Conflict Diamonds: Are Jewelers Doing Enough?
In late March, the human rights group Global Witness released a very public report saying major U.S. and international retailers who sell diamond jewelry are falling short of promises to demand warranties from suppliers that the diamonds they receive are conflict-free. The report details a survey and an undercover investigation Global Witness undertook to find whether retailers are complying with a voluntary industry system meant to keep conflict diamonds out of the legitimate jewelry trade.
The report says only five of 30 retailers Global Witness contacted informed the organization in writing they have a policy on conflict diamonds and are implementing the system of warranties: Fortunoff, Pampillonia, Tiffany & Co., the Signet Group (parent company of Sterling Jewelers and other retail brand names) and Zale Corp. Tiffany & Co. stood out, says Global Witness, because it described how it has strengthened its sourcing and auditing policies to help ensure its not dealing in conflict diamonds. Companies that did not respond include international luxury retailers such as Bulgari, Cartier, Harry Winston, Van Cleef & Arpels and Wempe; jewelry chains Littman Jewelers and Whitehall Jewelers; and department stores Federated (parent company of Bloomingdales and Macys) and Saks Fifth Avenue. These companies may have conflict diamond policies, but they didnt respond to public inquiries.
Just to review the background: As most of you know, the Kimberley Process Certification Scheme is an international import/export program launched in 2003. It requires governments to monitor and seal diamond exports and imports and keep records to ensure conflict diamonds cant enter the legitimate rough diamond trade. Diamond cutters and traders agreed in 2002 to follow up with a voluntary system of warranties, pledging the diamond parcels they subsequently cut and trade continue to be free of conflict stones. Diamond jewelry manufacturers also agreed to comply with and pass on the warranties. Retailers, in turn, are supposed to require their suppliers to provide the warranties.
Last year, Jewelers of America enlisted the support of its state affiliates to get a written commitment from members to secure the Kimberley warranties from all their suppliers. Rewards were given to associations that got 100% of those commitments. Still, JA represents only a portion of the U.S. jewelry retail trade and cannot compel compliance in the voluntary system.
So the international diamond and jewelry supply industry has a problem how do you get every retailer to come on board with a voluntary system? Make no mistake, the human rights groups are not going to let this issue go away, and recent surveys show consumer awareness continues to grow.
This ties into the larger issue of consumers increasingly holding retailers accountable for the social, ethical and environmental practices of their suppliers, wherever in the world theyre located. Two articles in this issue show smart retailers and suppliers are paying attention. Tiffany & Co. is openly protesting construction of a silver mine it says will pollute waterways in Montana and Idaho (p. 12). In our story on India (beginning on page 23), youll see other large U.S. retailers are demanding the Indian diamond and jewelry industry follow strict best-practices principles and the Indian industry is complying quickly.
Take time to learn more about complying with the Kimberley system of warranties by visiting JAs Web site, www.jewelers.org. While youre there, check JAs new Supplier Code of Conduct as well. Both efforts show JA understands the world has changed and retailers had better change with it or risk boycotts and protests.