Is the Industry Still United on Conflict Diamonds?

It was—perhaps—not surprising that some expressed skepticism about the proposal to change the definition of conflict diamonds to include stones mined under violent conditions at the recent Kimberley Process meeting in Washington D.C. What was—again, perhaps—a little more surprising was that among those expressing skepticism was a representative of India’s Gem and Jewellery Export Promotion Council.

The GJEPC is a member of the World Diamond Council. And in May the WDC passed a resolution endorsing a change in the definition. Yet a day after that happened, a GJEPC “senior functionary” expressed reservations about any expansion of the KP’s mandate to the Times of India—although this anonymous gentleman barely mentioned the WDC, saving all his rancor for the U.S. 

So does the GJEPC’s position now differ from the WDC’s? I’ve repeatedly asked GJEPC officials about this via email; so far, I’ve received no reply. However, if the Indian body really doesn’t back a change in definition, that would be a significant, and troubling, break in trade ranks. (What makes this situation somewhat unique is that the GJEPC is a quasi-public organization, which represents both the trade and the Indian government.) 

Now, while I happen to favor an expansion of the KP definition, I agree it should be done thoughtfully. But this brings me to a point I’ve been wanting to make for some time: People in the middle market—particularly those in India, China, and Dubai—have long felt under-represented by the World Diamond Council, which they see as dominated by the U.S. and big mining companies. At a speech at the recent WDC meeting in Vicenza, Dubai Diamond Exchange chairman Peter Meeus made that point publicly:

Today it is sometimes unclear whom the WDC represents. The world has changed in 10 years and in its constituent bodies this change should be reflected. The WDC should not only represent the West but also the East. 

This issue isn’t unique to the WDC; some also say that Chinese and Indian companies are under-represented in the Responsible Jewellery Council, with the exception of some bigger companies (for instance, Rosy Blue is a founding member).

There are many reasons for this—but among them is the fact that social issues just aren’t that important to Indian and Chinese consumers (yet). And their local industries reflect that. Of course, these concerns may grow in importance in these countries in a generation (or two). But most businesspeople aren’t far-sighted enough to look decades ahead. 

By contrast, while social concerns aren’t hugely important to U.S. consumers, they are big enough that they’ve become a priority to the people at the major American jewelry chains and organizations. (Many in the industry also care about these topics on a personal level, a factor that shouldn’t be overlooked.) I’ve heard local officials express frustrations that are the mirror opposite of those in the middle market, saying international industry groups need to be more sensitive to consumer confidence.

At some point, these different factions in the diamond business may be headed for a split. And really, it feels like it’s been building for some time, ever since the Marange issue raised its ugly head, and you had, on one hand, Indian manufacturers welcoming those goods, and, on the other, groups like Jewelers of America warning members to stay away from them. As Meeus put it in Vicenza:

[The] interests within the WDC are becoming less aligned. If you try to defend everyone’s interests, at the end of the day nobody is happy anymore. It is clear the American retailers and consumers expect different things from the KP than the manufacturing and trade centers.

Now, we shouldn’t oversell this; the industry largely agrees on the major issues. But uniting the trade hasn’t been a big problem in the past. It may prove more of one in the future. 

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JCK News Director

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