By Silke Koltrowitz

ZURICH (Reuters) – With Russian gold and diamonds off-limits because of the struggle in Ukraine, makers of luxurious jewelry and watches are discovering it harder to safe uncooked supplies and handle human rights points in provide chains.

Russia is the world’s greatest producer of pure diamonds, based on the World Diamond, and the second-largest gold miner, based on the World Gold Council.

Cartier maker Richemont mentioned in March it was not shopping for any diamonds mined in Russia for the reason that Feb. 24 invasion, and it reaffirmed in its sustainability report https://www.richemont.com/en/residence/media/press-releases-and-news/richemont-reports-strong-fy22-esg-performance on Thursday it was not shopping for any recycled gold from Russia.

Recycled gold is beneath scrutiny as a result of it might include gold of doubtful origin.

Non-governmental organisation Swissaid mentioned final month a leap in Swiss gold imports from Dubai https://www.bazg.admin.ch/bazg/fr/residence/themen/schweizerische-aussenhandelsstatistik/daten/waren/gold.spa.gold.app/gold_fr.html in March raised questions over whether or not Russian gold was discovering its manner through Dubai.

Reuters didn’t discover proof to again up that declare, however Robin Kolvenbach, chief govt of Swiss gold refinery Argor-Heraeus, advised Reuters: “One can assume that gold from Russia additionally results in Western worth chains through Dubai.”

Kolvenbach mentioned Argor-Heraeus has not accepted gold from Russian helpful house owners since Feb. 24.

“I’ve heard there are challenges in Dubai, we do not purchase gold from there,” Richemont’s new sustainability head, Berangere Ruchat, advised Reuters.

Dubai’s authorities media workplace didn’t instantly reply to a request for remark.

Ruchat mentioned Richemont had the instruments and expertise to segregate the origin of its uncooked supplies and aimed to know by 2025 the precise origin of all its gold.

It sources 94% of its gold by way of its in-house refinery Varinor that focuses on recycled gold of business origin or previous jewelry from North America, Western Europe and Japan, however doesn’t disclose its suppliers.

Swatch Group (SIX:) mentioned in its 2021 sustainability report https://www.swatchgroup.com/en/swatch-group/sustainability-report that it averted utilizing recycled gold from exterior sources given the dearth of traceability again to the mine.

Household-owned watchmaker Patek Philippe mentioned it trusted its suppliers and the foundations set by the federal government for uncooked materials sourcing, whereas Chopard and Rolex didn’t return requests for remark.

An essential software for jewelry and luxurious watch corporations to certify the origin of recycled gold are the Accountable Jewelry Council (RJC) labels that business gamers keep away from criticising in public.

An exception was when the Excessive Horology Basis that’s near Richemont mentioned in official feedback https://fedlex.knowledge.admin.ch/filestore/fedlex.knowledge.admin.ch/eli/dl/proj/2021/28/cons_1/doc_6/fr/pdf-a/fedlex-data-admin-ch-eli-dl-proj-2021-28-cons_1-doc_6-fr-pdf-a.pdf on a Swiss due diligence reform final yr: “RJC requirements have a loophole that makes it very simple to supply recycled gold – scraps are recycled and grow to be de facto accountable Chain-of-Custody (CoC) licensed gold.”

The CoC is the RJC’s strictest customary for supplies that ought to, based on its web site, “inform the whole story about how they had been sourced, traced and processed, from mine to retail”. Solely 221 of the RJC’s greater than 1,500 members are CoC licensed.

The business physique’s status was shaken in March when Richemont, Pandora (OTC:) and Kering (EPA:) left over the RJC’s ties with Russia’s state-owned diamond producer Alrosa.

Richemont executives criticised the RJC’s governance on the time, however Ruchat mentioned they had been now speaking once more to save lots of the 15 years of labor on an ordinary that was essential to have.

The RJC mentioned a lot of the corporations that stepped down had since returned. It didn’t touch upon how it might enhance its labels or governance.

Laurent Maeder, professor at Sustainability Administration College SUMAS, mentioned gold mining was laborious, harmful work utilizing a lot of chemical substances.

“You do not have clear gold or clear diamonds even when they’re labeled honest,” he advised Reuters.