Calcutta, Dec. 30: Jewellery exporters have gone on the overdrive to rebut a swirl of allegations about them using conflict gold in their operations.
The Gem & Jewellery Export Promotion Council of India (GJEPC) has taken the lead to allay the fears of key export markets such as the OECD on the standard of gold.
Conflict gold is illegal gold mined by rebel outfits in Africa and sold clandestinely to buyers in the world markets, enabling them to fund their wars against ruling governments.
Members of the Organisation for Economic Co-operation and Development (OECD), one of the largest buyers of Indian jewellery, had questioned the yellow metal used by the sector, which is a major source of employment.
Besides, the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act in the US and emphasis on conflict-free gold standards have raised fears of export orders getting cancelled if the origin of the metal is of a suspicious nature.
With rising concerns of jewellery traders, the GJEPC has requested the Reserve Bank to permit gold only from refineries accredited to the London Bullion Market Association.
Last month, the GJEPC made a presentation at a meeting in Paris before a group of representatives from the OECD and a UN group of experts on Democratic Republic of Congo to promote India as a country with proper sourcing standards. The meeting was on the implementation of due diligence for responsible sourcing of gold, tin, tungsten and tantalum.
The World Gold Council has developed a conflict-free gold standard to promote responsible mining practices and combat the potential misuse of the metal to fund armed conflicts.
“We have been successful in telling them that we are not a badly branded country. The US is already out with the Dodd-Frank act, scheduled to come into effect from January 1, 2014. This can penalise and sue any exporter from India if, according to them, the origin of the metal is found to be bogus. The US alone will have jurisdiction in court cases filed even at a later date after the trading has been conducted,” said Pankaj Parekh, vice-chairman, the GJEPC, who made the representation.
According to the act, gold used in the manufacturing of jewellery should not be sourced from conflict-prone countries such as Congo, where funds from such mining are used by rebels to perpetrate violence.
The source of the imported gold has to be mentioned by the importer.
The conference focussed on due diligence practices across the gold supply chain, consistent with OECD guidance.
“A minister of mining from one of the African countries had raised the issue against India at the conference. I have explained to them that there is no conflict in the gold we export. Our exports could have fallen by over 50 per cent because of this if we had not made our stance clear. Gems and jewellery are the second highest export earner for India. The council does not want to enter into any conflict area,” he said.