HOW TO BUILD AN ETHICAL AND RESPONSIBLE SUPPLY CHAIN FOR A JEWELRY BUSINESS
BRIEF: On this blog, you will learn the components of a responsible (ethical) supply chain for a jewelry business, the definition of due diligence, and the sourcing recommendations by the Human Rights Watch organization. - Reading time: 7 min
Note: This blog builds upon the previous one called "certifications and guidelines." Reading that one first will bring clarity to this one.
Photo by Raw Pixel
IMPORTANT NOTE ON TRANSPARENCY AND TRACEABILITY
Transparency and traceability are critical in the responsible (ethical/sustainable) jewelry world. It is ok to ask questions, and you will have to ask them to build a proper supply chain. A responsible supplier will understand that you ask because you need the appropriate documentation to establish your business's due diligence and chain of custody. Don't accept blank statements like, we assure you that our materials are ethically sourced; anyone can say that!
Without knowing, you can't stop the negative social and environmental impact of your business.
As you learned in the previous blog, not all certified suppliers have a chain of custody that goes all the way to the mine, and "conflict-free" diamonds (like Kimberley Diamonds) may be tainted by abuse, so do your research and ask questions.
Below are the recommendations from the Responsible Jewelry Council (RJC) and the Human Rights Watch organization.
WHAT IS A RESPONSIBLE SUPPLY CHAIN ACCORDING TO THE RESPONSIBLE JEWELRY COUNCIL?
Photo from the Responsible Jewelry Council website
The following is the information included in the Small Business Sustainable Toolkit by the RJC.
"As a company, you have to consider not only your business operations, but also your business partners' actions and other stakeholders (individuals or organization that might be affected by your business operations, e.g. Your employees or local community affected by the mining activities where your materials are coming from.) This could be examined in two dimensions: direct impact: which includes your core business operations that are under your control: e.g., human resources management, health, and safety in the workplace, disposal of waste in your workplace and indirect impact: includes activities of your business partners (e.g., traders), sourcing activities (where your materials are coming from) and the impact of your sourcing activities on communities (how do mining activities impact local communities and environment)."
Photo: Cover of the OECD Due Diligence guidance
DEFINITION OF DUE DILIGENCE BY THE OECD
From the latest edition of the OECD Guidance page 15: "Due diligence is an on-going, proactive and reactive process through which companies can ensure that they respect human rights and do not contribute to conflict. Due diligence can also help companies ensure they observe international law and comply with domestic laws, including those governing the illicit trade in minerals and United Nations sanctions. Risk-based due diligence refers to the steps companies should take to identify and address actual or potential risks in order to prevent or mitigate adverse impacts associated with their activities or sourcing decisions."
DUE DILIGENCE AND HOW TO COMMUNICATE WITH SUPPLIERS - RECOMMENDATIONS BY THE RJC
To be registered as a responsible jewelry business, you need to obtain and provide documentation on the origin of the materials and maintain records of financial transactions. It is not simple, and in my experience, suppliers have a hard time delivering this information. The following are the recommendations of the Responsible Jewelry Council:
Photo from the Responsible Jewelry Council website
"Good communication is the key to discuss such sensitive subjects: you have to decide carefully, when and how you communicate due diligence requirements and risks to your suppliers."
"It is always helpful to provide the reasoning behind such a request for information/documentation. Explain due diligence as a part of your overall CSR (Corporate Social Responsibility) strategy rather than a separate requirement. It will allow your suppliers to see the full picture. Communicate clearly your organization CSR motivations and ambitions and how you need to act as a team to create value."
"Try to understand the concerns of your suppliers in cases where they are unable or unwilling to provide the information needed. If the supplier does not understand the request, talk to the supplier again and tell them what information you need and why, offer training where applicable. If the supplier cannot get the information from its own upstream suppliers: offer to help (e.g. Joint meeting with suppliers or support in organizing a management system/procedure). If the supplier does not want to provide information because its confidential discuss the possibility of a non-disclosure agreement."
RESPONSIBLE SOURCING RECOMMENDATIONS BY THE HUMAN RIGHTS WATCH ORGANIZATION
The following are the recommendations on sourcing materials only. Please also read their advice on how to structure a responsible business mentioned in the previous blog post.
Support artisanal and small-scale mines audited by NGO's:
"Human Rights Watch believes that jewelry companies should support and source from responsible, rights-respecting artisanal and small-scale mines," so they are not left out of companies' resources.
Traceability and chain of custody: “Trace all conflict minerals like gold and diamonds to their mines of origin and require complete supply chain documentation from suppliers. “ According to HRW, traceability and chain of custody "are not guarantees that international human rights and environmental standards are respected in the mines of origin, but are useful tools for jewelers who seek to assess and monitor human rights risks at the mine level." (quote from their 2018 report)
Source from certified mines inspected by local NGOs. Many mines now work with non-governmental organizations that offer standards that help them enter the responsible jewelry market. The NGOs ensure good working conditions, safety, and direct contact with buyers. You will find links to these organizations in the traceable metals and gemstones blogpost.
Use recycled gold, but conduct due diligence. Recycled gold is not risk-free.
Thanks for reading and for being here. All blog posts are "active." I update them as I find new information. We are a community. If you have relevant information on the subject you want others to know, please leave it in the comments below.