Doubt on Diamonds

The World Diamond Council gathered this February in Catania, Sicily. It looks like a great place to go so I checked it out on the Net, and Sicily quickly made it on my vacation list. Of course, that was not why the WDC was there. That meeting was to discuss the large issues facing the diamond business.

Based on the various WDC press releases, the main topic was conflict diamonds. It was agreed that the Kimberley Process has been effective in at least deterring terrorists, rogue countries, and greedy individuals from undermining the integrity and image of diamonds and the industry. A decision was made to push the producers of a new film called The Blood Diamond, starring Leonardo DiCaprio, to include an update in some way that recognizes the industry and nongovernmental organizations for their efforts in ending and reversing the horrors that occurred in West Africa.

All the same, some questions linger. We do not hear of many cases in which illegal diamonds have been seized. We have to assume that illegally obtained diamonds are not being trashed in the face of the official documentation demanded by importing countries. We have to assume that compact and portable wealth—diamonds and colored stones—continue to attract thieves and terrorists as a convenient mode for moving across borders and advancing their own agendas. A new report on the Brazilian diamond business documents serious abuses and estimates that as much as 25 percent of Brazilian goods have fraudulent certificates. The Kimberley Process has made honest people more so, and made it much harder for bad guys to do their dirty work. But few, if any, have been reformed.

Whatever we do, there will always be a shadow of a doubt about where our diamonds come from, and how they got here.

I am not being a pessimist, but history tells us that corruption and exploitation have been with us forever. Despite enormous efforts to stop drug trafficking, that business continues to thrive in Colombia, Afghanistan, and elsewhere. Oil, we should note, has caused far more death and destruction than diamonds, but there are no calls to end that menace. Diamonds are an easier target. They are, after all, unnecessary, and are brandished by the rich and famous.

The meetings in Catania did need to cover Kimberley and investigate how it can be strengthened and extended. But the industry as a whole is now faced with many other problems—most importantly, the very survival of countless diamond companies. Maintaining the image of diamonds is one thing; survival is quite another. Maybe, when all is said and done, WDC members just shrug their shoulders and say these are forces of nature beyond anyone’s control. Maybe we will end up seeing a handful of mining powers channel the bulk of the world’s diamonds through a select group of companies. But maybe not. It is a subject worthy of serious discussion.

I am reminded of the latter days of the wholesalers’ association in the United States. There were big gatherings of old-line wholesalers from all over the country together with many suppliers, including the largest diamond companies. These meetings were held in the finest resorts, and we all had a lot of fun and did a lot of business. It was the same thing with the catalog showroom conventions when that was a huge business. When the world passed these business modes by, the collapse came in a hurry.

We do remember the wonderful resorts, though. Kind of like Catania, I guess.

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