NGOs say the diamond industry’s self-regulation system is failing

Almost two years after the diamond industry committed itself to a system of self-regulation to prevent the trade in diamonds from regions of conflict, retailers in the U.S. and U.K. are still failing to live up to their promises, according to a survey conducted by two nongovernmental organizations.

The survey of leading diamond companies and stores in the U.S. and U.K. found that fewer than one in five companies that responded in writing provided a meaningful account of their policy and less than half of diamond jewelry retailers visited in stores were able to give consumers meaningful assurances that diamonds are conflict free, Amnesty International and Global Witness said in a joint statement.

The NGOs charge that based on the results, the diamond industry “has failed to adequately implement a system of self regulation launched in January 2003.” The industry’s commitment required it to issue written warranties and implement a code of conduct to support the international Kimberley Process Certification Scheme preventing the trade in conflict diamonds.

“The continued lack of systematic monitoring throughout the diamond industry suggests that the industry is not taking the issue seriously enough,” said Alessandra Masci of Amnesty International.

Amnesty International and Global Witness sent letters to 85 major diamond jewelry retailers and Amnesty International activists visited 579 stores in the U.S. and U.K. The main findings, presented to this week’s World Diamond Congress (WDC) in New York, include the following:

* Despite an industry commitment to educate employees about company diamond regulations, staff in only 42% of stores was aware of their company’s policy.

* Out of 85 companies that were sent letters requesting written information about their policies, 48 (56%) failed to respond including major diamond jewelry retailers like Asprey, Theo Fennell and Debenhams in the UK, and Costco Whole Sale Corp., T.J.Maxx, and Kmart in the US.

* Thirty-two out of the 37 companies that responded (86%) are implementing the system of warranties and have a policy to prevent dealing in conflict diamonds. However, 30 of the companies responding (81%) did not provide adequate details on how the system of warranties is being implemented and audited.

“The World Diamond Council, the industry body responsible for coordinating industry efforts to tackle conflict diamonds, is still falling far short on adequately monitoring self-regulation implementation on a global level,” the NGOs said in the statement.

Today’s results are part of a wider ongoing survey in which more than 800 retailers and suppliers have been contacted in Australia, Belgium, France, Germany, Italy, The Netherlands and Switzerland but so far only 52 have responded with information on their policy.

“As the public face of the industry, diamond jewelry retailers must do more to show their commitment to comply with the self-regulation and actively promote compliance by their suppliers,” said Corinna Gilfillan of Global Witness. “The World Diamond Council and other key industry bodies must develop a common standard for verifying compliance, and we hope that trade organizations will follow Jewelers of America’s recent initiative to monitor its members.”