Search
ADVANCED SEARCH

Membership Login

Forget Password
Register Now

Advanced Search

Traceable gems: The future of the trade

5 October 2018

By Bernardette Sto. Domingo    Translated by Sze Man Young

Transparency has become a byword in the gemstone sector, with industry groups and other stakeholders staunchly supporting gem education and investments in traceability programmes. At the centre of this progressive movement is technology – a crucial agent of change amid a highly fragmented and complex world of gems.


Small-scale emerald mine in southern Ethiopia (Photo courtesy of Gübelin)

Rough Zambian emerald (Photo courtesy of Gemfields)

Klemens Link, head of development at Gübelin, applies the Emerald Paternity Test on a batch of high-quality emeralds from Gemfields’ Kagem mine in Zambia (Photo courtesy of Gübelin)

Rough emeralds
(Photo courtesy of Gemfields)

Rough rubies (Photo courtesy of Gemfields)

Polished rubies
(Photo courtesy of Gemfields)

 

With a plethora of information right at their fingertips, today’s consumers rarely make uninformed buying decisions. From purchasing food, clothes or luxury items, buyers’ universal requirements boil down to transparency and responsible sourcing.

With this in mind, clients are more perceptive to products that were manufactured and processed in accordance with best practice principles, ultimately benefitting workers and communities.

In the coloured gemstone and jewellery industry, a high level of transparency is yet to be fully achieved despite strong support from major brands.

Traceability challenges

Clement Sabbagh, president of the International Colored Gemstone Association (ICA), said modern consumers’ penchant for ethically sourced products, gemstones and jewellery included, is revolutionising the way the industry is doing business.

“This curiosity often has to do with provenance and quality factors but more and more consumers also want to be assured that responsible practices are maintained throughout the supply chain,” noted Sabbagh.

Unlike other vertically integrated industries however, the coloured gemstone sector remains extremely disjointed.

The ICA official cited a number of traceability programmes that were implemented with varying degrees of success within the diamond community. In the coloured gemstone trade though, “very few” stones could provide a robust platform to implement a reliable traceability technology.

“This is because many of the coloured gemstone mining sources are in remote, third-world locations. The mining is performed largely by artisanal miners and the gemstones change hands among small local traders many times before they reach the closest established market,” revealed Sabbagh.

Trading channels, for their part, follow time-honoured traditions that may be difficult to disrupt. “It would be unfair and less palatable to force methods controlling supply where well-resourced, large-scale, multinational mining companies take the livelihoods away from small, itinerant, local miners and traders,” he continued.

Dr. Daniel Nyfeler, managing director of Gübelin Gem Lab, echoed this sentiment, adding that the supply chain is “long, fragmented and complex.”

An “intransparent” industry likewise means end-consumers have to shell out more money, given that every transaction along the supply chain adds to the final price of the stone.

“Not every transaction makes a respective contribution to the value, possibly resulting in an inflated price for the ultimate buyer,” remarked Nyfeler. Buyers are also compelled to have the gemstones tested to verify their authenticity, with gem lab certifications further adding to consumers’ financial burden.

“Such a supply chain is not efficient and economic. Trustworthy transparency would allow for a shortening of the supply chain and lowering of the price for end-consumers,” he added.

Industry initiatives

Despite these challenges, a number of companies are making sustained strides in bringing transparency into their operations, continued Nyfeler. Organisations are also doing their part through industry-wide programmes and services aimed at raising awareness on transparency and sustainability.

ICA continuously educates its members about potential supply chain issues related to the environment, health and safety of workers, human rights, as well as geopolitical and trade matters, among others, ICA’s Sabbagh disclosed.

“ICA members adhere to a strict Code of Ethics requiring them not to participate in certain types of activities and to not knowingly trade gemstones where any unethical practices have been involved. Dealing with an ICA member ensures that great care and diligence have been taken with the sourcing and handling of the gem,” he added.

Coloured gemstone specialist Gemfields is likewise at the forefront of dynamic and progressive traceability efforts.

Adrian Banks, production director at Gemfields, said the miner had collaborated with Gübelin to implement the Emerald Paternity Test – a state-of-the-art tracking and tracing technology – at Gemfield’s Kagem Mine. The project involved embedding nanoparticles into emeralds mined at Kagem to prove their origin.

“This is a revolutionary and exciting development for the coloured gemstone industry,” stated Banks. “It is a huge step forward. It was a first for Gemfields to be able to physically prove downstream that a gemstone has originated from one of our mines even though it may have changed hands a few times throughout the process.”

Gemfields is currently investigating whether the same technology may be used for rubies, again, in partnership with Gübelin. Rubies, belonging to the corundum family, have fewer fissures compared to emeralds so the DNA can enter the gem quite easily, explained Banks.

“Ruby is a lot cleaner so very few fissures reach the surface. Some rubies also undergo heat treatment and we need to test if the tagging can survive the heat,” he noted. “There is greater focus now on knowing where the gemstone came from and whether it followed a clean route to market so it can be purchased with a clear conscience.”

The role of technology

Gübelin launched the Emerald Paternity Test in 2017 as part of its Provenance Proof initiative, a long-term programme aimed at developing tracking and tracing technologies to foster transparency in the trade.

This initiative also includes the Provenance Proof Blockchain for the coloured gemstone sector, in partnership with Everledger.

The blockchain technology tracks every transaction of a product along its value chain, comparable to a digital logbook that keeps track of an item throughout its lifecycle, Gübelin’s Nyfeler explained.

Applied to the gemstone industry, blockchain offers a permanent, immutable record that traces a gem’s individual journey, from the mine to the end-consumer and beyond. Each activity is registered in a decentralised ledger, maintaining a record of the type and order of activities that occurred, and who was involved.

“The shared governance and responsibility add to the resilience and trustworthiness of the system. A single organisation or company cannot be held responsible for the integrity and transparency of data throughout a whole supply chain. Even if they could, they would be a vulnerable target for bribery, manipulation or hacking. The decentralised nature of the blockchain makes it largely immune against these threats,” added Nyfeler.

The Provenance Proof Blockchain involves all stakeholders – miners, cutters, wholesalers, jewellery manufacturers, retailers, as well as dealers, exporters, gem labs, logistics companies, insurers, industry organisations, trade associations, auditing bodies, and others.

Gübelin’s Emerald Paternity Test meanwhile complements the benefits of blockchain. This involves the use of a physical marker attached to the stone at the source. The marker, which contains information about the stone, has to stay intact throughout various processes in the supply chain such as sorting, grading, cutting, treatment and transportation.

“To reduce the risk of removing the marker or altering the information it contains, we built a very small marker, invisible to the eye, and made it a part of the gem through nanotechnology,” explained Nyfeler.

Based on synthetic DNA fragments containing encoded, provenance-specific information, the labels provide the exact mine, mining company, mining period and possibly further information, the company official said. Since DNA is a fragile organic structure, it is protected by embedding it in a sphere of amorphous silica.

Such labels provide an independent proof of the exact provenance of the stones.

“This is the kind of assurance that today’s critical consumers demand and that jewellery brands want to be able to provide,” Nyfeler added.

The road to transparency

ICA’s Sabbagh underscored the association’s role in ensuring that the coloured gemstone industry promotes ethics and sustainability through various programmes around the world. An example of this was a project in India involving alternative methods for gemstone cutters to avoid the risk of silicosis.

“We will continue to research skills, technologies and methods from well-established small-scale mining communities like the Australian opal mining industry and pass some of these techniques on to others in locations where this knowledge can help,” he added.

Gemfields’ Banks said his company will remain at the helm of building consumer confidence through information, transparency and education. Major brands are likewise blazing the trail in this arena.

“Brands are doing their own research to make sure their gems are responsibly sourced. They would visit our mines to check first-hand what we’re doing, the working conditions and our corporate social responsibility projects,” remarked Banks. “There is a spotlight on mining companies and Gemfields is supporting this. We want it to be a clear, transparent industry where consumers can be confident of what they’re buying.”

The industry is also poised to benefit more from further use of nanolabels, revealed Nyfeler. The Emerald Paternity Test is now being applied by several emerald mining companies.

“Similar solutions for cultured pearls, diamonds, opals and Paraiba tourmalines have passed lab trials to demonstrate technical feasibility. Currently, Gübelin is undertaking field trials for these gems. Once completed, these technologies will also be made available to the entire industry,” he added.