Ever since the 2006 film Blood Diamond publicized the warfare and other atrocities powered by conflict diamonds, the diamond industry has been responding to demands from consumers, dealers, manufacturers and retailers to improve supply chain transparency.
That trend has become even more pronounced since the Covid-19 pandemic began, according to Beth Gerstein, cofounder of California-based diamond jewelry manufacturer Brilliant Earth. The coronavirus outbreak “has prompted consumers to become more introspective, creating a renewed focus on safety, sustainability and connection,” she claims. “Now more than ever, consumers care about how and where their products are sourced, and they want jewelry that reflects their values.”
A documented history
The term “responsibly sourced gemstone” means that “a diamond or colored gemstone possesses verifiable factual documentation assuring that it meets specific requirements related to its origins, authenticity and environmental, social and workplace provenance,” states Benjamin Guttery, a sustainable-jewelry business consultant in Dallas-Fort Worth, Texas.
More specifically, he says, “an environmentally responsible history must be associated with [the stone],” and its mine of origin “must also be proven to protect worker safety, uphold human rights, pay fair wages and make positive cultural contributions to surrounding communities.”
The documentation must cover “every step and handover” throughout the chain of custody, all the way to the consumer, continues Guttery, whose Instagram gallery @thirdcoastgems has been reporting on ethically sourced stones since 2012. “Such evidence-based records guarantee that a diamond or other gem material is being accurately represented.”
Today, all standards and requirements for certifying responsibly sourced diamonds are based on the same globally authoritative document, according to earth scientist Laurent E. Cartier of the Swiss Gemmological Institute (SSEF). That document is the Organisation for Economic Cooperation and Development’s “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.” Published in 2016, it “provided a foundation which those in the diamond industry have been building upon ever since,” Cartier explains.
Indeed, there is a growing number of guarantees, third-party certification systems and blockchain platforms that can help ensure a given diamond is neither a blood diamond nor one used as currency in an illegal transaction.
Setting an example: Botswana and Canada
Nigerian-born, London-based luxury jeweler Thelma West welcomes the industry’s efforts to create a more transparent and responsible diamond trade. As both a designer and a diamond dealer, she relies on different methods for ethically sourcing and supplying goods, including upcycling old mine-cut diamonds from antique jewelry. When it comes to newly mined specimens, there are only two countries she trusts as origins.
“Documented responsible mining practices, fair wages and humanitarian efforts are the main reasons why diamonds mined in Botswana and Canada are recognized as responsibly sourced and ethically produced,” West explains. In those countries, “diamond-powered revenue funds hospitals, social infrastructure and education. These, together with economic stability, work to improve the lives of millions of people in mining regions, especially in Africa.”
International watchdog group Transparency International corroborates this positive assessment of Botswana, rating it Africa’s least corrupt nation. Canada, meanwhile, is home to some of the world’s strictest environmental regulations.
“It is important that these responsible practices continue to multiply and that more organizations and governments follow these positive examples,” says West. “In this way, traders, dealers and manufacturers will be able to buy diamonds not
just from Botswana and Canada, but from a
wider market.”
Digital solutions
Among the various guarantees and certification schemes to ensure ethical sourcing, traceability programs such as blockchain ledgers and the Gemological Institute of America’s (GIA) diamond origin reports “are still relatively new within the industry,” according to Brilliant Earth’s Gerstein. Some manufacturers classify their diamonds as “responsibly sourced” and/or “conflict-free” because they buy stones with Kimberley Process (KP) certification, but this may fall short of satisfying many in the trade, she adds.
“The Kimberley Process defines conflict diamonds as those that finance rebel movements against recognized governments,” she elaborates. It never addresses “whether diamonds have been tainted by violence, human rights abuses or poverty.” As such, no one can know for sure if a KP-certified diamond comes from a mine that pollutes the environment, or from operations that use child labor, underpaid labor or even slave labor.
Concerns like these are why professionals who want to establish diamonds’ provenance and authenticity are buying into platforms like Tracr, the end-to-end blockchain traceability program the De Beers Group has developed in collaboration with 12 manufacturers and retailers. In addition to providing a secure digital ledger of transactions, Tracr utilizes artificial intelligence and the “internet of things” — the network of “smart” devices that populate people’s environments — to let parties throughout the supply chain access the ledger via their phones, tablets and computers. It also has controls in place to ensure security and privacy. Tracr participants include the Hong Kong-based Chow Tai Fook Jewellery Group, and Signet Jewelers, the US’s largest diamond jewelry retailer.
Another popular blockchain platform for diamonds is Everledger, which counts Brilliant Earth among its users. “Brilliant Earth has partnered with Everledger to offer blockchain-enabled diamonds at scale,” says Gerstein. The technology “has been integrated with our supply chain to seamlessly and securely track gemstone origin and provide greater consumer assurance [regarding] responsible practices.”
The benefits of blockchain “can extend far beyond ensuring chain of custody,” according to Lisa Koenigsberg, president of New York-based think tank Initiatives in Art and Culture (IAC). “This technology can also document ownership, demonstrate authenticity, and be leveraged to redress social and economic inequities.”
That said, Koenigsberg — whose group produces conferences and webinars on responsibly sourced gemstones and gold — observes that any information in a blockchain ledger will only be as truthful as the person who makes the entry.
Worth the effort
Creating a sustainable supply chain is a complicated, resource-intensive and expensive process. “It requires a systemic approach to develop and set forth clear guidelines and protocols with suppliers that regularly validate their practices,” comments Gerstein. “Implementing a blockchain system also requires additional resources to incorporate the technical requirements with the supply chain.”
Nonetheless, these efforts pay off, she stresses. “Establishing a transparent and ethical supply chain is a necessary and worthwhile endeavor. Once it has been established, additional investments are less significant, and organizations can reap the benefits for years to come.”
Image: Jon Rogers@phosphor art
Article from the Rapaport Magazine - October 2020. To subscribe click here.