Ethically-sourced food, furniture and clothing have become commonplace in British shops. Jeweller Stephen Webster argues that our baubles should be too

Two-and-a-half years ago, I was approached by two gentlemen from a Dutch NGO asking if I would be interested in a supply of ethically sourced gold. Suspicious of anyone offering me a supply of anything, ethical or not, I was sceptical. The NGO was called Solidaridad. Its business was to identify products that were mined, harvested or grown by the world's poorest people, those who might be able to lift themselves out of poverty if they were helped to deliver their products to the market in a responsible and efficient way. Solidaridad thought gold to be a suitable product and were looking for sympathetic jewellers. Being a sucker for a good story, I signed up.

Up until last year not much happened. Solidaridad kept us informed about the progress of its project. It was working constantly along the supply chain to ensure that by the time the gold reached the consumer it would be 100 per cent traceable. Every now and again we were required to make an adjustment to our business practice. Eventually all the parties, from mines to jeweller, were near to achieving certification. Finally, Fairtrade stepped in.

Best-known for bananas, coffee, cocoa and cotton, Fairtrade is always looking for groups such as Solidaridad to work with. These groups identify and prepare products to the high standards required, then Fairtrade, the most recognised and respected trademark for responsibly sourced products, provides the final level of approval.

It struck me that, as the final link in the ethical supply chain, it would be beneficial to make a trip to the source, thus putting us in a stronger position to enthuse more confidently about ethically mined gold. So my brother and I decided to fly to Peru, for a journey of discovery that has transformed the way we think about the material we have worked with for most of our lives.

The Solidaridad team – Erik from Holland and Gonzalo, Fredrico and Javier from Lima – meet us in the Peruvian capital and take us on a long, very rough minibus trip into the Inca province. This journey alone is an unforgettable adventure: hours of hair-raising driving, from Lima's sprawling, but strangely orderly, slums to dirt roads high in the mountains to the south. But it is the mines themselves, and the people who work in them, that make the biggest impression.

The first mine we visit, Aurelsa, near the village of Relave in the Pullo District, has its entrance high on a bare mountainside. As we approach, we catch sight of a scattering of single-room houses covered in a thick dust that makes them hard to distinguish from the surrounding bedrock, and, dotted among them, red-brick baths where mercury is used to extract the gold from the rock. These villages are attached to mines still working in the traditional way, meaning the unregulated use of mercury, harmful not only to the workers, but also to the community, since the residue finds its way into the water table. We are here to support an alternative way of processing.

The safer way to extract the gold is by extraction through a carbon and cyanide process in sealed tanks that prevent poisonous chemicals entering the environment. It involves a willingness from the people involved, plus organisation and support from bodies such as Solidaridad, who have the expertise and necessary funding.

The Aurelsa mine has been working with Solidaridad for four years to achieve Fairtrade certification. Jewellers such as myself and Garrard, who are prepared to pay a premium for gold mined and processed sustainably, can complete the jigsaw.

But the real heroes can be found in the mines. The chairman of Aurelsa's board, Juan, arrived in this valley 25 years ago as a 15-year-old boy who had heard talk of gold in these hills. There was no settlement then, but over the years more and more prospectors joined Juan, and together they built a school, a medical centre... everything.

Five years ago, with a home, a family and a proper community of which he is an elder, Juan was ready to change the traditional poisonous practices to make the community safer. It was impossible not to feel enthused, listening to this smart, articulate man – who, with minimal education and through hard manual work, had lifted both himself and his workforce (now 87 strong) out of poverty. He talks about his ambitions for them to become shareholders in a small but responsible mining operation – one of just a handful worldwide that merit such a description.

The mine is already processing 100 tonnes of rock per month, up from 30 a year ago. This is not just a question of manpower and willpower. It is about organisation, co-operation and the hiring of a mining engineer – which is just about unheard of with such small-scale mining. Every stage has been improved and monitored by Solidaridad to ensure sustainable business practice.

Our trip includes the terrifying experience of going down the mine. The shaft is about the height of a man, and the width of two, and as we venture into the mountainside we hear the thumps of explosions at the business end of things, hundreds of metres into the abyss. Our equipment consists of Davy lamps and canaries. Deeper and deeper we go with Juan, stopping now and again to stare down another gaping pit where exploratory work is being carried out. Then suddenly, right in front of us, there is a rockfall. It emerges that there is a man working in a parallel shaft above, who is unaware that we are there.

Finally we get to the face. Miners are hammering holes into the rock and inserting sticks of dynamite and joining lengths of white detonator cable. With self-preservation now into overdrive, we feel that we have seen enough.

It is the human element that convinces me that "slow gold" is worth supporting: Juan, for example, whose efforts enabled him to send his children to college; or Jilly, a 27-year-old cook at the mine, who had hitchhiked to Aurelsa from Lima a year earlier with her seven-year-old son, carrying all their possessions in a backpack. She used her savings to rent a single-room corrugated house and earns just $150 a month, but she is hanging on in the hope that, if she sticks at it, a pay-rise might eventually materialise.

Jilly welcomes us into her home, as did Maria, a miner at San Luis, the second mine we visited in Ayacucho, high in the southern Andes. Maria shares her small wooden home with her miner husband, four beautiful children, a tiny black sheep and some chickens. Cautious at first, she is soon laughing and talking animatedly about her hopes for her children and the opportunities they might have in life.

I give the children presents of footballs and coloured pens. Maria's eldest daughter is thrilled with her pens and tells me that her dream is to become a fashion designer – she is learning to make jewellery at school. This reminds me how ridiculously lucky we and our families are. The mountain between this girl (who can't stop smiling) and becoming a fashion designer is monumental; yet she believes, with the inextinguishable optimism of youth, that her dream might come true. And – who knows – maybe she's right.

"How great," I say. "Your mum mines gold, and you can make rings." She corrects me, explaining that she also makes bracelets and pendants. I tell her I gave the first ring I made to my mum. Who will she give hers to? After a second she says her mum also – but not until Mother's Day.

I also meet a young miner at San Luis, Juancesar, who tells me about his concerns for the health of his small daughter. San Luis is so contaminated by mercury that the only way to make the community safe, even when ethical production methods have been fully implemented, is to move the entire village to a new location around 1,000m away. Until then, says Juancesar, the only way to safeguard his family's health is to move his wife and daughter away, commute to the mine, and see them only occasionally.

For me, such conversations turn the idea of ethical gold from a vaguely worthy aspiration to a burning mission. If we can support these mines and miners by using their gold, and by communicating this to our clients and to the press, then I am more than happy to do so. Initially, the Stephen Webster and Garrard brands will be offering specific products – engagement and wedding rings made in London – using ethically sourced gold. Once we get started, we intend to increase the volume of business we conduct using such gold as quickly as possible. Eventually I want it to be 100 per cent of the gold we sell.

There are cost implications in the short term. The cost to us for ethically sourced gold is currently more than 10 per cent higher. We will be absorbing this premium: we don't want price to be the reason for people not to choose a more responsible product. But in the long term I am convinced that, as ethically sourced gold becomes an established concept, so it will become cheaper to produce. Larger mining companies, smelters and investors in mineral commodities will want to invest in small-scale, sustainable projects to show their commitment to responsible business practice. And, as demand grows, small-scale mines will be able to develop a more co-operative way of mining and processing. The yield will grow, generating more money for the miners and their communities; and, as the sustainable mines thrive, so they will be able to offer more competitive prices. All this eventually forcing the miseries of mercury contamination to become a thing of the past. I hope that I am right for the sake of Juan, Maria and Juancesar.