Fair Trade Jewellery Co.: Establishing an Ethical Global Value Chain

In August 2019, Fair Trade Jewellery Co., a mid-size jewellery retailer based in Toronto, Canada, was wondering how to ensure that its customers received responsibly sourced gold and diamond jewellery. The company had already devoted considerable amounts of time, energy, and expense to develop a responsible supply chain. Its activities toward that goal had included various initiatives beyond jewellery retail, such as providing inventory financing for artisanal miners in the Democratic Republic of Congo. After discovering that a key US partner along the supply chain may have not been following a clear chain-of-custody system in its refinery, the company was unsure how to proceed. Responsibly sourced gold was potentially being contaminated by other gold at the refinery, which led Fair Trade Jewellery Co. to consider opening its own local small-scale refinery. However, that initiative could mean considerable strategic risk and financial burden for the company. It could also have potential effects on its employees, who relied on the company for their livelihood. Did the company’s ethical mission require vertically integrating to such a considerable extent?