- How can the industry change the perception of itself while KPCS leadership remains hostile to civil society?
- How can the industry claim that they care about perceptions of labor conditions when Development Diamonds aren’t yet available to consumers directly upon request, and perhaps more importantly, what has been done to educate consumers of the issues surrounding artisanal mining? FWIW, some good developments here.
- How can the industry claim that it benefits its source nations when under-invoicing and transfer pricing — or, as one could call it, theft of sovereign resources — remains almost completely unaddressed?
- How can the industry claim any sort of ethical high ground when Marange headlines still surface, usually in connection with how much wealth was stolen from that country?
A few months ago I had the pleasure of attending a tech/kiteboarding networking event called Mai Tai in Cabarete, Dominican Republic. If there were ever an event designed almost specifically to appeal to me, this is it: kiteboarding, technology, startups, add in a few dashes of Burning Man / Robot Heart parties, and you have “me” encapsulated.
I met a rather idealistic, optimistic, wild-eyed and fascinating young lady who, after telling her of my odd interest in diamonds, quickly interrupted me to tell me a bit about Diamond Foundry, confidently boisting of how they were going to blow the diamond industry apart, completely uninterested and even a bit flippantly dismissive in what I had to say about the DDI or ForeverMark or Botswana.
“There have already been a few companies attempting such with lab-made diamonds. They never can quite get the color up there, can they? Mostly H-L colored stones, and most of them max out at about a carat.” I retorted.
“No, but they’ve figured it out and they’re perfect diamonds now”
I told her about the DDI and the good work they do in the field, helping artisanal miners in Sierra Leone, Angola, DRC, Côte d’Ivoire how to do their risky work, yet also minimizing the chances of death by drowning, cave-ins, geological prospecting and rough diamond valuation, and mitigation of environmental impact.
“I wonder if that’s actually even a good thing”, she posited, as I about gasped. “The people of Sierra Leone need to all become programmers.”
I’ll leave judgement of the wisdom, feasibility and maturity of that statement to my readers. “How could it be that, with no other economic options available to them at all, saving them from drowning or death by cave-in is somehow a bad thing?” I thought.
This week, Diamond Foundry came out of stealth mode with their billionaire and celebrity backers, and I’m trying to gather my thoughts. The goods listed on the rather tiny inventory on their site seem near identical to what has been offered by Gemesis / Natural Grown Diamonds for years, with colors mostly in the H-L range, and most stones under a carat. Maybe the better goods are forthcoming; They certainly have the hype. Furthermore, the stones are apparently not graded by a trusted 3rd party, but by a GIA-trained gemologist. Not to infer that those stones are incorrectly graded, but is there not a conflict of interest when the grading is done by the same party as the one doing the selling?
DF has already announced that they won’t be competing on price. Rather, they may price their goods at higher prices than competitors. With colors mostly in the H-L range, they certainly aren’t competing in quality either, it seems. What then are they competing with?
Assurance of origin. Diamonds born in California, from renewable energy, in a sustainable process. A 100%, nerve-soothing guarantee.
How is this better than assurance of diamonds being “responsibly sourced” by ForeverMark? Does this not seek to capitalize off of a common thinking that all of “Africa” is straw huts and AK-47’s, unsuitable for “ethical” consumers? Does this not do the same that CanadaMark may do, with assurance of Canadian origin, and allowing consumers to draw whatever conclusions they like (no matter how correct) from there?
Undoubtedly, DF’s customers will pay the premium for equal or lesser goods, and walk away from the jewelry counter thinking they’ve done something “ethical” and “good”. But what if they pick DF because of their opinions on De Beers being the “monopoly” that they no longer are? What if they pick DF because of fears of “conflict diamonds” that mostly don’t exist any more, or disappearing Marange diamonds that probably can’t be found in US stores anyway? What would be the “ethics” of collapsing national economies and livelihoods because of mutable and incorrectly-placed stigma? Will DF make diamond customers out of people that otherwise wouldn’t be?
Or maybe they choose DF because they’ve read of issues I’ve discussed on this humble blog: they’ve seen an antagonistic Peter Meeus speech and want nothing to do with him or the Mugabes or the Dos Santos clan? What if they’ve read about the problems at the KP that won’t ever be addressed because all decisions require unanimity? What if they read about under-invoicing and transfer pricing and want nothing to do with that problem, either? Wouldn’t the diamond industry, with almost no good news coming all this year and a gloomy forecast, then outright deserve to be “disrupted”?Read More
The Diamond Development Initiative — “a unique effort to address the problems faced by the millions of artisanal diamond diggers and their families, in Africa and South America” — came out with this excellent video featuring Ian Smillie, Ngomesia Mayer-Kechom and Dorothée Gizenga:
“Development Diamonds” may not yet be available to consumers, but a donation to the DDI can certainly help bring that promise closer to reality. I’ve long thought that the market is screaming for something along these lines (I am in that market) …Read More
Last month, The Bride and I went to a very fancy gala for UNICEF.
At a point in the night immediately following the live auction, a video was played about “white jeeps”, and how much they need them in places like Sierra Leone, Liberia, Guinea, Côte d’Ivoire, etc. (basically all the diamond-mining countries). The price was fixed at slightly north of $31,000, and the auctioneer asked: “Who wants to buy us a jeep?”
Hands bolted up. One. Two. Three. Four…. 15 … 20.
At $31k a pop and without a blink of an eye or a twist of the arm, at least 20 white jeeps were donated by some of the wealthiest people in the city and country (The Bride and I, despite what I think of as our rather comfortable lives, are usually by far the poorest people in the room at these events). One of the donors was a woman seated directly to our left; a 40-something socialite married to an apparently obscenely wealthy (and absent on the night in question) octogenarian. In no means do I question the worth of UNICEF or raising awareness by any means necessary, but upon becoming lost in the sparkle of the walnut-sized (I’m not exaggerating) oval-cut diamond on her finger, I couldn’t help but wonder what had contributed more to positive economic development: the diamond, or the Jeep?
I then became reminded of a conversation I had with a co-worker years ago, who, with the biggest heart and best of all intentions, announced her decision to go volunteering in “Africa”, and was seeking donations for her to go. Absent details on the flyer, when prodded a little more, I learned that the country she was destined for was Tanzania and that she’d be teaching … what specifically I don’t know, and I daren’t speculate.
I blame my eternal lover/nemesis Johnny Walker Black for what came later in that night, when I asked her: “what happens to the children after you leave and they graduate? Do they get jobs? Let’s say I go to Tanzania and Kenya for two weeks of kitesurfing, all along the way giving money directly to local businesses in exchange for services. I then return to the USA, blog about the journey, and tell all my friends and relatives to visit as well because it’s a lovely place … and some of them eventually do. Which one of us is responsible for the greater ‘good’?” If the kids don’t get jobs after they graduate from your school, what was the whole point? Awkward silence doesn’t even begin to sum up the stunned reaction.
If you don’t offer consumers some form of traceability, if you don’t even try to change the perception that “Africa” is just one large country, then you don’t give them a reason to buy in to something bigger and better than a pretty rock. If the industry is facing a crisis by continually losing share of the luxury consumer’s wallet, then simply “getting out the love message” (a/k/a, issuing new “greatest hits” collections on CD boxed sets) isn’t going to change that. To the extent that there is a “love message”, I do not disagree. But it has to be more than greenwashing, more than a slick marketing campaign, and more than a “love message” that diamonds bring smiles to happy brides.
“Blood diamonds”, “conflict diamonds”, “illicit diamonds”, “development diamonds” …
… and now, the time has come for “love diamonds”. And how do you prove that?
“The road to hell is paved with good intentions. Just because it doesn’t work doesn’t mean you don’t have good intentions, so you’re not a bad person, you just realize that the unintended consequences or your good intentions, that’s what’s gonna rule. So be careful with your intentions. And just because you’re a nice person trying to do a nice thing, doesn’t mean you are doing the “right” thing.”
Let’s assume you’re a resident of the DRC, specifically in the borderlands with Angola. Your economic opportunities are largely minimal, and one of the most promising paths is illegally entering comparatively more promising lands of the Lundas of Angola to mine for diamonds with a shovel and sieve. You risk torture and rape by Angolan private security companies, in addition to the usual risks of being an artisanal miner, such as death by cave-in, drowning, violence, malaria, etc. Or perhaps at no fault of your own, you live in Marange or the Central African Republic under similar circumstances. But you’ve also got hungry mouths to feed, so Dodd-Frank, the KP or other feel-good schemes be damned: the risks must be assumed.
Along comes a crazy-haired white New Yorker and self-styled researcher (really just a guy with an internet connection) who’s never lived in a war zone, and has been on TV a few times, specifically telling the relatively few consumers that do care about where their diamonds come from, to specifically avoid the resources that are your only economic option and livelihood, all because your government is corrupt and our country can’t meet some Western feel-good standard. Instead, he says, consumers should buy diamonds coming from your comparatively wealthy neighbors in Botswana. He’s certainly well intentioned, but how “good” is it to advise avoiding my diamonds (and everybody that brings them to market), just because, far downstream of me, they transit through Dubai or through some manufacturer with a checkered past and shady ties? How rational is it to essentially punish the people most ill-equipped to meet your “responsibly sourced”, “conflict-free” standards? Moreover, clearly it’s not rational to essentially sanction an entire large country because of problems existing in some regions with some companies and some resources, but that is what has apparently happened in the DRC. Shouldn’t the accent be on responsible sourcing, and on being “conflict-managed” rather than on a possibly unachievable “conflict free”?
The biggest thing I’ve learned through this whole experience is that complex problems imply complex solutions. The more I think about diamonds and the words “good” and “bad”, the more confused and less pointed I get. There is often very little connection between raw materials and finished products, and as far I’ve learned, little to nothing we can do on the consumer end to make that connection. We’re left to simply take a company’s word for it.Read More
Whereas brands such as the De Beers Forevermark program, for example, claim to guarantee the quality and authenticity of the associated diamond, CanadaMark simply verifies that the stone was mined in Canada. Dominion believes that, in itself, is enough to augment the branding of its manufacturing clients and associated wholesale and retail partners…
The second phase of its roll-out plan, Pounds says, will focus on educating consumers primarily in the U.S. and Canada about the hallmark. He added that efforts to bring more manufacturers and retailers on board would be helped by increasing end-consumer demand and interest in the program.
Much of that messaging will stress that Canadian diamonds are ethically sourced and produced according to socially responsible practices and in an environmentally friendly manner. Undoubtedly, more consumers are seeking such assurances.
I like to consider myself well-travelled and better-versed in geography — and African geography — than the average fella, and have even been to the continent twice before (with plans to return soon). However, when presented with the two options of a Canadian diamond that had been traced to the source versus the “general / African / mystery” pile of diamonds, who could blame a consumer for being convinced that the latter was the more “ethical” choice? I even had a persistent, obnoxious (and persistently obnoxious) co-worker imply to me, on three separate occasions, that since I was serious about getting a responsibly-sourced stone: “so, you’re getting a Canadian diamond, right?”.
Thankfully I did quite a bit of reading after that, and then changed tack:
“I’m looking for a diamond from Sierra Lone. Or Botswana, South Africa or Namibia. Or Lesotho. Or Tanzania. Oh, and radiant cut, SI1, F-I, l:w 1.2-1.3. ~1.75ct.”
Figuring it was worth a try and in my naiveté, I actually said this to a few rough diamond geologists (imagine their laughter!) and to my diamond dealer. But try saying this to an acquaintance with average geographic knowledge (which is also more likely minimal-to-no African geographical knowledge) and guess the reaction you’ll get. I’m guessing it’s probably along the lines of: “Well I’ve seen Blood Diamond, and …”. Even amongst my closest friends, some rather well-travelled, the reaction was pure confusion: “so, after all this research, now you want a conflict diamond?”
Obviously “Africa” is not just a monolithic mass and mess to avoid: judging just by the headlines, production in Botswana (most transparent country in Africa and among the most transparent in the world) has almost nothing in common with the production out of Zimbabwe or Angola (both among least transparent in the world). Is CanadaMark, by relying solely on its origin and allowing consumers to make all good assumptions from there, exploiting geographical ignorance? If full traceability from mine to retail were possible, what would a consumer think if his GIA cert included “Origin: Namibia” or “Origin: Botswana” on it? Obviously there are a lot of good things that should come to mind.
The status quo leaves more to be desired. CanadaMark exists, and consumers may find it enticing. Forevermark is a great step in the right direction, but there should be an option beyond just De Beers. How can I get a Lesotho diamond? A Tanzanian diamond? A Côte d’Ivoire stone (of which I’ve heard nothing but positive developments lately)? Is there not a good, marketable story to be told, and as well, a fungible perception that can be changed?
Rapaport’s article concludes with, what I perceive, the correct conclusion:
This column maintains that there is untapped diamond branding opportunity in Botswana. Perhaps the state-owned Okavango Diamond Company will consider developing a similar hallmark to enhance the value of its Botswana-produced diamonds. Namibia might be thinking along the same lines as it negotiates a new supply and marketing contract with De Beers.
From the perspective of a concerned consumer trying to do the right thing, there are plenty of legitimate gripes to be had about the diamond industry: lack of traceability and therefore the general absence of a guarantee that my diamond is doing ‘good’, weakness of the KP, under-invoicing and transfer pricing, enabling corruption, environmental damage, etc (I’ve made my gripes known here). But consumers are extremely powerful, and we are less powerful, not more, when we act on incorrect information. A speed-reader could be occupied for weeks reading one similar-sounding anti-diamond article after another, but there some are global standouts that actually deserve attention … that they should be ignored (I’m aware of the irony).
This is mostly a rehash of the old and boring “diamonds have no intrinsic value, are a bad investment and we only desire them because of De Beers” argument, as if the consumer is mindless (false), diamonds have no desirable qualities (false), and the only value to consider is what I am offered at a pawn shop or on eBay (false). This reasoning is, well, intrinsically “bullshit”, and Jewelry Atelier does a better job than me of responding to this argument and its other claims here. This argument appears to be more frequently-deployed to diamonds than other equally “valuable” goods for some reason. If the writer’s article is to be true, then it is also true for a multitude of other items people widely consider “valuable”. I won’t even bother reacting to the claim that we only demand diamonds because of “A Diamond is Forever”…
In addition to making nearly all the same claims made by the piece above, my favorite claim made here is that “De Beers has a global monopoly on diamond mining”. Words matter, especially when you have several million views. I remain perplexed about how exactly a company could create and enforce such a monopoly, unless they had somehow confiscated all shovels, pans and sieves in the world. Nevertheless, what they had, was a near-complete monopoly on the supply of rough (very different). It’s also important to note the tense of the verb: had. What they have now is far from it, unless CollegeHumor believes that 22% of global rough production and 37% of sales constitutes a “monopoly”. Being that this piece of trash was published in 2014, it seems that they either do believe so, or started with a conclusion and then lazily hacked together evidence to fit. I lean towards the latter. De Beers also liquidated their stockpile over a decade ago.
3. Jezebel: “A Quarter of All Diamonds In Stores Are Blood Diamonds, and Nobody Can Tell Which Ones They Are”
Jason Miklian created quite a stir when he published his excellent essay, “Rough Cut” in Foreign Policy. After an in-depth investigation in to diamond manufacturing in Surat, India (where over 90% of the world’s diamonds get cut and polished), he boldly concluded that up to 25% of the world’s diamonds are blood diamonds.
Mr. Miklian’s figure has been intensely debated, and there seems to be some confusion between the terms illicit diamonds and blood diamonds. Important nuance of the difference between “up to 25%” (which is a rather large range, but strictly means 0% at the low end, to 25% on the high end)” was therefore manipulatively lost in the headline when Jezebel.com reported that a full “quarter of all diamonds in stores are blood diamonds”: when given a range, they picked the highest end and saw it fit to publish, because it was more headline-worthy. In our tl;dr world, this may be all that most people read.
Moreover, it’s further dishonest to say that a full “quarter of all diamonds in stores” being blood diamonds. By writing “in stores”, we can assume that we’re talking about gem-quality diamonds, and not diamonds in general. While artisanally-mined stones (those most likely to be called “blood diamonds”) represent roughly 15% of world rough production, their share of world gem production is about 4%. However, it would also be dishonest to claim that diamonds mined artisanally are by definition “blood diamonds”, as the tough conditions of which they are mined — and who benefits — vary greatly dependent upon the mine, and when they are extracted. AADM is also ineradicable, and the more proactive approach as advocated by the DDI is most promising. Furthermore, “of all diamonds in stores” seems to lazy assume that all retailers have the same sourcing policies and therefore the same chances of winding up with a blood diamond. This is not the case, and Mr. Miklian himself even suggested to me that I look at Tiffany and Forevermark as viable options.
One could easily call alluvial Marange diamonds “blood diamonds” (or at the very least, less “diamonds doing good”), but those diamonds are not as likely to wind up behind a jewelry counter, as their quality is generally low and they have a noticeable green tint (casting further doubt on the headline “and nobody can tell which ones they are”). For what it’s worth, Ritani, Blue Nile and Brilliant Earth all have explicit an anti-Marange sourcing policy displayed on their respective websites, and trade in green-tinted stones is banned on the polished diamond trading network RapNet. Simply put, these companies understand reputational risk, and have been proactive about publicizing their efforts.
We could easily call many diamonds from the DRC “blood diamonds” (also an excellent article by Mr. Miklian), but of course, while one of the world’s top producers by volume, the quality of stones coming out of the DRC is generally low ($25/ct according to the KP) as well.
This business has recently gone defunct, but its literature is forever in my memory, and in that of Archive.org. Consider the following sentences: “Since [man-made diamonds] are in fact real diamonds, there is little remaining reason to endure the stigma now attached to natural diamonds. We feel the time has come to start transitioning those employed in diamond mining to sustainable livelihoods in other industries, while phasing out diamond mining altogether. It simply isn’t needed any more.”
Man-made diamonds certainly sound nice on paper, but are not without their limitations: the difficulty of removing nitrogen from the synthesis process generally results in diamonds of a color in the H-K range (if you don’t believe me, go ahead and look at Pure Grown Diamonds’ inventory yourself), the stones tend to max out at just under a carat, and environmental impact depends on how those HPHT machines get their energy.
I can find every reason in the world for being insensitive about future unemployment in the fossil fuels industry should we immediately transition to renewable energy sources, but to call for replacing all of what many countries, communities and millions of people depend on (some with no other options) with rows of HPHT machines, simply because of fungible “stigma”, is a sophomoric argument at best.
Diamonds, like Middle East geopolitics, are an issue that I’ve read a lot about, and the more I read and the more complexities I realize, the less pointed I become. Every time I’ve been linked somewhere, like clockwork this toad emerges from beneath his bridge to call me a shill for the diamond industry, including, as he foolishly and tastelessly somehow saw appropriate, on my fiancé’s Facebook page. Frustratingly, I’m still trying to figure out what exactly the point of this person’s argument is. Is it that by paying taxes to the Israeli Government, all business and citizens are complicit in the occupation, and therefore all diamonds cut and polished in Israel are “war diamonds”?
Frankly, I have too many friends that both live in Israel and disagree with their governments’ policies to buy in to this argument. I’ve already spent too much time thinking about this sad person.Read More
I’ve found this particularly fascinating. De Beers addresses changing consumer tastes, the rise of demand from China, safeguarding the supply chain from synthetics, pressure from banks on the middle stream, etc.Read More
I had been reading Rob’s excellent writing for a while, and was honored at the invitation to offer a consumer’s perspective. I’m quite sure people in the audience looked on me as a naive idealist, and that’s fine: my conclusions may be faulty, but I still feel confident in saying that I’ve read a hell of a lot more than most consumers have on the subject, and had already been told by some pretty amazing people that I had clearly done my homework.
A particular analogy that was offered by industry representatives was that of a salt shaker and the grains of salt: “We can certify the contents of the entire salt shaker as being conflict-free, but we can’t provide the same level of assurances for each individual grain of salt”.
I found this analogy to be particularly irritating, and the reason for this is simple: for us consumers (the people that keep the entire industry afloat), those individual grains of salt are the entire salt shaker. Diamonds aren’t exactly cheap things, and I don’t like being told that the small fortune I’ve just handed over wasn’t enough to bring assurances of origins of the only stone I care about. Are assurances for every piece of melee or every 2,3-pointer (0.2-0.3 carats) that makes up the bulk of diamonds in the supply chain necessary? Of course not. But if it can be done for a Kimye-sized stone, it can be done for my center stone, too.Read More
It does seem that the consumer baton is being passed on to the Millennials. The boomer generation is retiring in large numbers now, and their attention is turning to dealing with retirement. The Millennials are bringing a different attitude towards buying luxuries and it is one we are not used to.
…The vast majority of diamond dealers, and even diamond retailers, have not the slightest idea of how to enhance the product. With them, it is still a candy store business. And many will be departing the business as a result.
via Gem Thoughts
Also on millennials:
The Atlantic: How Millennials Spend
Millennials anticipated spending the greatest amount of money in the coming year on fresh fruits, organic food, and natural products. Less favorable, in their minds, was the idea of spending on luxury goods, soda, applications, and handbags.