and reputation.
(3) Our stakeholders, who include the millions of individuals living in the countries and regions around the world in which are active, and for whom we represent a resource for sustainable economic and social development.
To be responsible corporate citizens in the modern jewellery business, we have to follow three basic rules of practice:
(1) To defend the industry from the various challenges that could threaten our reputation and integrity;
(2) To function as a positive influence, serving as a means for sustainable economic and social development in the communities and countries in which we are active; and
(3) To be fully transparent in the way we operate our businesses and about what we sell.
Disclosure lies at the heart of our transparency requirement, and from the consumer’s perspective our responsibility is clear. We have to inform them exactly what we are selling. Treated and synthetic gemstones, for example, are not inherently immoral nor are they illegal, as long as the consumer understands exactly what they are.
But in order to be transparent – in other words to be able to disclose clearly – one needs to be able to describe the product in a language that is understood throughout the trade. It was to advance this requirement that CIBJO developed its Blue Books, which are today the most universally recognized and accepted set of jewellery and gemstone standards in the world.
The pursuit of knowledge and transparency also is a goal of this conference and of most of you attending today. So I believe is the goal to be responsible members of our community and of society in general.
CIBJO is the international jewellery confederation of national trade organisations. CIBJO’s purpose is to encourage harmonisation, promote international cooperation in the jewellery industry and to consider issues which concern the trade worldwide. CIBJO’s chief mission is to protect consumer confidence in the industry. Click here to go to the CIBJO website for more information.