Transparency and Responsibility in the Diamond IndustryFebruary 25, 16
I recently attended a fascinating diamond marketing panel discussion at the International Diamond Week in Israel, when there was an opportunity to listen to experts from throughout the diamond pipeline.
The guest speakers were World Diamond Council (WDC) executive director Patricia Syvrud, newly selected Diamond Producers Association (DPA) CEO Jean-Marc Lieberherr, British jewelry designer to the Stars, Stephen Webster and World Diamond Mark Foundation (WDM) chairman, Alex Popov.
The first thing that struck me about each of these individuals was the passion with which they talked about the subject of diamonds. They loved them as a product, they loved them as a subject and they loved them for what diamonds represent – well, er, love. Webster summed it up best of all when he said that emotion and passion were key ingredients in the success or otherwise of the entire business.
In the light of recent events within the industry, it was Syvrud’s highlighting that this business needs to embrace corporate social responsibility and transparency, which also piqued my interest. She noted that there are potential problems on the horizon, as NGOs become increasingly sophisticated in managing their message, for which last year’s Amnesty International report about conflict diamonds was an early outrider.
Her interest is from the point of view of the Kimberley Process and in particular, whether the current definition of what a conflict diamond is (which some NGOs claim is far too narrow), should also address human rights abuses – not just rebel groups’ sale of diamonds to fund the undermining of “legitimate” governments.
So, where do the stories of the CVD diamonds being offered for sale on global wholesale platform Alibaba with GIA natural diamond certificates, and the Zimbabwean government’s seizure of mines fit into this framework?
With regard to the lab-grown diamonds story, I am almost tempted to say that the person who perpetrated this attempted fraud is someone from outside the diamond industry, and who does not have a stake in it. However, that will just not do. As Chaim Even-Zohar said in his exposé, the potential damage to the reputation of not only the GIA, but also the entire diamond industry could be catastrophic.
The rapidity of the response and the seriousness with which all parties have taken this issue is a good sign – a sign that the industry is making strides to become more transparent and responsible. There is still a worry, however, about the number of GIA certificates floating around the industry, with the potential for them to be used by unscrupulous elements – as GIA senior vice president Tom Moses and other industry members have admitted.
And how do we respond to the problem of Zimbabwe? Only last month, World Federation of Diamond Bourses (WFDB) president Ernie Blom said in response to the proposed diamond exchange in Harare that, “it will need to ensure that all its laws and by-laws are completely in line with those of the WFDB.” Although this is not about the bourse, presumably the seizure of diamond mines might be a useful barometer for how diamond business is conducted in the southern African state.
For months the Zimbabwean government has attempted to merge the mines into one entity, the Zimbabwean Consolidated Diamond Company, with little or nothing to show for their efforts. Opponents of the move have consistently criticized President Robert Mugabe, mines minister Walter Chidhakwa and others for the lack of transparency, not just in this case, but the diamond industry as a whole. In 2014, Zimbabwe was the eighth largest producer of diamonds in the world, but the industry is disjointed and its people see little, if any investment from diamond profits.
For every down, however, there is an upside too. Signet Jewelers recently launched its Responsible Sourcing Protocol for Diamonds, an initiative whose aim is to commit to the improvement and increased transparency in the integrity of the global diamond supply chain.
The American Gem Trade Association (AGTA) also announced that it had amended its Code of Ethics and Principles of Fair Business Practice to stress due diligence as it sought to strengthen global supply chain integrity.
There are good people and good initiatives in our industry and we must support them as fully as possible, while doing all that we can to root out those giving our business a bad name. It’s 2016, and we just can’t afford that level of negative publicity any more.