[miningmx.com] — IT’S Valentine’s Day tomorrow. For diamond retailers it’s the Christmas after Christmas, the calendar simply mandates that love is in the air. It’s go-time. If global diamond merchants had figured out how to write a 24-carat Christmas jingle, they would have done so by now. “It Came Upon a Midnight Clear Antwerp cut,’ etc.
While it’s reckless perhaps for me to think that there’s a VEN diagram showing a crossover between diamond consumers and Talking Heads fans – surely there must be a few — when it comes to the world’s most sought-after stone, the line “We know where we’re goin’ (fingers, necks, ears, maybe the odd nose) but we don’t know where we’ve been’ (Ivory Coast, Congo-Brazzaville) probably isn’t running through the heads of customers.
Taken from the song ‘Road to Nowhere’, it raises an important and simple question: what’s the probability that the diamonds you’ve just bought are “conflict free’?
“It’s likely to be low, with the only official conflict diamonds coming from Ivory Coast,’ said Mike Davis, team leader of conflict resources at Global Witness, the London-based non-governmental organisation responsible for spearheading the Kimberly Process, an inter-governmental certification system that assures consumers that the diamonds being sold are not mined in a conflict area or being used to help prop up a warlord or support an army or rebel insurgency.
Earlier in the decade, as diamond-revenue fuelled wars raged on in Angola, Sierra Leone and Liberia, it was a different story. “We were looking at a situation 5-10 years ago when 10 to 15% were conflict diamonds.’ (The World Diamond Council, of which De Beers is a part, puts the figure of conflict diamond trade closer to 4%)
However, times have changed and both Global Witness and the diamond industry agree that the percentage of conflict diamonds in play on the global market is way down.
“Since we’ve been working very closely with each other, we’ve managed to reduce conflict diamonds to less than one percent, said Simon Gilbert, manager of international relations at De Beers Group. “The only country under embargo regarding diamonds is Ivory Coast and their production carat-wise is very small compared to global production.’
And in an industry that typically sees global sales of more than $60bn, that may be impressive, but even a minute percentage of that can cause a massive amount of misery, says Davis.
“The value of conflict diamonds being exported from the north Ivory Coast has been estimated at $23m which is an important source of revenue for the rebels. You can buy a lot of weapons with that.’
Several years on, says Davis, no one has a clue as to the final destination of the Ivory Coast diamonds. “No one has been able to get a handle on this which is very worrying.’ What’s particularly worrying is that Kimberly Process certificates aren’t an automatic part of the sale.
While most retailers will say that it’s possible to get Kimberly certification for any stone, different shops have different thresholds for having certificates on hand. While retailers such as Brown’s have certificates on hand for .25 carats and higher, one retailer said they had certificates on hand for only gems larger than a carat. Others said half a carat.
“That really is quite problematic if you look at the Ivory Coast stones, these are conflict diamonds. They are mostly pretty small. Ironically at the moment it’s the smaller stones that could be most problematic and about which consumers need to ask at least as many questions to be sure where the stones came from.”
Which brings us of course to retail South Africa, or at the very least the shops of the Johannesburg suburbs. Of course, what I knew about shopping for diamonds could fit on the head of a pin. I knew about things going pear-shaped, but I had no idea a diamond could take on that form as well.
Furthermore, there was the issue of appearance and believeability. No one was going to think that I was some tax-dodging German tennis star residing in Monte Carlo. So, with each store visit I carefully explained that I was a cult leader with a big mass wedding coming up, and for that I needed engagement rings and plenty of them. Or maybe I was getting ready to pop the question and I was in the market for just one, I forget.
The sampling of stores started encouragingly enough.
Just opposite the stores of Cartier and Shimansky, one of the display windows of South African jewellery designer Lorraine Efune proudly declares “OUR PROMISE’ in bold letters, informing would-be visitors past the fancy cast-iron security gate that “all our diamonds are sourced from “conflict free areas’’.
That declared epiphany may evoke a bit of a yawn at first, but after visiting at least 15 diamond sellers (you lose track of just how many at some point), what struck me is that the extent to which a boutique makes a point of being openly “conflict free’ seems to vary in colour as much as the stones themselves.
Occasionally, you’ll find similar declarations tucked inside display cases (sometimes next to notices of which cards they accept) and in other settings you’ll have to zero in on the invoice’s small print declaring the stone’s adherence to the Kimberly process. A badge declaring their membership of The Jewellery Council of South Africa is a pretty good sign too.
Sure, during my reconnaissance mission I was making this up as I went along, getting better with each effort, honing my routine and learning how to use “knife-edge band’ in a non-music context. But I got the feeling from a few shops that they weren’t all that comfortable either.
“Conflict diamonds, I’ve never heard of that,’ said one shopkeeper. Ok, I thought, let’s drag out Mr. Di Caprio. “Oh, ja, you mean like from that mooovie.’ She’s still not sure. We head inside to get reassurance. “We sell conflict-free diamonds don’t we?’ Inspiring.
Visiting that same chain in another location, I asked yet again about the presence of conflict diamonds. “So, with all the rings in the display window, I’m safe?’ The reply: “Most of them.’ For those that I couldn’t get a Kimberly certification, I could get a valuation telling me not of the stone’s adherence to Kimberly but the stone’s worth.
At another store, rather than rely on the warring words of “blood’ or “conflict’, I asked if their stones met the Kimberly Process standard.
The response: “I can’t tell you exactly where they’ve been mined, sir.’ If someone from the national cricket team misses the ball that badly, they’re serving drinks at Wanderers the next day.
While the amount of “conflict diamonds’ on the world market may be just a sliver of what they once were, when it comes to responsible shopping, there are some basics, says Gilbert.
“The advice of the World Diamond Council is to go to a recognizable jeweller who is a member of your national jeweller’s institution (i.e. The Jewellery Council of South Africa mentioned earlier). If a jeweller isn’t a member, one might wonder “why not?’ and I would advise them to look elsewhere.’
Third party auditing a worry
While that’s a good start, Davis says that Global Witness would encourage scrutiny that surpasses the institutional seal of approval. “Consumers should be asking retailers for evidence indicating they know where the stone has come from and that they have adequate assurance of this in the form of third party auditing.’ And it’s that third-party auditing -or lack thereof—that continues to worry Davis about the current set-up.
“Kimberly Process certificates accompany rough stones up to the point when they are polished, but there’s no adequate system of supply chain control thereafter. If somebody manages to smuggle a rough stone into a polishing center they will be able to effectively launder it.’
What’s lacking, he says, is an industry standard, adding that the current system of warranties amounts to bits of paper on which the supplier states that the stones are “conflict-free’.
“Consumers can ask retailers if they can show them a formal policy requiring that they have a system of third party auditing of their source of supply and that their suppliers and their suppliers’ suppliers have this also.’ MC Escher to the white courtesy phone, Mr. Escher to the white courtesy phone, please.
“In other words, they should ask for evidence of third party auditing of source all the way up the supply chain.’ Ok, I get it now.
Despite what some might refer to as imperfections in the system or as still a work-in-progress, the Kimberly process is obviously the way forward.
Gilbert is already in talks of “capacity building’ for Ivory Coast in hopes that the embattled nation will follow the rehabilitative course charted by Liberia, whose diamond-fuelled civil-war earned the country a United Nations-enforced sanction against the country’s diamond trade in 2001. Liberia was accepted as being part of the Kimberly process in late 2007.
“I can see replicating when the political process. Even though you don’t hear about it, a lot is going on, working together with Global Witness. We have to look forward to a political solution to the situation. In time, they will participate in the Kimberly process and we must assist them, but it’s difficult to interfere in government matters. It’s what we anticipate will happen,’ says Gilbert, but ultimately, “It’s up to the Ivory Coast.’
And when it comes to keeping your ring, pendant or necklace “conflict free’ it’s up to the consumer to ask for Kimberly certification.
Next week: the truth behind the Build-a-Bear Workshops: are the increasingly large fluffy garrisons positioned along the borders of the northern suburbs cause for concern?