The Fairmined Certification and Standards
Overview of the Fairmined Initiative and the Alliance for Responsible Mining (ARM)
The Fairmined initiative is a certification program developed by the Alliance for Responsible Mining (ARM), a non-profit organization based in Colombia. Fairmined aims to promote sustainable and ethical practices in the artisanal and small-scale mining (ASM) industry by certifying gold from empowered responsible ASM organizations. The initiative guarantees responsible and conflict-free supply chains for the certified gold, providing an opportunity for miners to participate in the global mineral market responsibly.
Key Requirements of the Fairmined Standard for Artisanal and Small-Scale Mining Organizations (ASMOs)
The Fairmined Standard includes requirements for ASMOs to conduct responsible mining operations, such as:
- Formal and legal mining practices: ASMOs must comply with the necessary technical, legal, and environmental requirements to obtain and maintain the Fairmined certification, which is renewed and audited every year 1.
- Environmental protection: The standard promotes environmentally-friendly extraction practices, including the responsible use and gradual reduction of mercury, and the protection of water supplies 2.
- Fair labor conditions and socioeconomic development: Certified ASMOs must ensure fair wages, safe working conditions, and the absence of child labor. The Fairmined Premium ($4 per gram of Fairmined gold and $6 per gram for Fairmined Ecological Gold) is used by the certified mining organizations to fund community development projects 1.
Fairmined Ecological Gold and its Additional Environmental Protection Criteria
Fairmined Ecological Gold is a special designation awarded to precious metals produced under stringent environmental practices, such as extraction without the use of mercury or cyanide, and forest/ecological restoration 3. This category has additional requirements to minimize ecological disturbance and promote the rehabilitation of native ecosystems in highly biodiverse areas 2.
The Fairmined Ecological Gold Premium is $2,000 per kilogram higher than the regular Fairmined Premium, providing an additional incentive for ASMOs to adopt more environmentally-friendly practices 4.
The Fairmined Precious Metals Supply Chain
Certified Mining Organizations and their Role in the Fairmined System
The Fairmined precious metals supply chain begins with the certified mining organizations. These artisanal and small-scale mining organizations (ASMOs) meet the strict requirements of the Fairmined Standard and are certified to sell Fairmined-certified gold to the market. Certified ASMOs undergo annual third-party audits to ensure compliance with the Fairmined Standard, which includes meeting requirements related to working conditions, worker well-being, environmental protection, and the absence of child labor and armed conflict 1.
Fairmined Suppliers, Licensees, and the Fairmined Assurance System
The next stage in the supply chain involves Fairmined Suppliers, which include refiners, traders, manufacturers, and casters. These actors transform the Fairmined gold into inputs for various segments of the gold industry, such as alloys, wire, sheet, and casting grain. To trade Fairmined gold, these entities must become Fairmined Authorized Suppliers.
Fairmined Licensees are any interested parties that want to trade in Fairmined gold and make claims about its use. They must comply with the requirements outlined in the Fairmined Standard, License Agreement, and Mark Manual to ensure credibility.
The Fairmined Assurance System encompasses all processes to ensure credibility and consistency with the compliance of the Fairmined Standard requirements by all actors in the supply chain. This system is audited and/or verified by third-party auditing bodies or the Alliance for Responsible Mining’s (ARM) Standards and Certification department.
Traceability and Transparency in the Fairmined Supply Chain
Traceability and transparency are crucial aspects of the Fairmined supply chain. The partnership between Fairmined and Tracemark, a global standard for traceable jewelry, ensures full traceability of the Fairmined gold and silver used in jewelry. Each piece of jewelry can be traced back to the certified mine of origin, providing transparency to the end consumer.
All Fairmined actors must report their purchases and confirm their sales to the Fairmined Information System, ensuring traceability of Fairmined metals transactions. Fairmined Connect is a virtual platform used to exchange relevant information between the actors of the Fairmined supply chain, including registration of information, traceability control, and management of audit and certification processes.
This robust supply chain, coupled with the stringent Fairmined Standard, ensures that Fairmined precious metals are responsibly sourced, traceable, and transparent, providing assurance to businesses and consumers alike.
The Benefits and Impacts of Fairmined Precious Metals
Environmental Sustainability and Responsible Mining Practices
Fairmined precious metals are produced under strict environmental standards, ensuring a low environmental impact from the artisanal and small-scale mines (ASMOs) that produce the gold. The Fairmined Standard requires ASMOs to protect water supplies and responsibly manage and reduce the use of toxic chemicals like mercury 1. Fairmined Ecological Gold takes this a step further, requiring the rehabilitation of native ecosystems, such as forest restoration in highly biodiverse areas 2.
Socioeconomic Development and Support for Mining Communities
The Fairmined Premium, which is $4 per gram of Fairmined gold and $6 per gram of Fairmined Ecological Gold, provides additional financial benefits to ASMOs. This premium is democratically reinvested in community projects and improving miners’ operations, supporting the well-being and development of mining organizations, their workers, and the surrounding communities 3. A study found that participation in the Fairmined certification scheme improves the well-being of gold miners, driven by the impact of certification on the workers.
Ethical Sourcing and the Mitigation of Reputational Risks for Businesses
By sourcing Fairmined precious metals, businesses can demonstrate their commitment to responsible and ethical practices. Fairmined gold is traceable, allowing businesses to make credible claims about the origin and responsible sourcing of their materials 4. This helps mitigate reputational risks and provides assurance to customers and stakeholders, aligning with the growing demand for transparency and sustainability in supply chains.
Investor Interest and the Growth of the Fairmined Precious Metals Market
While specific data on the growth of the Fairmined precious metals market is limited, the broader context of sustainable finance and the increasing demand for responsibly sourced materials suggest a growing interest in this area. Ethical gold has seen a 73% rise in interest since January 2020, indicating a shift in consumer and investor preferences. As more businesses and investors seek to align their practices with environmental and social responsibility, the Fairmined precious metals market is poised for growth, offering an opportunity to support the sustainable development of ASMOs while meeting the demand for ethical and sustainable investments.
