Investors Call for Better Supply-Chain Checks

RAPAPORT... More than 60 institutional investors have urged the jewelrytrade to implement more stringent control of supply chains in order toeliminate human-rights abuses.The organizations, members of the Investors Alliance for HumanRights, last week expressed concerns about child and forced labor in themining industry, and urged jewelry manufacturers and retailers to conduct duediligence in line with recognized standards. Many of the signatories are religious bodiesor Swiss pension funds. "Precious metals and gems are often used to commemorate themost sacred and momentous events in the human experience," said Mark Regier,vice president for stewardship investing at alliance members Everence Financialand Praxis Mutual Funds. "As investors, we need to see greater action - includingimproved standards and certifications - from the manufacturers and retailers in thisspace." Mining can injure child workers, expose them to dangerous substancessuch as mercury, and kill people when unstable pits collapse, the signatoriesexplained. Gold and diamond production has caused environmental damage thatthreatens people's health and access to water and food, while mining operationshave also displaced indigenous peoples, they continued. In addition, abusivegovernment forces and armed groups continue to benefit from the industry,despite efforts such as the Kimberley Process, they added. "Responsible management of global supply-chain risks ismaterial to investors," the statement read. "Where businesses fail to respecthuman rights in their own operations or in their supply chains, there is a riskof expensive litigation and reputational harm." The investors acknowledged that some companies in the industry weretaking steps to source more responsibly, citing Tiffany & Co., Pandora,Cartier, Signet Jewelers and Bulgari as examples. However, most fall short of standards,the group claimed. The alliance sent its statement directly to 32 companies it feltdid not meet responsible-sourcing requirements, requesting they improve supply-chainchecks. The group also criticized the Responsible Jewellery Council (RJC) fornot being in line with Organisation for Economic Cooperation and Development (OECD)sourcing standards. Although the RJC announced last week that it was in theprocess of aligning its due-diligence code for diamonds with OECD guidelines,that change will not fully go into effect until 2021. Human Rights Watch, a non-governmental organization that has campaigned for better standards in the industry, has acknowledged the RJC's positive impact on jewelry companies' practices, the council noted in a statement to Rapaport News Wednesday."We are committed to continuing that mission to driveimprovement in responsible behavior across the jewelry industry," the RJC continued. "The [RJC] standards themselves are internationally recognized as robust and arecontinually open to comprehensive and transparent review to ensure theycontinue to advance the cause of responsibility in the industry." Image: A Jewelry manufacturer making a ring. (Kozgunaydin/Shutterstock)