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Council for Responsible Jewellery Practices. Introduction: from Mine to Retail. January 2007.

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Council for Responsible Jewellery Practices

Introduction: from Mine to Retail

  • January 2007


Introduction l.jpg

The Council for Responsible Jewellery Practices (CRJP, “the Council”) was founded in May 2005 with Members from a cross section of the diamond and gold jewellery supply chain, from mine to retail. As at end of December 2006, there are now 67 commercial and association members of the Council.

Council Members are committed to promoting responsible ethical, social, human rights and environmental practices in a transparent and accountable manner throughout the industry from mine to retail. Their commitment aims to maintain consumer confidence in diamond and gold jewellery products and the trust of all interested stakeholders in their industry.

Council members believe that a coordinated worldwide approach to improving industry business practices will drive continuous improvement throughout the jewellery industry to the benefit of stakeholders everywhere. This, in turn, will maintain and promote consumer confidence in the industry. The Council will enable the industry to work together to improve standards and practices, and reduce duplication of efforts as a result.

Introduction

Council Mission Statement

Our objective is to promote responsible ethical, social human rights and environmental practices throughout the diamond1 and gold2 jewellery supply chain,

from mine to retail.

[1] The Council defines a “diamond” as: “a natural mineral consisting essentially of pure carbon crystallised with a cubic structure in the isometric system. Its hardness in the Mohs scale is 10; its specific gravity is approximately 3.52; it has a refractive index of 2.42 and it can be found in many colours.”

[2] The Council defines “gold” as: “a rare yellow metallic element with the chemical symbol "Au”. It is a mineral with specific hardness of 2.5-3 on the Mohs scale of hardness and the atomic number 79. Gold purity is measured by karat: one karat being 1/24th part by weight of pure gold.”

2


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In recent years, the wider business community has evolved. It has developed an increased awareness of corporate responsibility issues and assumed its share of responsibility and accountability for maintaining standards of ethical, social and environmental performance.

The developing awareness of the industry has grown in step with an increase in communities’ and society’s expectations across all sectors.

The Council recognises that there is a need for a more integrated approach to responsible business practices within the diamond and gold jewellery supply chain. In this way, the industry can be proactive in meeting challenges to consumer confidence in the diamond and gold supply chain, or can respond, if and as appropriate, in a coordinated and consistent manner should issues arise.

The Council believes there is a need for an open and transparent approach that produces tangible results.

The Council believes that by working in collaboration with society and governments it can promote responsible business practices throughout the diamond and gold supply chain, from mine to retail.

Context:


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The Council for Responsible Jewellery Practices is a not-for-profit organisation. It will endeavour to implement its Mission Statement and in turn will seek to reinforce confidence in the diamond and gold supply chain by:

The Council for Responsible Jewellery Practices

  • Developing a “Responsible Practices Framework”, in consultation with key stakeholder groups, that will define the ethical, social, human rights and environmental standards according to which all Members agree to conduct their business.

  • Making it a condition of Membership that Members apply the “Responsible Practices Framework” through a credible implementation process evidenced through independent, accredited third party Monitoring.

  • Working with industry players to advise on business responsibility issues as they arise and by offering guidance on the implementation of responsible business practices through conformance with the “Responsible Practices Framework”.

  • Promoting awareness and understanding of key ethical, social, human rights and environmental business responsibility issues by working with all stakeholders including (but not limited to) industry participants, trade organizations, governments and civil society representatives.

  • Acting as an advocate for business responsibility within the industry and developing initiatives to address ethical, social, human rights and environmental challenges through publicly and privately financed projects.

  • Working with stakeholders and industry participants to continuously improve upon the standards and processes set out above in order to ensure that they are relevant, achievable and address key ethical, social, human rights and environmental challenges with due regard to the business objectives of the industry.

  • Encouraging Members to promote the adoption of the “Responsible Practices Framework” amongst their Business Partners.

  • Seeking to be inclusive and extending the Membership opportunity throughout the industry.


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From mine to retail

  • The Council is distinct from other sectoral or single issue corporate responsibility initiatives because it aims to promote responsible ethical, social, human rights and environmental business practices across every step of the Diamond and Gold jewellery supply chain, no matter how large or small the business, in all geographies.

  • The Diamond and Gold supply chain is very complex and diverse, covering a wide array of businesses and geographical contexts. The diagram below attempts to illustrate this complexity.

COMMERCIAL MEMBERS

Refining

International

mining

Gold

Smelting

Small scale

mining

Retail

Semi-finishedproduct

manufacturing

Finishedproductmanufacturing

Rough trading

Polished trading

International

mining

Trading

Whole-

sale

Diamonds

Small scale

mining

Preparing

Cutting

Polishing

Financial Institutions and other Service Companies

Trade Associations

Geographies: Worldwide industry & business

Diversity: Micro/family entities to very large corporations


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Working for progress: Where are we now?

  • The Council is still in its infancy and a large amount of work will be required over the coming years to achieve its ultimate aims. In view of the importance the Council places on this initiative, it has set an ambitious timeframe to develop the building blocks with which to realise its mission.

  • On May 2nd 2006, the Council held its first Annual General Meeting in London, UK. New Board members were elected at this meeting, increasing industry representation at Board level and formalising the Council’s governance structure and processes.

  • In terms of Industry standards, the table below summarises progress to date:

  • These documents form the basis of the Council’s Responsible Practices Framework through which the Council will promote continuous improvement in responsible business practices throughout the diamond and gold jewellery supply chain.

  • During an initial period, the Council will focus on further development of the Implementation Model through which the Principles and Code of Practices will be applied throughout the Diamond and Gold supply chain.

  • During this period, the Council will also seek to engage the industry and promote the benefits ofmembership of the Council. The Council will also seek to explore ways in which it can support the industry in raising standards of business responsibility through education and partnership initiatives that will help companies develop the capability to meet higher standards.


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The Council defines stakeholders as those who have an interest in the jewellery industry’s performance with respect to its ethical, social and environmental responsibilities. Council stakeholders therefore include, but are not limited to, industry members, the host countries and communities in which the industry does business, and non-governmental organizations (NGOs), who monitor issues such as human rights and environmental performance.

Our Stakeholders

Host

Communities

Employees

Governments

Service

companies

Media

Stakeholders

Other

Industry

NGO’s

Consumers

TradeAssociations

Academics

&

thought

leaders

Shareholders

The Council undertook public consultation between July 2005 and August 2006 consulting widely with stakeholders interested in ethical, social and environmental issues within the diamond and gold jewellery supply chain on the need for a body such as the Council within the industry and on the draft Principles.


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Business Ethics

We are committed to conducting our businesses to a high ethical standard, and to ensuring integrity, transparency and conformance with applicable law.

We will not engage in bribery and/or corruption

We will not tolerate money laundering and/or financing of terrorism.

We will adhere to the Kimberley Process Certification System and the World Diamond Council voluntary system of warranties

We will fully and accurately disclose the material characteristics of the products that we sell.

We will take reasonable measures to ensure the physical integrity and security of product shipments.

We will respect commercial confidentiality and data privacy.

Social Performance

We believe in and will respect the fundamental human rights and the dignity of the individual, according to the United Nations Declaration of Human Rights.

We will not tolerate the use of child labour.

We will not use any forced, bonded, indentured or prison labour, nor restrict the freedom of movement of employees and dependents.

We are committed to high standards of health and safety in our operations.

We will not prevent workers from associating freely. Where laws prohibit these freedoms, we will support parallel means of dialogue.

We will not discriminate based on race, ethnicity, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, marital status, physical appearance, age, or any other applicable prohibited basis in the workplace, such that all individuals who are “fit for work” are accorded equal opportunities and are not discriminated against on the basis of factors unrelated to their ability to perform their job.

We will not use corporal punishment under any circumstances and will prohibit the use of degrading treatment, harassment, abuse, coercion or intimidation in any form.

We will adhere to working hours and remuneration legislation, or, where no such legal requirements have been established by law, the prevailing local industry standards.

We will support the development of communities where we operate, contributing to their social and economic welfare.

We will recognise and respect the rights of indigenous peoples and the value of their traditional, cultural and social heritage.

Environmental Performance

We will conduct our businesses in an environmentally responsible manner.

We will manage our environmental footprint by eliminating or minimising negative environmental impacts.

We will ensure the efficiency of our business operations by managing our waste and our use of water and energy.

Council Principles

  • As Members of the Council for Responsible Jewellery Practices, we seek economic, social and environmental benefits from our business activities so that we contribute to Sustainable Development. [1]

  • [1] The Council bases its understanding of Sustainable Development on the 1987 World Commission on Environment and Development (the Brundtland Commission) definition: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”


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The Council is fully committed to a robust and meaningful application of the Principles and Code of Practices to promote responsible business practices within the industry.

During 2006, an Implementation Model will be developed in consultation with key stakeholder groups. Development of an independent monitoring process and ensuring Member businesses’ capacity and commitment to implement the Principles will also be a key activity in 2006 / 2007.

Council Members commit to implementing the Principles and Code of Practices within their own organisations, to self-assess their conformance with the Principles and Code of Practices and to undergo independent external monitoring. Council Members will also commit to promoting membership of the Council and implementation of the Principles and Code of Practices amongst their business partners.

The Principles, Code of Practices and Implementation Model will set an aspirational standard towards which the industry can work. The Council will at first set the level of conformance required as a basis for Council membership at an achievable level, whilst driving continuous improvement.

In time, Members will be required to submit an annual progress report to the Council detailing their efforts to conform to the Principles.

Membership will be reviewed on a regular basis based on progress against defined criteria.

Processes for implementation


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There are a number of different ways to participate in the activities of the Council, as listed below.

CommercialMember

Any business that is actively involved for commercial reasons in the diamond1 and/or gold2 jewellery supply chain; commits to the prevailing Council Principles on business ethics, social, human rights and environmental performance; undertakes the payment of the annual Council commercial membership fee and files a fully and accurately completed application form with the CRJP Secretariat is eligible to become a Commercial Member of the Council.

Association Member

Any trade association actively involved in the diamond1 and/or gold2 jewellery supply chain that commits to the prevailing Council Principles on business ethics, social, human rights and environmental performance; undertakes the payment of the annual Council membership fee and files a fully and accurately completed application form with the CRJP Secretariat is eligible to become an Association Member of the Council.

Interested party

Any organisation or individual may become an e-mail subscriber to the Council. E-mail subscribers will receive copies of the Council Newsletter, available via e-mail. There are no specific requirements for Interested Parties.

The following pages outline the commitments required to qualify for each level of participation and the benefits associated in each case. To register interest in participation with the Council as a Council Member, Association member, or Interested Party please contact:

[email protected]

Participation with the Council for Responsible Jewellery Practices

[1] The Council defines a “diamond” as: “a natural mineral consisting essentially of pure carbon crystallised with a cubic structure in the isometric system. Its hardness in the Mohs scale is 10; its specific gravity is approximately 3.52; it has a refractive index of 2.42 and it can be found in many colours.”

[2] The Council defines “gold” as: “a rare yellow metallic element with the chemical symbol "Au”. It is a mineral with specific hardness of 2.5-3 on the Mohs scale of hardness and the atomic number 79. Gold purity is measured by karat: one karat being 1/24th part by weight of pure gold.”


Commercial member l.jpg

To be eligible for commercial membership of the Council, the applicant must:

be actively involved for commercial reasons in the diamond and/or goldjewellery supply chain [including jewellery watches for their diamond and/or gold components]; and

commit to the prevailing Principles and Code of Practices on business ethics, social performance human rights and environmental performance adopted by the Council for Responsible Jewellery Practices (CRJP); and

pay an annual Council commercial membership fee;

submit a complete and accurate application form to the Council Secretariat.

Member Commitments

Commercial Members must commit to:

promote responsible business practices in the diamond and/or gold jewellery supply chain;

operate their business in accordance with the prevailing Principles and Code of Practices on business ethics, social, human rights and environmental practices adopted by the Council;

implement Continuous Improvement processes to achieve increased performance and higher standards;

comply with the Anti-trust Compliance Rules adopted by the Council in its dealings with the Council and other members;

comply with the rules laid down by the Council as to the use of its logo and intellectual property;

undergo regular independent third party Monitoring to evaluate performance against Council Principles andprevailing Code of Practices, as will be defined in the Implementation model;

submit an annual report on progress made against the above commitments to the Council.

Member Role

Members will have the opportunity to be elected to the Board and the Committees focussing on key work-streams such as standards development, communications or financial management.

CommercialMember

  • Member Benefits

  • The benefits below may apply to the various stages of the supply chain to varying degrees:

  • A unique initiative, spanning from mine to retail, promoting convergence and simplification of standards and reducing duplication of conformance evidencing. The system will offer the opportunity to have one monitoring report which is credible to multiple stakeholders.

  • A vehicle for developing practical solutions in consultation with industry, society and government.

  • A valuable forum for discussion and interaction with industry peers and a communications and engagement platform, supporting you in communicating with media, your suppliers, NGOs and any others who may contact you.

  • Access to information on emerging business responsibility issues and challenges the industry is facing.

  • Use of the Council logo and intellectual property (including implementation and assessment tools) offering a means to demonstrate:

    • your business’s proactive approach to responsible business practices

    • your business’s commitment to implementing the Council’s standards in a robust and credible manner.

  • A means to provide confidence to your supply chain partners (or customers) in respect of your business practices.

  • • A transparent and practicable mechanism for helping your local operations and contractors develop the capacity to meet higher standards of ethical, social and environmental performance.

*PLEASE NOTE: All financial information provided by applicants to the Council Secretariat will be treated as confidential and will be used for the sole purpose of assessing relevant membership fees. The Council Secretariat will not disclose or release this or any other confidential information to any third party (including other Members) unless such information is required to be disclosed by a court, mandatory provision of law, governmental or other authority or regulatory body.


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Association Member

  • To be eligible for Association Membership of the Council, the applicant must:

    • be a trade association which is actively involved for in the diamond and/or gold jewellery supply chain [including jewellery watches for their diamond and/or gold components]; and

    • commit to the prevailing Principles and Code of Practices on business ethics, social performance, human rights and environmental performance adopted by the Council for Responsible Jewellery Practices (CRJP); and

    • pay an annual Council membership fee; and

    • submit a complete and accurate application form to the Council Secretariat.

      Association commitments

  • On becoming an Association Member you are committing to:

    • promote Council membership amongst smaller industry participants;

    • promote compliance with the Principles and Code of Practices within your own membership;

    • educate your members about the issues and risks within the industry and about how they may apply the Council implementation processes within their activities;

    • assist the Council in consulting widely throughout the industry;

    • comply with the Anti-trust Compliance Rules adopted by the Council in its dealings with the Council and other Council members;

    • comply with the rules laid down by the Council as to the use of its logo and intellectual property submit an annual report on progress made against the above commitments to the Council.

  • Association role

  • Association members play an important role of outreach and disseminating information about the Council and its activities to their respective memberships. Outreach activity will include educating their members as to the ethical, social and environmental challenges that are faced by the diamond and gold jewellery industry and communicating the messages and processes of the Council.

  • Association members will have the opportunity to be elected to the Board of the Council and management committees. Whilst Association members must support the Council mission, they will not be required to apply implementation processes within their organisation.

    Association member Benefits

    The following benefits will apply to Association member subscriptions:

  • Access to materials to use in educational activities within the membership.

  • Ability to demonstrate leadership in consumer confidence issues to your membership.

  • A means to enhance your reputation in relation to business responsibility issues and to support the interests and reputation of your own membership.

  • Access to information on emerging issues and challenges the industry is facing.

  • A vehicle for developing practical solutions in consultation with industry, civil society and government.

  • A communications and engagement platform, supporting you in communicating with media, your suppliers, NGOs and any others who may contact you.

  • Note: Individual trade association members do not join the Council by Proxy through membership of their associations to the Council. Membership of a trade association which is an associate of the Council will not confer the right to use the Council logo.


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What was the process for developing the draft Principles and Code of Practices?

The Council has used national law (or relevant state or local law) as the fundamental basis for the development of the Code of Practices. This is in recognition of the fact that business must respect the legal framework of the country in which it is operating. However, where no appropriate law exists, and there is a clear public interest in a standard being applied to Members operating in those countries, the Council has based Code provisions on appropriate, consistent and proportionate broadly accepted global standards or industry best practice (for example, the ILO Conventions, the Kimberley Process Certification Scheme) that must be adhered to by the relevant Member.

What makes this initiative different from others?

The Council for Responsible Jewellery Practices draws its membership from all phases of the diamond and gold supply chain, including the financial community. The finalised Implementation Model will offer a common aspirational standard that all within the industry can work towards such that responsible business practices are implemented from mine to retail. The Implementation Model will seek to cover the key aspects of responsible business practices, including business ethics, human rights and labour standards, environmental performance and community standards. Therefore, this initiative can be seen as unique in its combined breadth of issues coverage and in its relevance to multiple phases of the supply chain.

Why is the focus limited to diamonds and gold only?

The Council recognises the scope and scale of the challenges affecting the diamond and gold jewellery sectors. Existing Members view the diamond and gold jewellery industry segments as an appropriate first priority for activities aimed at improving responsible business practices within the jewellery industry, especially since serious challenges have already risen in those sectors.

In the future, the Council hopes to build on this first effort and enlarge its scope to encompass other elements of the precious jewellery supply chain, where there is scope for the development of a responsible practices framework.

How will the Implementation Model fit with existing industry standards and initiatives?

It is envisaged that the monitoring process will acknowledge internationally recognised initiatives such as the Kimberley Process Certification Scheme and ISO standards, as evidence of performance in defined areas of the Principles. The Implementation Model will cross-reference the requirements of other initiatives. It will therefore build upon existing standards and will reinforce implementation of key industry initiatives. The final model will the a subject of public and industry consultation.

How is Council run?

The Council is run by a rotating Board elected from the membership that is structured so as to be representative of the industry and which will

Questions and answers


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be advised by a number of management committees and issues-based stakeholder working groups. All Council Members have the chance to stand for election to the Board. In January 2006, the CRJP hired a Chief Executive Officer and Programme Director who run an operational and administrative Secretariat.

How will the Council ensure the transparency of its activities?

As a minimum, the Council will also provide an annual, publicly available report on its activities and Members’ progress. The Council also releases a regular newsletter to interested parties.

Is the Council imposing Western Standards on developing / emerging economies?

The Principles and Implementation Model will take, as their core, compliance with applicable

national law as well as internationally agreed standards. This is not about imposing Western standards on others, but about driving improvement in an industry according to standards agreed to by governments internationally, representing both developed and developing nations.

Will it be too onerous for the smaller participants to comply with the Principles?

The Principles and Code of Practices will be applied taking into account industry diversity

through an implementation process yet to be developed. Members will be able to agree with their independent monitors on areas of the Implementation Model that are not applicable to their business, according to guidance set by the Council. The Council will set an achievable required level of conformance at the start of the initiative, with a requirement to demonstrate continuous improvement. In this way the Principles should not be too onerous for small businesses. The Council will consult with smaller participants in order to assess their response to the draft Code of Practices and Implementation Model.

How will the Council make sure it understands all the issues?

The Council will convene stakeholder working groups in order to advise it in relation to key issues relevant to achieving its mission. Stakeholder working groups will advise the Board and/or management committees. The Council will also commission research and engagement activity as necessary to ensure that it keeps abreast of, and can respond to, emerging issues as they arise, on behalf of the industry. Ongoing stakeholder consultation will have a central role in informing the Board on key issues and helping to finalise the draft Code of Practices and Implementation Model to define appropriate standards to drive responsible business practices within the industry.

How will you ensure that the Council does not act in an anti-competitive way?

The Council takes all of its legal obligations, including those imposed by competition law,

Questions and answers (cont’d..)


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Questions and answers (cont’d..)

  • supply chain it derives the largest proportion of its diamond and/or gold-related turnover.

  • Method of fee calculation

  • A key principle of the Council is to be inclusive, encouraging organisations of all sizes to contribute to the overall aim of promotingresponsible ethical, social and environmental practices throughout the diamond and gold jewellery supply chain.

  • To achieve this, annual membership fees for organisations trading for commercial reasons in diamond and/or gold jewellery are calculated as a percentage of their annual Relevant Turnover.

  • Relevant Turnover is defined as the total turnover derived from those parts of the business / entity that are directly involved in the diamond and/or gold jewellery supply chain.

  • extremely seriously. The Council continues to take all necessary steps to ensure that its activities comply with all applicable competition rules.

  • Further, the Council has adopted an Anti-trust Compliance Rules which seek to ensure that the Council and its Members are aware of their competition law obligations and at all times act in accordance with all applicable competition rules.

  • How much will it cost to be a Member?

  • Membership fees are set annually by the Board. The current fees are set out in the table below.

  • The Council recognises that applicants may have diamond and/or gold commercial activities in more than one part of the supply chain (for example, both diamond manufacturing and retail activities). For the purposes of determining the annual commercial membership fee the applicant must specify at which level of the

  • Notes:

    • Gold that is a by-product of mining activity must be included.

    • Turnover derived from gold and/or diamond non-jewellery products may be excluded.

    • The membership year starts on 1 January. Membership fees for Members joining part way through a membership year will be pro-rated.

    • There will be a minimum fee of £60.

    • The Council reserves the right to challenge and/or request additional information about an applicant’s declared relevant turnover figure, so as to ensure consistency of fee payments across the Council’s Membership.

    • Discretionary supplementary financial contributions to the Council are also welcome.


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