The diamond industry is in grave danger. Not because demand is down or profitability has been almost completely squeezed out, but because it has lost its moral compass and is spinning out of control into free-for-all battleground where rules, decency and dependability don’t matter.
The majority of the diamond industry is being branded in the public eye because of the doings of a few rotten apples among us. But it is our own fault for staying silent and not taking strong action against these people, making an emphatic public statement that we are an ethical and dependable industry that will not tolerate wrongdoing of any sort.
Three major issues threaten us today.
The first is the undisclosed mixing of synthetics. It needs just one consumer to discover a single diamond in a piece of jewellery to be an undisclosed synthetic, to have the entire edifice come crashing down because people everywhere no longer trust us.
Serious as this is, I’m glad the diamond industry worldwide is taking this seriously and moving in the right direction in dealing with it. The global industry needs to stay vigilant and on top of the issue, however, as with technology improvements, it becomes easier by the day to produce synthetics — some specifically tailored to beat current detection techniques.
Knowingly Heading For Bankruptcy
The second is the almost completely shameless way in which non-performing businesses have continued to stay in business, secretly adding to their debt while siphoning money out into other investments and avenues of business until finally going out of business, taking other people’s money with them — much of it public money from banks. These people pursue a planned path knowing full well they’re heading for ultimate bankruptcy.
Very often, these people can actually restart gem and jewellery businesses by setting up new entities and life goes on as normal, while those who lost money have to simply write off the entire amount.
Very often, those who go out of business continue to get support of others in the industry who are their friends and relatives. The argument they put forward is that they don’t want to see these people fall on hard times because of a “business mistake”. That is fine. But helping someone so that he doesn’t fall on hard times doesn’t mean condoning his previous behaviour and setting him up to do business all over again. Employ them by all means if you want to, but there must be strictures against these people from doing business with the rest of the diamond industry on their own account, until they have settled all their previous outstanding payments.
Illegal Tampering With Diamond Certificates
The third, and in my opinion the most serious behavioural deviation is the increasing frequency with which diamond dealers are willing to tamper with official third-party certification of their goods. The latest, the data breach at the GIA and the illegal upgrading of the reports of 1,042 diamonds, reveals how deep the poison has spread in the industry.
The diamond industry cannot wait for law-enforcement to act in this matter. We all know that in India this could drag on for years and years. We know the names of the companies that submitted these diamonds and the Gem & Jewellery Export Promotion Council (GJEPC), the Bharat Diamond Bourse (BDB) in Mumbai as well as the Surat Diamond Bourse (SDB) should immediately take strong action against these companies.
This is not witch-hunting or taking the law into our own hands. It is what any other industry would do pending the outcome of an official investigation. The GIA immediately suspended the accounts of these companies and everyone understands that it is the right thing to do. Suspending these companies from official industry forums should also be seen as the right thing to do.
Why Ethics Are Essential
All of this is not some attempt to be holier than thou. It is essential for the survival and future well-being of the global diamond industry. Remember that diamonds are not some essential commodity. They are only worth as much as a consumer is willing to pay for them. And what they’re willing to pay for today has to do with whether that product or the industry that produces it is perceived as being a positive force in society.
Demand for diamonds has to be built up and reinforced with a message that resonates with today’s consumer. An industry that signals clearly that it stands for the common good and benchmarks moral behaviour will be perceived as one whose product is valued highly.
When Leonardo DiCaprio, who starred in the movie Blood Diamond, says he’s backing a start-up company to produce synthetic diamonds because this will ensure that the product is “ethically produced”, the whole world listens to him. And they think we are an industry that cannot be trusted.
We have to prove him wrong.