A consumer’s belief that a product is indeed delivering on the values it promises for the price paid, rests on the confidence that the industry that manufactures the product is able to generate.
Industries do this by building or supporting robust institutions that can monitor, audit and verify the claims the industry makes about the product, its raw material sourcing and processes by which it reaches the consumer in its final form.
For a product that is not essential to everyday life and depends solely on disposable income, not only is this assurance necessary to get the consumer to notice the product in world full of discretionary-spend products, it determines how much value it can generate.
The Kimberley Process (KP) is one of the key institutions that the diamond industry depends on to deliver the assurance that not only are rough diamonds responsibly sourced, but that they deliver fair value to artisanal miners and the local communities in the sourcing area.
With all its cumbersome procedures and the sometimes near impossibility of getting a consensus among all the participating governments, the diamond industry should be proud of the KP. It really stopped conflict diamonds and is now grappling with the issue of delivering fair value to artisanal communities. Without the KP, the consumer will see the diamond industry as just another exploitative undertaking that is driven by greed and is uncaring about what happens to local mining communities.
And despite the fact that it is run by various governments, the diamond industry and its organisations like the World Federation of Diamond Bourses (WFDB) and the World Diamond Council (WDC) are key components of the KP. The KP is the diamond industry’s very own institution. It is essential for the diamond industry’s credibility.
Which is why I was horrified when Martin Rapaport called the KP “bullshit” while taking questions on his presentation at the diamond industry Mines to Market conference organised by the Gem & Jewellery Export Promotion Council (GJEPC) in Mumbai over March 19 and 20.
I frantically signalled conference moderator Chaim Even-Zohar to be given a chance to take issue with this. I was even acknowledged, but I never got to be heard because the confrontation between Rapaport and angry leaders of the GJEPC and the Bharat Diamond Bourse (BDB) — Rapaport had claimed that the Indian industry was responsible for generating billions of dollars of slush money in Dubai — threatened to escalate to unmanageable levels and Even-Zohar quickly shut the whole thing down.
If the diamond industry stands mutely by while someone says the rough production data generated by the KP is worthless, it is telling the world that one of the pillars on which it rests its consumer assurance process is itself worthless. It is asking the world to rely only on mining company data. We all know what the global consumer thinks of that.
Rapaport offered no reason for his summary dismissal of the KP as a credible institution. But he had a public platform and was able to air his opinion for all to hear. Nobody else challenged him.
I do. I challenge Martin Rapaport to substantiate his terming of the KP as “bullshit”. I challenge him to support that dismissive term with data, facts and proof. I challenge him to prove that the data he drew his conclusions on was totally accurate.
And I want to ask the diamond industry why it did not rise to the KP’s defence. I want to ask it whether it knows how little credibility it has when it bases its own inter-dealer polished diamond pricing benchmarks on Rapaport’s price list — which is based on one man’s opinion and not any sort of established, verifiable pricing mechanism? Does it think the consumer will have confidence in its workings and its assurances?
The diamond industry has just told the world that it really doesn’t care about the mechanisms that deliver assurance and fair value. Creaky and slow it may be, but the Kimberley Process is not bullshit. By allowing Martin Rapaport to get away with calling it that, the diamond industry told the world that it was itself a “bullshit” industry.