Bling with no sting

When the TV documentary producer David Rhode decided to propose to his girlfriend, he was presented with more than the usual problem of picking the right moment. He would have to find the right ring – one that would meet her exacting ethical standards.

It wasn't just a matter of finding a diamond that was "conflict free". Many more people now understand this gemstone's often troubled route from ground to finger, thanks to shocking images of child soldiers, rap's obsession with the rock and a recent Leonardo DiCaprio movie. But few are aware that the gold from which the ring is made has an environmental and ethical impact that goes largely unmentioned in the jewellery industry.

Unfortunately, for Rhode at least, his girlfriend had mentioned the issue. But buying ethical gold is no easy matter. His response was extreme, but timely; Rhode and a university friend and former management consultant, Tim Ingle, have launched Ingle & Rhode, the UK's first fine jewellery business to stress its ethical credentials – all the materials they use can be traced back along the supply chain to source.

"We never really saw the point in producing a product that was 'half ethical', in which the stone was ethical but not the precious metal," Rhode says. "At the risk of sounding cynical, there are already too many jewellers who basically want to carry on doing what they've always done, and yet brand themselves ethical.

"But there's no reason why ethical considerations shouldn't apply to jewellery. In fact, you might imagine that people might be even more conscious of the issues when buying something that's supposed to represent the purity of your love, or mark a special occasion. The last thing most people would want was to think that someone or somewhere was being horribly exploited in the making of it."

Setting up the business hasn't been easy. As Ingle stresses, gold's traditional supply chain is anything but transparent. "Twenty years ago, they said about food that it would be impossible to trace meat, for instance, back to source. After BSE, now you can buy a packet of mince and almost find out which field the cow grazed in. It's a question of collective will.

"But go to Hatton Garden [London's jewellery district] to buy a ring now, and ask where the gold came from, and you won't get very far – in part because they don't know, but also, you suspect, because they're deliberately evasive."

Jewellers might have good cause to be so. Gold jewellery is a big seller – the UK market is worth £2.5bn and, according to the market researchers Mintel, six in 10 consumers have bought or received precious metal jewellery in the past three years – but most gold is a long way from ethically sound.

According to the Unearth Justice campaign, launched last year by the Catholic Agency for Overseas Development (Cafod) to publicise the issues and petition jewellers to improve practices, a single gold ring generates 18 tons of mine waste. Open-pit mining, which produces up to 10 times more waste than underground mining, creates craters visible from space.

Metals mines are generally the greatest toxic polluters of the industrial sector. Gold-mining can also employ a cyanide solution to separate the gold from the ore, and pollution of land and water is a major hazard; just one millionth of a gram per litre of water kills aquatic life, and a rice-grain-sized particle will kill an unwary worker.

Mining companies have been accused of encroaching on protected land and disrupting local communities. In the period 1995 to 2015, it is estimated, half the world's gold will have come from mines sited on the land of indigenous peoples.

The mining industry has stressed that there are laws to protect workers and the environment in the more advanced nations. But much gold-mining takes place where comparable laws are not enforced. And, with the gold price at an all-time high of about $800 an ounce, mining operations are encouraged to push into new territories.

But pressure on the industry is mounting. Keith Slack is senior policy adviser for Oxfam America, which runs a No Dirty Gold campaign. He says: "Mining companies are getting involved, if only because the issues are becoming obstacles to them doing business.

"But mining companies are largely anonymous; it's the jewellery businesses who are the public face of gold-mining. "When we first went to them, their initial reaction was, 'This has got nothing to do with us.' But they are increasingly aware that the issues do affect their reputation. There is an acceptance that large-scale gold-mining is always going to have some environmental impact, but it could be done much more responsibly," Slack says.

Ingle & Rhode buy their gold from a United Nations and international NGO-funded mining operation called EcoAndina, based in Argentina. It has policies to sustain village economies, introduce energy, irrigation and solar power systems, and to gather the gold the traditional way, by panning. That cuts out the use of toxic substances.

"Demand for 'fair' or 'clean' gold is still niche, but it's growing fast enough to sustain a market," says Thomas Siepelmeyer, a geologist and mining consultant whose company, Fair Trade in Gems and Jewellery, promotes EcoAndina. "It's not as easy as growing coffee. How you can get gold out of the ground is subject to the demands of the environment. But operations that can be changed should be."

Given that 80 per cent of all mined gold becomes jewellery, jewellers must play their part, Ingle & Rhode stress. The drive for change will come from upmarket and independent jewellers before the high-street chains, they believe.

But the big companies learnt from the diamond debate that it is best to act early. Wal-Mart (owner of Asda, and the world's biggest jeweller) and the Signet Group in the UK (owner of H Samuel and Ernest Jones) are supporters of No Dirty Gold's "Golden Rules" – new industry standards which they want implemented in principle.

According to Tim Jackson, Signet's investor relations director, the bigger players are also working with bodies such as the Council for Responsible Jewellery Practices and the Initiative for Responsible Mining Assurance, and with NGOs, to agree a way forward, chiefly through credible third-party monitoring and certification. This could be in place within two years.

But, Jackson says, the complexity of making gold an ethical product should not be underestimated. Smaller "artisanal" gold-sourcing operations are not necessarily the solution – they often slip under the radar of regulation. And most jewellery brands buy not from mines but from banks, which in turn buy from multiple sources.

"Arguably, that means the supply chain may never be transparent," Jackson says. "Gold is a commodity, so the market is more complicated. One bar of gold looks much like another, unlike a gemstone that can be tracked. Things are improving, but there is a long way to go."

Rhode says: "I know that if I had turned up and proposed to my girlfriend with an unethical product, it would not have gone down well. It worked out, though; I'm getting married next year. But my girlfriend was just as pleased that it spurred us on to launch a company like this. Awareness of the issue is growing, but if a celebrity took it up as their cause, that would be good. A Hollywood movie would help, too..."

New uses for old gold

One alternative to campaigning for better mining practices worldwide might be to recycle the gold already in circulation.

Neil Duttson of Duttson Rocks, a specialist jeweller and dealer in conflict-free diamonds, notes that the recent trend for recycling is feeding into the luxury-goods industries, and the concept of using recycled gold is gaining acceptance among consumers.

Customers come to Duttson with old family jewellery to be melted down and reconstituted for use in a piece. Also, ingots of recycled gold – comprising the shavings generated as gold jewellery is shaped – can be bought from London's Goldsmith's Office.

Gold can even be sourced from the circuitry of old electronics. "Recycling gold is an increasingly attractive idea but at the moment it is only possible for bespoke pieces," Duttson explains.

"There are also quality issues in mixing golds of different ages and standards which need to be considered, and the process tends to be more expensive. But it is another way of minimising the environmental and social impact of gold mining."