The Diamond Industry Embarrasses Itself Again

The decision by eight important industry groups to boycott the upcoming World Diamond Council meeting in Antwerp is a huge black eye to the industry—and if there isn’t a serious attempt to ratchet tensions downward, it will have negative, far-reaching repercussions. The World Diamond Council is one of the most important groups in the industry—maybe even the most important—but it may find it difficult to represent the industry after a fiasco like this.

Since the World Federation of Diamond Bourses announced the boycott yesterday—you can see its maddeningly unspecific release here—a lot of people have asked me what’s really behind this. The WFDB release cited the leadership’s decision to authorize Antwerp consultants Gemdax to conduct a survey of WDC members on the “various ethical, legal, and financial challenges facing the Kimberley Process.”

“A series of risk factors and impacts have—and are—affecting the whole pipeline,” said board member Stephane Fischler in an email to the WDC board. “The aim of the two-part survey is nothing more than looking for areas of risks and the various approaches to counter them.” 

So on one level, this argument is about—well, a survey. That’s not much. (Though for some reason, nothing scares certain industry members more than surveys and studies.) But tension has been brewing on the board for some time over what the dissidents see as heavy-handedness from the current “reform” leadership. I could report all the different fights and slights, but I’ll spare you, for your sanity as well as mine. Suffice it to say, some board members viewed the decision to do this poll—which they complained was presented to them as a fait accompli, minus their input—as the last straw. And they feared that, since the WDC now collects dues from members, the balance in the group has now tilted inexorably toward the bigger players, who tend to favor reforms.

Now, one aspect of being a leader is gaining consensus by reaching out to those who disagree with you, even if you think they are unreasonable. Sometimes even heated dialogue helps. And often people surprise you. So outreach is important, and leaders cannot do too much of it.

That said, it’s human nature to consider those who disagree with you to be arrogant and close-minded; we see that in the real political world all the time. And make no mistake, there are real disagreements here, and it’s not clear that any outreach could paper over them.

It’s no accident that those involved in this boycott did not support the faction now in power or that there was similar finger-pointing in the last three intra-industry skirmishes. The near-constant focus on procedural issues seems to be a handy crutch for not talking about things people don’t want to talk about.

As an aside: The birth of the Kimberley Process came about because one group—the International Diamond Manufacturers Association—went behind the back of another—WFDB—to make a deal with the NGOs. The WFBD was furious, but in the end, everyone signed on, because the industry had a gun to its head. If that gun wasn’t there, would the founding of the KP have been bogged down in a similar argument over who was consulted when? And what message does that send outsiders about how to motivate our industry?

Back to now: Industry members in places like India and Dubai remain skeptical of some of the transparency schemes proposed by trade members in the United States and Europe, as well as the big mining companies (particularly those who do business in the U.S. and Europe). But more than skeptical, they are scared. They worry that some of these initiatives—driven in part, but not solely, by bigger players—will place further burdens on companies and drive smaller ones out of the industry. Some dissidents even fear the WDC leadership has something up its sleeve, that this survey represents an unofficial expansion of the KP’s charter beyond conflict diamonds, which in turn will spark some overarching plan that will affect the whole industry. The WDC sources I spoke to say that’s not true.

I know most of the people involved here; they are mostly reasonable and affable folks who should be able to hash things out. This boycott escalates things, unnecessarily so, and it weakens the WDC not only today but for the future. A precedent has now been set: If one faction objects to the direction of the WDC, it is now okay not to talk it out but to walk out. It might be difficult now not only to run the WDC, but any industry group.

The eight groups had options that stopped short of the action they took.  They could have signed a petition. Sent a (more detailed and informative) press release. Called for a protest vote. Put their concerns on the agenda. Attended the meetings but not stayed for dinner. But not showing up makes them look scared to discuss these issues. Perhaps that’s the goal. Right now, everyone is discussing the boycott, instead of the far-more-important topics on the table.

Still, it’s only logical that those questions will have to be addressed, and that can’t happen when people aren’t talking. Those elected to serve the industry need to rise above fear and petty squabbles and work cooperatively to make this a better business, not a more mortifying one. I’ve written in the past about the industry’s sad lack of leadership. This may be its saddest depth yet. 

JCK News Director