6 Takes on the Challenges in the Colored Stone Supply Chain

SourcingJun 08, 2017

6 Takes on the Challenges in the Colored Stone Supply Chain

At the JCK Las Vegas show, experts covering various aspects of the industry talked about the obstacles and work being done to build transparency.

Las Vegas--Ethical sourcing and a transparent supply chain are among the most prominent issues being talked about in the industry right now.

Providing enough transparency to supply confidence for the consumer requires industry-wide efforts, but, based on the size and scale of the colored stone market, this presents issues across the board.

At the JCK Las Vegas show on Monday, former Jewelers Vigilance Committee CEO Cecilia Gardner moderated a discussion where industry experts from across the supply chain were present to discuss what they were seeing in the market, what’s being done and the obstacles that impede transparency efforts.

Gardner was joined by Andrew Bone of the Responsible Jewellery Council, Jack Cunningham of Gemfields, Chris Smith of the American Gemological Laboratories (AGL), the AGTA’s Doug Hucker and John Hall, a consultant for Signet Jewelers.

The following is a brief rundown on what each had to say.

1. Jack Cunningham, group sustainability manager, Gemfields
The colored gemstone miner is very conscious of its impact through the life of mine and its employees’ safety.

“The ability to retain our license to operate in those countries for the life of mine depends very significantly on our relationship with the local communities.”

Because they are sourcing their workforce from local communities, they want to give back in a way that provides opportunities for them. Cunningham noted that the company considers itself in partnership with the communities it’s in, developing projects designed not only to benefit the community but that also can be sustained by it.

Gemfields sells rough via auctions and buys back those stones in the cut and polished form to sell to the jewelry sector.

Since so many in the industry are asking to be shown the chain of custody, Cunningham said they are “conscious of the work that needs to happen through the downstream supply chain to provide assurances” around transparency and the conditions of the factories in which the cut and polished materials are being manufactured.

2. John Hall, consultant for Signet Jewelers
Signet’s approach is around a set of responsible sourcing protocols designed to set standards for the supply chains of the products it sells.

All Signet suppliers have to abide by the protocols and report annually about how they are complying with them. Additionally, they are required to be members of the RJC.

The company takes a two-pronged approach to the supply chain, Hall said: one that focuses on

product and the way it’s sourced; the other that addresses the nature of the companies in the supply chain and how they’re operating.

In developing its protocols for diamonds, he said Signet learned the companies have to be conscious of the differences in the diamond supply chain when compared with colored gemstones--there are very few examples of a linear supply chain in the colored gemstone sector other than Gemfields, he noted.
RELATED CONTENT: Signet Launches Report Detailing Sourcing, CSR Efforts
The main challenge with gems is that the chain is so varied.

“We think that the starting point that makes sense when we’re doing this sort of work is taking a due diligence approach to begin with, and then added to that is how you engage with your supply chain directly.”

3. Andrew Bone, executive director, RJC
The RJC just added its 1,000th member. With that growth, and in response to how important it has become to its members, has come the recognition of the need to look at rest of industry’s supply chain.

So, after already covering diamonds, gold and platinum in its scope, work has begun on creating a similar system for colored gemstones, which they hope to have totally incorporated by the end of 2018, Bone said.
RELATED CONTENT: RJC to Expand Scope to Include Colored Stones
But since most gems come from artisanal, small-scale mining, “This presents unique challenges for colored gems that we don’t find with diamonds, gold or platinum.”

However, the RJC’s Code of Practice includes standards about management processes and not about materials themselves, so they do offer a lot of rooms for colored gems to be incorporated.

4. Cecilia Gardner
The former JVC president is currently playing a big part in the Jewelry Industry Summit, which she said was meant to address supply chain issues and create a more responsible supply chain, mostly through identifying the steps available to the industry immediately.

Projects relating to gems have to do with addressing issues like silicosis, which comes from cutting gems without proper equipment and ventilation, and creating a toolkit for jewelers to understand how to have conversations with those in their supply chain.

Another project is designed to help tell the industry’s story from its own perspective, “to make sure that people in the industry, and the public, know what kind of efforts are already underway to address the supply chain not only of colored gemstones but all of the other products.”

5. Doug Hucker, CEO, American Gem Trade Association
Hucker, along with an industry delegation that included Jewelers of America and the Gemological Institute of America, traveled to Myanmar in the fall to see what the conditions were for industry workers there.

Even though sanctions had already been lifted by the time of their trip, “we pointed out to all people involved that while it was now legal to import ruby and jade to the United States, it wasn’t necessarily right and it wasn’t necessarily good.”

He said they saw that because it was emerging from decades of oppressive military rule, Myanmar was struggling to find ways to enter the international community.

They were trying to recreate the mineral extractive laws that are more than 100 years old, and Hucker said the group talked to leaders in the country about what kind of due diligence it would take to make it easier for them to come back.

“Across the board we saw a willingness to listen to us,” he said, though he added that it will take a while because they have to rewrite rules from scratch to bring them up to current market requirements.

“We’re trying to keep the process open so that it doesn’t backslide. There are still sig issues in Burma that aren’t pretty.”

The delegation recommended a number of things while they were there: separation of jade from gemstone sector, not only because of the many issues it’s had, but also because it’s separate financially and geographically; implementation of a 10-year plan for reclamation of the environment in mining areas; recognition of labor conditions, especially with respect to child labor; and a rewrite of the tax structure to encourage compliance.

6. Chris Smith, American Gemological Laboratories
From a lab standpoint, Smith said he believes that chain of custody is the best way to address supply chain issues, especially since the world’s gem labs can’t necessarily identify origin for all stones.

Since the gem labs have yet to analyze all deposits of all stones to identify each marker of origin, there are some stones that they can’t trace back to the mine.

“We’re kind of a neural, third-party operation that’s tangentially associated with this, but we’re not able to do this in all instances. It’s only with specific gem varieties where enough work and enough data has been collected.”
Brecken Branstratoris the senior editor, gemstones at National Jeweler, covering sourcing, pricing and other developments in the colored stone sector.

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