Gold and Diamonds: The Social and Environmental Impacts of Mining for the Diamond Ring

Phase 4: Manufacture / Retail

Diamonds are a value-added industry. In 1981, the sale of rough diamonds straight from the extraction process was $2 billion. By the time diamonds reached the end of their “industry cycle,” they were sold to consumers for $18 billion.²⁵ The diamond life cycle once it leaves the mine continues to “upgrade” the diamond. After the mining process, the rough diamond is sold to rough gem dealers who them sell it to cutting units, from where it proceeds to wholesale dealers, from where it finally goes to retail.²⁶ All along the manufacturing process, the energy inputs are commonly associated with transportation, and the generation of electricity.

The outputs associated with manufacturing are: the finished diamonds and jewellery; CO₂ emissions from transportation, and energy production; and minimal amounts of solid waste.

Because of the fuel involved in the transportation process, greenhouse gas emissions contributing to global climate change are the main environmental impact associated with the manufacturing stage. The DeBeers marketing campaign stating that “Diamonds are forever” is quite accurate. Diamonds are rarely discarded, and if they are, it is most likely accidental. Diamonds and diamond rings are passed down from generation to generation and are therefore an almost entirely recycled product.

Major Environmental Impacts Summary

The following summarizes the environmental impact of gold and diamond mining:

Air Emissions     

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  Climate change caused by greenhouse gas emissions during smelting of ore and in all aspects of transportation and construction.
  
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  Local air quality degraded by gases released in processing and particulate matter expelled during extraction and processing.
  

Water contamination   

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  Aquatic ecosystem degradation caused by seepage and major releases of toxins from contaminated waste water to surface water.
  
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  Ground water contamination due to acid mine drainage and surface water contaminant seepage.
  

Land resource use    

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  Decreased biodiversity, ecosystem degradation and soil erosion resulting from major land disturbance in sensitive environments and remote areas (e.g. tundra).
  
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  Complete ecosystem destruction (lakes, forests, rivers) from failed reclamation efforts.
  

Mining Sustainability Initiatives

There are several mining sustainability initiatives that are formed either by international governing bodies such as the UN, international non-governmental organizations (NGOs), or industry standards organizations that promote the sustainability of the industry through voluntary cooperation. The following five initiatives are just an example of prominent industry and international standards that are currently at the forefront.²⁷

Ceres
Ceres is a national network of investors, environmental organizations and other public interest groups working with companies and investors to address environmental sustainability issues and challenges. Its mission is to integrate sustainability into capital markets across the world for the health of the planet and its inhabitants. Founded in 1989, Ceres’ vision incorporates business and capital markets to promote the well being of human society and the protection of the earth's biological systems and resources. Ceres established the Global Reporting Initiative (GRI), a standard that is used by over 850 companies worldwide for corporate reporting on environmental, social, and economic performance²⁸. From the results of the Ceres report, it is evident that corporate responsibility amongst metals and mining leaders is varied as many firms and corporations place different degrees of emphasis on environmental standards.

In 2006, Ceres released a report that evaluated over 100 companies in 10 of the most carbon intensive sector industries in the United States that included the metals and mining industry. These companies are ranked as among the leaders in their industry and are evaluated according to a Climate Change Governance Checklist.²⁹ This checklist is comprised of 14 governance steps scored on a 100 point scale that companies take to actively address climate change. There are 5 broad categories that comprise the 14 governance steps that include:

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  Board Oversight (up to 12 points);
  
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  Management Execution (up to 18 points);
  
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  Public Disclosure (up to 14 points);
  
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  Emissions Accounting (up to 24 points); and
  
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  Emissions Management and Strategic Opportunities (up to 32 points).³⁰
  

ISO
ISO, the International Standards Organization, is the world’s largest developer of standards for a variety of industries. ISO is an NGO which aims to improve social, environmental, and technical standards. ISO sets out to bridge the gulf between private sector and public sector interests (ISO overview). International standards are beneficial to industry to ensure that their products are accepted in the global market so they have an incentive to abide by ISO standards. ISO strives to establish standards for environmental sustainability to better industry on a global scale. One fallback of being an NGO is that ISO has no power of enforcement, however many countries have adopted ISO standards as part of their legislative frameworks, and they hold a significant market impact in the case of non-adherence. ISO standards are voluntary and non-regulatory, but have resulted from market demand and therefore have a large amount of sway. ISO certification also holds a lot of weight and is considered legitimate because of a third party audit certification system to ensure compliance with ISO standards, and quality control.

United Nations Global Compact

The UN Global Compact is a non-regulatory framework for the mining industry promoting accountability and transparency. It is a corporate responsibility initiative emphasizing four universal values: human rights, environmental sustainability, labour, and anti-corruption. The three principles that focus on environmental sustainability are Principles 7, 8, and 9:
Principle 7

Business should support a precautionary approach to environmental challenges;

Principle 8

Undertake initiatives to promote greater environmental responsibility;

Principle 9

Encourage the development and diffusion of environmentally friendly technologies.³¹

International Council on Mining and Minerals (ICMM) – Global Mining Initiative (GMI)

The ICMM is a voluntary industry initiative with the following Principles of Sustainable Development:

1. 
   Implement and maintain ethical business practices and sound systems of corporate governance
   
2. 
   Integrate sustainable development considerations within the corporate decision-making process
   
3. 
   Uphold fundamental human rights and respect cultures, customs and values in dealings with employees and others who are affected by our activities
   
4. 
   Implement risk-management strategies based on valid data and sound science
   
5. 
   Seek continual improvement of our health and safety performance
   
6. 
   Seek continual improvement of our environmental performance
   
7. 
   Contribute to conservation of biodiversity and integrated approaches to land-use planning
   
8. 
   Facilitate and encourage responsible product design, use, re-use, recycling and disposal of our products
   
9. 
   Contribute to the social, economic and institutional development of the communities in which we operate
   
10. 
    Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders.³²
    

World Business Council for Sustainable Development (WBCSD) – Mining, Minerals and Sustainable Development Project (MMSD)

The purpose of the MMSD is to empower industry and business leaders to become catalysts for change in the industry to ensure that mining develops and continues in a sustainable manner.³³

International Development and Research Council (IDRC) – Mining Policy Research Initiative (MPRI)

The MPRI is primarily aimed at addressing mining issues in Latin America and the Caribbean. The Initiative serves to identify key stakeholders, ensuring greater corporate social responsibility. IDRC increases regional networking to ensure that needs of the region and the industry are addressed and discrepancies are resolved. Two major focuses of the initiative are indigenous peoples and mining technology innovation.³⁴

World Wildlife Fund (WWF) - Mine Certification Evaluation Project (MCEP)

The World Wildlife Fund has several initiatives on responsible mining and mining sustainability. One of these WWF initiatives is the Mine Certification Evaluation Project (MCEP), which audits the industry auditors. The WWD takes into account water and air pollution, as well as the displacement of ecosystems and people, and strives to ensure that the industry is held accountable for not upholding treaties and ignoring regulations. The World Wildlife Fund’s MCEP ensures that industry practices are transparent, and that they will continue to spearhead future sustainability initiatives.³⁵

Publicity Campaigns

The most well known ENGO publicity campaign was against “blood diamonds.” It was mainly a campaign to highlight socio-political issues surrounding the diamond trade in Sierra Leone. It was a fairly effective campaign, which proved to be beneficial for the Canadian diamond industry, allowing them to laser brand their diamonds with the image of a polar bear and market them as “clean diamonds”, not associated with the violent diamond trade of Sierra Leone and other conflict areas.

The No Dirty Gold campaign by Earthworks is relatively new and has had an effect on jewellers. Thus far they have enlisted a number of large jewellery manufacturers and marketers (Zale Corp., Sterling, Tiffany & Co., Helzberg Diamonds, Cartier, Fortunoff, Val Cleef & Arpels, Piaget) to promote sustainable and environmentally responsible gold mining by only purchasing gold from approved mining companies. However, the effects of this campaign are limited and need to attract greater attention to affect a greater impact on the jewellery manufacturers.

Jewellery Sector Initiative:

The Jewellers of America have formed the Council for Responsible Jewellery Practices (CRJP) to promote “responsible, ethical, social and environmental practices throughout the diamond and gold jewellery supply chain, from mine to retail”³⁶. Interestingly, both BHP Billiton and Newmont Mining are founding members of the CRJP. This initiative appears to be in the initial stages and very limited in its scope and overall effect.

Effect on Jewellery Sector

Jewellery manufacturers are mostly unaffected by the environmental issues associated with the mining industry. Some public pressure due to ENGO campaigns concerning environmental and socio-political issues has had a limited effect, instigating a slight shift in behaviour of the jewellery sector.

Canadian Policies and Regulations
Fisheries Act
Metal Mining Effluent Regulations
(SOR/2002-222)

The Regulations […] impose limits on releases of cyanide, metals, and suspended solids, and prohibit the discharge of effluent that is acutely lethal to fish. The Regulations also require metal mines to conduct Environmental Effects Monitoring programs to identify any adverse effects of their effluent on fish, fish habitat, and the use of fisheries resources³⁷.

Waste Discharge Regulation Implementation Guide
Issued by the Government of British Columbia, on July 8^th, 2004 to integrate and replace the previous Environmental Management Act and the Waste Management Act. The Waste Discharge Regulation Implementation Guide (WDRIG), only allows certain industries to release waste into the environment, and regulates the amount of waste that these industries can release:

Schedule 1

Industries, trades, businesses, operations and activities listed on Schedule 1 of the regulation will generally continue to be authorized through the use of site specific authorizations or regulations due to the complexity of their discharges, potential for significant environmental impacts or limited number of similar operations in the province. Schedule 1 also includes

some industries, trades, businesses, operations and activities that are authorized by existing

regulations.

Schedule 2

Industries, trades, businesses, operations and activities listed on Schedule 2 of the regulation are eligible to be governed by minister’s codes of practice. Codes of practice are enforceable, standard industry- or activity-wide regulations governing the discharge of waste from a prescribed industry or activity. If a code of practice governs the industry, trade,

business, operation or activity, no site-specific permit or alternate type of authorization to authorize the introduction of waste into the environment is required. In the absence of an approved code of practice, other forms of authorizations are required to authorize discharges to the environment.³⁸
Metal Mining: the Dirty Reality

The metal mining industry is among the most environmentally impactful industries in the world. For every ounce of gold that comes out of the world’s mines, 79 tons of mine waste is produced. Mining for metals, employs 0.09 percent of the world’s population, yet consumes 10 percent of the world’s energy consumption, and accounts for 96 percent of the US’s arsenic emissions.³⁹ The gold industry is very inefficient, requiring 18 tons of waste ore to produce enough gold for a single wedding band. The use of cyanide to leach the gold out of the ore is very toxic, with a grain-sized amount being fatal.⁴⁰

Cases: Leaders and Laggards in the Mining Industry

The Laggard: Newmont Mining

Newmont, one of the world’s most prominent gold mining companies, scored 24 points among the metals and mining industry with Alcan scoring a high 77 points. Ceres environmental standards are voluntary amongst companies and many governments both locally and nationally do not enforce penalties for non-compliance.

Company Profile

Newmont Mining is the largest gold mining company in the world. They have mines in North and South America, Asia, Australia, and Indonesia, and continue to conduct widespread mining exploration. Newmont’s mines also produce copper, silver, and zinc, which are all major components of gold jewellery production. Founded in 1921 in New York, they have been publicly traded on the New York Stock Exchange since 1925. Today, they employee 28 000 people, and profess to be leaders in sustainable mining.⁴¹

Environmental and Sustainability Initiatives

Newmont Mining makes various claims to being a leader in mining sustainability initiatives. The company claims to lead the industry in transparency and accountability. They market themselves as one of the founding members of the ICMM and of the Council for Responsible Jewellery Practices. Newmont is also a signatory of the UN Global Compact and are signatories of the International Cyanide Management Code. According to Newmont Mines, they set the highest standards of community development initiatives and environmental stewardship.⁴² Unfortunately, despite these initiatives of which they are founders and signatories, the reality proves different.