800 Years of Mogok: A Celebration in Tenuous Times

Mogok's diverse population includes Burmese, Shan, Palaung, and other Buddhist ethnic groups as well as Hindu Nepalese Ghurkas, predominantly Christian Lisu, and a small number of Muslims, Sikhs, and Eurasians. In many respects, Mogok is an anomaly. Despite differences in ethnicity, religion, language, politics, and history, the peoples of this historic gem mining community have peacefully coexisted for hundreds of years. (1)

The gift that has kept on giving, the never-empty purse, Mogok's production culminated in the most expensive colored gemstone ever sold, the $30.4 million dollar 25.59-ct Sunrise Ruby. (2) But, as we approach Mogok's 800th anniversary celebration, all this may be set to change.

Production Disruptions

Since the lifting of the USA embargo on Burmese rubies in 2016, the Myanmar Gems Enterprise has postponed reissuing mining concession permits. This has significantly disrupted gemstone production. Thousands of laborers have lost, or will soon lose, their income. If the government doesn't act soon, tens of thousands of spouses, children, and elderly relatives will be affected.

As the supply of already mined gems dwindles, the trickle-down effect results in many gemstone cutters, brokers, small dealers, and domestic jewelry manufacturers losing their livelihoods. The end of the USA embargo saw a marked increase in demand for Burmese gems from American dealers and jewelers. However, big name, high-end brands plan ahead, often a year or more in advance, before launching new collections. Growing international awareness of Mogok's supply chain disruption will inevitably divert demand to more reliable sources. While the markets will turn to places such as Mozambique for rubies and Madagascar or Sri Lanka for sapphires, everyone in Mogok will eventually suffer as a result.

An Emerging Problem for the Future

According to Ye Minn Htoon (aka Ko Choo) of the Mogok Miners Association, unemployment in Mogok could reach tens of thousands. Support industries such as hardware, convenience stores, restaurants, and other small businesses will also experience the effects. Regrettably, in April he must lay off another 50 workers. Many of the unemployed will return to their villages or find work in different trades, thus creating a vacuum in the local gem trade labor pool. In turn, this will precipitate a future problem. When the government eventually issues new permits, it will take mines months to re-staff and ramp up production. Mine owners have been told a draft law covering the issuance of new mining permits has been approved by Myanmar's National Parliament. However, they still wait for confirmation of the Union Parliament's endorsement.

Joseph Cifarelli — a 3rd generation, Bangkok-based American fine jewelry manufacturer — has worked for Harry Winston and William Goldberg, brands historically known for featuring fine Burmese rubies and sapphires in their collections. Cifarelli said:

American jewelers have once again been asking for fine Burmese pigeon blood rubies and royal blue sapphires, but this news will certainly dampen their enthusiasm. It is really a disappointment learning this after the long-awaited lifting of the embargo.

The Mozambique Ruby Alternative?

While visiting Tiffany & Co.'s 5th Avenue flagship store in New York last month, my wife, Nadthasiri, and I viewed exceptional rubies, sourced from Mozambique and mounted with diamonds in classic Tiffany & Co. style. In spite of the lifting of US sanctions, the company has maintained its policy of not sourcing gems from Burma. Tiffany & Co.'s PR department has made the following statement:

As a company that chooses to go above and beyond government regulations to uphold our own high standards for corporate social responsibility, Tiffany has not purchased any gemstones from Myanmar since the U.S. Burmese Freedom and Democracy Act was adopted in 2003. Despite the fact that the US sanctions have been lifted, we are not sourcing from Myanmar. (3)

Ironically, Mozambique's official ruby mining operation, co-owned by Gemfields, is not without alleged human rights abuses. In May 2016, ForeignPolicy.com published The Blood Rubies of Montepuez. Mozambican investigative journalist Estacio Valoi wrote of

a troubling pattern of violence and death contradicting the claim of "responsibly sourced" since locals say they have been forced off their land; armed robberies and violence have soared as speculators have flocked to the area; and a growing number of small-scale miners have been beaten and shot. (4)

Illegal Mining

Miemie Tin Htut of Silken East Co., Ltd., a 5th generation Mogok gem trader, voiced her concern about the rise in illegal mining due to un-renewed mining permits. As host to the 2016 Task Force, which included American Gem Trade Association (AGTA) CEO Doug Hucker and AGTA President Jeffrey Bilgore, Miemie endorses AGTA's Code of Ethics, deemed necessary to bring Mogok up to speed with modern supply chain requirements. Regrettably, the government's inaction under the leadership of NLD State Counsellor Aung San Suu Kyi hampers these critical efforts.

The Rohingya Humanitarian Crisis

The Rohingya humanitarian crisis, which erupted in 2017, has further exacerbated the Mogok gem trade's growing troubles. Myanmar's military has been accused of committing genocide against the country's Muslim minority. The United Nations has gone on record calling it "a textbook example of ethnic cleansing." In Is your jewellery funding genocide?, a missive of 900+ words, the human rights watchdog organization SumOfUs encouraged luxury brands to stop dealing in gems from Myanmar, since proceeds from the mining industry are shared by the country's military. (5)

In what appears to be a direct response, French luxury goods brand Cartier proclaimed the following:

As part of our continuous review process to ensure ethical sourcing, Cartier has decided to stop purchasing gemstones from Myanmar, which will become fully effective as of December 8, 2017. Cartier will not purchase certified goods from the country, and will make its best effort to ensure that non-certified gemstones did not originate there.

Furthermore,

Cartier strongly believes in the importance of ethically sourced materials, [even though] current international rules permit these gemstone purchases. (5)

Unintended Consequences

Having visited Mogok in 2015, Simon Watt of Mayer & Watt said:

As a board member of AGTA, I was very pleased when the Obama administration lifted the ban on imports of ruby to the US and am saddened by the reaction of some parts of the jewelry world to the Rohingya humanitarian crisis. While I believe that we all should be cognizant of human rights issues throughout our world, it is usually the small players in our industry that are hurt by embargoes of any kind. Myanmar has an ancient culture and Mogok is at the heart of the jewelry industry worldwide; we should all be celebrating this momentous [800th Anniversary] date in history.

Regrettably, as with the USA's Tom Lantos Act of 2008 banning the import of rubies and jade from Myanmar, such knee-jerk reactions rarely generate their desired effect. The military generals will still live in their luxury mansions, ride in chauffeured European luxury cars, and send their children to top universities overseas. Ultimately, the small players in the supply chain will suffer the most from such misdirected, though well-intentioned, boycotts.

The Story of the Mae Sot Gem Market

In 2005, the Thai/Myanmar border town of Mae Sot hosted a thriving gem market, supporting a significant community of dealers, brokers, and gem shops. Hundreds of dealers from the USA visited annually to source rubies, jade, and other gems from Myanmar. When the Tom Lantos Act came into force, those American buyers stopped coming to buy Burmese gems. As a result, the Mae Sot market retracted drastically.

UNICRI Post-Graduate trained human rights attorney Nadthasiri Bergman, LL.M., has visited Mae Sot several times per year since 2004. She observed:

By 2010, the gem market of Mae Sot had shrunk to about 20% of its pre-embargo size. Hundreds of Burmese gem cutters, carvers, dealers, and brokers were forced to look elsewhere to provide for their families. Some even sought residence in Western countries, such as Australia, the UK, and the USA through UN refugee relocation programs. Sanctions are important international political tools. However, they require regular review and re-evaluation, since they are a two-edged sword, often causing harm suffered downstream by small players in the supply chain, not at the top as intended.

The 800th Anniversary Celebration

Citing security concerns, government restrictions on issuing permits to visit Mogok have been unpredictable. At the time of writing, whether or not foreign visitors can attend Mogok's 800th anniversary remains unknown. Strategically scheduled after Baselworld 2018 on March 29-31, the event has all hotels now fully booked, mostly by locals. Regardless of who attends, all will surely feel great uncertainty during this auspicious celebration.

Certainly, many critical internal and external issues threaten the immediate future of this historic gem mining region. Nevertheless, the Mogok citizenry has developed a system of cooperation that can inspire other ethnically diversified communities. Rest assured that regardless of a myriad of domestic and international challenges and pressures, Mogok will continue as one of the world's most important sources of rubies, sapphires, spinels, peridots, and many other gemstones for generations to come. 

Happy 800th Anniversary, Mogok.

References

(1) Artisanal Ruby Mining in Myanmar: Environmental and Social Impacts, Sally Dickinson DeLeon, Summer 2007 - http://lapidaryworld.com/pdf/DeLeon_Myanmar_2007.pdf

(2) World's most expensive coloured gem sells for $30m - Ben Bland, BBC, 13 May 2015 - http://www.bbc.com/news/av/world-europe-32717029/world-s-most-expensive- coloured-gem-sells-for-30m 

(3) Private email from Tiffany & Co. March 6, 2018 

(4) The Blood Rubies of Montepuez, Estacio Valoi, May 3, 2016 - http://foreignpolicy.com/ 2016/05/03/the-blood-rubies-of-montepuez-mozambique-gemfields-illegal-mining/ 

(5) Is the Burmese ruby the new blood diamond? Panna Munyal, February 4, 2018 - https://www.thenational.ae/lifestyle/luxury/is-the-burmese-ruby-the-new-blood-diamond-1.699821 

The New Blood School

As part of their philanthropic efforts, for the past 12 years, Nadthasiri and Jeffery have supported New Blood school and orphanage for at-risk children not allowed to enroll in Thai government schools. New Blood offers free 1st-to-12th grade schooling to economic and political refugee families in the town of Mae Sot on the Thai/Myanmar border.