Provenance Proof – New Technologies to Track and Trace Gems in the Supply Chain

Charles Lawson, BSc (Geology) FGA FGAA
Miranda Simmiss, FGAA

Introduction

In the world of marketing, the notion of provenance as a branding tool is hardly an original thought. Pick up a bottle of wine and there is usually an eye-catching description about where and how it was made. The marketer’s job is to invoke a story that connects the consumer to the vintner who grew and trod the grapes, creating a point of difference to all other bottles on the shelf.

Yet, this connection can be fleeting. Read the label, enjoy the story, make the purchase, and then move on. People don’t always stop to think how true the story really is or whether the producer at the start of the supply chain is being properly rewarded for their efforts. There is no guarantee that the upsell from provenance is shared equitably amongst all those involved in the production and supply chain.

In the information age where multiple sources of information can be a click away, no-one can ignore the fact that the mining of precious metals and gemstones can be linked to environmental degradation, dangerous working conditions, child labour and, in some cases, even armed conflict (Butsic et al., 2015; Enrobe et al. ,2019; Hilson, G. 2010). A 2015 report from Nielson identified 60% of Millennials are willing to pay more for sustainable goods (Nielson, 2015). Among this generation of luxury buyers, the question of where the gemstone is from and whether it is completely conflict free, is of sufficient importance that the salesperson on the other side of the counter can no longer be uninformed when asked about the sustainability or ethics of the products they are selling.

Background

Provenance Proof is an initiative started in 2019 in partnership between Gübelin Gem Lab and Everledger. Founded in 2015 by Australian Technology Entrepreneur, Leanne Kemp, Everledger is an independent technology company helping businesses surface and converge asset information using secure technologies including blockchain, artificial intelligence, intelligent labelling, and Internet of Things. Everledger’s purpose is to digitally streamline compliance processes, and to help demonstrate the lifetime story of an asset in industries such as diamonds, gemstones, Li-Ion batteries and luxury goods.

The Gübelin Gem Lab was founded in 1923 by Eduard Josef Gübelin, in response to the introduction of imitation and synthetic gem materials. It started as a small gemmological laboratory whose aim was to determine the authenticity of the stones used in Gübelin’s jewellery (Gübelin, 2021).

Mr Gübelin has been recognised as one of the most important gemmologists of the 20th century and is best known for his inspiring groundwork in documenting microscopic gemstone inclusions. To truly understand the stones, he felt the need to visit the places where they were mined, and so he travelled the world collecting specimens. Gübelin identified that the inclusions, if properly understood, could reveal a stone’s origin and, crucially, if it had been treated by human hand. It was a revolution in the field of gemmology.

Provenance Proof is a perfect extension to the existing ethos of both Everledger and Gübelin Gem Lab. By using technology and collecting data pertaining to the origin and transformation of a gemstone, a greater understanding of the supply chain can be obtained and, in the process, documenting authenticity through transparency. As explained by Klemens Link, head of development at Gübelin Gem Lab: “Retailers and customers have begun demanding information that goes beyond the scientific data that we can provide in the gemmological laboratory” and further added “What were the working conditions for the miners? Were they receiving a fair price, so they could feed their families? Without traceability and transparency, there is no trust.” (Simmiss, 2021).

Gübelin Gem Lab recognised that many mining companies, associations, and cooperatives were going the extra mile when it came to fairness and sustainability. ‘Pact’ and ‘Columbia Gem House’ are just two organisations that have been working directly with Artisanal and Small-scale Mining (ASM) communities since the early 1970’s. Recognising the importance of ethical sourcing and working with communities to create long-lasting opportunities to improve livelihoods through education and better working conditions, they paved the way for presenting the reality of ASM globally to the greater world. However, they are still not widely known.

Klemens Link explained that “Digital technology has bridged the gap….we always wanted a kind of digital logbook for each and every gemstone, which could be passed from one stakeholder to the next along the value chain, from artisanal miner to consumer. Built and operated by Everledger, this platform is now the first comprehensive and fully functional blockchain dedicated for coloured gemstones” (Simmiss, 2021).

Blockchain Technology and how it is used by Provenance Proof

Blockchain is usually recognised for cryptocurrencies, like Bitcoin or Ethereum. However, blockchain is not only used in cryptocurrencies – it is a technology that can record all manner of transactions. Blockchain is an incorruptible digital ledger that can be programmed to record not only financial transactions but virtually anything of value (Rodriguez, 2018).

The Provenance Proof platform uses blockchain technology to enhance the data captured by each user. Transactions are linked and grouped into blocks, which are then distributed amongst the peer users, ensuring that there is no single point of failure where the data may be lost. In the case of Provenance Proof, transactions are recorded at each stage of the supply chain, from mining to end consumer. The data is focused on the characteristics of a gemstone that make it unique, the details of the origin, and circumstances under which that gem was mined, treated, cut and set. Imagery of the gemstone is mandatory to upload, and additional sections are provided to enter gemmological attributes and certifications adding further credibility to the data entered.

Compared to a normal database which can store data and provision permissions to rewrite or edit the data, blockchain does not allow data to be altered. Once the data is submitted to the blockchain, it is stored forever in that state. In the case of Provenance Proof, when a gemstone’s data is submitted to the blockchain it cannot be altered but more data can be added, capturing the transformation process from gemstone rough to faceted material, through to an item of jewellery. This is important to mitigate fraud and to make sure the details are saved in its entirety, direct from the participants in the supply chain.

Each user in the supply chain enters the data themselves, raising the inevitable question of the validity of the data being entered. However, this is an issue not just with Provenance Proof; it is a concern for any and all self-governed systems, including the Kimberley Process instituted for the diamond supply chain (Kimberley Process, 2014-2021). It is an unavoidable problem, yet the level of detail requested through the platform aims to mitigate this as best as possible, and as a gem passes from one user to another, all of the details about a stone should be verified by the new user allowing for any discrepancies to be traced. Beyond this, Provenance Proof is a platform that is pioneering new approaches in the coloured gemstone sector and it is an important first step, whilst acknowledging many more steps are to be implemented to become a more encompassing platform. With the advice and constructive criticisms from trade members at all levels of the industry, Provenance Proof will continue to evolve, with technologies such as digital image fingerprints, augmented reality and physical markers all being possibilities for the future of Provenance Proof.

Provenance Proof has now processed thousands of coloured gemstones from over 50 different gem species found all around the world. With over 400 organisations registered on the platform, users include miners, cutters, treaters, jewellers, retailers, gemmological testing laboratories, and traders from over 40 different countries, including one of the world’s largest emerald miners, Gemfields (Mining Review Africa, 2019). The largest communities of users come from America and Thailand, however, there is a growing contingent represented from Australia, where mining practices are ethical and the stories told by the miners can be just as important as the gemstone.

The Provenance Proof Interface

Today, users can register and log onto Provenance Proof from any desktop computer or smart device for free, as it is funded by Gübelin Gem Lab and Everledger. This will inevitably change in the future to allow for more robust ways to capture and validate the data.

Each user registers to the platform selecting the role they complete in the supply chain or transformation of the gemstone. However, each role has a specific set of predefined, mandatory data that captures the transformation of the gemstone, giving each participant the opportunity to tell their story and be recognised as part of the evolution of the gemstone or jewellery piece.

The user interface is designed to be intuitive and easy to navigate, enabling access in both online and offline modes, catering for remote ASM users. Similar to any online form, there are three main areas of data capture:

• the data pertaining to the gemstone or parcel itself which are the attributes that make the digital twin of the object;
• the second area is focused on the environment and the people; this is what is called Corporate Social Responsibility (CSR). This data is self-declared by the person who is inputting the data and can be about the mining practices, the history about the gemstone’s origin, the organisations that are a part of the transformation process, or any educational information that add additional value to the background of the object;
• lastly, data pertaining to the traceability of the object is added.

The role of the jeweller is significant to consumers as they represent a key step in the story telling of that individual gemstone. Provenance Proof has the capacity to capture the design phase; imagery shows the manufacturing process, materials used, and includes documentation supporting any claims relevant to the final piece, much like a recycled or fair-mined gold certification. This section of data capture emphasises the unique capabilities of recognising all participants and roles in the supply chain, through to an object of adornment.

All the participants in the supply chain bring generational experience or a specific skill that makes them invaluable in the production of a gemstone. Provenance Proof consolidates the information captured into a ‘story’ view, where the relevant data for each stage of the supply chain is visible. This creates a linear timeline view of the journey a gemstone has travelled, creating a connection for the end customer. This story is available for each owner of the gemstone to share or download to a printable PDF as sales collateral, enhancing the marketing and sales opportunities. Ultimately this enables the whole story to be transferred to the end consumer, to own it themselves.

Fair Trade?

Globally, there are approximately 100 million artisanal miners responsible for 80% of the world’s coloured gemstone mining. One subset, female gem miners in East Africa, often do not receive a fair share for the value they bring to the industry. They make up nearly half of the workforce, yet they fall far behind their male counterparts in terms of access to markets, availability of education about gemmology and basic business skills, as well as the price received for their hard-won gemstones.

Kenyan Mining consultant, Monica Gichuhi, promotes responsible sourcing of minerals through her Africa Gem Exhibition and Conference (AGEC) initiative. “The trading of gems remains a male-dominated environment,” she explained. “When it comes to haggling over price, women tend to take a back seat, even if they own the stone. Women are often bulldozed in the negotiation, especially if they lack the confidence and training to make their case. A lady might say: how much will you give me for my sapphire? While a man would say: this is how much it is worth, take it or leave it. By registering her gems on the Provenance Proof blockchain, women can raise their profile and self-esteem too” (Simmiss, 2021).

The blockchain also starts to generate demand for artisanal miners, which is something the industry has wanted for a very long time. “The end consumer, wherever in the world, can take pride that their necklace or bracelet contains a stone that was mined by a certain Mama Salma in Zambia or a Miss Behati in Tanzania,” added Monica. “One day, consumers may even be able to show gratitude and tip them directly for their work, using the blockchain. The women too understand the commercial power of this technology” (Simmiss, 2021).

The original miner gains visibility on the blockchain, and therefore grows their value in the supply chain. Rather than a footnote, they are part of the main narrative. “That visibility is very important,” said Klemens. “The miner writes the first chapter of the story and nobody can change or abridge it. She can’t be erased from the story. Those at the start of the chain benefit from direct marketing in a very easy and convenient way.

Case Study – Artisanal Mining in Madagascar

In March 2020, as a joint project between Gübelin Gem Lab, Lawson Gems, Responsible Gemstone Traders, the University of Queensland and GIZ (a German government aid body who has contracted University of Queensland to do work in Sakaraha), Charles Lawson and his colleagues conducted a week of training in the rural town of Sakaraha in South West Madagascar in computer literacy and the use of Provenance Proof, along with basic jewellery making and entrepreneurship skills.

Charles Lawson, who runs Lawson Gems, is a champion of responsible gemstone trading among remote communities in Africa. As part of his training initiative to improve the livelihood of sapphire miners in Madagascar, he is also helping women to register their gems on Provenance Proof.

The Provenance Proof training was run as a Responsible Gemstone Traders project (RGT), a new social enterprise started by Mr Lawson and his colleague, Dr Lynda Lawson (no relation). Charles has worked with Lynda in Madagascar since 2016 and in previous years they helped to set up a lapidary centre to support women who have been victims of domestic abuse (Lawson, 2019). The women of the centre were supplied with a laptop computer, digital camera, printer, laminator, and an internet connection along with additional computers.

With the challenges of infrastructure overcome, the next hurdle was the language barrier. Work was completed to create an offline document fully translated into the local Malagasy language and, following this, an extensive glossary of frequently used words, terms, sentences, descriptions and phrases was added to the document to cover the required input data on to Provenance Proof. The ladies took to the training with surprising enthusiasm and vigour. Rather than growing bored with five days of training in an unfamiliar field, they were attentive and made a great effort to manage the unfamiliar technology and concept (Figure 1).

Fortunately, previous work had also been done in the area of Sakaraha and its surrounding communities in the form of a training program for artisanal miners developed by Lawson Gems in 2013 (Lawson, 2015), facilitated to a large extent and funded by Tiffany & Co., the University of Queensland and the German Government from 2016 to 2018 (Lawson, 2016). The program titled “A Basic Guide to Gemmology and its Use in the Field” was a condensed 2-day program aimed at giving artisanal miners and traders basic training to be better able to understand their local gem deposits and the gems they produce. The training also gave the miners the ability to perform basic gem identification techniques and also how to evaluate their rough gems. Each student was provided with a tool kit containing a 10x loupe, gem torch, dichroscope, sorting/immersion tray, along with a durable, full colour, low literacy friendly textbook. This type of program is now being adopted by organisations large and small around the world with projects in place from smaller bodies such as Gem Legacy (Gem Legacy, 2021) all the way up to the Gemological Institute of America (Shor, 2019). There is hope that through such programs, the ability to use technologies like Provenance Proof by miners and traders at the start of the supply chain will be greatly increased.

A limitation to the technology is the assumption that the user knows exactly what their gemstone is at the time of uploading the data. Working in the field, one comes to understand that many long-term miners and traders do have a strong knowledge of the gems from their mining area. From knowledge that has been passed down to them through older generations, they can identify gemstones by simple tests such as hardness, heft, crystal shape, general appearance and by knowing what gems have historically come from the deposit they are mining. However, given the often transient nature of artisanal mining, there are many miners with little to no knowledge of the gems for which they are searching. In such cases, projects as described above become invaluable to making a platform such as Provenance Proof viable.

At the start, or top end, of the supply chain, one of the largest barriers to the adoption of a technology like Provenance Proof, other than a lack of technology and training, is the understanding of the need for such a platform. In this sort of environment and culture there is little appreciation as to why they are being asked to do the extra work when they do not see much, if any, benefit for themselves. Only a minute fraction of gem buyers working directly with artisanal miners and brokers in developing nations have any interest in a transparent supply chain, with most preferring a high element of secrecy.

But this is changing. More and more companies see the demand from end consumers as the impetus to shed a light on the sustainable practices in their supply chains, which start at this end of the process. For example, the women on this project, some of whom are miners and some are traders, are already seeing the benefits of participating in the Provenance Proof project (Figure 2). Given time, this change should continue. Seeing the enthusiasm for the training gives hope that even without seeing direct and immediate benefits (this is expanded, below), participants at the top of the supply chain will appreciate the long-term goals.

A further barrier are the differences in cultural understanding. In the West, increasingly there is widespread understanding of why there should be a transparent and responsible supply chain; however, it is this Western bias that leads to the belief that this concept is going to be universally understood. Through no fault of their own, this is frequently far from the case in developing nations. A substantial amount of time was spent explaining the concept (Figure 3), however the most pressing question asked by the ladies, and in fact by all parties, was “what’s in it for me?” When asking a miner or broker, living off less than $2 a day, to put in the extra work of first learning how to use a computer and camera, then how to use a technology like blockchain on a platform that is in a foreign language, to please a consumer they will never know, one begins to understand why this question is asked.

To combat this, both short- and long-term plans were employed. As mentioned above, great lengths were taken to reinforce the fact that gemstone provenance is an important and growing concern in the industry. Even though the gains for the local miners are still small, it is important to the future of the industry and will eventually have the potential to drive significant sales. However, to push for immediate participation in Provenance Proof, an ad hoc Word template was created with the critical information from the Provenance Proof platform, so that a printable document could be created.

By creating this physical document, they now had something with which they could generate additional income. The logic was that of the ‘upsell’ – part of the lapidary centre was converted to a small gift shop where they would have the occasional tourist pass through (Figure 4). Now having a physical product, the ladies can offer customers the option of having their purchase ‘blockchained’ and this becomes a much more enticing sale when offered along with a nicely printed and laminated ‘report’ for a small fee (Figure 2).

This conveys a tangible sense of worth to the buyer, and the seller, thus inspiring a longer-term commitment to the platform by the women of the lapidary centre. An official Provenance Proof PDF (as an example,
see Figure 5), which is a new feature to the platform, should drastically improve the adoption rate in developing nations.

Continuing from this project, RGT has begun to provide the ladies’ lapidary centre with their first wholesale orders of gemstones and jewellery (Figures 6 and 7) on the condition that all items shipped are to be added to the Provenance Proof platform for an additional fee paid by RGT. This is a very important part of the learning process in such environments, as without a demand for a platform like Provenance Proof, and without real physical value being created at the start of the supply chain, adoption of this platform by those in poor socioeconomic conditions will be drastically hindered.

The Way Forward

During this project, numerous members of the Malagasy gem trade were approached to discuss their interest in joining Provenance Proof. The further along the supply chain they were, the more value was perceived, however without fail the question of “what’s in it for me if I do this extra work?” was always asked.

Charles Lawson is now working with the Queensland Boulder Opal Association to bring the Queensland opal fields on to the Provenance Proof platform. Yet again, this same question was asked by almost all members of the mining community that were approached. 

It is clear that this is an issue widely perceived. It must be tackled from both ends of the supply chain with buyers required to understand that gems with responsible and transparent provenance need to be valued more than those with ambiguous or unknown origins, especially given the extra work that goes into sourcing and the culture of social responsibility it creates. At the other end, sellers are required to understand that this is the direction that the industry is taking. Provenance Proof is a powerful platform to not only better their industry, but a way to both add value to their stones and improve their industry exposure and remuneration.

Charles Lawson is now one of a number of industry members with extensive experience working in the artisanal mining sector and the coloured gemstone marketplace that has taken Provenance Proof to heart and is acting to bridge the gap with miners and traders who might have reservations about such a platform. Concerns can range from the discernible value of using such a platform to the perceived ‘big brother’ aspect where miners are protective of their mine locations and personal information. As always, it comes down to education: not only to educate industry members about the ins and outs of such a platform and what information they need to provide, but to educate the platform’s developers with feedback from the field. It has to be understood that every stage of the coloured gemstone supply chain can be a vastly different environment, which can vary significantly from the environment in which this technology was built. From a miner in a mud hut in the jungles of Mozambique, to a New York high street jeweller, to the Everledger head office in Brisbane, the experience of Provenance Proof can be worlds apart. Yet the aim is to unify the industry behind a common goal of a responsible and transparent supply chain benefiting all its members and Provenance Proof is a solid first step on this path.

Real Confidence in a Virtual World

The COVID-19 pandemic has further demonstrated the importance and potential of blockchain in empowering artisanal miners. Faced with the need for virtual trading, buyers can be more confident that the stone was sourced where the vendor says it was. Of course, this adds another string to the vendor’s bow in terms of selling power. The next step is to create a blockchain-enabled marketplace, whereby buyers can compare stones from, say, Madagascar, Zambia and Tanzania. All the while, vulnerable communities are growing their profile in the industry, whilst developing additional skills in information technology, gemmology and commerce.

Cord of Truth

Susan Wheeler, a US-based designer who crafts responsible jewellery to further the United Nations Sustainable Development Goals, is energised by stories such as Charles’ teacup experience (see breakout box, page 270). “An authentic narrative adds a richness to the finished jewellery piece, which I can then pass onto the customer,” she said. “Stories come from all the way along the pipeline – including traders, cutters and polishers – and their details add texture to the experience of owning and wearing an item of beautiful jewellery” (Simmiss, 2021).

She is excited to see how blockchain continues to fortify the creative process, by bringing designers and miners closer together. Working in Zambia, Susan has enjoyed the opportunity of communicating directly with miners, buying the rough gems and having them cut to measure. “Modern jewellery designers often have a disconnect from where our stones come from,” Susan said. She continued “In the old days, the high jewellery houses would buy large gems and have them cut to meet designs. This was all documented in beautiful illustrations. Now, we tend to get what we’re given by wholesalers. That’s not good enough! This level of customization and documentation in today’s market comes at a considerable cost. Provenance Proof has the capacity to bridge some of this cost, by adding the story telling element of this process with just the cost of the time it took to upload the gem. As designers, we want to have a say in everything. By establishing provenance, we can trace stones back to the root [top] of the value chain. My story starts to interweave with the female miners, which is really revolutionary. It puts real heart and soul in the finished article.”

By drawing a cord of truth between miners and consumers, blockchain is helping the gemstone industry to turn a corner. Jewellery now has the potential to empower vulnerable women like never before. There is still a long way to go, but the blueprint is set for others to follow (Simmiss, 2021).

Conclusion

industry is a very long one. The wider objective is to generate greater equality for all members of the supply chain. It is possible that the consumer will end up paying more for their product, yet this is already accepted by consumers across a multitude of industries from coffee to cotton. The real question is, what is the cost of not knowing the true provenance of the gemstone? Consumers are becoming more socially aware regarding the choice of products they want to be associated with; knowing whether an item was responsibly sourced, or is environmentally sustainable, is already on their minds and they are starting to ask questions about provenance.

The extra cost in terms of both a premium for transparently sourced gemstone and the cost of time taken to complete the upload process, however minimal at the retailer’s counter, is invaluable for the struggling communities that produce close to 80% of the world’s coloured gemstones through small-scale, medium-scale, and artisanal operations. A purely profit based approach to the industry is no longer morally acceptable or sustainable when there are millions of people worldwide who gain little benefit for their critical roles.

Provenance Proof is just one step in this journey, yet it is a crucial one. Having access to a transparent and secure storytelling platform across the entire supply chain will benefit every stakeholder in the value chain, and push to create a climate of change towards a sustainable and responsible gem and jewellery industry.

All photos courtesy of Charles Lawson.

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