Making a Difference

Doing good for the world can do a world of good for business.Maybe it was the price-gouging for gasoline that followed after Hurricane Katrina swallowed New Orleans whole in September 2005. Maybe it was the poisoned produce on supermarket shelves in early 2006. Perhaps it was the media blitz about the movie “Blood Diamond” at year’s end.

Thanks to the Internet and television, this country’s malls and main streets are now only a pang of conscience away from the factories and mines where the jewelry and gems we cherish originate. No wonder social responsibility and protecting the environment have become important elements of branding.

Suddenly companies aren’t just defined by the products they make, but also the difference they make in their workers’ lives or in the places where they manufacture. Owners and executives in companies across the country are changing the way they do business to improve their impact on the environment, on the community, and on the countries where their raw materials come from. And it isn’t only corporations that are making social responsibility a part of doing business. Even small companies can change their business models, improving worker pay, eliminating toxic processes, and protecting the environment, supporting sustainable development, and sourcing from suppliers that are equally responsible.

Children outside their new school near the Chimwadzulu mine in Malawi.

The trouble is that it costs more for goods when companies which make them do more good. Will consumers pay the price for conscience?

They say they will, according to a survey conducted by the Jewelry Consumer Opinion Council for Columbia Gem House in May of last year. Three-quarters of those participating said they would pay more for responsible products.

But doing good isn’t just good for the bottom line. Business owners are discovering rewards like deeper bonds with customers, employees, goodwill in the community, and the sense of satisfaction that comes from doing the right thing.

Of course, the core of doing the right thing is make things right. Quality and conscience go hand in hand.

In this special section, we profile people at every level of our industry, from retail stores all the way up to the mines, who changed the way they do business to make a difference. Some companies are large, others small, but they share a commitment to social and environmental responsibility.

Of course, the jewelry industry has long been known for exceptional support of charitable causes, including Jewelers for Children, which has raised more than $23 million since 1999 to help children whose lives have been devastated by illness or neglect. Most retail jewelers are deeply involved in their communities, supporting health care and research, the arts, and other worthy causes.

The industry’s culture of generosity makes it a perfect environment for conscientious businesses like the ones we profile in this section. The importance of social responsibility in the jewelry industry is also increased by the emotional value of jewelry, value that can be enhanced or diminished by the reputation of the company and materials that made it.

We’re hoping that these profiles of business that do good will inspire some of your notoriously soft hearts and lead you too to make a few small changes to make the world a better place. — Cheryl Kremkow and David Federman

MICHAEL KOWALSKI
Making Tiffany an Icon of Sustainability

Michael Kowalski, Tiffany & Co.’s CEO since 1999, is a stickler for details, especially ones involving vendors’ records on environmental and social responsibility. Company insiders say he is as interested in each product’s environmental impact as its marketability.

Kowalski’s passion for principles has forced him to make some harrowing decisions during his tenure as company chieftain. Take, for instance, the firm’s decision to abide by the letter of the Burma Freedom and Democracy Act passed in 2003. That no-imports law was meant as a gesture of solidarity with the ousted democratic government the Burmese people had elected by an 80 percent margin in 1990. (Right: Michael Kowalski).

Although the sanctions law allows U.S. firms to bring in Burmese stones that have been cut outside Burma, Tiffany’s refused to exercise this loophole. With typical modesty, Kowalski denies any heroism in this action. “Colored stones are one of our most underdeveloped product categories,” he says. “It’s not like we’re making big sacrifices with this policy.”

We beg to differ. Tiffany’s is the retail jewelry store most known for being a champion of colored stones. By not carrying Burmese ruby and cutting way back on most other gems—even tanzanite, which it named—the firm is basically turning its back on a pillar of its legacy. But for Kowalski, honor takes precedence over heritage. “You’ve got to make a lot of tradeoffs these days,” he admits. “Some are very painful.”

But there’s another reason Tiffany’s has conceded colored stones to its competitors. For Kowalski, there’s just too much gemological uncertainty in the marketplace today. And he cites hard-to-detect treatments as well as sophisticated synthetics. “Our small colored stone inventory reflects our concern, our conservatism, and our desire to give products with maximum purity and integrity,” he says.

Ruby isn’t the only gem Tiffany’s refuses to stock on strong moral grounds. Coral is also absent from its counters—and will be until Tiffany’s is absolutely sure that harvesting this organic gem doesn’t endanger the reefs from which it is taken. (Left: Tiffany’s 11 page “Sustainability” brochure informs customers about its ongoing environmental, ethical, and social responsibilities).

In short, vigilance has become a cornerstone of Tiffany’s vision. And as the world’s best-known jewelry retailer, its actions to ensure consumer confidence are being closely watched—and, more importantly, imitated.

ACTIVISM AS PART OF THE BRAND
Just before Valentine’s Day 2004, Earthworks issued “Dirty Metals,” its indictment of the global gold mining industry, and launched a “No Dirty Gold” campaign. Five weeks after the kickoff, says Payal Sampat of Earthworks, “Tiffany’s took out a full-page ad in the Washington Post signed by Michael Kowalski addressed to the head of the U.S. Forest Service opposing irresponsible mining development.” The ad turned heads—and signaled that Earthwork’s message had been received loud and clear where it mattered most.

For those who think such a gesture belated, reactive, and possibly self-serving, they might do well to remember that ten years earlier, before the No Dirty Gold campaign, Tiffany’s, all by its lonesome, publicly opposed mining development adjacent to Yellowstone National Park. It also protested this intention to Congress. Nothing dramatic, mind you, just some discreet letters to the right members. The upshot: The government bought the proposed mining tract and ended the threat to a national wonder.

Now Kowalski is getting ready to put pen to paper again and object to plans to begin underground gold mining at the Rock Creek site in Idaho. “The mine would be located in a federally-designated wilderness area. We question the need for such a venture.”

When publicly stated, such doubts will likely doom the project. For once Tiffany’s raises red flags, the people it opposes tend to wind up waving white flags. That’s why the company, now with 167 stores worldwide (64 in America), has become the elder statesman of American and global jewelry retailing brands, not to mention a role model for what marketers call “good brandsmanship.”

Part of good brandsmanship is to lead by example. To allay any possible customer fears about use of dirty gold or, for that matter, silver, it contracts for nearly all primary source gold and silver used in its American-made products with the Bingham Canyon Mine outside of Salt Lake City. “It’s an open-pit legacy mine with good, sound practices in both mining and smelting,” Kowalski says.

Such actions lead to the subject of vertical integration—a growing part of Tiffany’s corporate strategy for both economic and ethical reasons.

THE SEARCH FOR UNTAINTED DIAMONDS
When Tiffany’s first met with Global Witness in 1999 to discuss conflict diamonds from Africa, the firm only bought polished diamonds. Kowalski found the idea of possibly buying diamonds which had financed civil wars and terrorism in Africa so repugnant that he recognized a need for safer sourcing of diamonds. That meant vertical integration in the diamond area.

In July 1999, Tiffany’s paid $70 million to help Toronto-based Aber Diamond Corporation finance its 40 percent stake in Canada’s Diavik Mine (the other 60 percent is held by Rio Tinto), the second such venture in the country’s diamond-rich Northwest Territories. Four years later, when the mine came on stream, Aber began selling most of its share of the mine’s high-caliber production to Tiffany’s. At the end of 2004, Tiffany’s sold its 13.9 percent share in Aber Diamonds for a whopping $268 million. But it continues to buy the lion’s share of Aber’s rough diamonds—at fair market, not privileged, prices. What’s more, as part of its commitment to responsible sourcing, the company cuts these stones at its own factory at Yellowknife in the heart of Canada’s diamond country.

Meanwhile, Tiffany’s threw its full support behind the Kimberley Process, the pact between 45 countries, including America and the E.U., which creates mechanisms to ensure the honest flow of rough and polished diamonds from mine to market. The outgrowth of meetings between southern African nations in May 2000, the Kimberley Process became a workable certainty once the U.S. passed its Clean Diamonds Act in April 2003. Although Tiffany’s was only one among many to champion the agreement, Kowalski’s lobbying for this legislation, starting with an open letter to President Bush on October 3, 2001, was a big momentum booster for this cause of conscience, still in its early stages.

But even after passage of the bill and ratification of the Kimberley Process, groups like Amnesty International still fault the trade for tolerating loopholes in the scheme. Very few retailers escaped criticism. One of the exceptions, wrote the “Green Guide,” an on-line fair trade report, last year, was Tiffany’s which “stood out as a strong counterexample for its excellent sourcing and auditing policies.” Kowalski may shrug off such lauding, but his company’s full-bore approach to ethics is definitely leading the industry towards a new paradigm of social and environmental responsibility. —David Federman, Contributing Editor

BRIAN LEBER, LEBER JEWELER
Jeweler and Advocate of Shades of Gray

As one of the trade’s earliest and most passionate voices on conflict diamonds, Brian Leber, a retailer in Western Springs, Illinois, 10 miles west of Chicago, might be expected to welcome the attention the movie “Blood Diamond” has drawn to the issue.

But, like all things associated with the issue, it’s more complicated than that. Leber, a third-generation jeweler, has made a second career of walking the fine line between the heart—and its ethical imperatives—and the mind. He does feel that the movie may, paradoxically, bring attention to the positive things the industry is doing and provide an incentive to do even more good things. (Left: Brian Leber)

But like any black-and-white polemic, simplifying the issue could also do tremendous harm by encouraging consumers (and jewelers) to take the easy way out and buy Canadian or nothing at all.

“The truth is nuanced on the conflict diamond issue,” he says, “and when those shades of gray get lost, damage gets done. Single-issue advocacy of any kind also makes me rather uneasy because it may be sacrificing one ideal to promote another. Where mining is concerned, even though I’m a rabid environmentalist, I’ll agree that sometimes you need to dig a hole in the ground. If mining were to go away in places like Madagascar, the country could remain a beautiful forest and lemur paradise but people would also starve.”

Leber has educated himself thoroughly on the realities of the precious goods he works with and become an advocate for fair trade practice. He has traveled, written, and spoken for over a decade on fair trade.

But he has done more than talk about these issues, they have determined every decision he makes in his store. He sources all the precious and semiprecious stones he carries through suppliers who closely monitor the conditions under which stones are mined and cut, and whenever possible, from an environmental, as well as a fair trade, point of view. He has long been a critic of the human rights abuses of the nation calling itself Myanmar and a supporter of sanctions against that nation. He has also gone beyond politics and formed the Jeweler’s Burma Relief Project to support health, education, and micro-development in that country. With his wife Joanne, he launched Earthwise Jewelry, a line of fair-trade and recycled metal jewelry. (Picture: Paw Bulata Medical Clinic, Funded in part by the Jeweler’s Burma Relief Project. Photo by Planet Care).

“My advocacy for this industry basically started when I read a letter to the editor of a trade magazine more than a decade ago,” he says. “The writer, a well-known member of our industry, said something like: ‘These are just tribespeople in a little village in Africa. Why are we supposed to care?’ I was so stunned. People see so many stories about violence there, and they just write it off as ‘war-torn Africa.’ They see starvation, and it’s ‘poverty-struck Africa.’ The reality, as always, is in the shades of gray, the details.”

So while he carries primarily Canadian diamonds, he is concerned at the impact this decision may have on the livelihood of Africans who depend on diamonds, especially if this choice becomes widespread. So he works for a future when African diamonds will all be non-conflict as well.

Although he’s a critic of the Kimberley Process, wary of what he calls a “vaguely fox and henhouse element,” he’s quick to add: “I think the diamond industry is being largely responsible now. And I think that as an industry, at large, we are moving toward a more equitable system of trade in diamonds. There’s such an opportunity there now, after so much suffering, so much harm done, to ensure that, from this moment forward, diamonds do more to benefit Africans, and that’s just all the more reason to keep so vigilant.”

“But to confuse that concern with the livelihoods of literally millions of people is so dangerous. I can link our industry to its troubles, and I do, but it’s only to point out the remarkable position that we are in to accomplish something that’s truly good. Jewelers don’t have to feel helpless, they can change the way that business is done. While it may take just a little more effort, and at times cost a bit more, it’s so easily within reach.”—Ivan Solotaroff, Senior Editor

Donations to the Jeweler’s Burma Relief Project can be made to “JBRP/Planet Care” and sent to Foundation for the People of Burma, 801 Cedar Street, Suite 200, Berkeley, CA 94710. For more information, visit www.leberjeweler.com.

MARC CHOYT & HELEN CHANTLER, REFLECTIVE IMAGES
Fair Trade Manufacturers, One Step At A Time

Marc Choyt would like to change the world. For the moment, he’s just making a little less money. Altruism, he’ll be the first to tell you, is expensive.

Complicated, too. Reflective Images, the New Mexico jewelry design gallery his wife, the designer Helen Chantler, began in 1995, is a paragon of fair trade and best business practices, but it has also enjoyed annual double-digit growth for a decade. Much of that is a function of design. Chantler, a Cheshire, England-born artisan with a passion for cultural symbolism, has created a mini-brand with her Celtic knot-work jewelry. The gracious, gorgeous patterns inform much of Reflective’s catalog, sold both at their studio in Santa Fe and at some 200 jewelers and boutiques nationwide, to a middle to upscale demographic, always in excess of double keystone. (Picture: Helen Chantler and March Choyt).

“But success with fair trade also means having to exist in a gray area of constant ethical questioning,” Choyt says. This afternoon, he’s brooding about long-term customers who have fallen on hard times and about chain, which, like everyone, he imports. It’s from a vendor they met in the South Seas: “A New Zealander who manufactures in Bali. Great guy, great shop, and he pays well above the standard local wage. But I’m thinking now, what if I find a guy in India who’ll produce the chain 30 to 40 percent cheaper? Obviously, I won’t engage a shop with child labor, but I have to ask myself how fair will that shop’s trade have to be for me to make the switch? Fair trade happens in baby steps and each one has to be fair to me, too.”

That’s crucial at Reflective Images, where fair trade begins at home. Entry level salary is $12 per hour, 50 percent over Santa Fe’s already progressive rates. In 10 years, one employee has quit; five have bought homes; all work on flex-time, get three weeks paid vacation, 50 percent health insurance, IRAs of 6 percent of yearly wages, year-end bonuses of over 5 percent, wellness benefits of matching monthly fees for gyms, yoga, or meditation retreats.

The shop is environmentally solid—from solar and wind-driven electricity and recycled metals from Hoover & Strong to the citric acid base Chantler uses to pickle jewelry overnight in crock pots to conflict-free diamonds and the shredded junk-mail used for packaging materials. Rubies and sapphires come largely from Ratnapura, the Sinhalese capital whose alluvial deposits and community-based marketing system have earned the town the name, “City of Gems.” Emeralds are sourced largely through a man with close ties to a small mining community in Zambia. Each piece is hand-made, to order. Each is guaranteed “for life, or the end of the world, whichever comes first,” Choyt writes in a typical note on his website, where you’ll find everything from the catalog to blogs on the Asian tsunami—the couple spent two weeks in Sri Lanka rebuilding lost homes.

Though fair trade comes in baby steps, each one does cost—enough that Choyt is thinking hard about chain, and his boutique clients. “Silver and gold are so high now, and I have no choice but to pass that on—as much as 15 to 30 percent per piece.” The boutique owner absorbing that hike in the midwest and the Balinese chain worker are, of course, in the same supply channel.

What most differentiates Choyt is how he sees that chain. “The business standard, of course, is the pyramid: hierarchical, and geared to drive profits to the top. I feel it’s not so much unethical as unnatural, because the true blueprint of nature is the circle. If you do nothing to flatten the hierarchy, if competition is the sole motivation, then creativity must suffer, because the circle in which the artist and his audience exist is broken. Given the creative nature of our business, profit will eventually suffer. The pyramid is the cause of the disconnect between what we buy, as individuals and as a community, and the world economy. (Left: Celtic knot-work jewelry from Reflective Images, (888) 733-5238).

When that circle is broken, we’re in a world where our products and their uses are dissociated from both the damage they do—say conflict diamonds or dirty gold—but also the good they cause and represent. That may sound awfully tree-hugging, but with jewelry, whose symbolism must be positive for business to continue, it’s a very real hazard.”

But will consumers ever demand fair trade jewelry? Will they ever really care? “Don’t kid yourself. It’s happening already. True, on a small scale, but that could change overnight. Look at coffee, at organic foods. Look at Nike and Wal-Mart. I don’t know what it’ll take to hit critical mass, perhaps some mammoth industry leader to do it. Or some mini-Vegas, fair trade show. I’d love that. Or perhaps it’s just all of us, taking baby steps, and seeing where we wind up.” —Ivan Solotaroff, Senior Editor

TOBY POMEROY
Environmentalist and Goldsmith

Toby Pomeroy begins with a single piece of gold wire of a few grams. Placing it on his prized old anvil, he works quickly with deft blows, hammering first the rough shape of his signature hoop earring, then the final fluid details of the clasp. Forged gold has a resiliency that cast gold cannot approximate, strengthened by that uncanny process of plastic deformation that renders strength out of malleability.

Pomeroy’s artistry is a tribute to gold, the most malleable of elements, a paradox of softness and strength. One ounce can be beaten into 300 square feet. Pomeroy finds immense satisfaction in creating a seamless, jointless piece of jewelry out of a single gold billet. (Left: Toby Pomeroy)

But Pomeroy is also an environmentalist who recognizes this precious metal is won at great cost. The Forty-Niners removed a chunk of California during the gold rush. Today the impact of gold mining is not only physical, like most large-scale mining, it is chemical. Mercury vapors are released in small-scale mining operations. Cyanide salts, used to separate ore from rock efficiently to increase large-scale mining profits, leak into the surrounding environment. And 200,000 metric tons of waste-rock are generated daily by a full-scale gold mine.

“The typical pair of wedding bands,” Pomeroy says, “are the result of many, many tons of waste rock. If, along with that gift, the couple had to make room in their backyard for the tailings, the pile would be six feet wide by six feet high and ten feet long.”

Pomeroy opened Tobias Silverworks, his first custom design store in Eugene, Oregon, in 1967. In 1970, he closed his store and traveled from Canada to upstate New York to the Rockies, creating jewelry in the back of his Econoline van with a portable oxy-propane torch. In 1973, he opened Talisman Jewelers Ltd., a designer-goldsmith shop in Corvallis, Oregon. After 20 years, he sold Talisman and began consulting and training jewelers, then working with a natural foods company. (Right: Forged 18k reclaimed gold Stirrup hoops by Toby Pomeroy, (800) 381-8787).

“It was around this time that my daughter, who was graduating, lost her pair of earrings and I found myself back at the anvil. Our best seller at Talisman had been the forged gold hoop earrings, and I realized as I got to work, that this is what I wanted to do.”

He worked with eight engineering companies in the past decade to develop his manufacturing process, which grew to his current six-person studio in Corvallis. Pomeroy can now produce as many as 17 pieces a day, 350 a month, but he says the satisfaction of finishing a single piece is as fresh as ever.

The cost of gold mining, however, began to weigh heavily on his mind. Pomeroy, whose love of nature has been carried from the Himalayan foothills of his boyhood as the child of medical missionaries in India to the ocean-going streams of Oregon, was particularly troubled by the leaching of cyanide salts into American aquifers.

“I knew I was never going to resolve conflict in Africa or clean up a river in Nevada, but I could at least see to my own materials.” Diamonds weren’t a problem. It was the gold. Was it humanely possible, at all, to work with? Pomeroy didn’t know, but he decided, finally, to do what he could to stick with green practices and put pressure on the gold mining industry to clean up.

“I just sat down and wrote a letter to Torry Hoover of Hoover & Strong, expressing my dismay and requesting our gold be supplied entirely from scrap, purified to 24 karat, then re-alloyed. He agreed!” Within months, Hoover had arranged for all of Pomeroy’s metals—be it gold, silver, palladium, even alloys—to be entirely wrought of recycled metals, derived from old jewelry, discarded electronics, and other sources. Pomeroy now exclusively uses recycled Hoover & Strong “EcoGold.” One letter changed the market for metals. (Left: Forged 18k gold pendant by Toby Pomeroy, (800) 381-8787).

“It just took off,” Pomeroy marvels. “I don’t know if it’s fully 100 percent of their materials yet, but even clients who are unaware are receiving recycled metals from Hoover & Strong.”

“From purely a business point of view,” says Pomeroy, “the pollution wrought by metals mining is a public relations nightmare waiting to happen. Or you can look at it, so much better, as a timely and important opportunity—to behave proactively. You can get all scoldy and correct. Or you can just realize—and it’s easy for me, listening to the wind in the cedars when I’m out fly-fishing—that this isn’t a duty but a great privilege. To be stewards of this extraordinary place, these amazing creatures and their habitats. It’s not a task, or a cost. It’s a privilege.” —Ivan Solotaroff, Senior Editor

TORRY HOOVER
Refiner and Recycler

When the social activist group Earthworks published “Dirty Metals,” its scathing report on gold mining, in February 2004, most in the jewelry industry greeted its scandalous findings with shock. Suddenly, refiners all over America were flooded with inquiries about “environmentally friendly” gold. “Responsible sourcing” became a catch phrase among jewelers and manufacturers.

Torry Hoover was ready for the overnight surge of concern about “dirty gold.” In fact, his Richmond, Virginia, company, Hoover & Strong, had been ready for 20 years—ever since a complete overhaul in operations in the 1980s to be in full compliance with tough federal, state, and local anti-pollution regulations. “Our facility is located in an industrial park where there is no industry other than us,” says Ron Kelly, the company’s refining supervisor. “The city wanted our discharges and emissions to be absolutely clean.” (Right: Torry Hoover).

To pass muster with finicky officials and inspectors, the company invested a million dollars in technology that would reduce chemical wastes by 70 percent, making sure they met all current and any future regulations. That meant, among other things, installing giant new scrubbers to remove toxic chemicals from waste that had been converted into vapors. It also meant installing a chlorine gas precious metals leaching vat and making sure the chlorine was kept contained and harmless.

This brings me to one of the great ironies of the “No Dirty Gold” campaign: Without seeing it coming, American refiners had long ago addressed the concerns of groups like Earthworks and taken steps to provide clean gold. What’s more, most had made reforms in ignorance of what gold mining companies were doing. “The lousy job of earth stewardship by gold miners was as much a jolt to the jewelry industry as the public,” says Hoover. “Thankfully, refiners were prepared to meet any demand for responsibly refined gold that would come.”

How come? Simple. Jewelry, says Earthworks, accounts for 80 percent of all gold use. One-third of this gold, the group estimates, comes from refiners who buy scrap and sweepings from jewelers and manufacturers or process it for them. Refiners like Hoover & Strong are best seen as recyclers because they buy very little gold that isn’t secondhand. Understandably, “Dirty Metals” directs most of its ire at miners. True, refiners are also accused of being polluters. But the kind of refiners the report refers to are those who perform the final smelting of gold ore at mines and not those who smelt jewelers’ scrap. Yet it’s easy to see why all refiners are grouped together and take the same flak. Heavily toxic chemicals are used in the extraction of gold from both ore and scrap. Unless these materials are kept from being discharged into the air, soil, or water, a jewelry gold refiner can, and should, be considered as much a polluter as a miner.

Nevertheless, in the three years since the bombshell report was issued, groups like Earthworks and Oxfam have concentrated on formulating codes of responsible conduct for mining operations. “We have yet to draft criteria for refiners,” says Payal Sampat, a researcher and writer at Earthworks.

Earthworks may never have to draft criteria. Given the safety net of environmental regulations that already exist, it may only have to affirm the present body of laws and rules that bind jewelry refiners.

Nevertheless, Hoover isn’t about to wait for such codes to be drafted. “We have to be proactive,” he says. “A storm is brewing and we have to be ready for it.”

Thus was born “Ecogold”—a brand which stands for, in Hoover’s words, “gold refined in the most environmentally friendly fashion possible.” Hoover & Strong now sells only Ecogold. You can’t call them and request any other kind of gold. But, then again, who would want to? (Left: Totally enclosed eco-friendly refining system at Hoover & Strong).

Ecogold is more a part of outreach than any in-house operations reform. “It’s not enough to make sure no dirty gold goes out of our plant,” Hoover says. “It’s also important to make sure no dirty gold comes into it.”

And that’s what has changed for Hoover since Earthworks shook the world just before Valentine’s Day three years ago. No matter how prepared Hoover & Strong was in-house to meet demand for clean gold, the “Dirty Metals” report forced them to make their new earth-minded brand more than a symbol for conscientious metals refining. “The brand also stands for our commitment to responsible mining and sourcing,” says Hoover. “We are pledged to buy only from people who have signed on to best practices codes of conduct in the human rights and environmental areas. The brand is about ethics.”—David Federman, Contributing Editor

ERIC BRAUNWART
Conscientious Commerce in Gems

You have a mud puddle in Tanna, Madagascar, to thank for Eric Braunwart’s obsession with fair trade. In 2002, the World Bank invited the Washington state gem dealer to attend trade development meetings there. The goal of the discussions: write a report on the potential for starting a sustainable cutting industry in Madagascar.

Leaving his hotel, Braunwart stepped off a curb and went ankle deep in gutter slush that ruined one of the $400 Ferragamo shoes he was wearing. “I started to curse,” he recalls. “Then it suddenly hit me that my one soggy, mud-caked shoe cost more than the average annual income of Madagascar. I went from feeling angry to appalled to ashamed.” This flash of realization changed his life forever. “I was convinced a way could be found to let the people who craft the gems that give others so much happiness a way to share in that happiness. I call that moment my mud puddle epiphany.” (Left: Eric Braunwart).

Since then, Braunwart has been on a one-man crusade for what some are calling “conscientious commerce,” paying his cutting factory workers in China living wages, creating modern, comfortable working conditions, and staying mindful of the environment. Braunwart has also pledged, in the form of written business protocols that cover a wide gamut of issues from worker welfare to product integrity, that he will continually strive for the best fair trade practices. “The process never stands still. There’s always room for improvement.”

Doing all this raises the cost of his goods above those from vendors who do little or nothing more than the usual minimum for their workers or the environment. But Braunwart believes the added cost is small and he sees a growing willingness of consumers to pay what amounts to a social responsibility surcharge. “Ethics has entered the ledger sheets of global business. It is becoming an important ingredient of branding.”

That isn’t his gut talking. It’s consumers surveyed for his company, Columbia Gem House, by the Jewelry Consumer Opinion Council in May of last year. Of the nearly 3,800 people who responded, 19 percent said they would buy only jewelry made according to fair labor codes and 75 percent said they would pay extra for jewelry made in this high-minded manner. (Right: Rings with ruby and sapphire from Malawi by Trios Studios, (503) 496-1285).

Encouraged, Braunwart embarked on his biggest fair trade experiment so far. It involves the Nyala ruby mine in Malawi. When the mine is fully operational in two years, it will be state-of-the-art. It will also be revolutionary in terms of environmental safeguards, fair labor practices, and community commitment. By agreeing to very demanding employer standards negotiated with Malawi’s government, Braunwart has taken fair trade the farthest it has gone in gems. As he puts it, “I have no choice. Gems are an earth product and part of owning them is a belief that those who mined and cut them have respect for the planet.”

Located in the southwest corner of Africa between Zambia, Mozambique, and Tanzania, Malawi is as gem-rich as its neighbors. Although the Nyala mine has been worked for the past 20 years, the lack of heavy machinery, as well as the lack of social infrastructure, kept mining and miners at subsistence levels. But poverty is hardly the worst of the country’s problems.

Malawi is AIDS and malaria-infested. Lack of economic development keeps the country from fighting these plagues. “There’s a catch 22 at work,” Braunwart says. “Malawai qualifies for millions in medical funding from USAID and the Gates Foundation. But because there are no hospitals or clinics anywhere near Nyala to dispense care, miners and their families go without treatment.”

Braunwart and mine operator Greg Kennedy partnered to craft a mining and community transformation lease with the Malawi Mining Agency. This includes rebuilding a small hospital and the only local school. Braunwart also offers micro loans and grants that can be used to foster the growth of sustainable businesses that will outlast the projected 20-year life span of the mine.

All Nyala ruby production is cut at Braunwart’s cutting factory in China, which follows Columbia Gem House’s fair trade protocols. However, 2.5 percent from all sales of polished Nyala ruby will go back to Malawi as a royalty to sponsor community projects. What’s more, he is working with U.S.-based retail jewelers to develop unique Malawi promotions that can also support social programs in Africa.

In December, Trios Studios, a jewelry store in Lake Oswego, Oregon, featuring the designs of Mary Wong, Deborah Spencer, and Kathe Mai, took Braunwart’s suggestion and launched a promotion of Malawi gems. For every Nyala ruby or sapphire, or piece of jewelry containing such gems, that was sold, the buyer received a 10 percent discount. Trios matched the amount of each discount and sent it directly, along with a picture of the customer who purchased the piece, to the public school. “We wanted the kids in Malawi to put a face behind each donation,” says Wong. —David Federman, Contributing Editor

FRANK MCALLISTER
Miner and Good Neighbor

CEO Frank McAllister won’t be embarrassed if you call him the Mister Clean of American mining. To the contrary, you’ll make the Montana palladium/platinum miner’s very busy day. And that’s saying something because Stillwater Mining Company has been having a string of very good days.

“There have been no environmental enforcement actions by either state or federal agencies at our mine in over 20 years of operation,” McAllister says proudly. No wonder the company has earned awards for its land reclamation and environmental protection programs. (Right: Frank McAllister).

But staying on the good side of the law is just exhibit A in the rather remarkable case Stillwater has made for itself as one of America’s leading mining-sector good citizens. McAllister says he serves two masters: the bottom line and the public good. “The metals we mine are vital to clean air because they are essential for catalytic converters,” he says. “Imagine if the metals most associated with clean air came from mines associated with pollution and contamination.”

Stillwater’s public-mindedness is now manifesting in another way—this one of benefit to jewelers and consumers. Early last year, the company, which as yet sells very little of its own production for jewelry use, launched an organization called the Palladium Alliance International, modeled after the Platinum Guild. Its goal is to raise awareness of palladium as a superior white metal eminently suited for jewelry use.

Because of much-publicized “dirty gold” campaigns, McAllister is determined to make sure America’s only platinum group metals producer never faces charges of hypocrisy or despoliation from environmental groups. Stillwater could very well realize this intention and add luster to palladium’s growing reputation.

Stillwater’s “greater good” corporate accountability transcends mere compliance with laws and regulations. Mindful of mining’s checkered past with regard to clean air and water, worker safety, and community welfare, McAllister has taken a proactive approach and pursued substantive corporate commitments to the local land and its people. There’s a good reason for this. As a westerner himself, one who is proud of Montana’s reputation as an outdoorsman’s paradise, McAllister tends to personalize the impact of his operations on the mountainous country in which they are located. “I’m a local, too,” he reminds me.

Nevertheless, Stillwater has taken do-good-ism in the mining industry to exemplary levels, even earning specific mention for its solitary excellence in Jared Diamond’s 2005 best-seller, Collapse: How Societies Choose to Fail or Succeed. Here’s what Stillwater did to earn the author’s praise. (Left: Stillwater provides free water sampling and analysis within a five mile radius of the mine).

Stillwater’s two mines recover and process roughly 3,500 tons of ore a day, or over 1 million tons every 365 days of operation. From this, it extracts roughly 600,000 ounces of palladium and platinum at about a 3:1 ratio. That’s a lot of earth to move. Any water discharged from the mines must be restored to pristine purity, especially since the mines are situated two miles away from a designated wilderness area.

“Early on, management made a conscious decision to be responsible stewards of the land,” McAllister says. “That meant defining every area that could require our care and designing protection programs.”

To help it forge policies and procedures that would be above reproach, Stillwater made stewardship a collaborative process with the community. First, it sent company engineers and executives to meet regularly with every group of stakeholders in the local environment, including the Northern Plains Resource Council. The Sierra Club was also invited to comment on Stillwater’s action plans for the community and the environment.

Five years ago, this collaboration resulted in the first ever and still only “Good Neighbor Agreement” between a mining company and environmental and community interest groups. This task force drafted a series of environmental protection policies, including: water treatment technologies designed to maintain background conditions rather than simply meet standards; buffer zones that isolate pristine streams from mine-related chemical and waste discharges; ongoing reclamation projects that minimize erosion and increase foraging area for wildlife; a bighorn sheep herding management program that provides medicated salt to prevent lung worm infestations and decrease mortality rates; and free water sampling and analysis within a five mile radius of the mine.

Through the agreement, Stillwater allows citizen monitoring and third-party reviews of its environmental and community programs. This includes access to records of all environmental monitoring. In addition, Stillwater invites input into all current initiatives and welcomes suggestions for new ones. Clearly, McAllister isn’t just talking in sound bytes when he says, “The idea of corporate transparency is taken very seriously here.” —David Federman, Contributing Editor.

© 2007 Modern Jeweler – January 2007