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Interview with David Finlay from Fairtrade Gold

At a talk hosted by Flux (Fair Luxury) I asked David Finlay from The Fairtrade Foundation where I could read more about Fairtrade Gold’s environmental standards.

He sent me this link and suggested looking at section 3.2 on page 29 (onwards) which covers environmental protection in a range of areas.

Upon reading the document, lots of questions arose that I put to David. His answers are in bold and quotations from the document are in italics.

On Reforestation

Me: On page 37 of the document, it states that reforestation is an important consideration in Fairtrade Eco gold… 

Ecological gold, silver and platinum Intent: This section provides for additional requirements for gold and associated precious metals produced under stringent environmental practices that include forest restoration in areas of high biodiversity and ecological restoration in any ecosystem. Only non-toxic processes (e.g. gravimetric methods) are accepted, with no mercury or cyanide. ASMOs choosing to comply with the requirements in this section are eligible to an Ecological Fairtrade Premium. 

Me: But there is no mention of reforestation when it comes to standard Fairtrade Gold. There is this paragraph on page 36:

After the closure of mining operations, intervened areas are rehabilitated and
re-vegetated in ways that enhance local biodiversity as appropriate for the native ecosystem and/or are converted to an alternative use in accordance with land planning priorities of the local community authorities.

Me: Does re-vegetated mean re-forested?

DF: Yes indeed, re-vegated can mean re-forested in contexts where this is relevant.

Me: Regarding the Fairtrade mines that already exist, one can only assume that varying levels of deforestation occurred to make way for those mines.

It could be argued that reforestation efforts 2-3 years after mining has ceased, may be too little too late, as trees can take 10-20 years to grow back. Perhaps there could be an attempt at mitigation such as goals for carbon offsetting initiatives?

DF: I bring up the point of ‘relevance’ as in some mining contexts – especially in mountainous terrains – there may not have been forests to start with, but other types of vegetation.

To the point around the length of reforestation, this is a point we are cognisant of. It is the case that this process is long-term, and often also the case that de-forestation may have taken place some time prior to a site working towards certification.

It is a good idea to consider other options – e.g. carbon reduction – and this is an area we are considering in contexts to an update to our standard for Fairtrade Gold, which is currently on-going.

As and when details of these revisions surface, I would be very happy to share these with as/where of interest.

Another standard: ‘If you created open pits or underground mine apertures, you refill or block them sufficiently after the termination of extractive activities, to enable ecological regeneration and ensure Year 3 hazard prevention’. 

And ‘You set up a planning process for rehabilitation and restoration of the intervened areas in perspective of closing mining operations’. 

Me: Is there the potential for rehabilitated land to return to it’s original state or even improve the soil?

DF: This depends on the setup of the mine. If the mine is underground, it is filled in with depleted ore (rock that has already been excavated and processed).

If the mine is over ground – that is to say involving miners panning for gold in rivers – the land can be returned to its original state, provided that the safe use of chemicals has been observed (ie. non-contamination of water sources).

In the context of a transient sector, the issue of rehabilitation (for non-certified mines) does remain challenging, as there is often an inherent tension between the miners, the ministry of mines and the district authority for whose responsibility it is to lead for/fund rehabilitation work.

Me:  ‘The Province of Quebec, Canada, requires not only the submission of a closure plan before the start of mining activity, but also the deposit of a financial guarantee equal to 100% of the estimated rehabilitation costs’.[7]  Would it Be possible for Fairtrade to implement something similar? 

DF: It could technically be possible, but the result would almost certainly be a significant reduction in the number of sites which we could work with. This area would require the government themselves to act as the enforcer, rather than a certification scheme.

In the context of our standard review, we will be looking into how the issue of rehabilitation can come through more clearly, however.

On Chemicals

Me: Is there an environmentally constructive way to dispose of mercury?  

DF: We operate under the principles of reduce, re-use and (safely) dispose; encouraging miners to reduce their mercury use, to physically re-use it (which is possible several times over if safely handled) and to then dispose responsibly.

The ministry of mines in Peru do have extension agents who are able to collect mercury consignments from mine sites in safe storage units.

Me: Are there many mines that are mercury and cyanide free? Do you have any examples?

DF: There used to be some examples of mercury free mines – so called green mines – in Columbia, especially including a group called Oro Verde. This group were in a position to sell ecological gold, but ran out of access to gold in the area they were mining in.

Some of the groups we are currently working with in Peru, are highly motivated to move to full non-mercury mining. This is a complicated process, however; partly relating to the cost of investing in new equipment and partly down to the reality behavioural change, in contexts where mercury use has been so wide spread.

Going forwards, we are looking into how we can go further in encouraging miners to switch away from mercury, through programmatic partnerships with supply chain partners and institutional donors.

Me: How expensive is it to get to this stage?

DF: It depends on the starting position of the mine site. To improve the system of production (the way the mine site is physically set up) is not an expensive procedure – it would cost less than $10,000 to re-position existing processing technology. In the case of [the] mine we are working with in Peru, most are based in mountainous regions, away from direct water bodies including rivers. In this context, the process is more of verifying their compliance with the Fairtrade standard, rather than necessarily implementing changes.

The cost of the equipment itself will be in the range of $50,000  – $200,000, depending on the size of mine.

Me: In the document, one of the goals for mine sites to comply with is that…

Toxic and dangerous substances such as mercury, cyanide and acids are never used or handled by children under 18 years, pregnant or breastfeeding women, or persons diagnosed with mental deficiencies, or diseases of the gastrointestinal, urinary, nervous or respiratory systems. 

Me: A lot of the standards seem like they would be quite hard to check, how do you check that mine sites are complying with these standards? 

DF: Mines are audited on an annual basis by FLO-CERT, the auditing arm of the Fairtrade system. There are verification criteria attached to each criteria which are used to assess the compliance of mines with the Fairtrade standard.

 If you or your miners post-process the tailings with cyanide or mercury (which means the ASMO uses mercury or cyanide), even the purely gravimetrically recovered fraction is not certifiable as “ Eco Fairtrade ”. In this case the entire gold is certifiable as Fairtrade, but not “Eco Fairtrade” 

In the document it is stated that ‘…an Ecological Premium is offered on top of the Fairtrade Premium for ASMOs (artisanal and small scale mining operations) who choose to eliminate mercury and cyanide altogether, using only non-toxic processes (e.g. gravimetric methods, borax) for gold recovery, and developing low-impact mining in areas of high biodiversity’. 

Me: Who pays this premium for the gold?

DF: The trader pays this premium – in most cases this will be a refiner who imports their gold. The extra cost of the premium is built in to the on-sale price from the refiner onwards.

Me: Will ‘Eco – Fairtrade’ soon be coming to market? 

DF: We are exploring this for 2020, yes. However, the cost of eco-gold is very high for miners to achieve and maintain, and is therefore at a premium the market is often unwilling to pay.

To put some figures to this, it is around an extra $6,000 per kilo of gold, on the market side. We will keep you posted here!

Me: I assume that in order to adhere to Fairtrade standards, small scale and artisanal miners need to have some capital to invest in alternative methods of extraction. If a small scale miner cannot afford to implement what it takes to comply with the standards, what happens then?

DF: Fairtrade provides pre-certification support to mine sites who want to align with the Fairtrade standard. In practical terms, this means a specialist will spend time with the management of a particular mine to assess the areas they most need to improve, in order to comply with the Fairtrade standard, and then to work together to ensure that appropriate trainings are folded in.

The area of capital investment specifically, is not something that we (as Fairtrade) directly enable, but we do encourage market partners (i.e. traders) to provide mine sites with access to finance and/or to link mines in with existing lenders (e.g. institutional banks) to make improvements to their mine setups; principally focused on upgrading processing equipment to reduce reliance on harmful chemicals. Going forwards, especially in South America, we will look to make this further solidify this way of working.

Other General Environmental Considerations

Me: Is there anything that you can tell consumers and jewellers who are interested about radioactivity and whether this is an issue and also fossil fuel usage?

DF: Radioactivity is not an issue, although fossil fuel usage is.

There is currently a framework referred to as “climate smart mining” which is particularly focused on ways of reducing carbon and other emissions in the context of mining operations.

Again in the context of our standard review, we are looking at ways in which we can make our standard more climate and carbon sensitive.

Me: Who does Fairtrade consult with to ensure that they are implementing environmental standards that are up to date?

DF: The environmental standard is reviewed as part of our wider review of the Fairtrade standard for gold. The standard is reviewed every three years or so and includes two public rounds for consultation.

Each consultation window is open for around 3 months and includes input from NGOs, consultancies, businesses, government ministries and mine sites themselves – we want this consultation to be as far reaching as possible to ensure that we get are able to include as many expert positions as possible, especially relating to thematic areas which are very broad (e.g. components in environmental standards).

We are currently undergoing a standard review and have just closed the first round of external consultations; we will be re-opening for consultation at the end of this year or early next year. This second round of consultation will be open to comments on the first draft of the updated standard, which will be published shortly before the second window opens.

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