Corporate Social Responsibility: An Answer to Conflict Jewelry?
BACKGROUND
Conflict diamonds have reached every corner of the African continent from Sierra Leone, Ghana, Mali, Cote d’Ivoire, South Africa, the Democratic Republic of Congo, Rwanda, Angola, and Zimbabwe. These diamonds and precious gems have been used by rebel movements and national governments to fund devastating wars for decades. Philippe Le Billion discusses how natural resources have long shaped a black market industry built upon a network of elites, commercial agents, and the abused workers that mine these precious resources. Diamonds and gemstones that motivate these conflicts are easily integrated into international primary commodity markets. With lax standards on tracing systems, sourcing, and transparency, jewelry conglomerates have profited from the violence and perpetuated poverty.
William Reno cites several cases where diamonds and gems have prolonged conflict in Angola, Democratic Republic of Congo, Liberia, and Sierra Leone in his book, Warlord Politics and African States. In the early 1990s, well-established diamond corporations like De Beers were criticized for their indirect role in the Angolan and Congolese conflicts. Today, the company certifies that every diamond it sells is conflict-free and child labor free. Working with the United Nations and non-governmental organizations (NGOs), De Beers played a large role in creating the World Diamond Council to ensure the industry’s participation in the Kimberley Process. This certification initiative is endorsed by governments, industry partners, and NGOs to ensure that diamonds traded on the international market are conflict-free.
In Hot, Flat and Crowded, Thomas Friedman discusses the resource curse known as “Dutch disease,” which refers to how abundant natural resources can actually damage a country’s economy. A natural resource can inflate the currency and lead to a dangerous dependence because national politics, social welfare programs, and foreign policy may center on who gets these resources and how much money is involved.
For example, Zimbabwe has made extravagant claims that its diamond production and export industry would exceed total global output estimated at US $12.1 billion per year. As reported by the Economist, the World Federation of Diamond Bourses and European Union are calling for investigations into Zimbabwean diamonds, asserting that profits from these diamonds have funded gross human-rights violations. The Zimbabwe Mining Development Corporation took over mining operations of the Marange/Chiadzya diamond fields in eastern Zimbabwe in 2007. Mixing politics, security forces, and illegal artisan miners – the fields represent a “military garrison” and many have died in the region.
What is to be done? Le Billion observes that “Local and international NGOs play an important role in asking for greater transparency and accountability on the part of the international businesses and actions can be taken concerning specific commodities financing conflicts. . . . Responsible management of the supply-chain by the industry should ensure that no commodity ending up on the international market has participated in funding these conflicts.” This role for greater accountability and transparency (conscience) should also apply to companies. Many have evolved to become multinational operations with earnings portfolios larger than some countries’ gross domestic products.
ANALYSIS
While wide-scale industry change is some years away, local jewelers and nonprofits are doing their part. Jewelers like iGorman and Alberto Parada, who will be featured at the Fashion Fights Poverty benefit and gala on September 25 at The Renaissance Mayflower Hotel, have incorporated ethical, transparent practices into their business models.
Greg Furman, founder and chairman of the Luxury Marketing Council, a collaborative organization of more than 3,000 luxury brand executives, states, “More and more customers, 3.2 million people with assets of $1 million or more, are basing their decisions on how politically responsible companies are. People want a better world, and they’re using their dollars to vote.”
Environmental economist, Pamela Peeters, discusses the growth of the eco/ethical industry driven by consumer behavior. With predictions that consumer spending on green products will reach approximately $500 billion next year, Peeters believes, “There’s a strong parallel between the luxury market and the sustainability market.”
Speaking with Alberto Parada about his line of eco-friendly fine jewelry, he recounts his experience, “About 5 years ago, I was inspired to create my own jewelry line and . . . I began to learn about the very harmful affects of gold mining on the environment and communities. . . . The Alberto Parada brand was launched in correlation with the first Seattle Green Fashion week in 2007. More people are demanding conflict-free diamonds and ethical gold, but many people are still unaware or removed from the issue. That is why I have a responsibility to educate store owners and customers. When they learn that my jewelry is made from reclaimed gold and my gems are certified conflict-free and fair-trade, they can feel good about their purchase and I am fulfilling my social and environmental responsibility.”
In its fifth year, Fashion Fights Poverty (FFP) has established a center of social responsibility in the nation’s capital, Washington, D.C. Promoting change within the fashion and jewelry industry through various programs such as its own Dress Responsibly lookbook campaign, consumer/industry workshops, FORUM panel discussion, and annual benefit and eco/ethical runway show, FFP has illuminated the designs and fashions of ethical designers all over the world and raised thousands of dollars for nonprofit organizations like the United Nations Development Fund, Bead for Life, Aid to Artisans, and Nest.
On September 22, the third annual Ethical and Eco Fashion Forum will take place at the Historical Society of D.C., featuring panelists from the London-based Ethical Fashion Forum, Carbonfund, Style Ethic, and the University of Pennsylvania Law School. The discussion will focus on the next wave of corporate social responsibility and how eco-friendly and ethical consumerism can make an impact on multinational corporations and poverty. Admission is free and doors open at 6 p.m. On September 25, FFP celebrates its fifth anniversary with its annual gala fundraiser and eco/ethical runway show.
We do have a role, a voice, and an important choice in the jewelry and textile supply-chain. One need only “follow the money.” Reflected in economic growth in the eco-conscious and ethical industries, conscience has hit consumerism. And this change in market behavior is not lost on companies, both local and multinational. With greater demand for corporate social responsibility by a new generation of ethical and eco-conscious consumers, one hopes that these ripples of change may have a collective effect on the mining industries and reduce conflict in Africa.