Wednesday, December 7, 2011

The Consequences of Gold Price Increases


Picture courtesy of Human Rights Watch

As everyone is probably aware, unless you’ve been under a rock, companies are buying gold. You can’t drive down the street without seeing a jewelry store flying a flag proclaiming “We Buy Gold.” It’s almost an epidemic. This frenzy to purchase gold is a result of the huge increases in the price of gold. Many jewelry designers have switched from all gold pieces to sterling silver with gold accents because the jump in gold has priced many designs out of reach. I love it because I have always been a fan of sterling silver and white gold. Nowadays I have more options that are not only affordable but beautiful and while gold is also great it may be developing some bad habits.

Recently NBC Newsmagazine, Rock Center with Brian Williams ran a piece about the artisanal gold sector in Mali. These steep price increases in gold have created a demand for workers and unfortunately children seem to be filling the position in Mali. Human Rights Watch has released a report, A Poisonous Mix: Child Labor, Mercury, and Artisanal Mining in Mali, (view additional information at www.hrw.org). There, children labor in hazardous and toxic mines to get the gold that consumers wear in their jewelry. It is currently estimated that 12% of the world’s gold comes from artisanal mines. Couple this appalling figure with the lack of control and enforcement of those “We Buy Gold” companies and an uncomfortably large percentage of gold could come from child labor or crime.

Most people don’t think about where their gold comes from, we are all more concerned with diamonds and their origins. The Kimberly Process was hopeful that it could help regulate the flow of diamonds from countries with ethical issues. But since this form of regulation is now in trouble, it is a clear illustration of how hard it is to regulate another country that is either war torn or desperate. People in desperate circumstances do desperate things, like allowing their children to work in mines. The huge spike in gold pricing has made artisanal mining much more attractive, and while industry leaders such as The World Gold Counsel are opposed to such labor practices, it does beg the question, how will they stop it?

It is great that the media is bringing this practice to light and helping to inform the public about appalling child labor conditions. It is important to discuss these issues out in the open. Just as discussion of “Blood Diamonds” has brought attention and attempts at regulation and tracking, so too will the discussion surrounding artisanal mining. So the next time you go to a jewelry store and want something made of gold, ask the jeweler where their gold was sourced. It is highly likely they will not have an answer but at least it is the beginning of a discussion that could have beneficial consequences for the ethical treatment of children.

No comments:

Post a Comment