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'Shipwrecked!' Debate Addresses Certification, Sanctions, Standards

May 30, 2011 11:11 PM   By Ricci Dipshan
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RAPAPORT... The concluding session of Gemological Institute of America's (GIA) 2011 Symposium encompassed a spirited debate titled “Shipwrecked!” concerning the effectiveness and reality of certification schemes, as well as diamond and gem standards designed to keep conflict materials out of the industry.

Those participating in the forum included Dr. Brian Nattrass, a managing partner at Sustainability Partners; Susan M. Jacques, president of Borsheims Fine Jewelry and Gifts; Tom Cushman, managing director of Richfield Investor Services; Richard Drucker, president of Gemworld International; Martin Rapaport, chairman of the Rapaport Group and Dr. George Rossman, professor of mineralogy at California Institute of Technology.

Jacques, the moderator of the event, opened the debate by discussing the cases of a few countries that have eluded the regulatory power of the Kimberley Process (KP), as well as the different views on the efficiency of jewelry standards and certification. The debate, she said, would not focus on the specific current problems the KP and other programs face, but instead focus on the future to “to seek reality-based solutions and examine the conflicting characteristics of the trade: competitive prices versus fair practices.”

The starting question posed to the debaters was about the necessity and wisdom of sanctions and their impact on local communities. Drucker was the first to take the helm, asserting that he “truly believes in free trade, but sanctions are not working.” To prove his point, he highlighted the fact that although trade with Myanmar, also known as Burma, is under tight sanctions, the country’s exports actually rose 12 percent in 2010 due to the demand for goods from China.

Cushman, who lives in Madagascar, noted that while sanctions may work for politicians in Washington, D.C., they have not stopped government corruption in Myanmar or his home country. Nattrass agreed, stating that “in the industry, a lot of people are ideologically engaged in government intervention, but aside from any ideological aspect, they are not effective.”

Rapaport jumped in, opining that the issue of sanctions and moral obligations should not lie with the state. “I don’t trust the government to be my ethical guideline,” he said, adding, though, that, “Americans and our government have a right to say we don’t want those diamonds. But the ultimate responsibility should lie with the individual.”

Regarding the efficiency of sanctions and certification schemes, Rossman, the only science professor on the panel, dismissed the idea that one could know for sure where a diamond or gem comes from. “There is no absolute way to tell where these things come from until the science and technology exist, but that is a long way off — for now, we just simply cannot do it.”

Rapaport, however, was quick to advise against giving up verification and fair trade efforts in the face of undeveloped identification techniques. “We are responsible, irrespective of whether science has kept up with us,” he said. The way to keep conflict diamonds and illicit items out of the marketplace, he added, was to provide monetary incentive to those who promote fair trade.  “Get people to make more money and they will find a reason to be good because it will be more sustainable. Society will always have the level of ethics they pay for — no more, no less.”

Rapaport’s ideas were met with some resistance from Jacques. “I don’t believe it’s all about money, I believe that good honest people want to do the right thing,” she said. Yet Rapaport, noting the importance of altruism in promoting fair trade, was nonetheless skeptical of the pragmatics of relying solely on good will. “To expect an entire industry to be altruistic unless there is an economic benefit — it is very difficult. My point is to be realistic to how this works.”

The issue of the various standards and certifications of diamonds and gems was brought up, too, with Drucker arguing that having a wide variety of standards will dilute their overall influence.  “How are we going to decide which ones are meaningful?” he asked the panel. Rapaport disagreed, stating that competing standards are good for the industry. “I encourage competition in all aspects of the industry. I think there are a thousand ways to Rome.”

Cushman, however, argued that even though standards and certifications are necessary, such industry rules make jewelers seem guilty on arrival. “If you need to pay someone to show the world you are honest, perhaps you should wonder why they do not think you are honest in the first place,” he said, adding that people must be solely responsible for their purchases and merchandise. 

Everyone on the panel agreed that the perception of the jewelry and diamond business is at stake. If consumers think it is a business with illicit goods and blood diamonds, “they will choose other things; they will choose iPads over jewelry,” said Jacques. “Our competitors are everywhere. The issue that gets raised in mainstream media affects all of our businesses.”

Many also agreed that consumers will not resist paying more for products that they know come from safe, non-controversial sources. “Everybody in this room will pay a little more,” said Drucker, but added that wholesale buyers who buy in bulk may not be as willing as retailers and customers to adapt to higher prices. 

Rapaport was certain that consumers would accept higher prices because more and more customers were buying with a greater sense of social consciousness. “Fundamentally, the customer will pay more, as there is a wave of consumer awareness in the area of social responsibility,” he said.

After taking several questions from the audience, the panel wrapped up and GIA's president, Donna Baker, commended the efforts of all those who put the Symposium together and thanked the attendees for participating. A farewell toast was held on the Ocean Terrace before the event officially ended on Monday evening. 


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Tags: Borsheims Fine Jewelry and Gifts, Burma, California Institute of Technology, China, Donna Baker, Dr. Brian Nattrass, Dr. George Rossman, Gemworld International, GIA, GIA symposium, Martin Rapaport, President of GIA, Rapaport, Ricci Dipshan, Richard Drucker, Richfield Investor Services, shipwrecked, Susan M. Jacques, Sustainability Partner, The Rapaport Group, Tom Cushman
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