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Responsibly Sourced DiamondsResponsible Diamond Sourcing

By Peggy Jo Donahue

The Issues | Sourcing Diamonds Responsibly | Addressing Sales Concerns

Until a decade ago, most jewelry makers, designers, and consumers knew little about where the diamonds used in jewelry were sourced. They were probably aware that the most famous mines were in Africa, but the specific countries were rarely discussed. And the way diamonds were distributed to the trade made it almost impossible to know more: A few large mining companies such as De Beers gathered together diamonds from all sources, then sorted them by quality, size, and other factors—but not by their place of origin.

Origin mostly began to matter after horrific stories surfaced about wars in certain African countries being fought over control of diamond resources. Films such as the 2006 Blood Diamond, which depicted the human misery of diamond mining in Sierra Leone, brought further attention. More recently, human rights abuses in certain diamond mining areas of countries such as Zimbabwe have further heightened awareness among consumers and activists.

Generation Y—the new bridal generation, comprising buyers in their twenties and early thirties—has grown up with this knowledge, which makes it important for jewelry makers and designers who sell diamond jewelry to develop a strategy on responsible diamond sourcing. In fact, many jewelry retailers are now proactively posting their “Responsible Diamond Policies” on their websites and in their stores. Studies have shown that, while a diamond’s source is only one of many aspects that most consumers have on their minds when shopping, it could be the one extra feature/benefit that tips the scales in favor of a sale.

Taking action now means you will be able to answer your wholesale clients’ or consumers’ questions, such as: “Where do your diamonds come from?” or “Are you sure these aren’t blood diamonds?”

The Issues

Before talking about specific action steps you can take to develop a responsible diamond strategy, below is a quick review of the key issues affecting the diamond trade.

• Conflict diamonds. It was the use of diamonds to fuel conflicts in Africa that started the modern responsible practices movement. A collaborative effort to prevent diamonds from being used by rebel groups in civil wars led to the creation of the Kimberley Process Certification Scheme (KPCS), in which the governments of all the countries that mine, trade, or manufacture diamonds agreed to allow only rough diamonds that have not funded conflict to be legally traded. Each country (including the U.S.) passed a law or created regulations to enforce the KPCS. To further support the agreement, members of the industry pledged to pass on voluntary warranty statements-from diamond cutter to trader to jewelry manufacturer to retailer-which warranted that the diamonds in their products were certified conflict-free.

• Diamonds and human rights. Because of the narrow definition of illicit diamonds used by the KP (only those that are used by rebels to fuel conflict), it has been challenging to prevent the trade of diamonds that are connected to other human rights issues. Most recently, the KP grappled with how to deal with diamonds from the Marange fields of Zimbabwe, where human rights abuses, including deaths, had been reported. The trouble was that the abuses were coming from the legitimate government of Zimbabwe rather than rebels in a civil war. The U.S. government continues to view Marange diamonds as non-KP compliant; thus the U.S. industry, by law, may not purchase or trade them. Most of the world’s rough diamond traders are also banned from purchasing or trading these goods by the World Federation of Diamond Bourses.

• Diamonds for development. Another critical issue surrounding diamonds is that despite their role in fueling conflict and human rights mayhem, their mining provides an income to more than a million abjectly poor people in diamond-rich developing countries. These so-called artisanal, or small-scale, miners labor in parts of the world where there are few other options to earn a living. At the present, artisanal miners are often exploited by traders who don’t pay them what their gemstones are worth. This vulnerability also makes them prey to rebels and warlords hoping to use diamonds to fund insurrections.

To create solutions to the challenges these miners face, diamond companies and human rights groups created the Diamond Development Initiative (DDI). The initiative’s goals are to create solutions to the challenges these miners face. DDII is helping them to learn about diamond pricing, for example, so they derive more value from their finds. It’s also helping the miners to organize and find direct markets for their artisanally mined gems, and encouraging their local governments to help support them through better infrastructure and laws.

Sourcing Diamonds Responsibly

Pioneers in the industry’s responsible practices movement are fond of the expression, “Don’t let the perfect be the enemy of the good.” And there’s a reason: Responsible practices are a work-in-progress, due to a steep learning curve and a complicated supply chain that stretches around the globe. What’s key is to take the first steps. Here’s how.

1. Comply with the Kimberley Process and Its System of Warranties

Here are the basic steps:

• Send a written request to every one of your suppliers of loose diamonds and diamond jewelry, requiring them to include the official System of Warranties statement on all invoices. The approved warranty statement reads:

The diamonds herein invoiced have been purchased from legitimate sources not involved in funding conflict and in compliance with United Nations Resolutions. The seller hereby guarantees that these diamonds are conflict free, based on personal knowledge and/or written guarantees provided by the suppliers of these diamonds.

If suppliers are unfamiliar with the issue of conflict diamonds, direct them to the WDC-sponsored diamondfacts.org, where they can quickly learn the basics.

• Set up an audit process to ensure that every supplier is providing the warranty—and follow up with the non-compliant ones.Make it clear to suppliers that your company cannot accept shipments from them without the warranty.

• If you sell diamonds or diamond jewelry wholesale, create a new invoice sheet that includes the warranty statement, to ensure that you are passing it on to all your retail accounts.

• If you sell to the public, consider creating a conflict diamonds policy statement about your adherence to the System of Warranties, which you could give to customers and place on your website. A long sample statement can be obtained in the Industry Members section of diamondfacts.org, or you can simply state: “We require all of our suppliers to provide an official written warranty that their diamonds are Kimberley Process-certified and thus do not fund conflict.”

Remember that if you sell to the public, you are not required to furnish your suppliers’ official warranty statements to consumers—but you must acquire and keep on file the warranties from every one of your suppliers of loose diamonds or diamond-containing jewelry for five years.

• Seek out diamonds from suppliers known to mine and cut diamonds responsibly. Ask your suppliers if they source from miners who conduct independent auditing of their responsible practices. Also, begin to look for suppliers who can attest that the stone was cut responsibly, too. Be aware, however, that not every company has the capacity yet to source all of its diamonds from specific responsible miners, or to supply tracking information on cut diamonds.

To check out three programs that do track diamonds, see BHP Billiton’s CanadaMark, De Beers’ Forevermark, or Rio Tinto’s Select Diamantaire program. You might be able to source from a company that gets its diamond supply through some of these miners’ programs.

Since De Beers, Rio Tinto, and BHP Billiton are among the most common suppliers of diamonds, it shouldn’t be difficult to find a supplier who can source diamonds for you from these miners. For example, Ivanka Trump Fine Jewelry sources the diamonds for its responsible bridal jewelry line from a company that purchases its goods from a Rio Tinto Select Diamantaire.

If you simply wish to purchase diamonds from a specific country, both Rio Tinto and BHP Billiton offer Canadian-origin diamonds that are certified as mined there. Rio Tinto also offers diamonds tracked to its mine in Australia. These gems might appeal to certain jewelry makers, designers, and consumers who prefer to avoid African diamonds altogether. Such buyers and sellers usually believe that, no matter how small the percentage, there might be conflict diamonds smuggled into the legitimate African supply, tainting it.

However, proponents of African diamond mining point out that avoiding African sources could be devastating to the many in-need workers employed in that industry. One compromise that some jewelers have chosen is to source diamonds from Canada or Australia, but also support the Diamond Development Initiative, as a good faith demonstration that they will begin buying African-sourced diamonds when there is a tracking program they can trust. Since DDI is working on a tracked diamonds system via its Development Diamonds project, the promise has credibility, if not current applicability.

Other jewelry makers and designers have chosen to sell previously owned diamonds. While it cannot be proven that these “recycled” stones are conflict free, sellers can state that the gems were already in the marketplace, and thus are not newly mined diamonds that could be from a conflict source and have contributed to recent human rights or environmental problems. These problems can exist at mine sites that don’t conform to responsible practices or are not certified by a group such as the Responsible Jewellery Council.

Addressing Sales Concerns

Many consumer-facing jewelry makers and designers fear that if they begin selling responsibly sourced diamonds, the sales of diamonds sourced through traditional methods will suffer. After all, if you sell a lot of diamonds, it may not be currently possible to buy all your stones via third-party verified tracked sources, or via the other means described above.

But as a Rio Tinto Diamonds’ U.S. vice president, Rebecca Foerster, has pointed out, carrying “responsible” products doesn’t necessarily reflect poorly on the rest of a jeweler’s inventory. She compared it to “when you go to the supermarket and you see the regular food and the organic food.” Foerster also noted that large retailer Ben Bridge has successfully sold both “mine of origin” stones (via the Ikuma brand from Canada) as well other brands, to use one jewelry chain as an example.

Lisa Bridge, secretary of Ben Bridge, and the fourth generation to run the chain, agrees with Foerster’s statement. She says that while there is “definitely an awareness” of conflict diamonds among their customers, those customers understand there are choices. “We don’t denigrate our non-Ikuma diamonds when talking about Ikuma,” Bridge explains. “[We tell consumers that] all our diamonds are conflict free, and by purchasing a diamond from Africa they are also helping to support legitimate development.”  She says most Ben Bridge customers considering a diamond from Africa are satisfied by their sales associates’ explanation of the KPCS and its System of Warranties, as well as of the Bridge chain’s general vigilance in responsible sourcing. (Ben Bridge is also certified by the Responsible Jewellery Council.)

Other jewelry makers and designers facing the public have had reservations about presenting “responsibly sourced” diamonds for fear of adding something “negative” to what should be a joyful and happy process—especially for engagement purchases. But Charles Stanley, president of Forevermark U.S., the De Beers–owned brand that requires diamonds to originate from responsible sources, says that it’s important to keep the story positive.

“We don’t train our sales staff to say the Forevermark is a non-conflict diamond,” he says. “If the consumer raises the issue, that is when you get into the story. It’s never about the negative side of the story. It’s the positive side of responsible sourcing.” Forevermark customers, for example, might be told about the positive steps that De Beers has taken at its mines to ensure that its employees all receive free medicines to treat those who are HIV-positive, an enormous problem in southern African countries. However, if a customer insists on knowing whether a Forevermark diamond is conflict free, the seller can also state unequivocally that it is. The same is true for diamonds sourced from conflict-free Rio Tinto or BHP Billiton sources.

 “This may not be the most prevalent issue on consumers’ minds,” Stanley said. “But the number of people that are concerned about ethical issues is on the rise. There will come a tipping point where these concerns will underpin every purchase. People need a strategy in place to deal with this.”


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