Gemstone Sector Review
                                    DRAFT
                              In support of Myanmar EITI
                                        Emma Irwin
                                         June 2016
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            Acknowledgements
            The author would like to thank the Department of Mines and MGE for all their support and
            cooperation during the production of this report. The author would also like to express sincere
            gratitude to all stakeholders and experts consulted for this report, including MEITI MSG members,
            MDRI staff members, civil society and local community representatives, MGJEA and some of its
            members, gem traders, gem experts, jewellers and gemmologists. 
            This report has been prepared by the World Bank with financial support from the British Department 
            for International Development and the Australian Department for Foreign Affairs and Trade.
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                                   Table of Contents
            Acknowledgements...................................................................................................................................2
            Acronyms........................................................................................................................................5
            Executive Summary.........................................................................................................................6
            1. Introduction: EITI and Gems in Myanmar...................................................................................10
             1.1 Scope and Methodology......................................................................................................10
             1.2 Summary of First MEITI Report and Recent Literature on Myanmar’s Gems Sector...............11
            2. Gems in Myanmar.....................................................................................................................14
             2.1 Coloured Gemstones...........................................................................................................15
             2.2 Jadeite................................................................................................................................15
            3. Institutional and Legal Framework.............................................................................................17
             3.1 Government Institutions......................................................................................................17
               The Gemstone Law and Rules........................................................................................................20
               The Myanmar Mines Law and Rules..............................................................................................21
               UMEHL and MEC............................................................................................................................22
             3.2 Private Sector......................................................................................................................22
               MGJEA............................................................................................................................................22
             3.3 Parliament Natural Resources Committee............................................................................24
            4. The Gemstone and Jewellery Value Chain..................................................................................25
             4.1 Allocation of Rights/Award of Contracts and Licenses..........................................................26
               4.1.1 Overview...............................................................................................................................26
               4.1.2 Challenges.............................................................................................................................31
               4.1.3 EITI Implications....................................................................................................................32
               4.1.4 Recommendations................................................................................................................33
               Beneficial Ownership.....................................................................................................................34
               Contract Disclosure........................................................................................................................36
             4.2 Mining and Production........................................................................................................38
               4.2.1 Overview...............................................................................................................................38
               4.2.2 Challenges.............................................................................................................................42
               4.2.3 EITI Implications....................................................................................................................44
               4.2.4 Recommendations................................................................................................................44
               Environmental and Social Impact Management............................................................................45
             4.3 Traders and Brokers.............................................................................................................48
               4.3.1 Overview...............................................................................................................................48
               4.3.2 Challenges.............................................................................................................................49
               4.3.3 EITI Implications....................................................................................................................50
               4.3.4 Recommendations................................................................................................................50
             4.4 Cutting, Polishing, Treatment and Jewellery Production.......................................................51
               4.4.1 Overview...............................................................................................................................51
               4.4.2 Challenges.............................................................................................................................55
               4.4.3 EITI Implications....................................................................................................................57
               4.4.4 Recommendations................................................................................................................57
             4.5 Retail Market (local)............................................................................................................57
               4.5.1 Overview...............................................................................................................................57
               4.5.2 Challenges.............................................................................................................................59
               4.5.3 EITI Implications....................................................................................................................59
               4.5.4 Recommendations................................................................................................................59
               Gems Emporium.............................................................................................................................60
               Direct Sales.....................................................................................................................................64
             4.6 Revenue Collection, Management and Distribution..............................................................66
               4.6.1 Overview...............................................................................................................................66
               4.6.2 Challenges.............................................................................................................................68
               4.6.3 EITI Implications....................................................................................................................69
               4.6.4 Recommendations................................................................................................................70
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             4.7  Sustainable Development and End-Markets........................................................................74
               4.7.1 Overview...............................................................................................................................74
               4.7.2 Certification, Traceability and Responsible Jewellery Supply Chains....................................75
               4.7.3 Laboratory Testing and Certification of Gemstones..............................................................77
               4.7.5 Recommendations................................................................................................................78
            5. ASM and Subsistence Mining.....................................................................................................79
            6. Smuggling and Exports...............................................................................................................81
            7. US Sanctions..............................................................................................................................85
            8. Conclusions...............................................................................................................................86
            9. Recommendations.....................................................................................................................89
             9.1 Summary Table of Recommendations..................................................................................90
             9.2 Recommendations...............................................................................................................93
            Annex 1: Summary of Myanmar EITI First Report and Scoping Study..............................................98
            Annex 2: Table of Gemstone Permit Types....................................................................................100
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