‘Conflict diamonds’ issue still threatens the industry, panel says

Despite seeming consumer indifference to the issue of “conflict diamonds,” the industry shouldn’t be complacent about it, panelists agreed on a session on “Dealing with Conflict Diamonds and Other Issues” held Sunday, Feb. 3 at the JCK Show in Orlando.

While audience members and panelist John Cohen of Carlyle and Co. agreed that few consumers had asked about the issue, most also agreed with panelist Zvi Gutentag of Galaxy Diamond in Los Angeles that the real danger was consumers who were so turned off by the issue that they decided not to buy diamonds at all.

Panelists and audience members disagreed over whether the industry was really to blame for the way these diamonds are used. All felt, however, that the industry had done a good job in “containing” the issue. Panelist Jeff Fischer, president of the Diamond Manufacturers and Importers and Association, noted that the industry is now seen as the “good guy” and there haven’t been any demonstrations or angry press releases since the middle of last year.

But he notes there could be problems ahead. The conflict diamond legislation is now stalled in the Senate, as the Senators who sponsored the bill are uneasy about some changes made in the House version. Fischer worried that, if the bill continues to go nowhere, the NGOs (non-governmental organizations) might lash out at the industry out of “sheer frustration.”

Cohen, a board member of Jewelers of America, noted that his group recently commissioned a “social audit” to discover further problem areas for the industry, so it can act in a “pro-active” way and develop better relations with NGOs.

Most people in the audience and the panel felt that some major retailers had made a mistake pulling tanzanite from their shelves, after the Wall Street Journal reported it could be linked with terrorist group Al Qaeda. They said the stores could be vulnerable to charges of hypocrisy if there is further evidence of terrorists’ links to the diamond industry.

Fischer also spoke of an anti-trust lawsuit against De Beers, which De Beers recently defaulted on because it has no legal presence in the United States. The proposed remedies include halting De Beers advertising in the United States and stopping its dealing with U.S. sightholders. Fischer noted that industry organizations hoped the judge would see it as “legal blackmail” and that the groups are considering writing an amicus briefs on behalf of De Beers. One audience member felt that the lawsuit was a much greater threat to the industry than the noise over conflict diamonds.

The panel was moderated by Rob Bates, diamond editor of JCK.