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Diamond Dealers on Doing the Right Thing
Wholesalers have embraced ethical sourcing as a cornerstone of their trade.
Aug 30, 2021 5:06 AM
By Joyce Kauf
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RAPAPORT... Trust, reputation, integrity — these words are central to the diamond trade. “Our business is like no other in that we’ve always conducted it on a handshake,” says Maximo Quinones, president and CEO of wholesaler DVG Diamonds in Miami, Florida.
But these lofty ideals have also been tested, especially regarding the sale and use of conflict diamonds. In 2003, the Kimberley Process (KP) was established to ensure that responsible sourcing and accountability would be part of the diamond lexicon. Since then, jewelers have expanded their ethical standards to include transparency on lab-grown diamonds, the use of fair-mined metals, reducing carbon footprints, and promoting inclusivity.
Where do diamantaires stand?
“Corporate social responsibility is ingrained in the diamond business as a whole,” says David Rakower, president of New York-based manufacturer Joseph Asher Collection. “Our universe of manufacturers around the world is on board with the standards of the KP. I wouldn’t even know where to get an unethically sourced diamond. Written guarantees of responsible sourcing appear on our invoices and memos; they are a part of the general course of business.”
While he can’t speak as “the voice of every dealer on 47th Street,” Rakower says, “the people I come in contact with are very conscious of doing the right thing — ethically, socially and financially.”
Quinones agrees that “ethical sourcing is essential for a healthy industry,” adding that it is at the foundation of his company. However, he advocates a proactive approach in areas beyond what KP compliance requires. “Robust anti-money-laundering programs are one such socially responsible business practice. We seek out suppliers that take these extra steps to ensure that all diamond distribution is funded legally.”
Dealers should want to work with those types of suppliers, he says. Quinones praises his mentor, the late Phillip “Felipe” Berger — founder of Berger Gems & Pearls Inc. — as a “great diamond dealer” who “always conducted business in a socially responsible way.”
Working with people you trust is vital, affirms Girish Jain, owner of wholesale company Universal Diamonds in Pittsburgh, Pennsylvania. “Working with suppliers and manufacturers to create a product that we can talk about from the standpoint of being responsibly sourced is a very real part of our business.”
That said, he continues, “it also can’t be a blind trust.” Jain is more confident when it comes to assurances of larger diamonds’ origins; he would like to see improved origin tracking on smaller stones and melee, as in the case of Canadamark — an initiative of Dominion Diamond that certifies stones 0.30 carats and over with a laser inscription and certification card. While he doesn’t see enough demand for that yet, he would even like to add his own certification card, giving his “stamp of approval” for a diamond’s legitimate origins.
Blockchain may make it possible to enforce stricter measures in the future, dealers believe. Rakower suggests that “the KP may have been the blockchain of the 2000s,” and Jain is hopeful that the digital-ledger technology will have “a place in the diamond industry.”
Is it worth the money?
The resounding answer is yes. As the adage goes, if something is too good to be true, it probably is — and the price of diamonds is no exception.
In addition to selling loose stones, Quinones produces special-order jewelry, which he insists on fabricating in-house rather than overseas. Although this is more costly, it affords more control over ethical metal sourcing and labor.
“It has always been a tenet of my business — upstream and downstream — that I’m going to operate at the highest level of trust,” he stresses. “Since people know that we are buyers of large diamonds, we are, at times, approached with goods that are unethically sourced. These sellers are not bona fide; you simply have to learn to say ‘no.’”
Rakower would “find it odd” if someone offered him diamonds 20% cheaper than the market value along with “some ambiguity [about] where they came from”; that’s an offer he would reject. Conversely, he says, “I can easily be convinced to spend my money with companies that are doing the right thing.”
Indeed, in other industries marketing their products as environmentally friendly, customers are willing to pay extra because they want to be socially responsible, he observes.
Jain would be willing to pay a premium of approximately 10% for “legitimately sourced goods” such as parcels of smaller diamonds with certificates of origin. “I’d like to test a line of responsibly sourced diamond jewelry, with origin tracking, so that we can provide greater trust and assurance to the end consumer,” he says. “With issues relating to our planet and our people, we want to be at the forefront, rather than playing catch-up within the industry.”
Do buyers want these goods?
Successful retail jewelers have their finger on the pulse of the market, and corporate social responsibility resonates with their customers. As such, retailers expect diamond dealers, their trusted partners, to provide only ethically sourced diamonds for them to sell in their stores.
“It is very rare that the conversation even comes up between me and my clients, the retail jewelers,” says Rakower, explaining that he has been working with them for 20 to 30 years, and they are confident that his diamonds have been vetted. “Similarly, the people I work with are straight-shooting, honest, hardworking people who would not try to put something over on their customer.”
Consumers are also more informed. “Given that the younger customers and the much-sought-after millennials are influenced by social media, there is a greater awareness about where a product is sourced, and they often articulate that desire for ethically sourced goods,” says Quinones.
“More and more consumers, including myself, want to know where their money is going,” agrees Jain. “Retailers are in a powerful position because they speak directly to the end consumer and can establish a sense of trust by educating them. Wholesalers don’t speak to the consumer, but we need to provide retailers with more materials so that they can inform the consumer and even use responsible sourcing as a point of differentiation to drive the sale.”
Jain also sees a generational shift in the diamond industry that may lead to greater emphasis on social-responsibility issues. “Traditionally, this business has been passed down from generation to generation. But now, many of the newest entrants are joining with higher levels of education and after having begun their careers in other industries, which gives them a broader perspective. We’re not going back — we’re only going forward.”
This article was first published in the August 2021 issue of Rapaport Magazine.
Image (left to right): David Rakower, Girish Jain and Maximo Quinones.
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Tags:
dealers, diamonds, Joyce Kauf, polished, Polished Diamonds, sustainability, wholesale
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