CJA guidelines on Lab Grown Diamonds may seem reasonable but is also biased

Lab Grown Diamonds
[Image Courtesy: Ada Diamonds]

As Lab Grown Diamonds proliferate Canadian markets, the Canadian Jewellers Association (CJA) has releasedCJA Guidelines to Advertising Lab Grown Diamonds (LGD)’. Taking into consideration various Canadian laws and guidelines including the Competition Act, Canadian Guidelines for Gemstones etc., the CJA’s guidelines developed for Lab-grown Diamonds are intended to assist industry players to comply with laws while representing LGDs and protect consumers from being misled. While such guidelines are a must for businesses to clearly understand the direction and framework to operate within, a closer look at CJA guidelines also reveals that though it may seem reasonable, it is also biased.

 

The problem starts with CJA’s definitions

While defining a diamond, the guide states “… When the word ‘diamond’ is used alone it must be referring to a natural (mined) diamond.” CJA’s guidelines were developed with consideration of the U.S. FTC’s (Federal Trade Commission) Jewelry Guides also. However, the new definition by US FTC omits the word ‘natural’ while defining a diamond.

Besides, while defining a Lab Grown Diamond, the CJA guidelines states “… An LGD must state it is a lab-grown (or lab-created) diamond or synthetic. The word ‘synthetic,’ ‘lab-grown,’ or ‘lab-created’ must be placed immediately preceding the word ‘diamond’ and neither word(s) shall be given greater prominence or emphasis than the other(s), nor may they be separated.”

This again does not conform to the US FTC guidelines which has omitted using term ‘Synthetic’ while describing Lab-grown diamonds in its latest review, as it is deceptive and confuses consumers to wrongly believe that LGDs are not actual diamonds and are artificial/ fake stones. What this essentially means is FTC now acknowledges that both Mined diamonds and Lab-grown diamonds are diamonds, with the only difference being the source of origin.

If the basic changes made by FTC’s new guidelines were not considered, one wonders how CJA guidelines took US FTC guide into consideration!!

 

Environment-friendly conundrum

CJA’s guidelines says Any claims a supplier/manufacturer makes to you and, in turn, are made to a consumer must be truthful and substantiated as well as not mislead consumers.” This seems fair enough in spirit.

It further goes on to say “Request substantiation for claims such as ‘eco-friendly,’ ‘sustainable,’ ‘carbon neutral,’ and/or similar terms. If no credible evidence or data is available, refrain from using such unqualified terms.” There lies a problem.

After attacking Lab-grown diamonds on various fronts, attention of many factions is now turned to challenge the eco-friendliness claims of Lab-grown diamonds. While any basic comparison of environmental impact of mined diamonds vs. Lab-grown Diamonds will show that the latter does not cause permanent damages like land displacement, natural habitat disruption and definitely none of the ethical abuses associated with mining.

There are studies by Frost & Sullivan that established that mined diamonds have 7 times more environment impact than LGDs, and even by Princeton University that states “carbon footprint of a lab grown is 18-22% of a mined diamond. Some manufacturers are now carbon neutral.”

Report from Trucost, an analysis company under S&P Global, which was sponsored by Diamond Producers Association (DPA), an organization formed by seven of the world’s leading diamond companies, however alleged that making and polishing a 1-carat diamond can produce about 511 kilograms of carbon dioxide equivalent compared with 160 kilograms for a mined gem but the claim has been rubbished by several.

Tang Bin, deputy director of the Gem Appraisal Center of Peking University, “Even if that were true [Claims of Trucost report], it is worth noting that most chemical waste from producing lab-grown diamonds can be further managed within the lab. But for mined diamonds, it is another story.”

Likewise, Saleem Ali, professor of energy and the environment at the University of Delaware and an occasional adviser to diamond makers said in an interview to Vogue Business: “To claim that their carbon and energy footprint is less than synthetic… defies common sense.”

The biggest limitation of Trucost report by DPA is that its carbon footprint estimate for mining focused only on diamond production, not the years of work entailed in developing a mine. Saleem Ali (as quoted in Earther.com) notes that developing a mine can take a lot of energy, particularly for those sited in remote locales where equipment needs to be hauled long distances by trucks or aircraft.

Moreover, many LGD players are clearly working on eco-friendly principles like Diamond Foundry using 100% renewable energy sources, Lark and Berry planting trees etc. As per publicly available figures published by Diamond Foundry, the total environmental footprint of mined diamonds stands at a much higher level than lab diamonds. “It takes an entire factor more energy to extract an underground diamond from Earth than it takes to create one above ground… On top of this, the energy used in mining is generally dirty diesel versus renewable energy in our above-the-ground production,” says a blog post on their website.

However, without a substantiation by an authority, these eco-friendly ‘claims’ will continue to be questioned. What is required at the LGD sector side is to quantify things – take initiative to comprehensively measure, certify and transparently disclose their environmental impact. Perhaps the sector bodies like IGDA (The International Grown Diamond Association) should lead this. Absence of such ‘substantiations’ will continue confrontations like FTC’s warning to some LGD players in recent past.

However, the counterpoint here is that the basic tenets of law implies that no person is guilty unless proved otherwise and the onus to prove the guilt is on the litigant and not on the accused to prove otherwise. Just a food for thought.

 

If Chain of Custody is not present for mined diamonds, why insist on the Country of Origin for Lab-grown diamonds

CJA’s guidelines say “Establish the location (i.e. country) of the lab where a synthetic stone was created…” There is no harm in transparently disclosing the country of origin of a Lab-grown diamond. While some producers laser-inscribe the manufacturer name and ‘LGD’ on the diamonds, adding the country of origin either laser-inscribed or on the grading certificate seems fine.

But the point remains is does these guides insist on the country of origin of mined diamonds as well? Do you really know whether your mined diamond originated from Sierra Leonne, Liberia, Botswana or Russia? After mining, diamonds from across the world are collated at a trading center like Dubai and mostly go to India for processing (cutting and polishing) where parcels are mixed from various sources and then go to various trading hubs like Antwerp before proceeding to the destination countries of jewellers and retailers (if both are in the same country). From a mine, a diamond changes hands numerous times (according to a report 27 times), before reaching a consumer. How does one know where her mined diamond came from? There has been demand of implementing a Chain of Custody to know a mined diamond’s provenance, but to no avail.

While there is no issue in tracking a LGD’s Country of Origin, question is why not have similar guidelines for mined diamonds.

Besides, the CJA guide furthers this by stating “… Does the lab conform to the environmental standards of the producing country?” Really?!! Again!! Do the CJA have similar guidelines asking to check if a diamond mine conforms to the environmental standard of the producing country?!!

 

Representations to Consumers

The CJA guidelines goes on to elaborate on the need for substantiating any claims, especially the environmental claims of Lab-grown diamonds, made to consumers “It is important that every person selling to consumers (i.e. jewellers and their employees) know the facts about LGDs in light of the environmental claims being made in the marketplace and online in order to address any concerns or misconceptions consumers may have. While LGDs are a legitimate product, many companies selling these synthetic stones make environmental claims that have not been proven (e.g. that LGDs are more environmentally responsible than their mined counterparts). Without proof, such claims cannot be made… If vague claims relating to the environment are used as slogans and are not based on real environmental protection and/or benefit, they could be considered false or misleading. Such claims must be based on adequate and proper tests undertaken prior to making such representations to the public, if they relate or refer to the environmental performance or efficacy of a product… Environmental claims that are vague, non-specific, incomplete, or irrelevant and that cannot be supported through verifiable test methods should not be used… Further, statements that LGDs retain or increase in value also have not been proven and, thus, cannot be made.”

Emphasis on substantiating environmental claims has been made by CJA more than sufficient. However, one wonders what about similar substantiation of claims made by mined diamond players.

Let’s say about ‘Rarity’ – for a product that is mined in hundreds of millions of carats every year and whose supply exceed demand currently, how can you call it ‘rare’!!

Or let’s talk about the notion of diamonds taking billions of years to form – It’s a story weaved by mined diamond industry and a deception. As Tom Chatham explains “it does not take “billions of years to form or crystallize in the earth and nothing scientific backs up this statement… This is a growing trend of switching the AGE of diamonds found on the surface of the earth, which is likely in the billions of years, to the more romantic notion that it takes “billions of years to grow” in the ground.”

Shouldn’t CJA be asking the mined diamond sector too to prove such claims, before making any such representations to consumers.

 

Disclosures

CJA guide says It is imperative full disclosure along the full supply pipeline be adhered to.” Absolutely, why not. But shouldn’t that be the case with mined diamonds as well!!

 

While CJA’s intent in making the guidelines may have purely been to protect consumers, and rightly so, the way it has been drafted clearly goes on to say that it seems biased at the very least.

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