NEW YORK — Social responsibility is affecting every industry, and jewelry is no exception.
The fine jewelry business made steps to surmount a tidal wave of negative publicity and ensure diamonds remained a girl’s best friend in 2003 when its members helped pass the Kimberley Process Certification Scheme to combat blood diamonds. Now the business is attempting to make certain everything from the diamonds to the gold and even the coral that goes into creating that engagement ring or red-carpet necklace comes into this world under improved measures.
And the pressure on the industry isn’t diminishing. The Kimberley Process is coming up for its three-year review and nongovernmental organizations that were instrumental in first exposing the links between diamonds and escalating civil wars in Africa, including Partnership Africa Canada, Global Witness and Amnesty International, are saying it is still not completely effective. They are advising third-party audits and other system spot checks to make it more robust.
Also, following last year’s Kanye West video for his song titled “Diamonds Are Forever,” which used images such as a woman’s hand turning to blood when her suitor placed an engagement ring on it, comes a new potentially controversial fictional drama called “The Blood Diamond.” The film, which director Edward Zwick began shooting in February in South Africa and Mozambique with Leonardo DiCaprio, Jennifer Connelly and Djimon Hounsou, is set against the backdrop of the civil war in Nineties Sierra Leone and places at the center of its plot a rare rough diamond. The diamond was obtained from mines that were at that time run by the rebel Revolutionary United Front and used to fund their violent activities, including the killing of some 50,000 locals and the amputation by machetes of the limbs of thousands more. The film is expected to hit theaters in December, just in time for the lucrative holiday jewelry retail season.
Today’s awareness of the dichotomy of the jewelry trade — the ultimate in luxury versus alleged exploitation — can be traced to a small town in central South Africa formally known as Kimberley, also called diamond city.
It was near there in 1871 that a farmer’s son named Erasmus Jacobs is said to have found a shiny rock that he became so fascinated by that he hoarded it among his toys, where it remained until a curious neighbor, Schalk van Niekerk, passed it on to a trader, who in turn passed it on to a geologist. The geologist identified it as the country’s first diamond, a 21.25-carat stone now known as The Eureka.
Diamonds had long been mined in India and Brazil, but the size of the stone and the subsequent discovery nearby, also by Niekerk, of the rock that would become the 47.69-carat Star of South Africa changed the scope of diamond mining forever, kicking off a feeding frenzy in Kimberley and raising Africa’s prominence as the primary supplier of the precious gem.
But the role of Kimberley in shaping the diamond business didn’t stop there. Some 130 years later, in response to growing concerns about African warlords exploiting the continent’s rich alluvial cache to fund their power struggles, leaders in the diamond industry began meeting in Kimberley to devise a way to combat the traffic of diamonds from countries such as Sierra Leone, Angola and the Democratic Republic of Congo that were embroiled in conflict.
The result of these meetings was the Kimberley Process Certification Scheme. The program comprises an international system of extensive checks meant to track the origin of rough diamonds and a resolution that many have said kicked off a new era of increased accountability and transparency from mine to retail.
These changes have run from the introduction of branded diamonds to jewelers founding organizations to serve as a forum for ethical improvements.
“Sierra Leone was a wake-up call — or whatever you wish to call it — that overall [the industry] needed to be more responsible and come up with solutions to issues concerning this business,” said Eric Braunwort, president of Columbia Gem House, a company that is involved in gemstone mining and cutting, as well as jewelry manufacturing to sell wholesale to North America. “People were already starting to move in this direction, but the situation in Sierra Leone made it more of a protocol and codified it. Jewelry is a magical product, but to bring it out on the backs of others doesn’t make it so magical. Part of that sparkle is everything that helps to get it [to the consumer]. Consequently, the movement toward change is very much in its infancy right now, but everywhere you turn people are talking about it.”
Canadia Diamonds built its company based on news that came out of Africa in the Nineties, and uses as its primary marketing vehicle the notion of social responsibility.
“I was just a young guy in this industry and wasn’t interested in selling a product that was tainted,” said Canadia chief executive officer Oren Sofer, who helped found the firm in 2003 and now distributes diamonds loosely and in designed jewelry under a partnership with Rosy Blue called Tri-Star Worldwide.
All Canadia stones bear a brand laser-inscribed symbol and a number that enables a buyer to trace the stone back to its mine of origin in Canada. It also guarantees the stone was extracted under strict laws that seek to protect the diamond workforce, mining area’s native people and environment, including recent initiatives to reroute a lake disrupted by mining and protect wildlife like caribou.
“Luxury products have always had origin associated with them,” said Sofer. “Diamonds have been the only product not to exploit this. If we have the technology to provide this, why can’t we give consumers the option to have the peace of mind to know where a diamond comes from and under what conditions? The biggest motivator of change for most companies is profit, but companies like ours show the consumer response.”
Gem Certification & Assurance Lab Inc., a New York-based firm that authenticates and grades diamonds, is taking Canadia’s identification system one step further. It’s proposing to distributors to use its Gemprint technology to take what it calls a diamond’s unique fingerprint. This fingerprint will be incorporated into a document called the Source Veritas Passport that will accompany the diamond through to its point of purchase and serve as a lifetime guarantee that the stone did not come from a country involved in civil war. Gem Certification is introducing its new system at the JCK jewelry trade show in Las Vegas next month.
De Beers LV, a diamond retailer established in 2001 in a joint venture between diamond mining and marketing company De Beers SA and luxury conglomerate LVMH Moët Hennessy Louis Vuitton, is also putting its brand promise in writing in a passport form. Its passport states that De Beers diamonds are mined from areas that aren’t in conflict and that don’t exploit child labor. The passport will launch worldwide next month and will accompany any diamond purchase.
“What De Beers wants to do is help the legitimate diamond industry,” said Joan Parker, global communications director for De Beers LV. “There has been so much focus on the bad that diamonds can do, but there has been little focus on the good that diamonds can do. Places like Botswana in Africa have a whole economy that is supported by the diamond industry, including HIV treatments and the building of schools, and if buyers take the business away from Africa, a lot of people there and in other areas like this will suffer. There is a whole other side to the story and we hope the passports will help to open up a dialogue.”
Michael J. Kowalski, chairman and ceo of Tiffany & Co., said: “Coming to understand what the issues were when reports first started [coming out of Africa] was a slow evolution. We had such limited exposure to diamond mining then and we didn’t know at first what we could do to change the situation. We added our voice to other concerned retailers and were among the very first companies to support and help work through the Kimberley Process. Meanwhile, that coupled with another ethical issue that came about in the mid-Nineties when we helped to halt the construction of a gold mine that was going to threaten Yellowstone National Park, had raised our awareness about the question of the integrity of our supply chain.”
Tiffany first invested in a Aber Diamond Corp., which owns a diamond mine in Canada, and now has begun working directly with cutting and polishing facilities. It also refuses to use coral extracted from natural beds in its pieces so as not to disrupt the environment.
“We took a step back five years ago in thinking about this issue and part of the Tiffany brand promise is that our customers absolutely expect the precious materials — whether it’s gemstones or metals — that are used in our products are in fact extracted, processed and manufactured in ways that are socially and environmentally responsible,” said Kowalski. “Because of our scale and because we manufacture the majority of the product we sell, moving back was not as big a challenge for us as it might be for others.”
Cartier also wants to stand behind its brand promise of product excellence, so in response to concerns about issues facing the business it has become a founding member of the Council for Responsible Jewellery Practices. The year-old organization, according to Frédéric de Narp, Cartier’s North American president and ceo, will study the complex diamond and gold supply chain and isolate ethical, social, human rights and environmental issues that its members can work to address.
“We want to ensure the entire industry is working together toward a shared goal,” said de Narp. “Everybody is more sensible now and a large number of trade associations are playing a crucial role in engaging its members on these issues.”
While most experts agree the industry has put a mammoth effort forward to make the Kimberley Process work and regulate the annual production of some $11 billion in rough diamonds, some feel more can still be done. They say movies like “The Blood Diamond” can only help to maintain the discussion regarding the issue.
“The Kimberley Process is working, but it’s not over,” said Ian Smillie, research coordinator for Partnership Africa Canada, an Ottawa, Canada-based nongovernmental organization.
While the civil war in Sierra Leone has ended and the country is now a part of the Kimberley Process, along with some 44 countries worldwide, Smillie said the United Nations Security Council has just put a ban on diamond exports from the Ivory Coast. The Democratic Republic of Congo also continues to be a problem. Liberia, which has been under an embargo since 2000, now has a new government and they are working to have the embargo lifted.
“In the mid-Nineties, we estimated about 15 percent of the rough diamond industry involved conflict diamonds,” said Smillie. “Now, we say it’s only four percent and the reality is that it’s likely even closer to one percent. But one percent can still fund a lot of guns. If you think about it, diamonds are the most concentrated form of wealth in the world. You could put $1 million worth of diamonds in somebody’s shirt pocket. But we are getting the industry to work on this issue without having to push too hard. They want to fix it and they see that there are positive things that can be done. This can turn into a good-news story.”
Corinna Gilfillan, a lead campaigner of Global Witness, an NGO based in the U.K., said although a recent poll the organization saw said that only 20 to 25 percent of consumers know about ethical issues surrounding jewelry, it’s still a sizable amount and will only increase.
“Those brands that are taking that extra step and are able to give consumers a lot of information and assurances on where their products are coming from will have a big payoff,” she added.
Braunwort of the American Gem Association predicts the industry will be completely different even three years from now as a result of this.
“This industry is at the peak of the luxury chain and we should be held to a higher standard,” said Braunwort. “If we are producing a product that isn’t critically necessary to everybody in the world, we should be producing that product in the most beautiful manner possible.”