Industry Hits Back at NGO Report

The World Diamond Council took an unusually combative stance against a recent report by nongovernmental organization Global Witness that called the industry’s efforts to self-police conflict diamonds “abysmal.” (See “NGO: Industry Flunked Pop Quiz,” JCK May 2004, p. 30.)

Global Witness sent investigators into more than 30 retailers of various sizes in four cities on the East and West Coasts. It later followed up with a letter asking about the companies’ conflict diamond policies, as well as phone calls to the companies.

Its survey found:

  • In just four of 33 stores were sales associates well informed about their company’s policy on conflict diamonds and the system of warranties. One associate in New York’s diamond district even claimed to have “never heard of conflict diamonds.”

  • Only five of 30 companies responded to Global Witness’s inquiries.

  • Four of the five responding companies “did not provide details about specific measures companies were taking to ensure that they were not buying or selling conflict diamonds,” the report said.

Only two companies seemed to do well in the survey. Global Witness said Tiffany’s response to its letter “stood out because it described how it has strengthened its sourcing and auditing policies to help ensure that it is not dealing in conflict diamonds.” New York’s Fortunoff was the only retailer whose salespeople were deemed “well informed” and which also replied to the letter.

Other than that, the report, which was released at the March World Diamond Council meeting in Dubai, concluded the industry “is still not taking the issue seriously.”

“This continued failure means that diamonds can continue to fuel conflict, human rights abuses, and terrorism,” added an accompanying press release.

What raised the most controversy was Global Witness’s contention that this poor response meant retailers could not guarantee to their customers that their diamonds were conflict-free.

‘Utter nonsense.’ The WDC release said it “takes great exception to a report issued by Global Witness and completely and utterly rejects the representation of the industry as unable to offer proper assurance to consumers.” WDC executive director Matthew A. Runci says that while the report is embarrassing, it doesn’t call the whole Kimberley Process into question.

“We feel that not responding to a letter from Global Witness is not indicative of anything other than not responding to a letter from a Global Witness,” Runci says. “To conclude from that experience that the Kimberley Process is just a p.r. effort is utter and complete nonsense.”

World Diamond Council general counsel Cecilia Gardner added, “I have trouble getting a letter back from Wal-Mart. But I don’t think there is any major retailer to whom this is not a major issue.”

Global Witness campaigner Corinna Gilfillan says her group “is not invalidating the whole Kimberley Process. The industry should be delivering on the system of self- regulation that backs up the Kimberley Process.”

She notes that even after the report and the publicity it generated, her group had still not heard from several major retailers, including Van Cleef and Arpels, Whitehall Jewelers, and Bulgari.

“Clearly this isn’t an issue for some of them because they don’t seem to have a policy or any kind of response for us,” she says.

JCK contacted most of the retailers in the report, and most did not respond to us as well. Some of those who did seemed to back up Global Witness’s contention that most of the industry remains in the dark about conflict diamonds. “We have never heard of the issue,” said the owner of one New York store. Most didn’t know the industry had devised a way to deal with the problem. “I am not a jewelry manufacturer, I don’t buy unmounted gems, how am I supposed to know?” another New York store owner said.

Todd Bracken of Bracken Jewelers in Santa Monica, Calif., says he can’t remember the letter but does recall the follow-up phone call, which detonated into an argument over the issue. “It went on for 15 minutes and got pretty heated,” he says. He says that the group only printed part of what he told them in its report. “They were just looking for a something negative,” he says. Still, he says the report did cause him to “tighten up some things.”

‘Useful.’ In the end, Runci called the report a “useful reminder” that this issue remains important and potentially damaging.

“Obviously, many independents and retailers do not have this issue sufficiently top of mind,” he says. “There is really no excuse for [not responding]. At a minimum, it’s bad manners. People need to make room for this issue on their agendas.”

Runci expects more NGO “tests” in the future. “I have no doubt they’ll be back,” he says. “We as an industry have our work cut out for us.”

The Global Witness report can be seen at www.globalwitness.org/reports.