By Gaetano Cavalieri, CIBJO President

On June 21, 2015, CIBJO President Gaetano Cavalieri addressed the Sustainable Pearl Forum in Hong Kong, laying out a comprehensive framework for sustainability in the cultured pearl sector. The following is the full text of his address.

It is a privilege to be with you in Hong Kong today, and to be provided the opportunity of delivering the opening speech of what I hope will be a groundbreaking event. Thanks and congratulations are due to the organizers for both their initiative and foresight, and  may I express my admiration for the fact that so many of the leading participants in the international pearl sector have expressed their appreciation of the importance of what is being discussed here today, and have agreed to part of it.

The subject of sustainability is not new to CIBJO, the World Jewellery Confederation. We have been addressing it from a variety of perspectives for more than eight years, and I plan to present several of these perspectives in my address today. But the cultured pearl industry provides an opportunity to broaden the discussion, and to introduce concepts that often cannot be considered in other sectors of the jewellery industry.

Why is this so?  Because as we often point out: mining, through which we as jewellers obtain the bulk of our raw materials, is inherently unsustainable. Once a gemstone or mineral has been removed from the earth, it will not return, at the very least for the next couple of billion years or so. We can talk about sustainable mining methods that protect the environment, and we can talk about sustainable economic opportunities created by mining, but when it comes to natural gems and minerals we cannot truthfully talk about a sustainable product.

But with pearls we can, because we possess the means and knowledge to initiate the natural growth of new products within an economically viable period of time. And please take note that I refer to “natural growth.” True, we are talking about cultured pearls, which need to be differentiated from natural pearls, but the biological processes by which a cultured peal is created are natural, as is the environment in which they take place. This is not the same as with synthetic gemstones, where neither the processes nor the environment are how nature intended.

So, while the term “sustainable mining” is actually an oxymoron, meaning two words with essentially opposite meanings – like “open secret” or “seriously funny” – “sustainable aquiculture” most definitely is not.

From a business perspective it offers the cultured pearl industry a tremendous opportunity, but along with that comes responsibility. It is on that responsibility that we largely are focusing upon today.

First we should define “sustainability.

Most probably the most widely used definition is the one that was provided by the United Nations-established World Commission on Environment and Development. It stated that “sustainability is to meet the needs of the present without compromising the ability of future generations to meet their own needs.”

Paul Hawken, who is both an environmentalist and a successful entrepreneur, defined it somewhat differently. He said sustainability is about stabilizing the currently disruptive relationship between earth’s two most complex systems—human culture and the living world.

For today’s discussion I would like to talk about three types of sustainability, all of which need to achieved if we, as a business community, can claim to be a truly sustainable industry.

These are:

  • economic sustainability
  • environmental sustainability
  • and stakeholder or community sustainability.

For the sake of accuracy, I cannot claim ownership over this analysis. The World Summit on Social Development in 2005 identified three basic sustainable development goals, which it defined as economic development, environmental protection and social development.

It also is important to point out that none of the three are mutually exclusive. Indeed, the inability to address any one of those elements will make it difficult, if not impossible to address the other two, certainly over the long term and, as experience has shown, this is almost definitely true in the cultured pearl industry.

Dr. Gaetano Cavalieri (centre), flanked by participants in the Sustainable Pearl Forum in Hong Kong.

Let us take those three elements one by one.

Economic sustainability requires us to use our resources in an efficient and responsible way, so that our business will function profitably over the long-term.

Please note that the words “business” and “profit” feature prominently in that definition. Neither one is the natural enemy of the environment, nor the stakeholder community. On the contrary, in order that all operate in harmony it essentially that the business be profitable.

On the other hand if a business uses its resources in an irresponsible way, not only will its ability to profit over the long-term be threatened, it also is likely to pose an environmental threat and will not serve as a sustainable resource for the benefit of the stakeholder community.

The essential importance of economic sustainability must be appreciated by the business community, which needs be prepared to take a long-term approach, sometimes at the expense of short-term profit. It also needs to be appreciated by government regulators, who must do their utmost to protect their country’s natural environment and social fabric, while at the same ensuring that the economy is allowed to function.

I do not for moment suggest that regulations be relinquished, certainly not where fragile eco-systems are concerned. But to create the correct balance between a properly protected environment and a free market economy, the regulators need understand the business environment.

Let me now address environmental sustainability, which from our perspective I believe can be defined as enabling the ecosystems in our environment to continue operating, without being negatively affected by our business activities. In other words, environmental sustainability ideally does not require our intervention. Where we must intervene, however, is to offset any damage that our activities may have caused.

I spoke earlier about the pearl industry’s responsibility. When it comes to the environment this is a particularly critical, and it requires continuous scientific research and ongoing training and education. Simply stated, if the lessons that you have learned do not reach the grass-roots of your industry, your efforts may have been wasted. And the stakes are very high, not only for the eco-systems that need to co-exist with the pearl farms, but also for the pearl farms, which require a healthy aqua-environment in order to flourish over the long term.

Environmental responsibility should be a catchphrase of the cultured pearl industry. When a consumer buys an item of pearl jewellery, they should feel that they have invested in our planet’s long-term survival, rather than having taken advantage of it.

At our most recent congress in Moscow, we invited a carbon foot-printing expert to profile CIBJO as an organization, to ascertain how much of an impact we make upon the environment. In doing so, we hoped to act as a model for companies in the industry.

For those of you are familiar with the practice, the idea is to eventually offset your footprint with carbon credits, thereby being able to declare yourself as carbon neutral. A carbon credit is a financial instrument that represents a ton of carbon dioxide or equivalent gases that are removed or reduced from the atmosphere from an emission reduction project.

A suggestion was made in Moscow by Laurent Cartier that it may be possible to develop carbon credits in the pearl sector, as part of your regular activities, which could then be purchased by jewellery companies seeking to offset their carbon footprints. I would encourage you to investigate this possibility, for, were it possible, it would be a perfect example of the jewellery industry working in tandem in the interest of environmental sustainability.

Stakeholder or community sustainability, or what also has been referred to as social sustainability, connects to a great deal of the work that CIBJO has been involved in, since we obtained special consultative status with the United Nation’s Economic and Social Council in 2006, and where we committed the international jewellery sector to helping fulfil the UN’s Millennium Development Goals, which were declared in 2000, and more recently the UN’s Post 2015 Development Agenda.

What we committed to in 2006 was the principle that, while jewellery is a non-essential luxury item, in certain parts of the world the jewellery industry is an essential business sector, providing a livelihood and looking after the wellbeing of literally millions of ordinary people. Our obligation is to ensure that our activities provide them with sustainable economic opportunities that will help secure the future of generations to come.

In the gemstone and mineral sectors, stakeholder sustainability means investing in the communities so that its natural resources will continue to pay dividends long after the resources themselves are depleted. Community investment in the pearl sector is also encouraged.

But as I said earlier, pearl farming differs from gemstone and mineral mining in that it is a sustainable or renewable activity, and members of pearl grass-roots communities can be expected to remain actively involved in the industry for generations to come.  It, therefore, is important that these communities be provided with fair and equitable opportunities to benefit from the pearl farming enterprise, so that they will be incentivized to invest and reinvest in their future and that of the entire pearl industry.

To illustrate several of the points that I have raised, I suggest that we look French Polynesia and the Tahitian pearl industry. Now there are a number of Tahitian pearl experts here today, and I do not propose to impose upon their expertise. But from a perspective of the sustainability issues that I have raised, French Polynesia is a useful case study.

It is a country where pearls constitute a major portion of national exports, and for a good number of the country’s citizens, living in Tahiti and on numerous islands and atolls, they provide a means of living and a way of sustaining entire families and communities.

While the larger, more corporate participants in the Tahitian Cultured Pearl sector remain solid, the same cannot be said about the many family-owned operations, and their situation has impacted the pearl’s role in French Polynesia as anchor of the national economy. For almost 20 years the Tahitian Cultured Pearl industry, seen as a whole, has been a downward trajectory, with the average value of the Tahitian cultured pearl losing almost 80 percent of its value between 1995 and 2012.

The inherent problem of the Tahitian Cultured Pearl sector has been systemic. It exists in a business model in which in the bulk of the family-owned farms operating at the grass roots of the industry receive only a very small share of the added value of the pearls that they themselves produce. As a consequence, most of the pearl farmers are chronically under-financed, meaning that they lack the ability to invest the time and money necessary to achieve the full potential of their marine concessions.

Successful pearl farming, as many of you know better than I do, is the result of careful and responsible maintenance of both oysters and the aquatic environment in which they are kept, as well as time provided to allow the nacre to develop.  But many of French Polynesia’s family-owned farms felt they could do neither. With profit margins so low, they tried to compensate with increased production, and the result was lower-quality products and still lower prices. Pearl farms closed, and thousands of workers lost their jobs.  A lack of economic sustainability threated both environmental sustainability and stakeholder or community sustainability.

Sustainability and Corporate Social Responsibility is one of CIBJO’s core activities, In July 2007, I and members of the CIBJO Presidential Council met with UN Secretary General Ban Ki-Moon to discuss CIBJO’s development mission, and to further the liaison between the international body and the world jewellery industry.

On October 29, 2007, the CIBJO Executive Committee held a one-day meeting at the United Nations headquarters in Geneva with senior UN officials, where it was agreed create together an international educational programme, designed specifically to promote corporate responsibility in the greater jewellery industry. To manage the project the World Jewellery Confederation Education Foundation (WJCEF) was established in 2008.

Over the years WJCEF has run a variety of projects in different parts of the world, backed up a team of UN-endorsed experts. With CIBJO, and under the auspices of the United Nations Institute for Training and Research, it was instrumental in setting up a Centre of Excellence in CSR education for the jewellery industry in Antwerp, Belgium, 2011.

WJCEF would be delighted in working together with the pearl sector to tackle certain of the educational issues raised today.

CIBJO is also involved in ensuring the integrity of the supply chain, and cooperates with a variety of bodies in this respect, including the Responsible Jewellery Council. Through an Australian-based-foundation with which we have been working for several years, called Branded Trust, we are about to launch an online system that enables companies to educate their employees about proper supply chain due diligence, and then to introduce and implement them, as well as achieve accreditation and certification.

The harmonisation of industry standards has been a critical element of CIBJO’s mission, and has stood at the heart of its effort to protect the confidence of consumers in the jewellery product itself.

To advance the goal of universal standards and terminology in the jewellery industry, CIBJO developed its Blue Book system, which involves definitive set of standards for the grading, methodology and nomenclature of pearls and other organic materials, diamonds, coloured gemstones, precious metals and gemmological laboratories.

CIBJO has been actively involved in the development a recognized sets of terminology by the International Standards Organization (ISO). But this is a long and difficult process. In the absence of clear ISO-approved terminology, it is the CIBJO Blue Books that are most commonly referred to in official forums.

We operate transparently, with full disclosure part of parcel of our obligation to the jewellery consumer. We have to inform them exactly what we are selling. Treated and synthetic gems, for example, are not inherently immoral nor are they illegal, as long as the consumer understands exactly what they are.

But in order to be transparent – in other words to be able to disclose clearly – one needs to be able to describe the product in a language that is understood throughout the trade.   It is for reason that we are encouraging the development of a Unified Pearl Grading System, through our Pearl Commission. We realize that it is not an easy task, and that a variety of opinion exists. It will take time.

But we are patient, and believe that such system will enhance transparency, and, as a consequence, consumer confidence. And let me remind you, to operate a sustainable industry, or any business enterprise, consumer confidence is an absolute prerequisite.