The lab-created diamond market has once again found itself at a crossroads concerning transparency. ANGELA HAN argues that the adage of ‘adapt or perish’ remains as relevant as ever.
Many influential minds have said that adaptability is the most important attribute of survival – it’s no different in running a successful enterprise that withstands the test of time.
Indeed, as a child I’m reminded of what my mother taught me: ‘Be like the bamboo, lithe and flexible – no matter how strong the wind blows, it won’t break you.’
When you’re lithe, you can bend. From businesses to industries, when you’re ‘flexible’ the storms can’t break you – the gale forces only train your branches to become stronger.
For example, did you know that Nokia began as a pulp-and-paper company in the mid-1800s? Following a merger in the 1960s, the company added telephone and communications equipment to its operations.
Over the next 50 years, Nokia would blossom into the world’s largest mobile phone manufacturer. Could you imagine Nokia as a paper company today?
And then came Apple – beginning as a pioneer of personal computers – and subsequently overtaking Nokia’s market dominance in mobile phones. It is an example of identifying the wind direction and then making bold and risky ‘sail adjustments’ in an unrelentingly and fast-changing marketplace.
Doors of opportunity open for those who can adapt, which then paves way for even more opportunities.
With each passing year the diamond industry has faced new challenges and the need for adaptability has never been more pronounced.
Technology and improved manufacturing capabilities have finally caught up with the trade causing a huge shift created by lab-created diamonds.
According to research from analysts, lab-created diamonds reached 10 per cent of all diamond jewellery sales in the US in 2022. It’s a significant milestone for an industry given that it has been reported that lab-created diamonds represented less than 2 per cent just five years ago.
It could be argued that COVID and Russia invading Ukraine assisted this increase, however; I’m sure you’ll agree when I say it’s been a rapid rise nevertheless. And one that should not be ignored!
Concerns about the world economy have caused consumers to tighten their purse strings and could be another reason why it appears that the public flocked to cheaper lab-created stones.
Demand continues to increase for lab-created diamonds; however, prices continue to fall and this causes a contradictory set of circumstances to navigate for suppliers and retailers alike.
So, just how will this unusual dilemma be resolved? We’ve spoken to a range of industry pundits and most agree on one thing – transparency. The diamond industry needs to communicate to consumers in a more honest and transparent manner.
While transparency is inarguable, or at least should be, it’s one of the hottest talking points not only in the jewellery trade but indeed, the wider business community – espoused and endorsed by many but, unfortunately, often practiced by few.
For example, Australia’s Competition and Consumer Commission (ACCC) recently published the findings of a sweep of businesses that practice ‘greenwashing’ tactics.
Unsurprisingly, a number of those targeted in the review accused of making misleading claims come from the fashion sector, with the most issues pertaining to ‘environmental credentials’.
ACCC deputy chair Catriona Lowe advised that “this conduct harms not only consumers, but also those businesses taking genuine steps to implement more sustainable practices.”
This was a message emphasised by many of the contributors to our latest lab-created diamond analysis.
The new president of the International Grown Diamond Association, Joanna Park-Tonks, says retailers need to market their jewellery in a way that “avoids denigrating” natural diamonds.
She also highlighted greenwashing specifically as an issue, something that many lab-created diamond suppliers and retailers can rightly be accused of.
Another diamond industry professional described transparency between businesses and consumers concerning lab-created diamond jewellery as a ‘non-negotiable’.
It’s a pleasing commitment to the kind of practices that are crucial in ensuring that the public’s faith in such products should continue to climb.
If they can do it, why can’t you?
Championing the importance of transparency and clearer communication between suppliers, retailers, and consumers is a noble goal for these leaders of the diamond industry, however; the same cannot be said of a number of industry bodies.
In the past year, Jeweller has addressed the failings of representative bodies to be upfront and honest about their practices.
For example, the Responsible Jewellery Council (RJC) faced a tidal wave of scrutiny after demonstrating a complete failure to communicate on simple and fundamental matters during the fallout of the Russian invasion of Ukraine.
Jeweller subsequently reported a number of failures by the RJC on matters of transparency even though this international jewellery organisation boasts about having a “fundamental commitment to transparency and accountability for progress”.
The RJC has either been unable, or has chosen not to explain why at least 400 of its members cannot be ‘found’.
That is, given its constant call for the industry to be transparent, there has been no explanation by the RJC as to why around 400 members did not list a company website and, of the 400, we could not locate a website corresponding with the RJC member name for around 120 companies.
And this is the Responsible Jewellery Council!
The World Federation of Diamond Bourses (WFDB) is another industry organisation that has chosen not to be transparent on a number of issues. Astonishingly it allows its members to make false claims without ‘penalty’.
Worse, to this day the WFDB continues to promote a misleading ‘membership counter’ on its website – despite a spokesperson admitting that it does not keep a running tally of members.
The matter came to light when Rami Baron, president Diamond Dealers Club of Australia (DDCA) – a WFDB member – refused to answer simple queries about the Club’s membership base – including the most basic question of all – how many members do you have?
The DDCA website continues to make claims for which it has been unable to substantiate and which were denied by other industry participants more than six months ago and the WFDB has turned a blind eye to it.
Baron – who is a WFDB board member – was also caught-out using the intellectual property of two leading international associations without permission to promote his own private businesses. As far as we know, Baron did not apologise for his actions.
Rather ironically, in Baron’s most recent monthly column for Jewellery World as DDCA president, he discusses transparency at length.
Baron poses these questions: “I want to stop for a moment and ask you. (sic) Who in your business can confidently speak about traceability, transparency and sustainability?… Is it something that you believe in? How important are these issues to you?”
They are good questions and yet, Baron and the WFDB have chosen to ignore “important” questions about transparency concerning their own organisations. Why?
The DDCA refuses to divulge its membership number and despite the WFDB advising that it doesn’t monitor the membership of the individual member bourses, its website continues to display a membership counter that suggests it has 28,780 members, a figure that could only be derived from tallying the membership of the 29 individual bourses.
We have our own question: If the people who head the organisations and who purport to be leaders in the natural diamond industry refuse to be transparent on simple matters about their own organisations, what right would they have at pointing the finger at the the lab-created industry for any perceived lack of honesty and transparency?
Worse, it appears that the same people who lecture the industry about transparency cannot be transparent themselves.
Someone once said, the only vice that cannot be forgiven is hypocrisy.
This double-standard permeates through to other organisations such as the Jewellers Association of Australia (JAA) which was exposed in the past year for failing to disclose a commercial relationship between two – of its six – board members.
When Jeweller first contacted Meredith Doig, the newly appointed JAA director – and a Fellow of the Australian Institute of Company Directors – she claimed that she was approached to become join the JAA board because she has expertise in corporate governance and was “from outside the industry”.
What she failed to explain – and only disclosed following further questions by Jeweller – was that she has a commercial relationship with the vice president of the JAA, Ronnie Bauer, who, ironically had found himself in hot water over some unfounded claims he had made and for which he subsequently retracted and apologised.
Further, it’s interesting to note that three months after Jeweller uncovered a potential conflict of interest between two JAA board members – Doig and Bauer – the JAA’s website has not been updated to clarify the matter.
Neither the original media release about Doig’s appointment on 1 September 2022 or her director biography have been altered to disclose the relationship.
We have another question: Given Doig’s claims about being a “professional company director and governance consultant”, would it not have been prudent for the JAA to act transparently to the wider industry so as to avoid any accusations about an undisclosed conflict of interest?
Lead the way
There is no doubt that some in the lab-created diamond sector have been less than transparent about their product and have been guilty of gilding the lily when it comes to the eco-friendliness of these products.
That said, if we are unable to demand transparency from our industry ‘representatives’ then by what right can we expect suppliers and retailers to be honest and forthcoming?
It cannot be a case of: Do as I say, not as I do!
Let’s hope that this push for improved communications by some in the lab-created diamond category proves to be an infectious phenomenon – as it’s an area that the wider jewellery industry must improve.
After all, if these industry so-called leaders fail to change their ways then perhaps ‘adapt or perish, now as ever, is nature’s inexorable imperative’.