Fairtrade – the new gold standard

Ethical foundation targets precious metal industry to ensure fair pay for miners

We have had bananas, coffee, and tea but now the latest Fairtrade product is ethical gold. Gold miners have jobs that are among the most arduous in the world. They spend long hours underground with little or no safety equipment, working with poisons such as cyanide and hewing the precious metal out of the ground for wealthy Westerners.

Some of the 20 million artisanal, or self-employed, miners earn less than $1 (70p) a day so the foundation is backing a plan to sell gold from South American miners who are trying to improve their lives.

Until now Fairtrade has concentrated on farming, having its roots in subsistence coffee producers, but the "trade not aid" movement is trying to move into new areas such as fishing and, now, mining. In December, the Fairtrade Labelling Organisation in Bonn, the international body which oversees the global movement, approved plans to back the sale of Fairtrade gold from small-scale miners by the end of the year.

Pilot studies are now taking place with about 1,000 artisanal miners in four countries – Colombia, Peru, Bolivia and Ecuador – with the intention of putting licensed gold on sale in Britain early next year.

Most would be used in jewellery, which accounts for 77 per cent of Britain's £820m-a-year gold imports.

Fairtrade gold could ease the conscience of some jewellery buyers who are concerned about the treatment of miners because of the reputation of precious metals, and preciousstones, for fuelling conflicts in developing countries.

Harriet Lamb, executive director of the Fairtrade Foundation, the British wing of the global movement, said: "About 100 million people worldwide work in the gold industry but what's absolutely shocking is that this iconic commodity symbolises wealth and yet the lives of the miners are shockingly bad. It was actually the miners who came knocking on the door of Fairtrade saying, 'We've seen what you're doing. We've seen that you're able to add value to the product and talk directly to the public'."

The Fairtrade Foundation has developed the project with ARM, the Alliance for Responsible Mining, which aims to improve the returns for miners as well as reducing the use of mercury and cyanide to extract gold from ore.

Gold joins more than 3,000 certified Fairtrade products, whose producers are guaranteed a minimum price for their commodities as well as an improvement premium, typically for building classrooms or funding health advice.

Fairtrade sales in the UK rose by 43 per cent to £700m last year, despite the credit crunch, which has reduced sales of other "ethical" products such as organic food. It makes Britain the most successful Fairtrade country, with about one third of worldwide sales. Ian Bretman, vice-chairman of the international body, credited Ms Lamb with much of the UK movement's success since she has managed to get Fairtrade goods into British supermarkets.

David Clayton-Smith: A lifeline in difficult times

When Fairtrade was approached by miners in South America seeking certification for their gold, it became clear we could get a more sustainable price for their product and help their communities.

We are delighted to welcome new products into the Fairtrade system, because they increase the reach and scale of our work.

In Britain, we have seen tremendous growth in commitment to Fairtrade because customers increasingly appreciate that buying Fairtrade directly improves the lives of producers.

At the heart of the movement are the democratically elected co-operatives that decide how best to improve their productivity and how to spend the "premium" – the extra payment sent back to communities.

The premium is essential in unpredictable times, allowing villages to continue investing in projects such as schools and health care, improving their businesses, or addressing food security.

Times are desperate for many small producers, with costs rising while the prices they get for their produce barely cover their costs.

David Clayton-Smith is chairman of the Fairtrade Foundation