Trust Is Key for Ethical Dealing, Say Wholesalers

RAPAPORT... Transparency is a growing goal for wholesalers, but there'sanother "T" word that may be even more important: trust. In an industry definedby long-abiding relationships, assurances of ethical sourcing depend heavily ona seller's reputation for integrity. Opening up Transparency is now a "definite trend," according to EricMor, president of New York-based wholesaler Abe Mor Diamond Cutters. There ispublic concern, especially among millennials, about an industry associated with"blood diamonds," he notes, th "Thirty years ago, it used to be just family members, andnow we are bringing in brain-power and Wall Street money," he says. "We'reopening up, but we're still so insular." David Rakower, president of New York-based manufacturerJoseph Asher Collection, also hails the move toward greater openness."Transparency is de rigueur; everyone is trying to be transparent," he says. Hecites the Kimberley Process (KP), as well as the written and oral guarantees inplace to ensure that everyone from producers to retailers is complying withethical standards. Is it sustainable? For all those efforts, however, it's difficult to verify astone's source indisputably, says Mor. "Our suppliers sign pledges that theirdiamonds are sourced ethically, but frankly, without advances in technology,such as blockchain or photographing the diamond from the rough to the finalproduct, there is really no way to absolutely ensure that every step of the wayis ethical." The same is true for recycled diamonds - or as Mor prefersto call them, "reclaimed" diamonds. "It's definitely hip right now to buy things that areenvironmentally friendly," he observes. While he occasionally receives requestsfor reclaimed diamonds, he believes retailers need to make consumers aware thatsuch diamonds exist, as customers "are not going to ask for them unless theyare advertised." That said, it's not always possible to confirm that suchdiamonds are indeed recycled. "Short of showing the old Gemological Instituteof America (GIA) cert or other paperwork, there is really no way to prove thatthe diamond has been reclaimed and entered the market," he says. Maintaining a good name As such, many wholesalers consider trust to be the drivingfactor in an industry traditionally known as a "handshake business." "As a supplier, the most important thing we can do isestablish a trusting relationship and [strengthen] those relationships we haveboth up- and downstream," asserts Rakower. "We are going to regulate ourselvesto ensure that when we produce and/or sell things, we do that with theknowledge that we have our reputations at stake." Indeed, he declares, "we don't hide behind anything. We putour name on our products." Of course, that doesn't stop less savory players from tryingto gain traction. "We get from two to five calls as well as several emails aweek from all kinds of dubious suppliers. We ignore those calls," says Mor. "Itisn't all that hard for someone to find illegal sources. We only do business withpeople we trust." 'A very strong chain' It takes a joint effort from parties throughout the pipelineto ensure ethical sourcing, says Rakower. "We have a personal responsibility todo the right thing. If everyone in the chain stands up and does the rightthing, we'll have a very strong chain." Of course, there are other benefits to sourcing stonesresponsibly. "Besides being the right thing to do, being ethical is a smartbusiness move - more so for our industry," states Mor. "The most exciting partis the potential to market our transparency to consumers and shine a light onall the good the industry does. But at the end of the day, market forces willdrive the change. Being transparent will pay off." Getting certified One of the ways companies can get their ethical-sourcingcredentials is by joining the Responsible Jewellery Council (RJC) - and theorganization has high standards for entry. "It was quite intense," says Andrew Rickard, vice presidentof operations at RDI Diamonds, recalling the extensive audits required formembership. The certification recognizes a company's commitment to responsiblebusiness practices, and RDI - a wholesaler in Rochester, New York - took thisproactive step to reinforce its values of transparency and integrity. "You're essentially going through the rigorous process toprove that your product is done in an ethically sourced way with people who aretrusted resources," Rickard elaborates - in other words, that "you are doingthings above board." Occasionally, clients question him about the company'ssourcing policies, and he views it as an opportunity to explain the RJC'sgoals. "Clients gain a different perspective once they understand whatcertification entails and how comprehensive - and difficult - it was. There isa newfound respect for what we're doing...to mitigate those risks." Still, nothing is "1,000%" foolproof, he acknowledges."There is always the fear that one bad player can damage your reputation. Thereare so many parts of the chain - and only so much that is in your control." This article was first published in the June 2019 issue of Rapaport Magazine.Image: A natural diamond in kimberlite. (Shutterstock)