Walmart greenwashing: Workers pay the price
For a Spanish version of this story, click here.
A few blocks from the jewelry factory's entrance in La Paz, Bolivia, Julia and Maria look over their shoulders to see if the night guards are watching. The two young Aymara Indian women shiver in the cold night air and lower their heads as they speak.
"It's a horrible experience, but it's what I have to do to feed my kids," says Julia, a 20-something mother of two. "Supervisors yell at us constantly, and if we don't finish our work quickly enough, we are told: 'The doors are open for you to go.'"
Says Maria: "There isn't even soap or adequate masks to protect from the dust." Their list goes on — insufficient pay, strip searches upon exiting, discouragement from attending night school because it would interfere with work.
Barely a few moments have gone by and they are nervously shifting in place. After another over-the-shoulder glance, Julia's slightly widened eyes seem to say, We've got to go. Courage spent, they pull their jackets tighter against the chilly wind and walk off toward their homes in the impoverished neighboring city of El Alto.
The two women don't know it, but thousands of miles away, their daily labor is sold by South Florida-based jewelry manufacturer Aurafin under the guise of "responsible sourcing." (Names of current and former Aurafin factory workers have been changed to avoid retribution.) In 2008, Aurafin teamed up with Walmart, and the largest retailer on Earth sells this so-called responsibly sourced jewelry under a product line named Love, Earth. Aurafin and Walmart say the jewelry is made in conditions that favor workers and the environment, a claim contradicted by tales from current and former workers.
Love, Earth's gold comes from U.S. mines no more environmentally friendly than other mining operations, which critics say are responsible for widespread pollution. The precious metal's journey then goes to Bolivia, where Maria and Julia and thousands of other workers toil — many in conditions much worse than the two women's — for the benefit of the U.S. companies. While Love, Earth may shine like gold, that's only varnish. Underneath, its anatomy is greenwash: The product is no better for the environment — or the people who manufacture it — than a standard piece of jewelry.
Aurafin and its parent company did not respond to repeated requests for comment. After New Times questioned Aurafin's practices, a Walmart spokesman indicated that the company "immediately launched an investigation" into the La Paz factory.
"We take reports like this very seriously and we will take prompt remedial action if our investigations confirm any of the findings," spokesman Kory Lundberg wrote in an email on November 23. "We remain committed to sourcing merchandise that is produced responsibly by suppliers that adhere to Walmart's rigorous Standards for Suppliers code of conduct."
Since that initial email, Lundberg has been unable to provide any additional information on the investigation's findings or if any remedial action has been taken. Meanwhile, Walmart continues to sell the Love, Earth line. That means that Aurafin's factories in Bolivia, Peru, and the Dominican Republic still provide the labor for turning the precious metals into jewelry and that customers continue buying the pieces — believing they are helping workers like Julia and Maria.
It's meant to be a love letter — to you, from Mother Earth. Sparkling tree pendants, shimmering butterflies, intricate braided hoops; it's jewelry that wants you to feel good about your purchase.
That's a lofty goal: Gold and diamond jewelry are notorious for having some of the dirtiest production lines on the planet, with mines and factories alike blamed for lasting harm to people and the environment. Not this one, says Love, Earth's website, with its airy green cursive font and images that alternate between polished rings and Chia pet-like replicas of Love, Earth pendants sprouting with grass. Walmart, the site promises, "can catalyze positive change in the way jewelry is produced — from mining to refining, polishing and cutting, and through to manufacturing — by promoting responsible practices in all the business activities in our jewelry supply chain."
The idea originated in 2005, when then-Walmart CEO Lee Scott decided to make sustainability a core part of the retail giant's mission. Over the next few years, the company would craft a large-scale green strategy that came to include increased energy efficiency in stores, improved fuel efficiency in its trucking fleet, and reduced product packaging. Eco-attention was put toward supply chains too.
Though "greening" production lines was not a novel concept, nobody was doing it for jewelry. To determine the line's sourcing, Walmart spent almost three years in consultation with numerous nonprofits and industry experts. Dr. Assheton Stewart Carter was senior director of business policies and practices at Conservation International when Walmart established the line. The D.C.-based environmental organization was a founding partner for the Love, Earth line, though a spokeswoman told New Times that the organization is no longer part of the partnership. "At that time, no one had tried making a traceable jewelry line," says Carter. Since gold often gets melted together from various sources at some point in its refining process, it's not easy to identify its origin, Carter explains. Walmart's decision to identify sources for consumers "was a significant step forward for the industry," he says.
Walmart knew the mines would have to be in the United States, because ensuring even the most basic environmental and worker standards in large-scale operations abroad was too risky. Rio Tinto and Newmont Mining — two of the largest mining companies in the world — stepped forward, offering their U.S. mines to provide the gold and copper for the line. In 2009, diamonds were added to Love, Earth and are sourced from the Rio Tinto Argyle Mine in Australia.
Conservation International joined the partnership with enthusiasm. As one of the most prominent environmental conservation organizations — the Goliath doles out around $115 million annually — Conservation International would give consumers the ease of knowing that an organization of its caliber had given Love, Earth a green stamp of approval. But for close environmental observers, CI's involvement raised an immediate red flag. The group frequently partners with corporate America — companies such as Chiquita and Exxon Mobil — and is often criticized for putting its business partners' interests above those of the environment and local populations. The organization has been denounced for signing off on land grabs in Panama that benefit pharmaceutical companies and helping to talk indigenous Filipinos into oil drilling, to name a couple. For Love, Earth, there was a personal side to the Walmart alliance too: Conservation International CEO Peter Seligmann is a longtime close friend of the Walmart founding family, the Waltons. Rob Walton heads Conservation International's executive committee.
The final partner — Tamarac-based Aurafin — was an easy choice. "Aurafin was a longtime Walmart supplier in good standing," Carter recalls.
Founded by Michael H. Gusky in 1982, Aurafin merged in 1999 with Northwest Equity Properties. The company came to dominate the ten-karat and 14-karat U.S. gold jewelry market. In 2007, billionaire Warren Buffett's Berkshire Hathaway bought Aurafin as well as Bel-Oro, another industry major player. The alliance created the Richline Group — currently the largest jewelry supplier in the United States. It generates more than $500 million in revenue annually.
The Richline Group, which now includes Aurafin and seven other jewelry companies, has operations in the United States, Italy, India, Israel, Turkey, Bolivia, China, the Dominican Republic, and Peru. Supplying both high-end and low-cost jewelry to more than 3,500 outlets in North America, Richline recently created its Todo por un beso ("Everything for a kiss") line, which takes a starring role in Telemundo soap operas.
Aurafin and Walmart launched Love, Earth in 2008 — self-claimed as a "pilot project" with the long-term goal of greening its entire jewelry offering. The site offers a list of 24 self-regulated criteria that include compliance with mining-industry-developed environmental codes for limiting toxic waste, standards for worker rights established by the United Nations, and promises to reduce greenhouse gas emissions. The partnership promises continual assessment and monitoring at all source sites.
Aurafin's factories in Bolivia, Peru, and the Dominican Republic provide the labor for turning the precious metals — mined in Utah and Nevada — into jewelry. An innovative website makes the process transparent: Plug in the batch number from those new earrings and watch them move from a Southwest mine to an abroad factory to a Walmart near you.
At its heart, says Carter, the alliance wasn't about changing the jewelry industry in one fell swoop. Walmart's piece of the jewelry pie is small — about $2.8 billion out of an $80 billion annual global industry. Yet, since the company is the largest jewelry retailer in the world, Carter says it was hoped the pilot project would push others in the right direction. "With its considerable influence, market reach, and commitment to sustainability," Carter stated at the time of the line's release, "Walmart has brought together like-minded suppliers, mining companies, and conservation partners to work together to build a traceable supply chain on an impressive scale."
One blustery morning in May, perky blond Newmont Mining spokeswoman Lisa Hoffman gave a public tour of her company's Northern Nevada operations that supply Aurafin's raw material. Hoffman drove the company SUV past the security checkpoints and up to Pete Pit, a half-mile-wide crater that's more than 350 feet deep and is couched inside Carlin Trend — a 200-square-mile stretch that's one of the world's richest gold-mining pockets.
Hoffman's gold nail polish sparkled as she gestured toward the pit, beaming with pride: "A hundred and 50 years ago, we couldn't imagine what we'd be doing today or how we'd be doing it. Now look at this."
As mines go, these are not the worst. There are no 12-year-olds dropping down three-story shafts with nothing more than a rope to dangle themselves. Newmont mines adhere not only to all government standards, Hoffman says, but also set higher industry standards by following voluntary environmental codes. Yet that's a long way from being responsible, say industry watchdogs, and telling the consumers that it is responsibly sourced borders on purposeful misrepresentation.
"There is no evidence that the Nevada and Utah mines that provide gold to Love, Earth are any less destructive than other mines around the world," reads a 2008 letter sent to the jewelry line partners by Global Response, a Boulder, Colorado-based indigenous rights group that was the first to draw public action to possible Love, Earth greenwashing. (The organization is now known as Cultural Survival.)
Several denouncements by environmental and indigenous rights groups followed. The activists point out that government regulations, particularly in Nevada, are notoriously lax, and so claiming adherence could hardly be considered an accomplishment. For example Love, Earth's mercury standards meet federal guidelines but, according to scientists, allow for "unacceptable amounts" of the dangerous substance to be released.
The mines also rely on a controversial process called cyanide heap-leaching, which can result in one of the most toxic substances on Earth entering local water supplies. Indeed, the process is so problematic that it's been banned in Montana, and the European Union is considering a similar prohibition. Love, Earth boasts that its mines voluntarily subscribe to the International Cyanide Management Code. But according to Dr. Robert Moran, a hydrogeologist and geochemist whose clients included the mining industry for more than 25 years, this makes little difference.
"There is no real enforcement," Moran says. "The code was written by the industry and allows the discharge of waters that can be lethal to aquatic organisms. It also fails to measure some cyanide or cyanide-related compounds that are likely to be present at mining sites." Moreover, the code's own monitoring processes have repeatedly proven problematic. Authorities in Ghana recently fined Newmont $4.9 million for failing to prevent or properly report and investigate a 2009 cyanide spill.
Scott Cardiff, international campaign coordinator for Earthworks' No Dirty Gold campaign, says that his organization provided comments to Walmart during the development stage for Love, Earth but says Walmart did not end up going with the more rigorous standards. Most important, Love, Earth gold sites have never allowed for outside, third-party monitoring — a crucial component of responsibility, he says. "These [Love, Earth] mines do not represent precautionary best practice, which is what responsible mining must be," Cardiff concludes.
Additionally damaging, say community groups, is that the sites of Aurafin's raw material do not adhere to their own criteria of community approval or, in their own words: "to engage with communities directly affected by the project... ensuring that their rights are respected."
"The source mines for Love, Earth have not received this consent," says Julie Cavanagh-Bill, legal counsel for the Western Shoshone Defense Project, "and this is well-known and documented."
Cavanagh-Bill and her husband, Larson, live in a home nestled in the Ruby Mountains, just a few dozen miles from Newmont's Carlin Trend operations. Bill and his native ancestors have been on the land since before it was known as Nevada.
Larson, a cowboy-boot-wearing grandfather of two, still recalls the way he felt upon seeing the Love, Earth placard on display, listing the gold mines surrounding his land as responsible producers. An easygoing man who's quick to chuckle, Bill remembers his anger: "I said to myself: That's green?"
The entrance to Aurafin's Exportadores Bolivianos factory is tucked on a dead-end alley, perpendicular to the steep slopes of the Andean city of La Paz. There is no sign, nothing to indicate its existence as one of the largest factories in highland Bolivia. The reception area is lined with heavier security than most Bolivian airports, and to the right, a mammoth poster in Spanish: "Walmart's Standards for Suppliers."
Up a short flight of stairs is the inner sanctuary of Eduardo Bracamonte, general manager of Aurafin's factory, who granted this interview in August 2008. The clean-cut, self-assured father of two was sought out by Aurafin to start its operations in Bolivia in 1993. The factory saw 25 to 30 percent growth in its early years thanks in part to its biggest buyers, Walmart and Kmart. "I've been to Bentonville, and really, they are very pleased with our work," Bracamonte says, flashing pearly whites.
Downstairs, 680 workers toil away under the glare of fluorescent lights. At two long tables, a group of about 40 peer through magnifying lenses that resemble robotic metallic 3-D glasses as they braid gold chains. "How's it coming along?" Bracamonte asks as he pokes his head in on a group of trainees below his office. "Looking good!" he says to his polishers, resting his hand briefly on the shoulders of a few workers.
"Ah, there it is," say Bracamonte, as he smiles big and points toward a polishing table. "Love, Earth," he confirms.
Bracamonte remembers being approached about the innovative line. The Aurafin factory had already been a Walmart supplier for ten years, so when headquarters decided to partner with Walmart on the new initiative, the Bolivian facility entered in as part of the deal. According to Bracamonte, no inspectors arrived, and there was no specialized review. He recalls: "There were a lot of forms to fill out."
Those papers filed, Love, Earth production began — alongside the rest of Aurafin's normal manufacturing. "All that is just my usual stuff," Bracamonte says, pointing to the hundreds of pieces lying inches from the "responsible" ones. He explains that it's high season and that in addition to the Love, Earth order, the Aurafin factory is readying a shipment of 237,000 pieces. He admits he's slightly behind; workers are going to have to put in overtime. "That's all voluntary," Bracamonte, who likes to take the kids to Disney World, is quick to assure. "But we never have trouble in having people stay because they want to earn overtime and because my staff feels truly committed to finishing production and with top quality."
Yet this is just one of the inconsistencies between Aurafin's representation of the quality of Love, Earth manufacturing and worker testimony or documents uncovered in Bolivia.
New Times secured confidential payroll sheets from the Aurafin factory that shows workers made far less than what would be reasonable for "responsibly sourced" products. Base salaries for workers in 2008 were just cents above Bolivia's legal minimum, then around $85 a month. According to a 2009 report by the U.S. State Department, this minimum wage in Bolivia "did not provide a decent standard of living for a worker and family."
Not that Maria and Julia needed Washington to tell them that. "Basically, we make between $75 and $85 a month," Julia says, which is less than half of what Bolivian economists consider sufficient to cover basic necessities. "Sometimes we can make [more] during the high season. It means working six days a week for 12 hours," she explains. "But that's giving up your life."
Another worker, 21-year-old Claudia, says that's the worst part: "You must stay if there is production to be completed; there is no other option." She wants to go to night school but says she is threatened not to do this. "We are told that nothing that would compete with our time or take away from work being our priority will be tolerated," she explains.
For Fernando, who's finishing his ninth year as an Aurafin employee, the biggest problem is feeling threatened into silence. "The safety equipment is just for show, and we are paid miserably," says the slight father of two. "But I learned to keep my mouth shut early on when Bracamonte brought me into his office after I voiced concerns. I don't say anything anymore."
Bruno Rojas, an employment and labor rights investigator for the Center for Agrarian and Labor Development Studies, a think tank in La Paz, says that the Aurafin operation contradicts promises of Love, Earth being a responsibly sourced product. He wonders: "Isn't the point of social responsibility at least to give workers a wage that allows them to pay for their basic necessities and conditions that are better than the norm?"
José is 31 years old and, like most in the impoverished city of El Alto, Bolivia, indigenous Aymara. His thick black hair flops up and out from an even middle part, creating something resembling McDonald's arches atop his forehead. It was 2004 when he started with Aurafin: He entered the factory as a trainee, part of a highly fluctuating rookie work force that, according to the company's payroll record, makes up a constant source of new and low-paid labor.
(Though it has been years since he was employed by Aurafin, José spoke to New Times only on the condition of anonymity because he fears retaliation by the company against friends and family.)
His memories of inside the factory echo current worker testimony. José recalls being in a meeting when a coworker complained about the low pay. A supervisor responded: "You don't have the right to demand anything here because we are the ones who put the bread on your table each day." José's job of filing gold created a lot of dust, but he, like Maria and Julia, wasn't given a mask for protection.
After three months, he was let go, as were all but 30 of about 200 who entered with him. José was disheartened. But that didn't change the fact that he needed to work to help support his parents and younger bother. So in 2005, he sought out a job closer to home — in one of El Alto's talleres, or clandestine workshops, that supply labor for the Aurafin factory.
"I thought I knew what I was getting into," José remembers. He knew it would be far from a dream job, but the experience was worse than he imagined: poor pay, no benefits, long hours. Workers were forced to complete tedious tasks like braiding gold chains in rough conditions and with verbal abuse by supervisors. And it's these workshops that constitute the most glaring contradiction between Love, Earth's promises and on-the-ground reality.
According to a 2005 New York Times article, José's workplace was one of 17 subcontracted outfits used by Aurafin, accounting for 1,600 jobs. Records released in 2008 by the Aurafin factory confirm that 11 percent of its costs, or $918,000, went toward paying the workshops to produce jewelry — meaning a yearly per-worker salary of about $574, or less than $50 each month.
From the outside, the workshops are unrecognizable: a two-story house with a garage door open that signals to employees that the shop is operating, for example. Inside, according to José and Elvio Mamani, another former workshop laborer, there's nothing more than benches and chairs. Mamani has worked in various Aurafin talleres over the years and says that some of his fellow workers were as young as 14, under Bolivia's legal minimum of 18. Lighting is scant; there are no robotic magnifying glasses. "Your work materials are your hands, some tweezers, and the gold," says Mamani.
Rosario is going on her 11th year in the workshops and says nothing has changed in all that time. Rosy-cheeked with slightly crooked teeth, she daily dons a pollera, the traditional Aymara skirt, and a typical bowler hat tipped to the side. "I stay out of necessity," she said in December 2010, also requesting anonymity. She admits it's a precarious way to provide for her three children.
The workshop paid by the piece, and working eight-hour days for five or six days a week, Mamani and José took home only $40 a month — less than half of Bolivia's minimum wage.
Most of the workers were women, and José recalls supervisors verbally berating them. "When a woman didn't work fast enough, the supervisor would yell at her, calling her 'useless' and telling her that she was 'better suited for the red-light district' that was across from our workshop," remembers José. "Some of them would start to cry, and we'd be told: 'Don't console her. If she's crying, it's her own fault.' "
In 2006, José, Mamani, and a few others decided to unionize their shop. At first, the 80 other workers were terrified — their meager pay in one of South America's poorest countries makes the difference between being able to feed and school their children or not. But with abuses mounting daily, the workers decided they had no other option. Once management got wind of their organizing, Mamani recalls, they were quickly visited by "Bracamonte's man," who tried to talk them out of their decision. The workers held their ground, and the next day they found their workshop door padlocked. The site had been closed, and all workers were fired on the spot.
Rojas, with the Center for Agrarian and Labor Development Studies, says that this double-manufacturing system is common in Bolivia. "The main factory is a sort of cover," says Rojas, explaining that many companies in La Paz have one central facility that minimally abides by labor laws but that supplements its production with off-site — and off-the-books — labor. "There is no doubt that conditions in these workshops are extremely precarious and constitute serious worker exploitation," he concludes.
Bracamonte's defense at the time of the 2006 firings was that the workshops were a separate, subcontracted entity. But according to Bolivian law, the Aurafin factory is responsible for the working conditions of those employees, confirms Rojas: "Our national law is clear on this. [Aurafin] is liable."
There is not yet a Spanish translation for greenwashing. But, José gets it: "They take our work and tell people that they treat us better than they do so that they buy it."
The soft-spoken man who's a strong power forward for his neighborhood soccer team, took several odd jobs to support his family after Aurafin. Two years ago, he was able to go back to school and is now a law student. He plans to open a small labor-law practice.
"My dream is to sit down at the table with the bosses [like Bracamonte] but this time knowing our rights as workers," he says. "I want to help out all workers in positions like we were," he says as he glances, perhaps inadvertently, in the direction of the Aurafin factory. "You know, so they have someone on their side."
Jean Friedman-Rudovsky is a freelance journalist based in La Paz, Bolivia.
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