Kimberley Confusion

A year after the launch of the Kimberley Process Certification Scheme, much of the industry still is not fulfilling the requirements.

That's the conclusion of a JCK Retail Panel survey that asked jewelers whether they require their suppliers to put "conflict-free" assurances on their gems. Fewer than 50% said they did—even though virtually every industry association requires it. Some said they tried, to no avail. "We have asked [our suppliers] but get nothing," one retailer wrote. "It's a joke. Try and require and see what it gets you."

A slim majority said that most of their diamonds come with "conflict-free" warrants, and that they have a policy for dealing with customer inquiries. Some 60% said they're having staff members learn about the issue.

The JCK survey comes on the heels of a report from nongovernmental organization Global Witness, which found that nearly all the sales associates they talked to were ignorant of the issue. For anyone in the industry who is familiar with the problems of sales associates, this probably came as no surprise. However, it did lead Global Witness to tell the Financial Times that the industry was not fulfilling the Kimberley requirements—the first piece of negative press the industry has gotten on this issue in more than a year.

When informed of the survey, executives of the World Diamond Council tried to look on the bright side, noting it's hard to get the word out in such a disparate industry.

The survey "suggests the industry is making considerable progress," says Matthew A. Runci, chairman of Jewelers of America and WDC executive director. "It's much better than the Global Witness report and more in line with what we've been hearing. Even so, 40%, 50%, 60% is not good enough. We need to redouble our efforts to improve education and to provide better guidance."

Runci says his group is looking at ways to increase compliance.

Corinna Gilfillan, a campaigner for Global Witness, is more critical.

"I don't think the results are very impressive," she says, adding it was "disturbing" that more than half of jewelers surveyed were not requiring their suppliers to document their stones as "conflict free."

"That is a major component of the self-regulation scheme, and it's very important for retailers to do that in order to pressure their suppliers and the diamond pipeline to comply," she says. "It really speaks to the need for the industry to do a lot more."

Weak consumer interest. If retailers are not concerned about the issue, it could be because it hasn't made much impact at the sales counter. Ninety-five percent of retailers surveyed told us they "never" or "rarely" hear it mentioned by consumers, and only one retailer said it comes up "often" or "frequently." Many retailers say they hear about issues like synthetic gems and treatments far more often than conflict diamonds.

Some panelists said they actually bring the subject up to consumers: "Honesty is always best. I mention it before they do," said one. But another said, "Why open a can of worms? Most people really don't care." Agreed one jeweler, "It comes up so rarely, and only the NGOs care about it. Our customers and potential customers really don't." Another wrote, "I've had one or two people mention it. Neither were buying a diamond."

Many retailers are still fuzzy about their obligations. Many didn't realize that they are supposed to not only require Kimberley certificates but also keep them for five years. Many didn't know how to deal with sticky situations such as pre-Kimberley goods. And a surprising number still say a diamond's origin cannot be traced, despite the industry's efforts to make it traceable. "I'd be glad not to sell conflict diamonds, but who really knows?" wrote one retailer.

In the end, complacency could hurt the trade, Runci warns. The heat's off the industry for now, since the conflicts that diamonds were involved in have fizzled out. But the situation in Africa remains unstable, and this issue could return.

"If and when this problem presents itself again, industry measures will be in place to ensure that conflict diamonds don't once again find their way into the supply chain," he says. "It's like insurance. You are paying a premium to protect the reputation of the product from future damage. You hate to pay the premium, but when something goes wrong, you are glad it's there."