The Quest for Fair Trade Diamonds

Say you’re an ethical consumer. You don’t want to own diamonds associated with the atrocities you saw in the movie Blood Diamond. So you buy from BrilliantEarth.com, or another seller of Canadian stones. There’s no civil war in Canada. You’ve made the principled decision, right?

Not necessarily. Global Witness and Partnership Africa Canada, the two nongovernmental organizations nominated for a Nobel Prize for their work on conflict diamonds, have called that logic “backwards,” because it hurts Africa by effectively boycotting its diamonds.

What about lab-grown (aka synthetic or cultured) diamonds, which also are conflict free and don’t involve ripping up the ground? They’re hailed by Web sites like greenKarat.com, which opposes all diamond mining, including Canadian mining. Aren’t they more ethical?

Not really, says Estelle Levin, a sustainability expert studying the diamond industry for TransFair, the only third-party certifier of fair-trade products in the United States. “Synthetics do nothing to improve the situation in developing countries,” she argues. “There is the environmental cost of producing synthetic diamonds in a world of climate change and pollution.”

The issues surrounding so-called ethical diamonds are more complex than they appear. But these subtleties often get lost on the Internet, where sales at sites like Brilliant Earth and greenKarat are booming. And while these products give consumers a way to salve their consciences, whether they really do any good is debatable.

The sad fact is, nearly a decade after the conflict diamond issue was raised, there is no firm consensus—aside from asking for a Kimberley warranty—on how an ethical consumer (or retailer) should buy diamonds. Levin, who’s been studying the industry for years and just became engaged, says she’s stumped.

Yet there’s also reason for optimism. The diamond industry benefits the economies of Namibia, Botswana, and South Africa, countries that are among the most prosperous and stable in Africa. In addition, the conflict diamond issue is mostly settled, and complaints about the way diamonds are mined in traditional industrial mines are relatively few.

Diamond mines are safer than gold or platinum mines, and their workers are mostly unionized. And while diamond (or any) mining is inherently damaging to the environment, mining companies, particularly in Canada, must undergo strict environmental assessments before they begin. The companies also contribute to the community—something they’ve begun to trumpet in the wake of the Blood Diamond furor. The industry also is beefing up its standards, most notably through the work of groups like the Council for Responsible Jewellery Practices.

But the artisanal sector—which produces an estimated 10 percent of diamonds—remains an embarrassment and a disgrace. Artisanally mined diamonds—generally produced in Africa by “sponsored” workers who fish them out of riverbeds—produce riches for the industry, yet the workers toil for hours on end, are paid less than a dollar a day, and work in unhealthy and sometimes dangerous conditions.

So, is the answer not to buy artisanally mined diamonds? That, too, is complex. Artisanal diggers live in some of the world’s poorest countries. Cutting them off could mean unemployment, and possible starvation, say human rights advocates.

Still, the conditions in the artisanal sector are so unsettling—and the public relations implications so damaging—that there is now an industry organization, the Diamond Development Initiative, aimed at finding an answer to the problem. It has the support of just about every major player, from De Beers on down, and is looking for a full-time director.

Will there ever be a diamond that everyone can agree is ethical? The question is increasingly being asked; the Madison Dialogue, a joint industry/NGO initiative, has a working group devoted to just that question. “’Green’ and ‘ethical’ labels are currently in vogue among marketers in pretty much every retail sector one can think of,” notes Susan Thea Posnock, public affairs manager for Jewelers of America and a member of the Madison Dialogue working group. She says her organization “is supporting those efforts that will lead to real change on the ground for workers throughout the supply chain, not just a nice shiny label that consumers can feel good about when they plunk down their money.”

Most of the attention is on the decidedly non-shiny labels offered by the Fair Trade Labeling Organization and its U.S. member group, TransFair, which has exclusive rights to the black-and-white Fair Trade insignia (though not the term fair trade, which is not trademarked). The Fair Trade label already adorns products like coffee and chocolate, and it has considerable potency among certain consumers. For an industry like diamonds, with its damaged reputation, it could be a crucial endorsement. A recent survey by the Jewelry Consumer Opinion Council found more than half of respondents said it’s important that diamonds be mined under fair-trade guidelines—and most said they would pay extra for such a product.

The Tiffany Foundation, the charitable arm of the famed retailer, is funding a study by TransFair on the feasibility of fair-trade diamonds. Tiffany chairman Michael Kowalski says such a label is appealing. “We always look for third-party certification,” he says. “I can tell the consumer anything I want, but if I were a consumer, I would be looking for an objective assessment to assure me what Tiffany is doing has an objective basis in reality.”

But Tiffany isn’t sure it wants to carry fair-trade diamonds. “We’re far from making a commitment to sell them,” Kowalski says. “We are committed to responsibly sourced materials. We would very much like to responsibly source diamonds from Sierra Leone. But we don’t want to create sub-brands in our stores where we say this brand is better than the product next to it.”

TransFair, for its part, isn’t committing to the concept either—just studying it. Caren Holzman, TransFair’s director of category management, notes that the diamond industry has certain peculiarities that make the concept difficult, including a sometimes opaque supply chain. “There is so much illegitimate and illegal mining taking place,” she says. “For fair trade to be successful, you need infrastructure.”

Diamonds also have to be manufactured under strict conditions. “We can’t have a diamond that was mined following fair-trade principles and then find out children cut and polished it,” Holzman says.

Another issue is the environmental impact of diamond mining—any hole that’s dug must be filled in. “I don’t want anyone to underestimate or simplify what it takes to make something fair trade,” Holzman cautions. “We have set a really high bar. For us to do something less would affect our coffee business, our banana business. Our brand is at stake, and we are co-branded with some of the biggest names in the world, like Starbucks.”

The TransFair study will take at least a year to complete. Not surprisingly, it, too, has raised controversy, since deciding whether or not to label a product “fair trade” is complex. For instance, one could argue that some of De Beers’ operations in southern Africa might qualify, since they benefit third-world countries. And it’s easier to guarantee environmental standards and humane working conditions at a tightly controlled corporate mine than it is in the sometimes chaotic artisanal diamond fields.

The notion that traditionally mined diamonds might someday be labeled fair trade angers some supporters of the concept. Marc Choyt, for example, who blogs at FairJewelry.org, argues that artisanal miners have far greater need. “The real issue is whether fair trade will benefit large multinational corporations or small, impoverished miners,” he says.

Holzman says her group “obviously” wants to benefit the artisanal diggers but adds “there is a role of traditional mining to play.” She notes that fair trade “works with some of the largest producers there are” with its other products. “We are willing to work with any and all companies,” she says. “Obviously we want to make a difference in many countries.”

Meanwhile, Martin Rapaport, arguably the first industry figure to raise the fair-trade concept, is charging ahead with his dream of producing fair-trade diamonds in Sierra Leone. (Remember, the name is not trademarked.) He recently began organizing local diggers in what he says are strictly monitored conditions. “I’m hoping by the end of this digging season we will have the first fair-trade diamonds from the source,” he says. “This is something that takes a lot of time and money to do. We want to make sure it’s really correct. Then we’ll worry about labeling.”

The danger is that the quest for an ethical diamond has become too crowded, and initiatives like these could wind up at cross purposes. Even so, momentum has begun to gather, and most industry observers believe a market is developing as well.

“There is so much demand for fair-trade diamonds, it’s ridiculous,” Rapaport says. “I like to say, the rarest diamond in the world is a fair-trade diamond.”