Globally, over 100 million people depend on Artisanal and Small-scale Mining (ASM) for survival. The 15 million ASM miners work in harsh and dangerous conditions to produce just 10-15 percent of global gold supplies, but they make up 90 percent of the global work force in gold extraction. These miners and their families are caught in a vicious circle of exploitation, illegality, and many lack the skills and resources to move forward.
However, if managed responsibly, ASM mining can provide a great opportunity for poverty reduction and sustainable development for millions of people.
This is why Fairtrade International (FLO) has created Fairtrade gold certification. This groundbreaking initiative enables ASM miners to improve their livelihoods and it assures concerned consumers that gold jewelry they buy is responsibly sourced.
Through an extensive consultation process the two organizations have developed a set of standards for responsible mining, which the miners have to fulfill in order to get certified. Achieving the certification means that the miners:
- receive a guaranteed Fairtrade Minimum Price set at 95% of the London Bullion Market Association (LBMA), fixing at the FOB export point;
- receive a Fairtrade premium payment, which is democratically reinvested in community projects and improving miners´ operations. This is calculated as 10% of the applicable LBMA fixing;
- for Ecological Gold (gold extracted without the use of chemicals) is the Fairtrade premium is calculated as 15% of the applicable LBMA fixing;
- develop long term business relations with their commercial partners;
- have developed democratic and accountable organisations and formalised all their operations;
- are using safe working practices including the management of toxic chemicals, such as mercury and cyanide, used in the gold recovery process;
- are respectful with their environment;
- recognize the rights of women miners;
- do not allow child labour in their operations.
Organisations are audited by the independent, international certification body FLO-CERT to ensure they are complying with the standards.
Ecological Fairtrade certified Gold is also available. This is gold which has been extracted without the use of chemicals, with strict ecological restoration requirements.
If you are a consumer or company looking for more information please visit the relevant labelling initiative in your country at info.fairtrade.net and contact them directly. In the UK, please visit www.fairtrade.org.uk/gold.
If you are a miner interested in certification, visit:
To download the Fairtrade Gold Standards, visit:
For more information on ASM mining and miners visit the gold minisite of the Fairtrade Foundation.
Fairtrade International - FLO
Bonner Talweg 177
53129 Bonn Germany
Telephone: +49 228 949230
E-mail: info@ fairtrade.net
Bonner Talweg 177
53129 Bonn Germany
Tel.: +49 (0) 228 24930
Frequently Asked Questions
What is artisanal and small-scale mining (ASM)?
ASM is labour intensive but requires little specialist technology, knowledge or skill. The mining method differs depending on geology. For example, Colombian miners in Oro Verde pan for gold in water, whereas those working for Sotrami carry out hard-rock mining using dynamite and machinery to extract ore, which is then processed to extract gold.
ASM attracts economically disadvantaged and vulnerable people seeking a higher income. It is also seen as an important alternative to less attractive or profitable activities and as a chance to improve economic situations. These miners produce just 10-15% of global gold supplies, but make up 90% of the labour force in the gold industry.
What challenges do ASM miners face?
Globally, the roughly 100 million ASM miners are characterised by high levels of poverty and are often from the most disadvantaged part of society. They often do not receive the full price for their gold – sometimes as little as 70% of the internationally agreed prices. Most mining communities lack basic sanitation, clean and safe drinking water, have poor housing, little or no access to education and healthcare and are financially unstable. Lack of transparency in supply chains makes it virtually impossible for consumers to know where and under what conditions the gold in their jewellery was mined.
Mining laws are usually geared towards large-scale industrial mining and governments tend to give the large-scale industry preferential mining rights. This leaves small-scale miners, who find it hard to access legal mining rights, more vulnerable and pushes them into informal or illegal operations where working conditions are hazardous and health and safety measures are non-existent. The unskilled handling of toxic chemicals such as mercury and cyanide poses severe risks to miners’ health and natural environment.
What is Fairtrade gold?
Fairtrade certified gold comes from artisanal and small-scale mining (ASM) organisations that meet the Fairtrade gold standard. This means the gold has been responsibly mined and that the miners have received a Fairtrade Minimum Price and Premium, which assists social, environmental and economic development in the communities.
What is Fairtrade International (FLO)?
Fairtrade International (FLO) is made up of 25 organizations working to secure a better deal for producers. They set international Fairtrade standards and support Fairtrade producers.
What are the benefits of Fairtrade certification to miners?
Like producer organisations certified for other Fairtrade products, mining organisations and their communities are guaranteed a better deal. Miners get market access and a fair price for their gold and increased security from the Fairtrade premium, which is invested in economic, social or environmental projects.
The Fairtrade Label ensures that gold has been extracted and processed in a fair and responsible manner. This means:
- Miners‘ organisations are strengthened
Miners form groups to give themselves better bargaining power with traders, to get a fairer return for their gold, and gain greater control over the jewellery supply chain. They are required to participate in the social development of their communities.
- Child labour
Miners' organisations must eliminate child labour from their organisation. No one under 15 years old must be contracted to work in the mining organisation. Those under 18 must not work in hazardous or dangerous conditions.
- Working conditions are improved
Fairtrade certification requires mandatory use of protective gear and health and safety training for all miners.
- Freedom of association and collective bargaining is respected
Miners’ organisations recognise the right of all workers to establish and join trade unions and collectively negotiate their working conditions.
- Responsible use of chemicals is mandatory
Miners must use safe and responsible practices for management of toxic chemicals, such as mercury and cyanide, in gold recovery. Chemicals have to be reduced to a minimum and where possible eliminated over an agreed time period.
Where are the miners Fairtrade works with?
Fairtrade gold comes from Bolivia, Colombia, Ecuador and Peru. More mining organisations from Latin America are expected to join the system in 2011. Work with miners in Africa and Asia has also begun and will begin in to bring them into the system from 2012 has also begun. The scope of the work only covers ASM miners and not, rather than medium or large-scale industrial mining, because this is where Fairtrade certification could have the most impact. Other initiatives support improvements in medium- and large-scale mining such as the Responsible Jewellery Council.
How will I know the product I have bought is from a certified Fairtrade mining organisation?
By creating fully transparent and traceable supply chains, consumers and retailers can have confidence that ASM miners are getting a fairer deal and responsible practices have been used. Consumers can recognise Fairtrade products as their packaging will carry the FAIRTRADE label and the jewellery product a stamp (similar to the hallmark). Consumers will recognise products made from ecological gold as it will carry a slightly different dual label and stamp.
How will the Fairtrade Minimum Price and Premium be calculated?
Most Fairtrade products have a minimum price determined by their cost of sustainable production (COSP) but it is not feasible to calculate this for gold, due to the geological characteristics of mineral deposits. Therefore the Fairtrade Minimum Price (FTMP) is set differently and based on the London Bullion Market Association’s (LBMA) fixing for gold. The LBMA is the London-based trade association that represents the wholesale market for gold and silver in London. The Fairtrade Minimum Price for the pure gold content (in unrefined gold) is set at 95% of the LBMA fixing at the FOB export point which is substantially higher than the 70% many often receive.
In addition, buyers must pay a Fairtrade Premium of $2000 USD per kilo sold. For Fairtrade Ecological Gold an ecological premium calculated at 15% of the LBMA fixing is payable.
The Fairtrade premium for silver is set at 10% of the LBMA price on the day of purchase.
How do artisanal and small-scale miners use chemicals to extract gold?
Mining methods vary according to geology of the area. The gold found in riverbeds is easier to extract from the surface without chemicals using just basic tools or river terraces or digging pits. Hard-rock mining underground extracts ore which is processed on the surface to extract the gold. Most commonly, it is mixed with mercury, which captures the gold to form a mixture known as amalgam. The amalgam is then heated which evaporates the mercury, leaving residual gold and other metals.
Some small-scale miners use cyanidation as an alternative to mercury. Cyanide leaches the gold from the crushed ore, dissolving it in the water. As this process requires substantial investment, special training, a longer processing time, and significant financial capacity, it is less widely used by ASM miners. However when used properly, cyanidation enables miners to eliminate mercury completely and increase gold recovery rates.
What is the impact of chemicals used in mining?
The environmental impacts of ASM depend on where it occurs, but can include deforestation, land degradation through air, water and soil pollution from dust, mud or toxic substances, as well as impact on local wildlife. By working with the mining organisations before certification, it is possible to drastically reduce these impacts with the proper support and incentives. ASM is not significantly dirtier per unit of output than other mining activities, and since ASM processes much less ore than large-scale mining per ounce of gold, the magnitude of its impact on the land is much smaller.
If chemical use were not permitted by Fairtrade standards, 95% of all ASM would be excluded from the Fairtrade system. Instead the standards set out a process to support ASM mining organisations to minimise the use of mercury and cyanide over an agreed period of time through responsible practices and technologies to mitigate impact on the environment and human health. The Fairtrade standards require ASM miners to use a process which ensures that mercury emissions are drastically reduced. For many miners‘ organisations the Fairtrade premium can provide the only opportunity to invest in more environmentally efficient technologies.
Will Fairtrade certified gold produced without the use of chemicals be available?
Yes, there are ASM mining organisations that do not use chemicals when mining and promote environmental conservation. The gold produced by groups with strong environmental management systems in place and who are not using chemicals will be known as ‘Ecological Gold’ and these products carry an additional premium on top of the Fairtrade premium. The additional premium recognises the additional costs in maintaining environmental controls.
Would it be better to recycle unwanted gold instead of extracting more to limit the environmental impact of mining?
Although recycling is a good way to reduce the environmental impacts of mining, only 30% of the market for gold can be satisfied from such sources. Fairtrade certified gold will provide direct developmental impacts for ASM miners, who may otherwise take up other exploitative activities in the drug or sex trades.
©2011 Fairtrade Labelling Organizations International e.V.