The financial regulatory bill signed into law by President Obama last month aims to overhaul the laws that govern Wall Street. Although we will leave it to political pundits and economists to comment on the bill’s implications for the U.S. financial system, we would like to highlight a little-noted provision in the bill that affects the market for luxury jewelry. Hidden away in a section entitled “Miscellaneous Provisions” is a measure requiring large, publicly-traded companies to report to the federal government on whether certain minerals in their products could have come from the Democratic Republic of Congo or the surrounding region.
Since 1998, a civil war in Congo has claimed more than 5 million lives, making it one of the deadliest wars in history. As we wrote last December, the conflict has been fueled, in large part, by contestation over mineral resources. The goal of the provision is to create a degree of transparency and accountability surrounding mineral production in Congo.
The provision in the financial bill targets four “conflict minerals”—tin, tantalum, tungsten, and gold—that are mined in Congo and that have been contributing to the bloodshed. Many of these minerals are components of laptops, cell phones, and other electronics. Gold, of course, is a major component of jewelry. Most electronics and jewelry manufacturers in the United States are presently unable to say with any certainty whether the minerals in their products could have come from Congo. We attribute this situation to indifference and lack of awareness, as well as to the difficulty of tracing a fungible metal like gold back to the source. At Brilliant Earth, we use only recycled gold and fair trade gold in our jewelry, allowing us to be certain that none of our gold originates in Congo and that it meets the highest ethical standards.
We, at Brilliant Earth, hope this bill will use government leverage to speed up the process of creating a more transparent and accountable gold supply chain. Although the bill does not ban the sale of gold from Congo, it should give consumers and jewelry retailers the information they need to avoid buying and selling such gold. Potentially just as important, the bill may spur reforms that will make all gold, not just gold from Congo, more easily traceable. In many places, although gold is not contributing to civil wars, it is not being mined in a way that is ethical or environmentally responsible. Jewelry buyers deserve to know where their gold comes from and the conditions under which it is mined so that they can make informed decisions.
The Securities and Exchange Commission (SEC) has until April 17, 2011 to issue regulations that will clarify the meaning of the bill’s measures against Congolese gold. Much of the effectiveness of the law will depend on those regulations. As the law is implemented, Brilliant Earth will continue to fight for increased transparency in the gold supply chain and to support efforts to develop responsible sources of gold.