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Industry
Summit in Moscow
CIBJO 2014: Disclosure and sustainability were the key issues.
By Anastasia Serdyukova
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Above, left to right: Ahmed Bin Sulayem, executive chairman of the Dubai Multi Commodities Centre; Eli Izhakoff, chairman of World Diamond Council; Gagik Gevorkyan chairman of Russian Jewellers’ Guild; Gaetano Cavalieri, CIBJO president; Anton Siluanov, Russian finance minister; Maxim Shkadov, president of International Diamond Manufacturers Association and Andrey Yurin, head of Gokhran.
Photo courtesy Russian Jewellers’ Guild. |
The 2014 Congress of the World Jewellery Confederation (CIBJO) covered a wide range of issues from terminology to synthetic diamonds to legal issues and sustainability, yet the keynote idea that linked all the sessions was the crucial importance of transparency, disclosure and greater social responsibility. “We are working to increase the confidence in our industry,” said Gaetano Cavalieri, the president of CIBJO.
More than 130 delegates from 40 countries met in Moscow from May 19 to 21, with the event hosted by the Russian Jewellers’ Guild. Much work was done in advance of and during the congress over the harmonization of the Diamond, Pearl and Gemstone Blue Books that cover all the terminology used in the industry. “We are working to facilitate all those technical issues in a way that will be easy for consumers and retailers to communicate,” said Cavalieri.
The Diamond Commission expanded the CIBJO definition of a diamond to include the following: “A diamond is a mineral which has been formed completely without human interference. It may be subsequently cut and polished.” The addition is intended to strengthen the position of natural stones. CIBJO’s position is that if the term diamond is used without any qualifiers, it can be assumed to have been formed in nature.
There is also a strong feeling in the industry that the term “natural” should be included on invoices for even greater disclosure. “If there is a term ‘natural diamonds’ on the invoice and receipt and the diamond turns out to be otherwise, then it is also easier for the police to step in,” said Maxim Shkadov, president of International Diamond Manufacturers Association (IDMA). “Saying ‘this is natural,’ and ‘that is synthetic’ is a perfect way for disclosure,” said Harry Levy, deputy president of the Diamond Commission.
The Diamond Commission also discussed changes needed in the Blue Book regarding colored diamonds, whose color hues are not universally accepted and understood. The discussion reflects the increased demand and prices for colored diamonds in recent years. Currently, “there is no price list or guide for buyers as to how much they should be paying,” said Levy. “We have heard complaints that the profit margin is as much as a factor of 10. Bringing order to the issue would help create a price list.”
The definition of colors for other precious stones was the focus of the Gemological Commission meeting. The delegates debated how to introduce a standard for colors, especially when they come with such creative descriptive names as pigeon’s blood red and royal blue on gemstone reports. “The terms are a good marketing tool, but they are difficult to standardize because they represent an image in the mind, “ said Nilam Alawdeen, CIBJO Colored Stone Commission president.
Synthetic was the buzz word of the congress, with many jokes made about real diamonds and real love vs. the synthetic versions. But, on a serious note, the industry participants agreed that there is an urgent need for a solution on how to deal with these stones. “The issue of synthetic diamonds cropped up a lot over the past year and we felt the need to explain what it is so that there would be no fear,” said Udi Sheintal, president of CIBJO’s Diamond Commission. “The synthetic diamonds are here and they will have their place on the shelf.”
A special event was organized within the congress to present a wide spectrum of issues related to synthetic diamonds. The latest technologies in synthetic diamond creation were presented in a report by Dr. Andrey Katrusha. He spoke about the two production methods — High Pressure-High Temperature (HPHT) and Chemical Vapor Deposition (CVD) — saying that they are similar in cost and profit levels, with the HPHT method producing more stones per production run as well as producing bigger and clearer stones than the CVD method.
Katrusha is working for the St. Petersburg company Inreal, which created a 2.2-carat E, VVS2 polished diamond — an especially large size for synthetics. Aleksandr Kolyadin, director of Inreal, said that producing jewelry-quality diamonds is a way to measure the advancement of the technology, since most lab-grown diamonds are made for industrial use. The company currently has 16 machines and Katrusha noted that 500 machines would be able to produce 2 million carats a year.
Dr. Simon Lawson of De Beers Technologies UK assured the CIBJO audience that “any synthetic diamond can be identified.” He said the De Beers machines designed for synthetic detection were DiamondSure, DiamondView and DiamondPlus, and that his division works closely with Element 6, the De Beers division that produces synthetic diamonds, in order to produce the most effective detection devices. CIBJO Pearl Commission President Ken Scarratt, who is Gemological Institute of America’s (GIA) managing director for Southeast Asia, said GIA’s DiamondCheck does preliminary screening to reduce the number of diamonds that have to be referred for further checking.
Jean-Pierre Chalain, director of the diamond department at the Swiss Gemmological Institute (SSEF), spoke about his lab’s Automated Diamond Spectral Inspection (ASDI), which can analyze large quantities of colorless melee diamonds from 1 millimeter to 3.8 millimeters in diameter. He explained that the device is specifically made to meet the needs of the Swiss industry, which uses millions of carats of colorless melees. “When we realized the high quality of CVD lab-grown diamonds, we needed a speedy solution so we focused on colorless as it was technically easier to make,” he said.
All the conference participants spoke about the need to disclose information about synthetics. Suzan Flamm, senior counsel at the Jewelers Vigilance Committee (JVC) in the U.S., said the failure to disclose that diamonds are lab-grown is a violation of U.S. law, even if the seller doesn’t know their origins. She also explained that prosecutors in such cases more often seek a civil remedy for a breach of contract violation because it is difficult to prove the “intent to defraud” that would make it a criminal violation.
There were no specific decisions made at CIBJO 2014 on how to proceed with synthetics in the market other than emphasizing the need to disclose the origin of the stones. Levy said that the industry should be talking to producers of synthetics and the manufacturers of synthetic production equipment, instead of just giving warnings to retailers.
“We need to take action and we want a solution because India will be affected the most by synthetics,” said Pankaj Parekh, vice chairman of India’s Gem and Jewellery Export Promotion Council (GJEPC). “We need to know how to avoid undisclosed sales of synthetics and how to avoid mixing” synthetic stones with natural diamonds.
The other key topic that ran throughout the congress was corporate responsibility and meeting sustainability requirements. “We’re making every possible effort to comply with United Nations regulations and the requirements of human rights groups and promote sustainability,” said Cavalieri. “Why do we do all this? Because we want to keep our jewelry house clean, and we are trying to do better.”
Attention also was paid to legislation on conflict minerals because a preliminary draft of a law on the subject is under consideration by the European Union (EU) commission. There has been a legislative effort to create a law similar to the Dodd-Frank Act in the U.S., but one that avoids the problems that Dodd-Frank poses. Cavalieri noted that poorly conceived and improper legislation or regulations can be devastating. He added that one of the negative consequences of the conflict minerals clause in the Dodd-Frank Act is that “companies are avoiding legitimate gold producers in the Great Lakes region of Africa. Let me stress, those who are paying the steepest price for the ill-conceived legislation are not the jewelers, but the stakeholders. These are people and entire communities living in some of the most economically underdeveloped areas of Africa.” Michael Allchin, CIBJO Precious Metals Commission president, said that the best system would be one in which EU countries send their authorities to inspect how refineries are complying with regulations on nonconflict metals and then compile a list of reliable companies, which can then be referred to by gold buyers seeking responsible suppliers.
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On the final day of the congress, CIBJO signed a cooperation agreement with the Fairtrade Foundation, whose jewelry activist Greg Valerio had urged the delegates to start talking more to consumers in disclosing the origin of the metals used. “We need to stop worrying about bad news coming out because it is already happening,” said Valerio, referring to several films and documentaries on the subject that he says are about to be released.
During a session devoted to education and marketing, the delegates heard reports on what is being done in other industries on carbon emissions control and global warming prevention. Carbon experts have been working with CIBJO over the carbon footprint because it has direct impact on sustainability in the industry. “It is essential for organic materials such as pearl. If there is global warming, such trades will die,” said James Riley, chief executive officer (CEO) of the Gemmological Association of Great Britain.
Dr. Laurent E. Cartier shared the results of three years of research into the sustainability of pearl farming, which showed that the process had a positive effect on marine life. He said that work is currently underway to create a list of requirements for responsible pearl farming and to create certificates that would accompany every responsibly farmed pearl. “We had great feedback,” said Cartier, “with people going to our website and saying, ‘This is great for consumers because they begin to understand how much effort goes into growing such pearls and why they cost as much as they do.’”
Cartier added that the sustainability issue is so strong for the younger generation that it can affect the purchasing decision and it is important to get the message across in a credible way. He told the audience that a conference on sustainable pearl farming is scheduled for June in Hong Kong.
“When people come for jewelry, they want to hear where diamonds and gold come from. They want to hear a good story,” said Marylyn Carrigan, co-director of the Centre for Trust and Ethical Behaviour at Coventry University in the U.K.
The congress host country Russia is a newcomer to CIBJO, having joined the organization a year ago. “It was a logical step because Russia is integrated in world jewelry trade,” said Gagik Gevorkyan, the president of the Russian Jewellers’ Guild. He noted that the experience of other countries would be interesting to implement in the country. Prior to the opening of the congress, there was concern that the political tensions between Russia and the West over Ukraine would affect the decision of some delegates to come, but it did not appear to have done so. “We come here in the same spirit as we would any other part of the world, ” said Cavalieri. “We take care of issues related to the industry, not politics. We want to support the Russian jewelry industry.”Article from the Rapaport Magazine - June 2014. To subscribe click here.
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