The need for incentives to promote responsible mining practices

The need for incentives to promote responsible mining practices

Conny Havel is the Markets and Supply Chain Manager at the Alliance for Responsible Mining. She leads the strategy to promote gold from artisanal and small-scale mining in the gold industry, as an opportunity to develop more ethical supply chains and support the social and environmental development of the small-scale mining sector.

In this interview, Conny shares her view about ethical supply chains and the important role of the market to empower small-scale miners on their journey towards responsible mining.

HOW ARE FAIRMINED GOLD SUPPLY CHAINS DIFFERENT COMPARED TO REGULAR ONES?

Fairmined supply chains, in general, are shorter than traditional ones, as we are cutting out any intermediaries that don’t add value in the supply chain. Additionally to that, every actor in the supply chain has been either certified in the case of the mining organizations or authorized to trade the Fairmined gold.

All these supply chain actors are registered in the Fairmined initiative so, if a consumer wants to know who touched the gold that they are buying, we are able to name each one of the companies that were involved in the trade. There is traceability throughout the whole supply chain.

This is not only backed by the Alliance for Responsible Mining, but by independent auditing firms who oversee the process and check if actors comply with the Fairmined traceability requirements.

DOES RESPONSIBLE MINING DEPEND ON THE DEMAND FROM THE GOLD MARKET?

The demand for responsible gold facilitates more responsible gold in the market. In our experience, there needs to be an incentive for the miners to start working towards more responsible practices. If there are no incentives such as receiving technical support or some in-kind contributions or a better price, it is simply easier for them to continue with the old way.

In many regions, at a local level, the gold price is the same for informal or formal gold, for gold extracted implementing irresponsible or responsible practices. So, why should the miner that hardly has the knowledge, capacities or money to invest in more responsible practices, make this extra effort and invest in cleaner technologies, pay the workers fairly or provide them with securities?

It’s important that there is a demand for responsible gold as well as an incentive for the miners. In our experience, the strongest incentive is a monetary incentive. There needs to be a return on investment for the miner.

WHAT IS THE MAIN CHALLENGE OF CREATING DEMAND FOR FAIRMINED CERTIFIED GOLD?

There is not much knowledge in the market about where the gold comes from. And when consumers and buyers learn about the origins of the gold, they often hear negative stories that are associated with gold mining. What we normally see and read in the media is how mining destroys and contaminates, how it is used to finance illicit activities, how it takes advantage of people, children, women, etc.

This can cause disengagement, meaning that brands and consumers decide not to choose gold for the products or they look for alternatives such as recycled gold because they feel that as such they prevent new and irresponsible mining. But this isn’t true, as we know that buying recycled gold doesn’t stop irresponsible mining, therefore this isn’t the solution for an improved mining industry.

The main challenge therefore is awareness raising and educating the consumers and the gold industry, to convince them not to disengage but rather support artisanal and small-scale miners who perform their work in a responsible way. We need to acknowledge that an additional, external support is necessary to  improve and turn negative impacts into positive ones.

DO YOU ENVISION AN OPTIMISTIC SCENARIO FOR THE FUTURE? WHAT IS GOING TO HAPPEN WITH SUPPLY AND DEMANDFOR RESPONSIBLE GOLD?

I’m definitely optimistic. This is an educational topic and we know that this takes time, but on the other hand, we know that there is a strong consumer trend towards responsible products.

Consumers now, more and more, question the origin of the products that they eat, use and wear, so although consumer awareness in the gold sector isn’t that big yet, it is definitely something that we are heading towards. I’m optimistic about the future of the gold industry, that it strives to become a more transparent and responsible one.

This trend is further supported by the fact that there are more and also stricter national and international norms and regulations that promote responsible gold sourcing. As Fairmined is one of the easiest solutions to access certified and traceable gold from artisanal and small-scale mining, I’m sure that demand will further increase in the coming years.

And if we look at it from the miners’ side, as more miners see the benefits of responsible mining, more and more will choose this path, so it’s important to demonstrate the miners that there is a demand for responsible gold and that the market is willing to support and contribute their journey towards more responsible practices.