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Ethical consumer holds sway over diamond market

11 january 2011

New standards of consumption are gathering pace in today's world. Buyers get conscious about ways the goods they are going to purchase were produced. They wonder if this kind of production impaired animals, or whether child labor was used by manufacturers, or nature suffered from associated pollution. The so-called ethical consumption is developing momentum and quickly gaining huge market segments. It is shaped by active participants of various social movements. They investigate and give publicity to dark and hidden sides of activities pursued by corporations. This is especially true as far as actual working conditions at their factories in third world countries are concerned.

According to Fairtrade Labelling Organizations International (FLO), the organization which controls the standards of ethical production and consumption, about 45% of population in the Western countries are concerned about new standards and are willing to overpay.

Ethics has already become a powerful marketing force. It is suffice to recall the incident, which happened to Nike, when information leaked to the mass media about too harsh working conditions at the company’s factories in Asia. In Pakistan, the salary of children employed in manufacturing in violation of every conceivable law was $ 0.6 for one working day. A Nike factory in Vietnam practiced a 65-hour working week (it is more than 10 hours a day if you are employed six days a week). The scandalous articles triggered a strong public protest causing Nike hefty losses. Mass rejections to buy the company’s products brought down its sales in the U.S., Canada and Mexico by 7% in 2003. In particular, its sales of jogging shoes in the U.S. fell by 4%.

In recent months, the debate “for ethical diamonds” is growing in strength. This is not about the "conflict diamonds" or "blood diamonds", which are successfully suppressed by the Kimberley Process. This discussion deals with diamond jewelry produced without violations of ethical standards in any of the links in the "diamond pipeline" and any harm done to the nature, plants, or animals and of course without human rights infringements.

Probably, the Soil Association, a pace-setting British charity promoting renewable organic farming since 1946, may be considered the father of the idea of ethical self-restraint in trade. Later, in the 1970s, the idea was picked up by Body Shop, a chain of "healthy" cosmetics stores. Recently, there emerged LaModeEthique (www.lamodeethique.com), an informal organization which brings together more than 170 designers of apparel and accessories.

In terms of gems the idea was initially tried out on Burmese rubies. In September 2008, the United States initiated the Tom Lantos Block Burmese JADE (Junta's Anti-Democratic Efforts) Act, imposing a ban on rubies and jade from Myanmar. Several international jewelry organizations had addressed the U.S. Congress to reconsider the American embargo on trade in rubies from Myanmar (Burma). These organizations included the American Gem Trade Association (AGTA) and the World Jewellery Confederation (CIBJO). The aim was to cut off sources of funding for the ruling military junta of Myanmar, accused of human rights violations.

Ethical diamonds are starting to appear on the market, albeit in small quantities. For instance, Katharine Hamnett (www.katharinehamnett.com) has created a wedding ring graced with an "ethical" diamond.

The ideologists of the movement “For Ethical Diamonds” are obliged to propagate their ideas to the past as well: it would be absolutely unfair if along with “ethical diamonds” our contemporaries were to wear “unethical diamonds.” The supreme task is to liberate the world's diamond market of unethical and defiantly anti-ethical diamonds by their voluntary surrender at special centers and their legal disposal (in the same way as it is done with counterfeit computer disks, poisonous vodka or illegal psychotropic substances). Ideally, not only unethical, but also ethically questionable diamonds will completely disappear both in the secondary market (excluded, for instance, from jewelry auctions at Christie's and Sotheby’s), as well as in beyond-market circulation (for example, in deeds of gift and inheritance). Radicals even suggest the slogan “Clean up or die!” which seems too much.

So, the movement for ethical consumption appears to be a real power, and manufacturers have to reckon with it. There is no doubt that for diamonds it will not be possible “for this cup to pass,” except drink it in its entirety. The Russian Diamond Manufacturers Association or the Diamond Chamber of Russia have the right to take this honorable responsibility to initiate and lead the movement “For Ethical Diamonds.”

Putting the idea of ethical diamonds in life, besides humanitarian values, will give additional impetus to the international diamond business if all admirers of diamond jewelry will feel a distinct gap in their personal jewelry boxes.

Vladimir Teslenko for Rough&Polished