There will be no development in the local jewellery industry because among other things Guyana lacks a gold refinery

Dear Editor,

I would like to respond to an article carried in the Stabroek Business of Friday, June 24, 2011 entitled ‘Local jewellers confirm problem of poor quality jewellery.’

The second paragraph of the article refers to a meeting between local jewellers and Minister of Tourism, Industry and Commerce Manniram Prashad, to discuss the problem of jewellery being offered for sale at prices in excess of its actual value. Without being facetious, I would be highly suspicious of anyone offering jewellery for sale at or below its actual value. I would further suggest that it is perhaps the unrealistic expectation that jewellery can somehow be purchased for less than its actual value that has led to so many persons into buying “poor quality jewellery.”

The gist of your article was that a lot of jewellery being produced in Guyana was not in compliance with the relevant  standard, and that this could potentially be harmful to our reputation as a tourist destination. It was also suggested that the local jewellery industry was essentially unregulated and was responsible for processing much of Guyana’s undeclared gold.
Even without supporting data I tend to agree with these sentiments. However, in attempting to find solutions to these problems it is important that we do not overlook their fundamental cause: that our jewellery industry remains largely underdeveloped.

Guyana has been producing gold and gold jewellery for at least one hundred and twenty years, and yet our jewellery industry remains one of the most backward in the world. Had the right initiatives been taken and strategies implemented, we could by now have been producing US$1 billion worth of jewellery per year.  I’d like to comment on just a few of the basics that are lacking and without which there will be no development of this local industry.

Guyana lacks a gold refinery. The very basis of jewellery manufacturing is access to refined gold and refined gold products. Why is there no gold refinery in Guyana? I would argue that the Guyana Gold Board usurps the role of the private sector in relation to the buying, selling and exporting of gold in Guyana and that its existence presents a disincentive for investment in gold refining. In fact, one of the recommendations contained in our slowly decaying National Development Strategy as part of its mining policy is the replacement of the Guyana Gold Board with a system of licensed and bonded gold buyers who will be responsible for remitting royalties to the government. While this in itself would not necessarily cause the setting up of a gold refinery it would certainly open up the possibility to potential investors.

Guyana lacks a jewellery export strategy. For a country which derives 85% of its export earnings from primary products and has been making noises about economic diversification for over 40 years, we are yet to devise a viable strategy for capitalizing on our long-time association with gold, gold jewellery and the El Dorado legend. While the state employs scores of experts on sugar, timber, bauxite and oil, the exports of which combined do not exceed US$500 million per annum, there is not a single person in any state agency or department with any real knowledge of the international jewellery industry or even the local jewellery sector. Policy-makers without access to expertise in specific sectors cannot create conditions that will guide and encourage investment in those sectors.  The following excerpt from the National Development Strategy is still very relevant today: “Consecutive governments have focused policy largely on the foreign exchange potential, particularly of gold, and less so on diamond and semi-precious stones, rather than more comprehensively on the potential contribution they could make to expanding the national manufacturing base.”

Lack of access to mainstream markets: This impacts mainly on the state of the existing industry rather than the overall capacity for development of the sector, since it is quite possible that the investments necessary to transform the industry will come from outside of the existing establishment if conditions allow. However, on the current trajectory it is unlikely that local jewellery producers will ever connect with the rest of the world in terms of technology, design and general industry trends since the bulk of their products are made for the Guyanese (including diaspora) market which tends more towards traditional “Guyana gold.” Whatever demand there is for mainstream jewellery is usually filled by imported products, since we cannot produce these competitively enough.

As explained towards the end of your report the poor quality of the jewellery referred to is the low karat or low gold content of the items being offered for sale. This is brought about by the goldsmith knowingly or unknowingly alloying his gold to below the required or requested purity. In other words, adding more copper or silver to a given amount of gold thereby increasing its weight but reducing its gold content.

This is nothing new, nor is it limited to Guyana. Owing to the high value of this metal, there are significant profits to be gained by reducing the gold content (under-karating) at the manufacturing stage. As a consequence the system of hallmarking was designed to protect the public against fraud, and the goldsmith or merchant against unfair competition from under-karating. Hallmarking is one of the oldest forms of consumer protection and dates back to fourteenth century Europe when the testing and marking of precious metals was first instituted in France and England. There is evidence that hallmarking was used one thousand years before that in Byzantine jewellery from the fourth century AD. It should be noted that alloying is quite normal in the manufacture of precious metal jewellery because most of the precious metals are too soft in their pure form for the requirements of many manufacturing processes.

In fourteenth century London, wardens of the Company of Goldsmiths would visit workshops and test silver and gold and then mark those items that met the required standard of purity with a symbol representing their purity. Later on a maker’s mark was added to the hallmark. It took another six hundred years before the Guyana Standard for specification of gold articles was finally developed in 1995.

Your article mentioned the Guyana National Bureau of Standards’ (GNBS) Jewellery Certification Scheme as recommended by the Minister as a possible solution to the problem of low-karat gold jewellery. I’d like to draw a distinction between the Guyana Standard and the Jewellery Certification Scheme.

The Guyana Standard in the main sets out the marking requirements and the gold content of different karats of gold jewellery. It also specifies the type of testing that should be used to determine gold content. Finished gold jewellery is normally provided in various designated karats or gold purities with each designated karat having a standard composition with respect to gold content. For instance, barring a specific request or arrangement with a client, my workshop makes gold jewellery in 12, 14 and 18 karat gold with a gold content of 500, 585 and 750 parts per thousand of pure gold respectively as required by the Standard. This gold content is stamped on each item along with the makers’ mark (in my case TZ) again as required by the Standard.  This simple combination of tiny hallmarks is what makes the manufacturer responsible for ensuring that gold jewellery made by his or her establishment meets the required standard in terms of purity. This Standard is mandatory.

The Jewellery Certification Scheme, on the other hand, is a voluntary scheme administered by the GNBS in which in-house gold testing and record keeping are done so that every item produced can be traced back to a particular batch of gold and its test records.  All gold jewellery produced under this scheme is then marked with the GNBS Standards mark in addition to the other two marks set out in the Guyana Gold Standard. My company was one of the first few jewellers to be certified under the scheme; however, we have since opted out as we do not feel that this scheme is working the way it should. This is borne out by the fact that fifteen years after its implementation there are only two participating companies.

The scheme is a manufacturers’ scheme designed to reassure the middle-man or retailer purchasing the product from a third-party manufacturer. It was never envisaged that the scheme would be used to direct end-consumers towards retail outlets. However, this is exactly how it has been used, and to that extent the public is being misled. I shall explain. When the GNBS advertises its list of jewellers who are certified under the scheme there is an implied guarantee that jewellery purchased at these establishments is somehow officially approved.

What the Bureau does not make abundantly clear is that the GNBS standards mark can and should only be applied to gold jewellery manufactured in accordance with the scheme. Therefore if I have on display one thousand items of which I have manufactured only fifty then as long as I am a certified manufacturer my name will appear on their list giving the public a false sense of security with regard to the other nine hundred and fifty items. I have raised this repeatedly with the Bureau but they seem unconcerned.

If indeed we anticipate that tourists will one day roam this land then we should prepare our local jewellery industry for this eventuality. How we do this should be given careful consideration.

Yours faithfully,
Dominic Gaskin

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