Pact drives responsibility in artisanal mines

2nd July 2021

A new programme, funded by the European Partnership for Responsible Minerals (EPRM), will support artisanal and small-scale mining (ASM) in southern Peru to formalise their activities and further adopt responsible practices, enabling them to operate more safely, while safeguarding the environment and improving productivity. The partners involved include UK-based trade justice movement Fairtrade, Swiss gold refiner Valcambi, lender FairCapital and social enterprise company Fairphone.

The Responsible Peruvian Gold programme will work with four ASM organisations in the Puno region of Peru, supporting the miners to acquire the technical and financial skills needed to meet the mining standards required to sell their gold to international markets on Fairtrade terms. The three-year EPRM-funded programme (worth £490 000) also aims to ensure decent and safe working conditions for miners.

This work will be delivered by a consortium led by Fairtrade Foundation, in partnership with: Valcambi, who are Fairtrade certified; FairCapital, who offer financial services to Fairtrade supply chains; and Peru’s national network of Fairtrade producers CNCJ-Peru. In addition, Fairtrade partner Fairphonewill support in promoting responsible ASM gold in different sectors.

A total of ten mine operators within the four ASM organisations will be supported to become Fairtrade certified as a collective. This will enable them to market their gold under the Fairtrade gold standard.

In Peru’s Puno region, around 300 000 people depend directly or indirectly on the extraction of gold from ASM for their livelihoods. Yet the gold mining sector in this region is largely informal and characterised by a lack of responsible practices, including exposure to health and safety risks, such as those related to mercury use, and low productivity.

In the context of Covid-19, the existing challenges facing small-scale miners have been exacerbated, especially in relation to market access, price, and the health and safety adjustments required.

The Responsible Peruvian Gold programme will guide mine sites through a process of supply chain formalisation, compliance with the Fairtrade standard and enhanced recovery rates of gold. It will do so by strengthening their internal management and traceability systems, supporting the uptake of responsible mining practices and creating links between mines and formal lines of finance for investing into more effective and cleaner technology.

Fairtrade Foundation director Louisa Cox enthuses: “Fairtrade Foundation is pleased to be partnering with Valcambi, FairCapital, Fairphone and Coordinadora Nacional de Comercio Justo, or CNCJ-Peru, to help small-scale miners operate formally and as a part of a robust and stable supply chain.

“This project will help meet the increased demand for ethically sourced gold.What’s more, we estimate that sales of Fairtrade gold by the end of the programme will generate an extra $400 000 in Fairtrade Premium yearly for the mining organisations. This is an additional sum of money that miners can invest collectively in mine-level, social or community projects of their choosing, and which we expect will, in particular, have a positive impact on women in the mining communities.”

Valcambi CEO Michael Mesaric notes: “Valcambi is delighted to be part of this programme that fosters responsible mining practices and will provide miners access to international markets under Fairtrade terms.

“Since 2014, we have been in a fruitful collaboration with Fairtrade establishing successful supply chains with Peruvian Fairtrade-certified mines, and we look forward to further expanding our impact on the ground, helping more miners to benefit from direct exports, thereby improving their incomes and livelihoods.”

FairCapital Partner SA Dr Christoph Gosdenoz adds: “It is FairCapital’s mission to provide small-scale producers from the Fairtrade ecosystem access to financing. We are convinced that the responsible Peruvian gold project is an excellent opportunity for artisanal and small-scale miners who have limited resources to address increasing market demand for their certified production. Because their diverse financial, operational and environmental challenges can best be addressed in a collaborative approach, we are happy to support our experienced project partners.”

CNCJ-Peru executive secretary Luis Suárez comments that, by sharing experience and knowledge with miners, the programme will also help “to make them visible – not only for formalisation, but also for building a different future”.

“The CNCJ-Peru is interested in influencing and developing activities within the framework of respect for nature and the environment, the reduction and elimination of mercury, and the rational use of resources. We see great potential for synergy with partners committed to this common goal,” adds Suárez.

The consortium members will draw on their long-standing experience of working in Peru. Fairtrade will advise on ethical standards and promote certified gold to end-buyers, both in the jewellery and technology sectors; Valcambi will provide its expertise in supply chain due diligence and in facilitating the export of gold on Fairtrade terms; FairCapital will provide technical assistance on investment and financial planning and CNCJ-Peru will provide in-country support and work directly with the mines.