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Defaming Diamonds As A Market Entry Strategy

Evidence of "minimal employment"?

Delve below the surface of the global diamond industry and you will find not only a fascinating mosaic of culturally diverse communities, but  an extraordinary story of how these communities have constantly cooperated using their own socially cohesive community networks to support the functioning and development of the industry to today’s globe-girdling enterprise, contributing both to the betterment of their own communities and national economies.

When I was a young and active diamond broker I had the privilege to work closely with two such communities, both of which initially made a vital contribution to the manufacturing side of the industry. Although  the two communities are from different continents, they share one thing in common, they are both from farming backgrounds, and initially provided the labour and skills which enabled first the Belgian and later, the Indian industry, to develop into global diamond hubs.

In Belgium, highly skilled  Flemish cutters and polishers in the farming region outside Antwerp known as the Kempen, set up as cottage-industry-style contractors working with the predominantly Jewish diamond traders of Antwerp, in time many emerged either as manufacturers exporters  in their own right or in partnership with the Antwerp based dealers and Sightholders.

Similarly  the extraordinary rise of today's Indian industry is the result of the close collaboration between two communities in particular, the Palanpuri Jains the" founding fathers" of the modern Indian industry, and the Kathiawaris, originally from the Saurashtra  farming region of Gujarat State, who back in the 1960s and ‘70s, established small-scale contractors with close links to the rural farming communities that they themselves came from, providing employment and social development extending into rural communities which were previously so dependent on agriculture, that a poor monsoon had ruinous consequences on them.

The entrepreneurial mindset and interaction between these communities generated exponential growth in employment and progress at both a local and national level. It is a story of how constant cooperation  innovation and enterprise brought opportunity and prosperity to  economically deprived regions.

In 2006, eminent Cambridge professor Kaivan Munshi published a major thesis  entitled From Farming to Transnational Business: The Social Auspices of Entrepreneurship in a Developing Economy. This academic study focussed on the how the Kathiawari community was transforming and regenerating the Indian industry.

Other academic studies of the industry in New York, for example, have demonstrated how the bonds of community have always been the underlying strength and sustenance of the diamond industry’s success.

Last week, JCK’s News Director, Rob Bates, a seasoned gem and jewellery industry writer with in-depth knowledge about the diamond industry, wrote a brilliant open letter to film star Leonardo Di Caprio, brand ambassador and investor in the "Diamond Foundry”, a lab-grown diamond start up which has the financial backing of number of significantly wealthy Silicon Valley investors.

The ensuing debate showed that while the trade has no problem competing with lab created diamonds as long as they are a clearly declared and differentiated product category, it really takes issue with the way it's promoters’ sole USP seems to be the constant propagation of a defamatory narrative about an industry which, according to the Word Diamond Council, employs some 10 million people worldwide. An industry which has economically empowered not just communities, but countries too (lifting Botswana from poverty); one whose representative trade bodies have consistently faced up to its moral responsibilities in adapting and responding to challenging circumstances.

Maarten De Witte of the Diamond Foundry replied to Robs letter with a predictable list of unsubstantiated anti-industry rhetoric; adding a new claim that it "uses big factories, big machinery, and minimal employment.” Is it the Indian industry he is referring to, with its one-million-strong workforce, or something else? It appears that Mr. De Witte is scrupulously careful not to reference his assertion with established facts, knowing that when all else fails, incorrect claims or defamatory remarks can ultimately be challenged in a court of law.

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It's a shame that some in the synthetic industry are resorting to unsophisticated and harmful tactics to try to sell their product. There are enough people in that industry from the natural industry that you'd think they'd have better strategies. When at the supermarket (where there are A LOT of choices), you never see "We're good, they're bad, so buy us." And why? Because it doesn't work. It does work in politics where they are selling to the lowest common demoninator, but that is not the typical diamond buyer -- certainly not one with money to spend. I guess it pains me that that's all the industry has, synthetics have a lot more going for them than that. And yes, if that's how they want to position themselves, they need to start looking at selling cheap.
Thank you so much for your wonderful descriptions and academic review of the history of the diamond-cutting cottage industry among the farmers of the Belgian Kempen. Equally interesting is your spotlight on the emergence of the global diamond-cutting powerhouse in modern day India, from the rural countryside of Gujarat to urban Surat. The diamond cutters of the Kempen were my major inspiration, when I personally set out to become a master diamond cutter. Nothing of the sort existed in the USA. At that time, 45 years ago, New York City was the premier cutting center in the America, if not the world. My how things have changed. Today my admiration for diamond cutters around the world continues to be as strong as it has ever been, since the day I first entered the trade. Having said that, I fail to see the connection between your article and my response to Rob Bates. In fact, the quote you used does not refer to diamond cutting at all, it specifically refers to open-pit mining, “For the record, earth-mining of diamonds is based on environmental destruction of vast dimension, particularly in open-pit operations. It literally leaves giant holes in the countryside. It uses big factories, big machinery and minimal labor.” And, that is reality. It is very much true in Botswana. My master’s thesis, Diamonds and Development in Southern Africa: A Case Study of Botswana (1989) University of Illinois, argued precisely this point. I was prescient in advocating that mineral-led economic development must include local diamond cutting and other value-added entrepreneurial activity. As you’ve made abundantly clear, endeavors of this kind are necessary for economic diversification. It is the only way to forestall the "Resource Curse", dependence on revenues generated solely by depletion of a non-renewable resource base. Today, DeBeers embraces this practice, particularly in Botswana, and calls it beneficiation. The plain truth is that lab-created diamonds are part of the present and future of the entire diamond industry, especially for the craftsmen and craftswomen we both admire. These are the very people who transform what is often quite unsightly rough crystal into the gorgeous gems that are so beloved. To even suggest that we at Diamond Foundry seek the demise of diamond cutters is patently false. Nobody in their right mind would advocate such nonsense. Our intent is to keep them busy well into the future. Respectfully, Maarten de Witte
First of all I find it reassuring and unsurprising that as a master cutter yourself, you have a proper respect for both the skills as well as the history of diamond polishers and their communities — which I don't need to remind you remains by far the largest employment segment of skilled workers in the world diamond industry. You have clarified that your response to Rob Bates was aimed at the "mining side of industry”, but I find it strange that you then use the phrase "big factories and minimal labour”. This clearly refers to the cutting and polishing community — and the statement is wrong about the “minimal labour” as I pointed out. If we’re talking about mining, the big mines have large, well-trained and well-looked-after workforces. Even with the best equipment, mining is still labour-intensive. In contrast, a synthetic diamond production unit will, in fact, fit the description of a “large factory with minimal labour”. Also, of all the different mining segments, diamonds have the best environmental record. The diamond mining companies have consistently worked with local communities, respected the rights of indigenous people — even in Australia, where indigenous people and their traditions stretch back tens of thousands of years. Diamond mining firms also have the best environmental record among all the mining segments. They’ve even been commended by indigenous people for being proactive on environmental and traditional issues. As to your suggestion that natural diamonds are a resource curse I don't think you would find many of the citizens of Gaberone or Yellowstone, Perth or Yakutia who would subscribe to that view. Natural diamonds have a geography as well as a history and the extent that they can be viewed as either as a blessing or a curse has always been primarily dependent on the prevailing political governance and social conditions in the countries where they are found. You have worked in the industry for many years so you must be aware that the vast majority of the people in the industry are decent, principled people, but a high value industry will always attract its fair share of rogues and that applies just as much to the lab grown segment as the natural one. The defamation of the natural diamond industry will simply result in the consumer having a negative perception about all diamonds whether lab-grown or natural not leaving much of a market for either!
Correction, I mean to remind the public what the outcome will be if they try to sell their "Lab Grown" diamond