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Industry
RapNet Bans EGL Grading Reports
By Brian Bossetta
As of October 1, online diamond trading network RapNet stopped accepting all diamond grading reports from all the European Gemological Laboratories (EGL). Martin Rapaport, chairman of the Rapaport Group, made the announcement during the first annual RapNet Symposium in Fort Lauderdale, Florida, in September.
Too much confusion and inconsistency in the EGL reports, which often fall below the global standard of diamond grading set by the Gemological Institute of America (GIA), was the main reason Rapaport gave for banning EGL from the online network. As human subjectivity is part of the process of grading the quality of a diamond, Rapaport said that some differentiation on any given report is understandable and tolerable. This move against EGL, he explained, was part of a larger effort to maintain transparency and establish a more “ethical market” within the diamond industry.
Voicing disagreement with Rapaport, EGL USA — which alleges that its reputation for grading has been more credible than EGL labs overseas — underscored in a press release that it is “in no way affiliated” with EGL International or any other EGL lab outside of North America. It also distanced itself from the “false advertising claims against the EGL labs outside of North America, for both their inflated grading practices and improper use of the EGL name in the U.S.”
Rapaport’s announcement seemed to meet with approval among the majority of the estimated 150 RapNet members at the symposium. “I believe this is an inflection point for the entire industry and a giant leap forward,” said Joshua Niamehr, co-founder and chief executive officer (CEO) of EnchantedDiamonds.com, an online diamond retailer in New York City. “This move rapidly accelerates the entire industry toward universally recognized standards and practices, strengthening the confidence, trust and reliability that has long been needed in this trade.”
And while EGL South Africa issued a statement expressing solidarity with Rapaport in taking action against any lab overstating a gem’s value, Alan Lowe, managing director of EGL South Africa, stated his “disappointment” that his lab was included in the ban. “EGL South Africa has been in business for 34 years and during this time has never been accused or found guilty of any wrongdoing in the grading of diamonds,” Lowe said in the statement. “I was the founding managing director of EGL South Africa and I have always made it my mission to ensure that we produce certificates to the highest international standards based on sound gemological criteria.”
Jewelry activist and diamond branding expert Diane Warga-Arias, who was at the symposium, said that “We need to look at this from a consumer’s perspective. Overgrading takes away from consumer confidence. The industry needs to be building consumer confidence.”
Andrew Rickard, vice president of business development at RDI Diamonds, a wholesaler in Rochester, New York, said the impact of the ban on wholesalers would be minimal as long as those wholesalers carried significant stock of GIA- and other non-EGL-graded gems. In Rickard’s view, consumers need to evaluate a diamond based on its cost, not its grading report.
“If you are going to use GIA terminology, than you have to use GIA standards,” concluded Rapaport, who cited the customer — who might unknowingly pay more for a lesser-quality diamond — as his chief concern. “When consumers try to resell their diamonds or send them to the GIA for regrading and discover significant quality differences, there will be hell to pay,” he said. “The diamond trade must prioritize the protection of consumers above profits.”
Rapaport Magazine and RapNet are owned by the Rapaport Group.Article from the Rapaport Magazine - October 2014. To subscribe click here.
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