Conflict-Affected and High-Risk Areas (CAHRA)

Supply-chain accountability, due diligence, and the coloured-gemstone trade

Cross-cutting essaysView in dictionary · 2,190 words

Conflict-affected and high-risk areas — universally abbreviated in trade and regulatory discourse as CAHRA — are geographic zones formally identified by the Organisation for Economic Co-operation and Development (OECD) as presenting elevated risks of armed conflict, weak or absent governance, systematic human-rights abuses, or serious violations of international humanitarian law. The designation is not merely descriptive; it is operational. Under the OECD's Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (first published 2011, revised through subsequent editions) and under the European Union's Conflict Minerals Regulation (EU 2017/821, which entered into full force in January 2021), companies importing tin, tantalum, tungsten, and gold into the EU from CAHRA are legally required to conduct enhanced supply-chain due diligence, report their findings, and take measurable steps to mitigate identified risks. Although coloured gemstones fall outside the current mandatory EU scope, the CAHRA framework has become the dominant conceptual and procedural reference point for voluntary due-diligence initiatives across the broader gem sector, shaping how responsible traders, laboratories, and certification bodies approach sourcing from regions such as eastern Democratic Republic of Congo, northern Myanmar, parts of Afghanistan, and several artisanal mining districts in sub-Saharan Africa.

Origins and Regulatory Architecture

The CAHRA concept emerged from a decade of international concern over so-called conflict minerals — raw materials whose extraction or trade was financing armed groups responsible for mass atrocities, particularly in central and eastern Africa. The United States Dodd-Frank Wall Street Reform and Consumer Protection Act (Section 1502, 2010) was the first major legislative instrument to impose supply-chain disclosure obligations on publicly listed companies using tin, tantalum, tungsten, and gold sourced from the Democratic Republic of Congo or adjoining countries. The OECD guidance, developed in parallel and in close consultation with the UN Group of Experts on the DRC, provided a globally applicable, non-legislative framework that governments and industry bodies worldwide could adopt or adapt.

The OECD guidance defines CAHRA with deliberate breadth: areas are considered conflict-affected if they are experiencing armed conflict of any intensity — international, non-international, or low-level — or if they are in a fragile post-conflict transition. They are considered high-risk if they exhibit weak governance, pervasive corruption, or systematic violations of international law even in the absence of active hostilities. This dual criterion is significant for the gem trade, because many of the world's most productive gemstone localities — including ruby and jade deposits in Kachin and Shan States in Myanmar, emerald and tourmaline workings in Afghanistan's Panjshir and Kunar Valleys, and coloured-stone mining in parts of the eastern DRC — satisfy one or both conditions without necessarily being active war zones at any given moment.

The EU Conflict Minerals Regulation operationalised the OECD framework within a binding legal structure for the first time in a major jurisdiction. It requires EU importers of the four covered minerals and their derivative metals above defined volume thresholds to: identify and assess risks in their supply chains using the OECD five-step framework; implement a risk-management strategy; commission independent third-party audits of upstream due diligence; and disclose their findings publicly. The regulation does not prohibit sourcing from CAHRA; it requires that such sourcing be conducted with documented diligence and that identified risks be addressed.

The OECD Five-Step Framework

The procedural core of CAHRA compliance — whether mandatory or voluntary — is the OECD's five-step due diligence framework. Understanding its structure is essential for any gemstone professional seeking to apply its logic to coloured stones:

Step 1 — Establish strong company management systems: Adopt a supply-chain policy aligned with the OECD's model supply-chain policy for responsible sourcing; establish internal management structures; maintain records of suppliers and chain-of-custody documentation.
Step 2 — Identify and assess risks in the supply chain: Map the supply chain as far upstream as practicable; identify CAHRA; assess whether sourcing from those areas is associated with specific red-flag risks enumerated in Annex II of the guidance (financing armed groups, money laundering, bribery, export of minerals by illegal armed groups, and others).
Step 3 — Design and implement a strategy to respond to identified risks: Report findings to senior management; suspend or discontinue engagement with suppliers where risks cannot be mitigated; engage with suppliers to build capacity for responsible sourcing.
Step 4 — Carry out independent third-party audit of supply-chain due diligence: Commission audits of smelters, refiners, or — in the gemstone context — processing facilities and exporters, to verify that due diligence practices meet the OECD standard.
Step 5 — Report on supply-chain due diligence: Publish an annual report disclosing due diligence policies, supply-chain mapping, risk assessments, and measures taken.

For the four covered minerals, the Responsible Minerals Initiative (RMI) — formerly the Conflict-Free Sourcing Initiative — administers the most widely used third-party audit programme for smelters and refiners, the Responsible Minerals Assurance Process (RMAP). No equivalent programme of comparable scale and international recognition yet exists for coloured gemstones, though several initiatives have drawn on the OECD framework's architecture.

Coloured Gemstones and the CAHRA Framework

The omission of coloured gemstones from the EU Conflict Minerals Regulation's mandatory scope reflects both the political economy of the regulation's drafting and genuine technical challenges. Unlike gold or tin, coloured gemstones are not fungible commodities processed through a small number of identifiable smelters or refineries. A ruby mined in Mogok passes through a chain of individual miners, local brokers, Mandalay dealers, Bangkok cutters and treaters, international wholesalers, and retail jewellers before reaching a consumer — and at each stage the stone's provenance documentation may be incomplete, inconsistent, or absent. The diversity of species, localities, and trade routes makes a single audit-and-certification architecture far more difficult to design than one covering, say, gold refining.

Nevertheless, the CAHRA framework has exerted substantial influence on voluntary initiatives within the coloured-gemstone sector. The most significant of these is the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector's conceptual cousin, the OECD-FAO Guidance for Responsible Agricultural Supply Chains — but more directly relevant is the work of the Responsible Jewellery Council (RJC), whose Chain of Custody Standard and Code of Practices explicitly incorporate CAHRA risk assessment as a requirement for certified members sourcing coloured stones. The RJC's 2019 Code of Practices requires members to identify whether their supply chains include CAHRA, to conduct enhanced due diligence where they do, and to document their risk-mitigation measures.

The Gemological Institute of America has published research in Gems & Gemology examining supply-chain transparency challenges in specific gem-producing regions, and the International Colored Gemstone Association (ICA) has developed its own responsible sourcing guidelines that reference the OECD framework. The Madison Dialogue — a multi-stakeholder platform involving the RJC, ICA, and CIBJO — has worked to align these voluntary frameworks and to develop practical tools for smaller traders who lack the compliance infrastructure of large mining or jewellery corporations.

Key CAHRA Localities in the Gem Trade

Several of the world's most celebrated gemstone-producing regions fall within or adjacent to areas that meet CAHRA criteria, creating both commercial and ethical complexity for the trade:

Myanmar (Burma): The Mogok Stone Tract — source of the world's finest rubies and spinels — and the jade-producing Hpakant district in Kachin State have been subject to international sanctions and human-rights scrutiny for decades, intensifying sharply following the military coup of February 2021. The Kachin Independence Army and other ethnic armed organisations have long controlled portions of jade and gemstone mining territory, and revenues from gem extraction have been documented as financing multiple armed actors. The United States, United Kingdom, and EU have imposed targeted sanctions on Myanmar's state gem enterprise (Myanma Gems Enterprise) and on military-linked conglomerates involved in gem trading.
Afghanistan: The Panjshir Valley's emerald deposits, the lapis lazuli mines of Badakhshan, and tourmaline workings across Nuristan and Kunar have operated in conditions of chronic insecurity and shifting armed-group control. Following the Taliban's return to power in August 2021, the governance and revenue-flow situation for Afghan gemstones became substantially more opaque. Lapis lazuli from Badakhshan was specifically identified in a 2016 Global Witness report as a significant revenue source for the Taliban, predating the OECD guidance's formal adoption in the gem sector.
Democratic Republic of Congo: Eastern DRC — particularly North Kivu, South Kivu, and Maniema provinces — produces tourmaline, cassiterite (tin ore), coltan (tantalum ore), and gold in conditions extensively documented by the UN Group of Experts as involving armed-group taxation, forced labour, and conflict financing. While DRC's coloured-gemstone output is modest compared to its mineral production overall, the region's status as the paradigmatic CAHRA locality has shaped the entire regulatory framework.
Colombia: Muzo, Coscuez, and other emerald-producing districts in Boyacá Department have historically experienced cycles of violent conflict between mining interests, paramilitary groups, and state forces — the so-called guerra de las esmeraldas — though the security situation has improved considerably since the 1990s. Colombia does not currently meet a strict CAHRA definition across its emerald sector, but due-diligence practitioners routinely assess it as a region requiring elevated attention.
Parts of sub-Saharan Africa: Artisanal ruby and sapphire mining in Mozambique's Montepuez district, tanzanite mining in Tanzania's Merelani Hills, and various coloured-stone workings in Zimbabwe, Madagascar, and the Central African Republic present varying degrees of governance risk. Montepuez in particular attracted international attention following documented violence between security personnel employed by Gemfields and artisanal miners in the early 2010s.

Practical Due Diligence for Gem Traders

For a coloured-gemstone dealer or jeweller operating below the scale of a multinational corporation, the OECD five-step framework can appear daunting. In practice, responsible sourcing in the gem sector has coalesced around several concrete measures that translate the framework's principles into workable procedures:

Know Your Supplier (KYS): Maintaining documented relationships with named suppliers, understanding their own sourcing practices, and conducting periodic due-diligence questionnaires or site visits where feasible.
Origin documentation: Requesting and retaining certificates of origin, export permits, and — where available — mine-level documentation. Gemmological laboratory reports from institutions such as Gübelin, SSEF, Lotus Gemology, or the GIA that include geographic origin determinations provide a degree of provenance anchoring, though they do not constitute supply-chain due diligence in themselves.
Red-flag awareness: Training procurement staff to recognise the OECD Annex II red flags — unusually low prices inconsistent with legitimate production costs, suppliers unable to identify the country of origin, cash-only transactions, and others — and to escalate identified concerns.
Contractual commitments: Incorporating responsible-sourcing representations into supplier contracts, including rights of audit and termination for cause.
Participation in industry programmes: RJC certification, ICA membership with adherence to its responsible-sourcing guidelines, and engagement with multi-stakeholder initiatives such as the Madison Dialogue provide both procedural frameworks and peer accountability.

Limitations and Critiques

The CAHRA framework and its application to gemstones have attracted substantive criticism from multiple directions. Development economists and mining-sector researchers have argued that blanket avoidance of CAHRA-sourced minerals — sometimes called de-risking or, pejoratively, conflict-mineral McCarthyism — can harm the very communities the framework is designed to protect. Artisanal miners in eastern DRC, for instance, experienced severe income losses following the passage of Dodd-Frank Section 1502, as some smelters temporarily suspended purchases from the region rather than invest in compliance infrastructure. The OECD guidance explicitly cautions against disengagement as a default response, emphasising instead that responsible sourcing from CAHRA — with appropriate due diligence — is preferable to abandonment of affected communities.

A second critique concerns the framework's limited reach into the artisanal and small-scale mining (ASM) sector, which accounts for the majority of coloured-gemstone production globally. The OECD guidance was designed with industrial-scale mineral supply chains in mind, and its audit and documentation requirements are difficult to apply to informal networks of individual diggers, local brokers, and itinerant dealers. Initiatives such as the Fairtrade and Fairmined gold standards have attempted to address this gap for gold, but comparable certification infrastructure for coloured gemstones remains nascent.

Finally, the geographic scope of CAHRA designations is inherently dynamic and contested. A region may shift from conflict-affected to post-conflict status, or vice versa, faster than regulatory or voluntary frameworks can respond. The designation of Myanmar as a CAHRA following the 2021 coup, for example, required rapid reassessment by traders who had previously treated Mogok rubies as subject to standard — rather than enhanced — due diligence.

Outlook

The trajectory of CAHRA-related regulation is clearly towards greater scope and stringency. The European Commission has indicated interest in extending supply-chain due-diligence obligations beyond the four minerals currently covered, and the EU Corporate Sustainability Due Diligence Directive (CS3D), adopted in 2024, imposes broader human-rights and environmental due diligence requirements on large companies operating in the EU that will encompass gem and jewellery supply chains. The United Kingdom's Modern Slavery Act and equivalent legislation in other jurisdictions add further layers of supply-chain transparency obligation. For the coloured-gemstone trade, the direction of travel is unambiguous: voluntary due diligence, conducted in good faith against the OECD framework, is increasingly the baseline expectation rather than a mark of exceptional responsibility.

Understanding CAHRA — its definition, its regulatory architecture, and its practical implications — is therefore no longer optional knowledge for the serious gem professional. It is a core competency, as fundamental to responsible practice as understanding heat treatment disclosure or laboratory grading standards.