RAPAPORT... Labs are issuing reports for synthetic diamonds and the industry buzz has started with a debate on nomenclature and the impact for the trade.
When the Gemological Institute of America (GIA) announced at the World Diamond Congress in Tel Aviv this past June that it was planning to issue grading reports for synthetic diamonds, industry reaction was immediate. Diamantaires rushed to lodge their protests and embarked on a heated discussion of nomenclature.
Half a year later, though, industry leaders around the world seem largely content with the synthetic diamond reports. GIA has been issuing them since January; the International Gemological Institute (IGI), since December and European Gemological Laboratories (EGL) USA, since 2001.
“Personally, I am in support of the decision to issue reports on these stones,” says Jeffrey Fischer, president of the International Diamond Manufacturers Association (IDMA) and the New York-based company Fischer Diamonds. “There are some caveats, of course. We have to be very careful to protect all parties involved — particularly the consumer — and that the distinction between natural diamonds and synthetic diamonds is very clear and distinct and obvious in the reports. Not everyone reads things with the same detail or the same understanding or the same attention.”
Fischer says he is satisfied with the format and terminology used in the “good and balanced report” launched by the GIA, which, he says, “went through a very exhausting process to arrive at conclusions that served the interest of everybody throughout the pipeline.” The laboratory, Fischer says, came up with a report that balanced the desire of the traditional diamond industry for a system that highlights the differences from synthetic diamonds still further and the desire of the man-made diamond industry to tone down some of the differences.
DISTINCTION
In sharp contrast to the GIA’s staid grading report for regular diamonds, the synthetic report is a distinctive yellow, with the capitalized words “LABORATORY GROWN” prominently displayed in the top section of the report, between the laser inscription number and the shape and cutting style. A note lower down indicates “This is a man-made diamond and has been produced in a laboratory.”
IGI also uses the term “laboratory grown.” EGL USA has also adopted that wording, announcing in December that it would be changing the terminology on its synthetic grading reports from “laboratory created” to “laboratory grown.” “I’m gratified to see that some of the other laboratories appear to be hopping on board with standardization of terminology, which is a good thing,” says Fischer.
Philip Claes, director of corporate affairs and spokesman for Antwerp’s Diamond High Council (HRD), says the HRD’s certification laboratory is also seriously considering certifying synthetic diamonds, in an effort to protect the consumers’ interest and provide full disclosure. The HRD is expected to make a decision on the matter within a few months, according to Claes.
“We haven’t decided yet what to do, but HRD’s opinion is, ‘Okay, synthetic diamonds are a fact. They are a reality, and we cannot deny them, so we should take them into account,’” says Claes. “Nomenclature is undecided yet. It could be called ‘synthetic,’ it could be called ‘man-made’ or ‘lab-grown.’”
“I think that having a synthetic grading report could be a positive thing — [increasing] consumer confidence in our product, which is very important,” states Claes.
However, he goes on to say, it would have been preferable if all the laboratories had jointly decided on a single, standard nomenclature for synthetics before launching their reports.
NOMENCLATUREFrom the perspective of the traditional diamond industry, perhaps the most controversial word that could be used to describe synthetic diamonds is “cultured.” A petition filed by the Jewelers Vigilance Committee (JVC) and endorsed by ten jewelry industry trade associations, including IDMA and the World Federation of Diamond Bourses (WFDB), asked the Federal Trade Commission (FTC) in December to add the word “cultured” to the list of terms determined to be “unfair or deceptive to use in conjunction with manufactured products.”
The petition cites three recent consumer surveys showing that “consumers understand ‘cultured’ to be a natural growth process with some human intervention, and that they value cultured products more than synthetic ones” and therefore are likely to be misled or confused by man-made diamonds labeled as “cultured.”
“Anything that assists the consumer in identifying the true nature of the product they are purchasing is positive,” says Cecilia Gardner, JVC president and chief executive officer (CEO), about synthetic grading reports. “The terminology used should be consistent with the FTC guides for the jewelry industry, which provides for words including ‘laboratory grown,’ ‘laboratory created,’ ‘manufacturer name’ grown or created and the like. The word‘synthetic’ is also permitted.”
Moti Besser, general manager of the Israel Diamond Manufacturers Association and president of the CIBJO Diamond Commission, says protecting consumer confidence was a key element of the decision to issue the synthetic grading reports, which he supports. “The stability of the market depends on proper use of terminology, for treated diamonds as well as synthetics,” he says, adding that neither the CIBJO World Jewellery Confederation nor Israeli regulations accepts the use of words like “genuine,” “real,” “natural” or “cultured” to describe synthetic diamonds.
Like Fischer, Besser points out that the GIA launched its report only after extensive talks with industry officials. “It’s not a unilateral act, but an act that stems from a long and extensive discussion with the official representatives of the global industry,” says Besser. “As long as full disclosure is maintained and consumer confidence is maintained, then we are silent.”
Lawrence Ma, president of the Diamond Federation of Hong Kong, says the grading reports for synthetics “can give the consumer a clear representation of what they are buying” and could boost consumer confidence, which he calls the diamond industry’s most important consideration. Gem-testing laboratories capable of identifying synthetics, he goes on to say, have a responsibility to grade both natural and synthetic diamonds.
IMPACT ON THE INDUSTRYVasant Mehta, a director of the Indian Institute of Gems and Jewellery (IIGJ) and vice chairman of the country’s Gem & Jewellery Export Promotion Council (GJEPC), also welcomed the grading reports for synthetic diamonds. “The issuance of synthetic grading reports is a welcome step,” he says. “The damage, if any, to the diamond industry would be more if these [synthetics] were not certified by laboratories around the world.”
Industry leaders differed on the wider impact that synthetic diamonds could have on the diamond market. Claes and Besser feel that synthetics pose little cause for concern because they constitute quite a small portion of the market. “We believe the consumer will still choose the real, natural products,” says Claes.
A December report on the worldwide precious jewelry industry, however, conducted by the GJEPC and KPMG, a global network of professional services firms, predicted that the industry equilibrium was likely to be significantly disrupted by 2015. It predicts that substitutes such as synthetic diamonds and nonprecious metals will capture a share of the precious jewelry market. The JVC petition also notes that further significant growth in jewelry-quality synthetic diamonds is expected in the next few years.
For Fischer, the implication of grading reports for synthetic diamonds extends beyond mere disclosure of diamond type. “The implication,” he says, “is that the traditional industry has come to terms with the fact that this product is coming to market, that there is a market for it and that it will compete in the marketplace for the consumer’s attention.”
Article from the Rapaport Magazine - February 2007. To subscribe click here.