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					Gold and Diamonds: The Social and Environmental
     Impacts of Mining for the Diamond Ring




                MPA Conference 2007

                  Katharina Marcin
                   Nicholas Ruder
Table of Contents

Introduction                                                      2

Life Cycle Assessment                                             3

Major Environmental Impact Summary                                7

Mining Sustainability Initiatives                                 7

Canadian Policies and Regulations                                 11

Cases: Leaders and Laggards in the Mining Industry                13

The Canadian Mining Experience                                    17

Major Stakeholders                                                20

Recommendations                                                   23

Eliminating Mining from the Life Cycle: Golden Circle Jewellers   24

Conclusion                                                        26

References                                                        27

Appendices

               Appendix A                                         31


               Appendix B                                         32




                                                                       1
    Gold and Diamonds: The Social and Environmental
         Impacts of Mining for the Diamond Ring
Introduction
         In order to explore the mining industry in Canada from a perspective that affects
us through a symbol of love, unity, and value, the diamond engagement ring has been
chosen as the example of how our desires affect the social and natural environment of
mines around the world, as well as in Canada. The diamond engagement ring is not
necessary to our survival; we do not depend on it for transportation, better lifestyles,
electricity, or any other necessity. The diamond ring is a purely superficial object that
our society values enormously thanks to very effective marketing campaigns. Given the
high social and environmental impact of gold and diamond mining on millions of
peoples’ lives around the world, it is important to start questioning the importance of
―bling,‖ and whether diamonds really are a girl’s best friend.
         The gold and diamond industry is an important economic resource for many
countries. Most gold mined is converted into jewellery which has been highly valued for
over 8000 years. The second largest market for gold is the electronics industry, because
gold does not easily corrode, and is highly conductive. This industry accounts for 8
percent of global demand for gold.1 Most gold mines (90 percent) in Canada are open-
pit, and hard-rock underground operations. In terms of gold production, Canada is
ranked eighth in the world, and exports $3.6 Billion a year. Canadian mine production
has decreased in the last several years, but world demand continues to creep up. The rise
in gold price has not affected Canadian producers as much as can be expected in 2005,
because of the high Canadian dollar, and higher energy costs associated with mining
operations.2
         The diamond industry in Canada is currently worth $2 Billion.3 The first
Canadian diamond mine is the Ekati mine in the Northwest Territories. The second is
Diavik, which produces more than Ekati. Three other mines are set to open in the near
future in Nunavut and the Northwest Territories, which will rank Canada third in world
diamond production after Botswana and Russia.4 Mining operations are not the only
source of employment in Canada from the diamond industry; new cutting and polishing
facilities have opened up north, in addition to pre-existing facilities in southern Canada.
The Canadian diamond industry currently employs 4000 people directly and indirectly,
40 percent of whom are Aboriginal at Ekati and Diavik.5 Currently Canada produces 15
percent of the world’s diamonds, but has 80 percent of the world’s ―excellent‖ or ―ideal
cut‖ makes.6



1
  Chevalier, P. Gold. http://www.nrcan.gc.ca/ms/pdf/nfo/nfo05/gold_e.pdf
2
  Ibid.
3
  Canada: A Diamond Producing Nation. NRCan. http://www.nrcan.gc.ca/ms/diam/index_e.htm
4
  Ibid.
5
  Ibid.
6
  Canadian Diamonds. Diamond Info. http://www.diamondinfo.org/canadian-diamonds.html


                                                                                          2
Life Cycle Assessment
Components
        The major components that comprise a diamond ring are diamonds and gold.
Lesser components that are present but in low and variable amounts are: copper, nickel,
silver and zinc. All of these elements and the processes associated in their acquisition will
be taken into consideration for this Life Cycle Assessment, which can be broken down
into five broad stages: exploration, extraction, processing, manufacture and retail, use and
re-use (See Appendix A).

Phase 1: Exploration
        The exploration phase of the life cycle assessment is considered a preliminary
phase of the mining process. A small fraction of exploration projects proceed to the
extraction phase. For this reason exploration is rarely taken into consideration in a life
cycle assessment of products in the mining industry. 7
        The processes involved in exploration include: geological surveys, geophysical
surveys, trenching and drilling. Geological surveys generally involve mapping,
surveying and prospecting. The geophysical surveys can include airborne (helicopter
and/or airplane) and ground surveys. The trenching process is the stripping of overburden
with heavy equipment to expose underlying bedrock. Depending on remoteness of the
area, road construction may be needed for access for drilling and trenching equipment.
        The exploration for metals and diamonds uses energy, water and land resources.8
The energy used to power equipment, electricity and fossil fuels varies with the type of
process. Large amounts of fuel are used in the advanced stages of exploration to power
equipment (e.g. generators, excavation equipment, helicopters, and airplanes). Water is
used throughout this phase, most intensively in the trenching and drilling for washing and
drilling fluid, respectively. Varying amounts of tree cutting and soil disturbance can be
attributed to exploration activities, most notably the clearing of forest for roads and trails,
and the stripping of soil and vegetation for trenching.9
        Air emissions are a significant output for this phase of the life cycle. Helicopters,
airplanes and heavy equipment consume large amounts of fuel and thus expel CO2 into
the atmosphere. Trenching and drilling produce considerable amounts of waste soil, rock,
and water.
        Land disturbance and water contamination are the biggest environmental concerns
involved with mining exploration. The cutting of trees, stripping of soil can have serious
implications for soil erosion, which can also lead to increased sediment in water bodies
and may be harmful to fish and fish habitats10. Fluids and drill cuttings from the drilling
process can also pose a risk to water systems if not disposed of properly. In more
7
  Durucan et al. Mining life cycle modeling: a cradle-to-gate approach to environmental management in the
         minerals industry. Journal for Cleaner Production. 2006. 14;1057-1070.
8
  Poliquin, Morgan. Mineral Exploration Techniques. Kitco Casey. 2005.
http://www.kitcocasey.com/displayMining.php?id=5
9
  Ibid.
10
   Working on Crown Land: What you should know about Mineral Exploration, Building Construction and
         Road and Trail Construction. NRCan. 1996.
         http://www.mnr.gov.on.ca/MNR/csb/news/crown1.html



                                                                                                        3
advanced exploration projects the amount of fuel and electricity used could be considered
a major contributor to greenhouse gas (GHG) emissions and global climate change.

Phase 2: Extraction
         The extraction phase of the life cycle assessment encompasses all aspects of
mining and extraction of raw minerals and metals. While mining is a large part of the
Canadian economy, it has extensive environmental impacts that need to be considered.
The extraction of raw materials is one of the biggest concerns for environmental impacts
in the life cycle assessment of a diamond ring.
         Two main types of mining methods are the surface method, and the underground
method. The former, is used when the deposit is located over a broad area close to the
surface. The latter, is used when there is a high grade deposit over a smaller area deeper
beneath the surface. Most of the world’s mines are open-pit mines, which are large
craters blasted into mostly environmentally or historically protected areas.11 Open-pit
mines generate large amounts of waste rock which has made groundwater thousands of
times more acidic than battery acid.
         There are very large inputs involved in the mining process. Land resource use
varies dependant on the method being used for extraction; surface mining covers a large
land area and can cause extensive land disturbance due to removal of overburden (soil
and surface rock) and vegetation. Water is used throughout this phase, most notably in
separation and drilling. Surface and groundwater can be encountered throughout the
mining process and needs to be diverted and disposed of due to its contamination. Very
high amounts of fuel and electricity are consumed in powering equipment and
transportation of personnel and materials.
         The main objective of extraction is the output of concentrated metals and
diamonds. Other outputs that are involved include: air emissions, waste water and solid
waste. According to Environment Canada, the mining sector in Canada released 15700 Kt
CO2 equivalent of GHG (CO2, NOx, SO2) in 2003.12 Other air contaminants that are
associated with the gold and base metals mining sector include: cadmium, mercury,
nickel, lead, arsenic and chromium.13 Waste water and water contaminant release is a
major concern for the mining industry. The types of contaminants released vary
depending on the type of metal being mined. For gold mining, water contaminants may
include Arsenic and Mercury.14 For base metals mining, the contaminants released can
include: cadmium, mercury, nickel, and lead.15 When underground mining for gold or
base metals encounters groundwater, the oxidation of the sulphur-bearing rocks can cause
the release of H2SO4 (acid mine drainage) into the groundwater.16 There are massive
amounts of solid waste that result from the excavation process in the mining industry. All

11
   No Dirty Gold
12
   Greenhouse Gas Inventory Data Search. Environment Canada. 2003.
http://www.ec.gc.ca/pdb/ghg/query/index_e.cfm
13
   Toxic Release Inventory. Chemical Fact Sheets .National Mining Association.
http://www.nma.org/pdf/tri/tri_fact_sheets.pdf.
14
   Dirty Gold Impacts. No Dirty Gold. http://www.nodirtygold.org/dirty_golds_impacts.cfm
15
   Ayers et al. The Life Cycle of Copper, its Co-Products and By-Products. Mining, Minerals and
Sustainable Development, 2002.
16
   Cohen, R. of microbes for cost reduction of metal removal from metals and mining industry waste
streams. Journal of Cleaner Production. 2006. 14; 1146-1157.


                                                                                                     4
overburden, including top-soil and vegetation, must be removed in order to commence
surface mining. Also, waste rock must be removed from the mine and disposed of. An
economical grade for a diamond mine is in the range of 5 carats per ton, according to Dr.
J. Findlay,17 therefore leaving the majority of the rock as waste.
        Surface and groundwater contamination can occur at various stages of the
extraction phase. The contamination can occur from slow seepage of contaminants due to
poorly constructed waste storage facilities, by acid mine drainage, or by catastrophic
failure of storage facilities of tailings and other waste products18. Local air quality can be
greatly affected by the release of contaminants into the air and can have major
implications to human and ecosystem health. The extensive surface area disturbance and
land resources required for surface mining can have serious implications for biodiversity
and ecosystem degradation if reclamation efforts are unable to restore an area to it’s
original state (e.g. draining of Lac de Gras, NWT, Canada).19 The emission of greenhouse
gases in the extraction phase can be a significant contributor to climate change.

Phase 3: Processing
         The processing phase of the life cycle assessment involves the further refining of
concentrated metals and diamonds of the mining process. Processing covers all aspects
of the separation and concentration of the metals as well as diamond cutting and
polishing. The most complex phase is the separation of metal ores and diamonds from
surrounding waste rock materials. It is conducted using a variety of processes.
         The base metals that make up a gold ring, which form an alloy with gold, are
silver, nickel, zinc, and copper. In order to extract metal ores (silver and gold) from the
waste rock, several possible extraction methods can be used. Some of the processes used
to separate gold from surrounding rock are: gravity, floatation, comminution, or magnetic
processes. All of these separation processes require the use of water.20
         Floating agents are often toxic, but are hydrolytically decomposed while still in
the processing plant. Ore extraction is often done with either heat or water. The water-
based separation process—hydrometallurgy— is becoming increasingly common.
Hydrometallurgy uses leaching liquids that are often acids, alkalis, salts, or other
solvents, and the resulting waste water is polluted with remnants of these chemicals.21
Other methods involve large quantities of cyanide. One way of extracting gold from ore
is to spray the ore with cyanide and induce the gold leaching out of the ore. Many mines
use several tons of cyanide each day, and this cyanide-contaminated waste is usually
abandoned. To put this into perspective, a rice-grain-sized amount of cyanide is fatal,
and to extract enough gold for a single wedding band, 18 tons of waste-ore are produced.
Today, the efficiency of the gold industry is very low: 0.00001 percent of ore (by weight)
can be refined into gold; everything else is waste. Comparatively, copper mining
performs little better, resulting in 0.51 percent of weight proportion of ore actually being
usable copper. The amount of waste from the mining industry in the US is 9 times the

17
   Findlay J. Personal Communication 1 October 2006.
18
   Dirty Gold Impacts
19
   Diavik. http://www.diavik.ca/WCD.htm
20
   Neved, Jansz. Waste Water Pollution Control in the Australian Mining Industry. Journal of Cleaner
Production. 14 (2006); 1118-1120.
21
   Ibid.


                                                                                                       5
amount produced by US towns and cities combined. ―In 2001, the most recent year for
which data were available, metals mines produced 1,300 tons of toxic waste—46 percent
of the total for all US industry combined—including 96 percent of all reported arsenic
emissions, and 76 percent of all lead emissions.‖22 Some of these toxic substances are
naturally occurring, but are disturbed and released by the mining process, whereas others
are intentionally added to the gold leaching process. The efficiency of mining and
consumer awareness of their demands for metals has not changed as demonstrated by the
continued growth of gold on the NY Stock Exchange.
          After the separation process, metal is melted into blocks at almost 100 percent
purity, and is then sold to buyers who melt parts of the gold blocks to make the gold ring.
This process uses intense heat and therefore consumes large amounts of electrical energy,
which, depending on the region, is generated with either water or fuel.
         Rough diamonds, being the hardest material in the world, can only be effectively
cut and polished using other diamonds and diamond film. Other substances, such as
silica, are sometimes used in the cutting and polishing process; however diamonds are the
tool of choice.23
         The inputs into the ore and diamond processing systems are: electricity used to
run the processing facility, and the fuels associated with transportation to the processing
facility (if the processing takes place outside of the mining area); the chemicals used to
separate rough diamonds, gold and metals from surrounding waste rock material; and the
water used in the separation processes.
         The chemicals used in solutions designed to dissolve the ―waste rock material‖
surrounding gold or diamonds can be released along with the sludge into the
environment. The base-metal production process produces a lot of waste. Some
examples of the waste that results from the extraction of solid metals include: large
amounts of solids (gypsum, jarosite, slag, etc.), air and water pollutants (e.g. CO2, SO2,
NOx , Cd, Ni, As, Pb.24
         The environmental impacts associated with the processing of the metals and
diamonds are airborne pollutants and water contamination. Airborne pollutants are
associated with acid rain and the greenhouse effect. Waterborne pollutants are equally
damaging, as they often reach the groundwater and can contaminate aquifers and other
aquatic systems that are otherwise unassociated with the processing system.

Phase 4: Manufacture / Retail
        Diamonds are a value-added industry. In 1981, the sale of rough diamonds
straight from the extraction process was $2 billion. By the time diamonds reached the
end of their ―industry cycle,‖ they were sold to consumers for $18 billion.25 The
diamond life cycle once it leaves the mine continues to ―upgrade‖ the diamond. After the
mining process, the rough diamond is sold to rough gem dealers who them sell it to
cutting units, from where it proceeds to wholesale dealers, from where it finally goes to
22
     No Dirty Gold
23
     Tang et al. A New Elegant Technique for Polishing CVD Diamond Films. Diamond and Related
           Materials. Aug. 2003. Vol. 12 Issue 8. 1411-1416.
24
  Ayres 2002.
25
  Chang et al. The Global Diamond Industry. Chazen Web Journal of International Business. Fall 2002.
http://www2.gsb.columbia.edu/journals/files/chazen/Global_Diamond_Industry.pdf


                                                                                                       6
retail.26 All along the manufacturing process, the energy inputs are commonly associated
with transportation, and the generation of electricity.
         The outputs associated with manufacturing are: the finished diamonds and
jewellery; CO2 emissions from transportation, and energy production; and minimal
amounts of solid waste.
         Because of the fuel involved in the transportation process, greenhouse gas
emissions contributing to global climate change are the main environmental impact
associated with the manufacturing stage. The DeBeers marketing campaign stating that
―Diamonds are forever‖ is quite accurate. Diamonds are rarely discarded, and if they are,
it is most likely accidental. Diamonds and diamond rings are passed down from
generation to generation and are therefore an almost entirely recycled product.



Major Environmental Impacts Summary

The following summarizes the environmental impact of gold and diamond mining:

Air Emissions
    Climate change caused by greenhouse gas emissions during smelting of ore and in
      all aspects of transportation and construction.
    Local air quality degraded by gases released in processing and particulate matter
      expelled during extraction and processing.

Water contamination
   Aquatic ecosystem degradation caused by seepage and major releases of toxins
      from contaminated waste water to surface water.
   Ground water contamination due to acid mine drainage and surface water
      contaminant seepage.

Land resource use
    Decreased biodiversity, ecosystem degradation and soil erosion resulting from
      major land disturbance in sensitive environments and remote areas (e.g. tundra).
    Complete ecosystem destruction (lakes, forests, rivers) from failed reclamation
      efforts.


Mining Sustainability Initiatives

        There are several mining sustainability initiatives that are formed either by
international governing bodies such as the UN, international non-governmental
organizations (NGOs), or industry standards organizations that promote the sustainability
of the industry through voluntary cooperation. The following five initiatives are just an


26
     Chang et al. 2002.


                                                                                         7
example of prominent industry and international standards that are currently at the
forefront.27

Ceres

        Ceres is a national network of investors, environmental organizations and other
public interest groups working with companies and investors to address environmental
sustainability issues and challenges. Its mission is to integrate sustainability into capital
markets across the world for the health of the planet and its inhabitants. Founded in
1989, Ceres’ vision incorporates business and capital markets to promote the well being
of human society and the protection of the earth's biological systems and resources.
Ceres established the Global Reporting Initiative (GRI), a standard that is used by over
850 companies worldwide for corporate reporting on environmental, social, and
economic performance28. From the results of the Ceres report, it is evident that corporate
responsibility amongst metals and mining leaders is varied as many firms and
corporations place different degrees of emphasis on environmental standards.
        In 2006, Ceres released a report that evaluated over 100 companies in 10 of the
most carbon intensive sector industries in the United States that included the metals and
mining industry. These companies are ranked as among the leaders in their industry and
are evaluated according to a Climate Change Governance Checklist.29 This checklist is
comprised of 14 governance steps scored on a 100 point scale that companies take to
actively address climate change. There are 5 broad categories that comprise the 14
governance steps that include:

        Board Oversight (up to 12 points);
        Management Execution (up to 18 points);
        Public Disclosure (up to 14 points);
        Emissions Accounting (up to 24 points); and
        Emissions Management and Strategic Opportunities (up to 32 points).30

ISO

        ISO, the International Standards Organization, is the world’s largest developer of
standards for a variety of industries. ISO is an NGO which aims to improve social,
environmental, and technical standards. ISO sets out to bridge the gulf between private
sector and public sector interests (ISO overview). International standards are beneficial
to industry to ensure that their products are accepted in the global market so they have an
incentive to abide by ISO standards. ISO strives to establish standards for environmental
sustainability to better industry on a global scale. One fallback of being an NGO is that
ISO has no power of enforcement, however many countries have adopted ISO standards
as part of their legislative frameworks, and they hold a significant market impact in the

27
   Newmont the Gold Company http://www.newmont.com/en/
28
   Ceres www.ceres.org/ceres
29
   Cogan, Douglas G. Corporate Governance and Climate Change: Making the Connection, Summary
Report. Ceres, March 2006. 3.
30
   Ibid. 3.


                                                                                               8
case of non-adherence. ISO standards are voluntary and non-regulatory, but have
resulted from market demand and therefore have a large amount of sway. ISO
certification also holds a lot of weight and is considered legitimate because of a third
party audit certification system to ensure compliance with ISO standards, and quality
control.


United Nations Global Compact
       The UN Global Compact is a non-regulatory framework for the mining industry
promoting accountability and transparency. It is a corporate responsibility initiative
emphasizing four universal values: human rights, environmental sustainability, labour,
and anti-corruption. The three principles that focus on environmental sustainability are
Principles 7, 8, and 9:

Principle 7
       Business should support a precautionary approach to environmental challenges;
Principle 8
       Undertake initiatives to promote greater environmental responsibility;
Principle 9
       Encourage the development and diffusion of environmentally friendly
technologies.31

International Council on Mining and Minerals (ICMM) – Global Mining Initiative
(GMI)
       The ICMM is a voluntary industry initiative with the following Principles of
Sustainable Development:
   1) Implement and maintain ethical business practices and sound systems of corporate
       governance
   2) Integrate sustainable development considerations within the corporate decision-
       making process
   3) Uphold fundamental human rights and respect cultures, customs and values in
       dealings with employees and others who are affected by our activities
   4) Implement risk-management strategies based on valid data and sound science
   5) Seek continual improvement of our health and safety performance
   6) Seek continual improvement of our environmental performance
   7) Contribute to conservation of biodiversity and integrated approaches to land-use
       planning
   8) Facilitate and encourage responsible product design, use, re-use, recycling and
       disposal of our products
   9) Contribute to the social, economic and institutional development of the
       communities in which we operate
   10) Implement effective and transparent engagement, communication and
       independently verified reporting arrangements with our stakeholders.32

31
   About the Global Compact: The Ten Principles. The United Nations Global Compact.
http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html
32
   2005 Annual Report NYSE. Newmont the Gold Company. Accessed 28 October, 2006.


                                                                                           9
World Business Council for Sustainable Development (WBCSD) – Mining, Minerals
and Sustainable Development Project (MMSD)
        The purpose of the MMSD is to empower industry and business leaders to
become catalysts for change in the industry to ensure that mining develops and continues
in a sustainable manner.33

International Development and Research Council (IDRC) – Mining Policy Research
Initiative (MPRI)
        The MPRI is primarily aimed at addressing mining issues in Latin America and
the Caribbean. The Initiative serves to identify key stakeholders, ensuring greater
corporate social responsibility. IDRC increases regional networking to ensure that needs
of the region and the industry are addressed and discrepancies are resolved. Two major
focuses of the initiative are indigenous peoples and mining technology innovation.34

World Wildlife Fund (WWF) - Mine Certification Evaluation Project (MCEP)
        The World Wildlife Fund has several initiatives on responsible mining and
mining sustainability. One of these WWF initiatives is the Mine Certification Evaluation
Project (MCEP), which audits the industry auditors. The WWD takes into account water
and air pollution, as well as the displacement of ecosystems and people, and strives to
ensure that the industry is held accountable for not upholding treaties and ignoring
regulations. The World Wildlife Fund’s MCEP ensures that industry practices are
transparent, and that they will continue to spearhead future sustainability initiatives.35

Publicity Campaigns
        The most well known ENGO publicity campaign was against ―blood diamonds.‖
It was mainly a campaign to highlight socio-political issues surrounding the diamond
trade in Sierra Leone. It was a fairly effective campaign, which proved to be beneficial
for the Canadian diamond industry, allowing them to laser brand their diamonds with the
image of a polar bear and market them as ―clean diamonds‖, not associated with the
violent diamond trade of Sierra Leone and other conflict areas.
        The No Dirty Gold campaign by Earthworks is relatively new and has had an
effect on jewellers. Thus far they have enlisted a number of large jewellery manufacturers
and marketers (Zale Corp., Sterling, Tiffany & Co., Helzberg Diamonds, Cartier,
Fortunoff, Val Cleef & Arpels, Piaget) to promote sustainable and environmentally
responsible gold mining by only purchasing gold from approved mining companies.


http://www.newmont.com/en/investor/releases/media/newmont/2005_Annual_Report.pdf
33
   The Mining, Minerals, and Sustainable Development (MMSD) Project. International
Institute for Environment and Development. http://www.iied.org/mmsd/what_is_mmsd.html
34
   Mining Policy Research Initiative (MPRI). International Development Research
Council: Environment and Natural Resource Management.
http://www.idrc.ca/minga/ev-70315-201-1-DO_TOPIC.html
35
   Mining Certification. World Wildlife Fund. http://wwf.org.au/ourwork/industry/mining/


                                                                                           10
However, the effects of this campaign are limited and need to attract greater attention to
affect a greater impact on the jewellery manufacturers.

Jewellery Sector Initiative:
        The Jewellers of America have formed the Council for Responsible Jewellery
Practices (CRJP) to promote ―responsible, ethical, social and environmental practices
throughout the diamond and gold jewellery supply chain, from mine to retail‖36.
Interestingly, both BHP Billiton and Newmont Mining are founding members of the
CRJP. This initiative appears to be in the initial stages and very limited in its scope and
overall effect.

Effect on Jewellery Sector

        Jewellery manufacturers are mostly unaffected by the environmental issues
associated with the mining industry. Some public pressure due to ENGO campaigns
concerning environmental and socio-political issues has had a limited effect, instigating a
slight shift in behaviour of the jewellery sector.


Canadian Policies and Regulations
Fisheries Act
Metal Mining Effluent Regulations
(SOR/2002-222)

        The Regulations […] impose limits on releases of cyanide, metals, and
        suspended solids, and prohibit the discharge of effluent that is acutely
        lethal to fish. The Regulations also require metal mines to conduct
        Environmental Effects Monitoring programs to identify any adverse
        effects of their effluent on fish, fish habitat, and the use of fisheries
        resources37.


Waste Discharge Regulation Implementation Guide

        Issued by the Government of British Columbia, on July 8th, 2004 to integrate and
replace the previous Environmental Management Act and the Waste Management Act.
The Waste Discharge Regulation Implementation Guide (WDRIG), only allows certain
industries to release waste into the environment, and regulates the amount of waste that
these industries can release:


36
   What We Stand For. Council for Responsible Jewellery Practices.
http://www.responsiblejewellery.com/what.htm
37
   Fisheries Act: Metal Mining Effluent Regulations. Acts Administered in Part by the Minister of the
Environment. Environment Canada: Environment Acts and Regulations. 1979.
http://www.ec.gc.ca/EnviroRegs/Eng/SearchDetail.cfm?&intReg=174


                                                                                                        11
           Schedule 1
           Industries, trades, businesses, operations and activities listed on Schedule
           1 of the regulation will generally continue to be authorized through the use
           of site specific authorizations or regulations due to the complexity of their
           discharges, potential for significant environmental impacts or limited
           number of similar operations in the province. Schedule 1 also includes
           some industries, trades, businesses, operations and activities that are
           authorized by existing
           regulations.

           Schedule 2
           Industries, trades, businesses, operations and activities listed on Schedule
           2 of the regulation are eligible to be governed by minister’s codes of
           practice. Codes of practice are enforceable, standard industry- or activity-
           wide regulations governing the discharge of waste from a prescribed
           industry or activity. If a code of practice governs the industry, trade,
           business, operation or activity, no site-specific permit or alternate type of
           authorization to authorize the introduction of waste into the environment is
           required. In the absence of an approved code of practice, other forms of
           authorizations are required to authorize discharges to the environment.38

Metal Mining: the Dirty Reality
        The metal mining industry is among the most environmentally impactful
industries in the world. For every ounce of gold that comes out of the world’s mines, 79
tons of mine waste is produced. Mining for metals, employs 0.09 percent of the world’s
population, yet consumes 10 percent of the world’s energy consumption, and accounts for
96 percent of the US’s arsenic emissions.39 The gold industry is very inefficient,
requiring 18 tons of waste ore to produce enough gold for a single wedding band. The
use of cyanide to leach the gold out of the ore is very toxic, with a grain-sized amount
being fatal.40

Cases: Leaders and Laggards in the Mining Industry
The Laggard: Newmont Mining

        Newmont, one of the world’s most prominent gold mining companies, scored 24
points among the metals and mining industry with Alcan scoring a high 77 points. Ceres
environmental standards are voluntary amongst companies and many governments both
locally and nationally do not enforce penalties for non-compliance.

38
  Waste Discharge Regulation Implementation Guide. British Columbia Ministry of the Environment,
Environmental Protection Division. 2006.
http://www.env.gov.bc.ca/epdiv/env_mgt_act/pdf/wdr_implement_guide.pdf
39
     Dirty Metals. No Dirty Gold. http://www.nodirtygold.org/pubs/DirtyMetals_HR.pdf
40
     Ibid.


                                                                                                   12
Company Profile
       Newmont Mining is the largest gold mining company in the world. They have
mines in North and South America, Asia, Australia, and Indonesia, and continue to
conduct widespread mining exploration. Newmont’s mines also produce copper, silver,
and zinc, which are all major components of gold jewellery production. Founded in 1921
in New York, they have been publicly traded on the New York Stock Exchange since
1925. Today, they employee 28 000 people, and profess to be leaders in sustainable
mining.41

Environmental and Sustainability Initiatives
         Newmont Mining makes various claims to being a leader in mining sustainability
initiatives. The company claims to lead the industry in transparency and accountability.
They market themselves as one of the founding members of the ICMM and of the
Council for Responsible Jewellery Practices. Newmont is also a signatory of the UN
Global Compact and are signatories of the International Cyanide Management Code.
According to Newmont Mines, they set the highest standards of community development
initiatives and environmental stewardship.42 Unfortunately, despite these initiatives of
which they are founders and signatories, the reality proves different.

Performance

The No Dirty Gold Campaign is a good industry watchdog which incorporates all the
mining issues that Greenpeace, Earthwatch, the World Wildlife Fund, and others cover in
their extensive research of mining companies and their environmental and social impacts.
Thus, their compilation is the source for the following environmental and social impacts
of Newmont Mining around the world.

Ghana
        Several Environmental Impact Assessments on their mining activities in Ghana
suggest that they are not adhering to the International Cyanide Management Code, and
that there is no evidence of financial backing for mine cleanup and reclamation.
Although Newmont is claiming transparency as one of their core values, they are not
disclosing potential significant acid generation from mine waste. On the social side, the
involuntary displacement of subsistence farmers by mining activities threatens food
security in the area.43

Indonesia
        In Indonesia, Newmont’s mining activities are near a fishing village, where
particular consideration should be paid to the livelihood of the surrounding community
and the ecosystem of the waters in the area. Instead, Newmont dumps about 120,000
tonnes of mine tailings a day directly into the ocean—an illegal activity in North
America. This activity has caused the relocation of several fishing villages because of all

41
   Newmont 2006. www.newmont.com/en
42
   Ibid.
43
   Communities Affected by Newmont Speak Out. No Dirty Gold. 27 April 2005.
http://www.nodirtygold.org/newmont_communities.cfm


                                                                                         13
the marine pollution. They have also dammed two rivers, threatening protected forests
and causing further displacement of peoples.44

Peru
        Peru is a serious problem area for Newmont Mines. There are numerous claims
that a mercury spill about six years ago still causes problems with child development and
the health of the indigenous population that lives around the mining area. Newmont has
not responded to these claims, and has not performed an official health investigation.45

Romania
        Most of the focus on the development of the Romanian mine has been on the
social consequences. The operation is to consist of four open-pit mines in the densely-
populated Rosia Montana valley, with an unlined cyanide storage pond in the
neighbouring Corna Valley. If the project goes ahead despite mass opposition, it would
be the largest open-pit mine in Europe, in an area with archaeological value comparable
to that of Pompeii. This mine would also require the demolition of 900 homes and the
displacement of 2,000 people from the area. Romania and Hungary, the two countries
that would also be impacted, have voiced their concerns about pollution from the mine.46

Nevada
        Finally, one of Newmont’s mines located on the Western Shoshone Nation’s Land
of Nevada, has been developed without the approval of the Shoshone Nation. It threatens
to leave significant land scarring, and pollution of groundwater. Groundwater depletion
is also a major concern in the area, as is the emission of mercury, and air and water
pollution caused by Newmont’s mining activities.47
        Compliance to the initiatives that Newmont Mining has signed is difficult to
impose as most of the treaties are non-binding, voluntary, and unenforceable. Also, in
the private sector, as long as profits are made—and Newmont’s stock values keep
rising—there is very little incentive to change. There is currently no regulatory body
besides government, which would keep the industry in line. Public opinion is powerful,
but money talks, and in the end, the effect of public opinion on profits will be the one to
effectuate change in the industry.

The Leader: BHP Billiton
        BHP Billiton is widely considered, within the mining industry and the financial
sector, as a leader in sustainability practices and environmental performance. They scored
64 out of 100 on the CERES Climate Change Governance Checklist, where the average
for mining sector was 42.2.48 Also used as a measure of environmental performance the
Roberts Environmental Center developed the Pacific Sustainability Index (PSI), which is
based on environmental and social intent, reporting and performance. The overall score
from the PSI for BHP Billiton was a B+ (Roberts Environmental Center). The Dow Jones

44
   Ibid.
45
   Ibid.
46
   Ibid.
47
   Ibid.
48
   Ceres 2006


                                                                                        14
Sustainability Index (DJSI) named BHP Billiton the sustainability leader for the mining
sector in 2006 (see Appendix B).49

Company Profile
        BHP Billiton was formed in 2001 from the merger of BHP and Billiton
Resources. Incorporated in 1885, BHP was headquartered in Melbourne, Australia and
had three main operations: minerals, petroleum, and steel. Billiton had been an active
mining company since 1860, were Headquarters in London with operations that were
focused predominantly on minerals and coal.50
        Currently BHP Billiton employs 38,000 employees and has over 100 operations in
25 countries. Their operations are spread across a wide array of mining activities,
including: aluminum, coal, copper, manganese, iron ore, uranium, nickel, silver, titanium,
oil and gas, liquid natural gas, and diamonds. Their after tax profit in 2006 was calculated
at US $10.2 billion.51 BHP Billiton is a global company, with extremely diverse interests.
        BHP Billiton’s operation of greatest interest to the Canadian diamond industry is
the EKATI mine in the Northwest Territories of Canada. The EKATI diamond mine has
two open pits (Koala and Misery) currently in production, two in development (Beartooth
and Fox) and seven pits in total planned.52

Environmental and Sustainability Initiatives
         BHP Billiton has been ranked as a leader in the mining industry because of their
clearly defined sustainability development policy and goals; transparency in
environmental impact reporting; support of numerous international environmental
initiatives; and leadership on new proactive eco-certification programs.
         BHP Billiton’s policy on health, safety, the environment and the community
(HSEC) clearly states the goals, principles and guidelines for future sustainable
development of the company and its operations. Under the HSEC they have set numerous
benchmarks for sustainability with the ultimate goal of ―Zero Harm‖ to the environment
and affected communities.

        [BHP Billiton aspires to the principle of] to Zero Harm to people, host
        communities and the environment, and strives to achieve leading industry
        practice. Sound principles to govern safety, business conduct, social,
        environmental and economic activities are integral to the way we do
        business.53



49
   DJSI STOXX - Supersector Leaders. 2006. DJSI.
http://www.sustainability-index.com/djsi_pdf/Bios06/CBR_BHP_Billiton_06.pdf
50
   BHP Billiton. Company Overview. BHP Billiton. http://www.BHP
Billitonilliton.com/bb/aboutUs/companyOverview.jsp
51
   Ibid.
52
   Ibid.
53
   BHP Billiton’s Sustainable Development Policy. BHP Billiton. 2005.
http://www.BHP
Billitonilliton.com/bbContentRepository/docs/SustainableDevelopment/policiesAndKeyDocuments/HSEC
Policy.pdf


                                                                                              15
        BHP Billiton is involved in a number of international initiatives for sustainability
in the mining industry. BHP Billiton is a signatory to the United Nations Global
Compact, a member on the World Business Council for Sustainable Development and a
founding member of the Global Mining Initiative. They are also active in the
International Council on Mining and Minerals and have endorsed the recently developed
Sustainable Development Framework.54
        BHP Billiton is also working on some pro-active programs on eco-certification
like the Mine Certification Evaluation Project, and the Green Lead project, which are
attempting to develop certification frameworks for mine sites and lead producers.55

Performance
         According to the HSEC targets scorecard, BHP Billiton has achieved or exceeded
all of their short term goals set for environmental performance, with regard to greenhouse
gas emissions, water consumption, waste management and product stewardship. All of
the benchmarks set for the goal of ―Zero Harm‖ have not been achieved or are behind
schedule.56
         The Roberts Environmental Center Pacific Sustainability Index (PSI) ranked BHP
Billiton very high in intent, moderately high in reporting but graded them very poorly for
performance in both the environmental and social categories.
         Upon further investigation there is a discrepancy in BHP Billiton’s reporting and
self assessment, as well as other environmental non-governmental organization (ENGO)
reports. This discrepancy calls into doubt the veracity of the company’s environmental
reports and assessment. The following selected issues are currently being reported:

       Liability for the ongoing environmental devastation at Ok Tedi will return to
       haunt BHP Billiton. A court case is currently underway in Melbourne
       regarding BHP Billiton’s failure to live up to its obligations under a
       settlement agreement with the affected landowners of the infamous mine
       that destroyed a river system. BHP Billiton cleverly attempted to limit its
       liability for the ecological disaster caused by its Ok Tedi mine by placing its
       shares of the mine in a trust fund from which compensation payments to
       landowners would be made, and succeeded in gaining indemnity for any
       damages that will exceed the amounts in this trust fund.

       …efforts by BHP Billiton to pressure the Indonesian government to allow it
       to mine in protected forests where open cut mining is currently banned.
       BHP Billiton had committed internationally not to attempt to undermine
       laws of countries in which it operated...

       Dumping Mine Tailings and Wastes into the Oceans At Gag Island
       (Indonesia), BHP Billiton is considering submarine tailings disposal- the


54
     BHP Billiton 2003 Health Safety Environment and Community Report. Roberts
Environmental Center. http://www.roberts.cmc.edu/PSI/AutoReports2.asp?ReportNameID=712
55
     Ibid.
56
     BHP Billion 2005 Sustainable Development Policy


                                                                                          16
     disposal of mine wastes and tailings into the ocean – currently operations
     are suspended.57




The Canadian Mining Experience

Diavik Mines

       Diavik is a Canadian diamond mine located 300 km northeast of Yellowknife,
Northwest Territories in the Lac De Gras area. Diavik is a subsidiary of Rio Tinto plc of
London, England. The lake is now part of the mining operation, as diamonds are located
below the lake. Diavik is unique in that it is ISO 14001 certified, and maintains high
ecological protection standards in its industry. Diavik is also a joint venture between
Aber Diamond Limited Partnership which owns 40percent of the operations, and Diavik
Diamond Mines Inc. which is responsible for 60percent of mining operations. The
Diavik mine holds a relatively small amount of diamonds by global mine standards,
however, the diamonds that originate in the Diavik mine are of the highest quality, with
―some of the world’s highest per tonne ore value‖.58 Mining started in 2003, and is
expected to last for 16-22 years.

Corporate Social Responsibility

        Diavik recognizes that it is located in a pristine area in northern Canada. They
also recognize that they are located on a lake, and in the middle of the caribou migration
route. As such, with local partnerships and consultations with local stakeholders and
interest groups, Diavik has developed a sustainable development policy, and has attained
ISO 14001 certification. These environmental sustainability initiatives set out a long
term goal of treating all water re-released into the environment, ensuring that toxins are
not introduced into the area, and that mine restoration will take place to restore the area to
as natural a state as possible59. Although mining operations will remove fish habitat
temporarily to access the ore through rockfill dike construction in 0.5percent of the lake
area, full restoration of the lake will take place after mine operations shut down. In the
meantime, the other side of the dike will form new fish habitat to compensate for the
temporary loss. ―As per Canadian Fisheries Regulation, there will be no net loss of fish
habitat.‖60 Also during mining operations, the end of mine-life will be kept in sight. The
recreation of fish habitat is such an example, as is the ―contouring of country rock piles to
create smooth hills that allow caribou safe access‖ (Diavik). In 2000 prior to mining



57
   BHP: The Quiet Deceiver. 2003. Mineral Policy Institute (MPI). Media Background Briefing.
 http://www.mpi.org.au/companies/BHP Billiton/bhp_deceiver/
58
   Diavik. http://www.diavik.ca/WCD.htm
59
   Ibid.
60
   Diavik. http://www.diavik.ca/WCD.htm


                                                                                               17
activities, Diavik entered into an Environmental Agreement with local Aboriginal groups,
and can therefore be help accountable for their activities in the mine area.

Ekati

       Ekati is another Diamond mine also located 300km northeast of Yellowknife, in
the Northwest Territories. Ekati, unlike Diavik, performs open-pit mining, as well as
underground mining operations.61 There is little evidence to suggest that they are
proactively working to protect the fragile environment in which they conduct their
operations.

Sullivan Mine, Kimberley BC

        Located near the Alberta border in Kimberley, British Colombia, the Sullivan
Mine deposit was rich in resources with zinc, lead, and iron. After 92 years of activity,
the Sullivan mine closed its production in 2001 totalling over $20 billion in revenue
during its operations. Teck Cominco is currently overseeing the extensive
decommissioning and reclamation process of the mine. Tasks that have been undertaken
by Teck Cominco include reclaiming disturbed lands, a property wide human health and
ecological risk assessment, contaminated site assessments, and the demolition of
operational/building structures no longer in use. Also being undertaken is the
establishment of an underground mine dewatering system that will collect contaminated
waters for delivery to the Drainage Water Treatment Plant (DWTP) for final processing
before being discharged into the St. Mary River.62
        Effluent discharge of water from the DWTP that removes contaminated water
associated with acid rock drainage has met all BC Ministry of Water, Land, and Air
Protection (MWLAP) permit requirements. This includes 0percent mortality to fish
exposed to 100percent effluent water over a period of 96 hours. The underground mine
dewatering system uses the mine’s underground workings to store contaminated water
and progress will continue to be made in this area with ongoing ecological assessments.63
        In 2004, 162 hectares of land were prepared for reclamation and 18 hectares were
seeded. No woody species seedlings were planted in 2004 but 54,000 seedlings
representing 17 woody species were planted in 2005. An additional 115 hectares of
tailings ponds were covered with glacial till, the second layer of the soil cover system.
Seventeen hectares of miscellaneous linear disturbances (rail beds and launder routes)
were reclaimed and 30 hectares, which made up the open pit waste dump, were prepared
for grass and woody species planting in 2005. Reclamation work which started at the site
over 12 years ago is revealing a degree of success as evidenced by the wildlife migrating
to the reclaimed areas.64
        Teck Cominco continues to engage and participate with the community in the
City of Kimberley, aiding the transitional development from mining community to a

61
     Ekati. http://ekati.BHP Billitonilliton.com/default.asp
62
   http://www.teckcominco.com/operations/sullivan/sustainability.htm accessed January 15th 2007.
63
   Ibid.
64
   Ibid.


                                                                                                   18
more diversified economic and social city. Teck Cominco has also offered to make land
available for a light industrial park and has worked with the city to turn over the
remaining portions of the main water system to the city. An agreement was also finalized
with the city to utilize portions of Teck Cominco lands under a license of occupation, for
the purpose of establishing an integrated walking, biking and skiing trail system.65
        The Teck Cominco example with the decommissioning of the Sullivan Mine
reveals the corporate responsibility that a corporation is undertaking after the lifespan of
its resources to make a community more sustainable as well as environmentally safer.
Other companies need to build upon success stories such as this case study.

Holloway Mine

        In Ontario, the Holloway Mine operated by the gold giant Newmont Mining is
another case study where corporations are striving to be more socially and
environmentally responsible to the community and surrounding environment. Located
east of Timmins, Holloway’s environmental strategy is to remain compliant with
government regulations and industry standards especially in the case of emissions, while
maintaining effective monitoring and control programs to protect the environment. In
2004 the acquisition of the nearby Barrick’s Holt-McDermott mill required Holloway to
incorporate new disciplines into its environmental management system, such as cyanide
and tailings (waste rock) management.66
        The tailings are placed into confined ponds to allow the metals to settle out and
for diluted cyanide to be broken down before the water is discharged into the
environment by using natural degradation. The natural degradation process involves
retaining the discharged mill process water for a period of time sufficient to allow for the
natural breakdown of cyanide, and for the associated precipitation of heavy metals
previously forming complex cyanide compounds.67
        The Holloway mine has also pursued other means of recycling waste water in
order to reduce the amount of dependency on the nearby Magusi River. Until October
2004, Holloway had an agreement with the amalgamated Barrick’s Holt-McDermott mill
to reuse all of Holloway’s underground water during the milling process. As a result,
there is no effluent discharge into the environment by Holloway and the amount of fresh
water used has been reduced. Sampling and monitoring of the mine’s water continues
according to the certificate of approval.68

        The mine is not expected to close for another several years but the site has been
identifying areas of contamination or potential contamination that needs to be addressed
before further environmental damage can occur. The mine has an approved
environmental closure and reclamation plan that outlines environmental activities that



65
   Ibid.
66
   http://www.newmont.com/en/operations/nthamerica/holloway/social/index.asp accessed January 15th
2007.
67
   Ibid.
68
   Ibid.


                                                                                                     19
will occur after the mine closes. The plan will cover public health and safety issues, land
rehabilitation, and minimal environmental impact.69

Sustainability Issues and Options

         In the life cycle of a diamond ring, the exploration and manufacturing phases are
the biggest concern for environmental impacts. The mining industry is under extreme
pressure to develop and extract resources in a more sustainable manner, with limited
deleterious effects on the natural environment. The mining industry has reacted to this
pressure by instigating and signing onto a number of initiatives and policies aimed at
reducing the overall environmental impacts of their operations. The initiatives are
ambitious but the performance does not seem to be achieving the goals set out. Even
those companies considered to be the leaders in sustainable development do not seem to
be making significant progress in limiting their environmental impact.
         The jewellery manufacturers and retailers are becoming increasingly affected by
the growing emphasis on sustainability in the mining sector. The connection between
jewellery and the environmental impacts of the mining industry is an important issue for
the modern consumer. The jewellery manufacturers are not greatly affected by the
pressures that are predominant in the mining sector. There is no connection in the mind of
the consumer between the jewellery that they purchase and the environmental impacts of
the mining industry. Publicity campaigns are limited but, when used, do seem effective
in raising awareness of the environmental and social issues that are associated with the
production of a diamond ring.
 The purpose of this report is to investigate the environmental performance and
responsibility of the jewellery sector and to make recommendations for improvement.
         There are a number of initiatives that jewellers can pursue in order to improve
their overall environmental responsibility. The most effective would be targeted at
improving the mining industry’s performance.



Major Stakeholders
The Mining Sector


Environmental Issues
        There are three main areas that raise environmental concerns for the mining
sector: air emissions, land resource use and water contamination.
        The main problems associated with air emissions are the greenhouse gases
produced in the mining process, which contribute to climate change, as well as local air
quality degradation caused by gases and particulate matter expelled during extraction and
processing.


69
     Ibid.


                                                                                         20
        In the course of mine development large-scale land disturbance can occur in
sensitive environments and remote areas (e.g. tundra) resulting in decreased biodiversity,
ecosystem degradation and soil erosion. Also, complete ecosystem destruction (lakes,
forests, rivers) can result from failed mine reclamation efforts.
        Toxins from contaminated waste water that are released into surface water can
cause aquatic ecosystem degradation. Acid mine drainage and surface water contaminant
seepage can also cause ground water contamination.


Mining Sustainability Initiatives
        Several sustainability initiatives exist, both domestically and internationally.
Often, international initiatives are designed to apply to all signatories in all countries.
Such sustainability initiatives include, but are not limited to the following:

    1) The United Nations Global Compact
    2) The International Council on Mining and Minerals (ICMM)—Global Mining
       Initiative (GMI)
    3) The World Business Council for Sustainable Development (WBCSD)—
       Mining, Minerals and Sustainable Development Project (MMSD)
    4) World Wildlife Fund (WWF)—Mine Certification Evaluation Project
       (MCEP)


        All of these initiatives share a common set of underlying values. Namely, they
emphasize increasing accountability, increasing transparency, decreasing environmental
impact, minimizing social impacts, and cleaning up their practices to ensure that there are
no negative health impacts on adjacent communities. Unfortunately, these initiatives are
all voluntary, and non-regulatory. Since international initiatives are not being effectively
enforced, and the industry has little incentive to abide by these initiatives, consumers and
the retail end of the chain may then offer the solution by putting pressure on producers
and miners by steering the market in the desirable direction.



The Jewellery Sector


Current Sustainability Initiatives
        The key to a successful awareness campaign is the introduction of consumer
choice. Responsible jewellers recognize the need for change in the mining and
processing sector, and work together toward achieving a sustainable jewellery life cycle.
One such jewellers’ council already exists: The Council for Responsible Jewellery
Practices (CRJP). They are a non-profit organization that seeks to better the entire life
cycle of gold and diamond jewellery. They aim to create a ―Responsible Policies
Framework‖ for their members; require the implementation of the framework that
requires ―self-assessment and is evidenced through a system of independent third party


                                                                                              21
monitoring;‖ they advise and promote this framework; and they will promote the ethical,
social, and environmental responsibility of the business community.70 This initiative is in
the early stages of development, but looks at the initiatives that affect the industry from
the jewellers’ perspective. This is a key, retail driven, initiative to promoting sustainable
mining practices, since the end of the jewellery supply chain—consumer opinion in
general—is the determinant of the market. The Council’s idea is admirable; however
there seems to be little power of enforcement.

No Dirty Gold Campaign

         The No Dirty Gold Campaign follows the format of the Blood Diamonds
campaign and is beginning to address the impacts of gold mining on societies and the
environment. Initially targeted as a consumer education campaign, some of the bigger
jewellery manufacturers have since signed onto the initiative. These signatories have
committed to purchasing gold from mines that meet a minimum set of criteria. The
criteria include stakeholder and community involvement and guaranteed funds for mine
reclamation. If the No Dirty Gold campaign is as effective as the Blood Diamonds
campaign, it could influence jewellers to pressure the gold mining companies to improve
environmental performance.

Jewellery Organizations
        There are a number of jewellery associations that have recently adopted
environmental responsibility initiatives, two of which include CIBJO the World
Jewellery Confederation and the Jewellers of America (JA).
        CIBJO is an international confederation of national jewellery organizations. Its
Corporate Responsibility Initiative is a very general document that focuses mainly on
sales practices and conflict diamonds and relies completely on self-monitoring. The
document’s only reference to the environment is the following: ―…full compliance with
international best practice and the related regulatory framework with respect to the
environment.‖71 There is a need to know what the effects of non-compliance with
international initiatives are on the jewellery industry.
        The Jewellers of America’s has a Supplier’s Code of Conduct which provides
guidelines for assessing the suitability of metal and gemstone providers. It is a four page
document dedicated predominantly to employee rights, child labour and ethics. There is
one paragraph dedicated to the environment which states: ―…it is therefore in the
industries best interest to ensure that the minerals upon which it depends are obtained,
produced and used in environmentally and socially responsible ways.‖72 This statement
does not address any specific issues and has no guidelines for assessment of suppliers and
their practices.

70
   CRJP
71
   Code of Ethics – Commitment. CIBJO The World Jewellery Confederation.
http://www.cibjo.org/commitment.html
72
   Corporate Responsibility. Supplier Code of Conduct. Jewelers of America.
http://www.jewelers.org/pdf/CorporateResponsibility/SupplierCode.pdf




                                                                                           22
        The environmental responsibility initiatives of the jewellery organizations are
weak documents that do not address the environmental issues associated with the mining
industry. Both documents have a separate section dedicated to ―conflict diamonds,‖
which is a result of the bad publicity created by the Blood Diamonds campaign and the
internationally recognized Kimberley Accords of 2002 that were signed by both the
diamond industry, and international governments to combat the trade of diamonds in
conflict zones.73

Recommendations
Independent Certification and Monitoring
        It would be effective for the jewellery manufacturing industry to create a third
party monitoring group consisting of industry, government and public stakeholders,
which would evaluate the environmental sustainability of mines and producers. This
independent group would have the authority to grant certifications, impose fines and
create regulations.
        Certification should be based upon stakeholder and industry constructed criteria.
The fines charged must be significant enough to act as deterrents to non-compliance.
Collected fines can be used to develop environmentally sustainable technologies.
        Self-regulation methods are a solution to the high costs associated with
enforcement by governments, and they benefit the industry as they will promote
innovations and clean processing and mining practices. If jewellers were to purchase only
from certified suppliers, they would influence the mining industry towards compliance
with certification guidelines.

Enforcement
        The voluntary and non-regulatory nature of international enforcement initiatives
impedes their effectiveness, especially considering the associated costs. Without any
consequences to face for ignoring enforcement, mining companies and jewellery
producers have little incentive to abide by the initiatives they have signed. Mining in
developing countries presents increasingly complex cost and compliance issues.
Government enforcement regimes tend to be costly, and host governments, which have a
myriad of local social or geopolitical issues to address and enforce, cannot be relied upon
to take action against visiting industry in the name of environmental standards. 74
        Lack of enforcement is an impediment to improving the mining company’s
environmental performance standards. This regulatory void puts the jewellery sector in an
important position of influence; its support of third party monitoring and certification
would give the sector influence in assessing international industry practices, particularly
in developing or underdeveloped countries. The jewellery sector has the power to hold

73
   Diamonds in Conflict: The Kimberley Process.
www.globalpolicy.org/security/issues/diamond/kimberlindex.htm
74
   Paquin M, Sbert C. Toward Effective Environmental Compliance and enforcement in
Latin America and the Caribbean. UNISFERA: Centre International Centre. November
2004.
http://www.unisfera.org/IMG/pdf/New_approaches_to_environmental_protection_vfinal3_ajout_.pdf.



                                                                                                 23
mining companies accountable, and to encourage them to improve mining standards in
developing countries to coincide with standards in more developed regions.

Consumer Education
        Self-assessment and self-regulation may also offer a company a competitive edge
over others. Incentives coming from the jewellers themselves, greatly impact the
industry, as exemplified by the Blood Diamonds campaign against DeBeers and other
large diamond miners and producers. The Blood Diamonds campaign was so successful,
that global awareness effectuated change in these industries, and improved social and
human resources practices were put in place. That is not to say that the industry is
without flaws with regard to the social aspect, however consumer pressures have put
pressures on the jewellers who have then put pressure on producers and miners.
Consumer awareness can therefore be deemed essential to the success of environmental
sustainability initiatives as well. Therefore, it is important to impact consumer awareness
through campaigns promoting ethical mining practices. The No Dirty Gold Campaign is
taking the example of the Blood Diamonds campaign and is beginning to address the
impacts of gold mining on societies and the environment.
        Diamond and gold rings have enormous value-added potential. At the bottom of
the chain, at the jewellery store, the diamonds have a relatively large financial impact. If
the monetary value of a purchase is large, consumers spend more time evaluating the
product. If jewellers themselves claim to deal only with ethical mines, then they can
market themselves as ethical and sustainable companies. This campaign has worked with
the market for Canadian diamonds which were initially marketed as ―ethical diamonds.‖
Through consumer awareness, and pressures on the industry from the jewellers who
purchase cut diamonds, an impact on the mining end of the industry can be quite
significant. Culture changes can shift market direction. Jewellers can then take it upon
themselves to impact the entire life cycle of gold and diamonds by forming councils and
regulatory bodies to audit their suppliers. Jewellers hold a lot of power, since they supply
the demand for jewellery, and as such, by prioritizing environmental sustainability, they
would truly impact the entire industry. .

Eliminating Mining from the Life Cycle: Golden Circle Jewellers
        Golden Circle Jewellers is a jewellery manufacturer and retailer that will attempt
to sever the connection between mining and jewellers by using 100 percent post-
consumer materials. The concept of recycling jewellery is not new, but a business
concept that capitalizes on emerging marketing opportunities associated with increasingly
environmentally-conscious consumers is.
        Golden Circle Jewellers will operate in a small to medium sized community (e.g.
Halifax) and marketed as an alternative to the bigger trans-national jewellery
manufacturers. GCJ does not eliminate the need for mining activities globally, it fills a
niche market with a huge growth potential.
        Despite a 50 year supply surplus of gold, approximately 2, 500 tonnes are mined
every year. Increasing the use of recycled materials for jewellery would reduce overall
demand for mined metals. This decrease in demand would indicate a shift in consumer
priority and the mining industry would be pressured to improve their public image by
adopting sustainable practices and decreasing environmental impacts.


                                                                                         24
Vision
       Golden Circle Jewellers (GCJ) removes the link to unsustainable mining practices
and ―closes the loop‖ in jewellery manufacturing. The vision of Golden Circle is to use
only post-consumer materials, minimize or eliminate all ecological impacts, effectively
remove mining from the life cycle of its products and ultimately achieve a minimum
ecological footprint.

Golden Circle Model
        The Golden Circle model involves two separate phases termed the outer circle and
the inner circle. The two phases of production are determined by the consumer, based on
availability of recyclable material and customer preference. GCJ has a goldsmith / metal
smith on staff who will manufacture and design jewellery to specifications set by the
customer.

The Outer Circle
         The outer circle refers to the manufacturing of jewellery using recycled metals
obtained from an external supplier. The facilities of each of the metal recyclers will be
visited and must meet a set of minimum environmental requirements. The recycling
facilities must be located in eastern Canada, adherent to Canadian environmental
regulations, ISO 14001 certified and they must have minimal discharges. GCJ will work
in conjunction with facility staff for the implementation of eco-efficiency strategies.
Whenever possible the distance of the shipped materials will be minimized.
         The environmental impacts of the outer circle are externalized to the individual
metal recycling facilities and all attempts will be made to consult with the recyclers for
minimizing their environmental impact. GCJ offers consumers in the outer circle the
opportunity to make a donation to finance the planting of trees on a GCJ-owned tree
plantation to counter-balance the emissions produced from the large scale smelting
involved in the metal recycling process.
         Canadian diamonds can be supplied on customer demand, but all efforts will be
made to acquire materials that are recycled from previously enjoyed jewellery. Once the
materials are acquired the consumer enters the inner circle.


The Inner Circle
         Once into the inner circle, the materials enter a closed loop system, which means
that all of the environmental impacts are controlled and minimized. All of the buildings
operated by Golden Circle Jewellers are powered using a combination of solar and wind
power. Deliveries made within the Halifax area are done by bicycle couriers, and if
necessary, by a hybrid vehicle. A charcoal forge, using Forest Stewardship Council
certified charcoal, is used to form the metal into jewellery.
         Product stewardship plays an integral role in the inner circle. All jewellery can be
returned to GCJ and, for a processing fee, can be reformed and re-designed to suit the
customer’s changing fashion needs.




                                                                                           25
Conclusion
         Given the nature of the mining industry, it is important to acknowledge that
ecological sustainability in mining areas is a unique challenge. The key to protecting our
resources and to ensure that society and nature remain as undisturbed as possible is a
collaborative relationship between industry and government. Governments need to
ensure that regulations that are in place are enforceable, and that companies are held
accountable for mine reclamation. However, it is ultimately in the government’s interest
to protect its people and resources, so they need to be actively involved in the mine
reclamation process. Another important factor in ensuring sustainable mining is
changing international initiatives into regulatory, enforceable rules. ISO 14001 is an
effective way of certifying and monitoring mining activities. Diavik is a prime example
of how mining can minimize its impact on the environment when adhering to
international codes.
         To decrease the environmental impact of the life-cycle of the diamond ring,
mining practises need to be cleaner, water needs to be treated, transportation throughout
the process needs to be decreased, and new technologies need to be used to detect mine
sites to decrease all aspects of the mining process. An important note about the jewellery
life-cycle is that a change at any level of the cycle will affect it entirely. Consumer
awareness and changing the demand will have the strongest effect on the life-cycle, as it
will require a change in practice if market forces are to remain steady. Money talks, and
consumers are the source of that power.
         Swaying personal attitudes towards purchasing gold and diamond rings will
successfully change the behaviour of spending habits towards these jewels. The
effectiveness of the Blood Diamond campaign is the best example of how information
can change personal purchasing habits as well as create formal agreements between
international governments and the diamond industry. The success of the No Dirty Gold
campaign is still being determined but governments with their partners in industry can
take the first steps towards curbing environmental impacts with effective policy,
legislation, and enforcement.




                                                                                        26
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                                                                                       27
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                                                                                       28
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                                                                                       29
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                                                                                     30
Appendix A – Life Cycle of the Diamond Ring




                                     Life Cycle
                     Waste?

                                Exploration        Extraction




       Re-use
                                                                     Processing
“A Diamond is Forever”




                              Use             Manufacture / Retail




                                                                                  31
Appendix B – BHP Billiton




Fig. 1: BHP Billiton’s global operations.
(BHP, 2006)




Fig. 2: Roberts Environmental Center Pacific Sustainability Index (PSI) results for BHPB.
http://www.roberts.cmc.edu/PSI/AutoReports2.asp?ReportNameID=712




                                                                                            32

				
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