After ISO published its controversial and misinformed standard ISO 18323, India’s Bharat Diamond Bourse (BDB) repeated the mistake of treading on the same path that puts the entire diamond industry at risk, by banning trading of Lab-grown diamonds on its floor.
A myopic decision
By doing so, the diamond exchange completely ignored the fact that Lab-grown diamonds are not just increasingly in demand by the new-age millennial consumers but also being sought by several diamond traders and jewelers. Lab-grown diamonds are now reaching a point where they can no longer be ignored.
As Thierry Silber – CEO, Diamaz International, points out in a recent article “[BDB’s decision] is another sign that bourse leaders don’t understand that the best way to avoid unethical practices is to encourage traders to deal with full disclosure and transparency.”
BDB became the second diamond exchange, after Israel Diamond Exchange, to ban trading of Lab-grown diamonds. However, as in the case of Israel Diamond Exchange where though Lab-grown diamonds are no longer traded on its floor but continue to be traded in the same building, suggests that such bans simply means pushing the legitimate Lab-grown diamond players in the dark corners of the market rather than embracing them as a genuine part of the industry, where both Earth-mined and Lab-grown diamonds can coexist thus expanding the overall markets for diamonds.
Self-professed diamond ‘experts’ manipulate
Problem stems from some vested interests who pose as ‘experts’ and impose their opinions on the entire trade. These individuals or entities have nothing to do with Lab-grown diamonds but still position themselves as ‘experts’ of the industry.
Tom Chatham – CEO, Chatham created Gems & Diamonds gives an example of one of his customer in Germany who used the term ‘cultured’ while clearly disclosing that the diamonds were ‘man-made’ but “The courts took the word of the ‘experts’ in the field, CIBJO, and found him guilty of fraud.” The customer ultimately went bankrupt because of the legal costs.
Fearing similar scenario, Tom sketches the danger that ISO 18323 poses “If this ISO ruling is allowed to stand and CIBJO, (or anyone else like the JVC) decides that one of us is getting too successful, or too aggressive, they will go to that countries’ protective board, in my case the FTC and say, ‘this company is in violation of ISO 18323 and should be stopped and/or punished because they are breaking the rules the ‘industry’ agreed to. So the court takes the word of CIBJO or JVC as ‘experts’ in nomenclature for gemstones and goes after the dealer.”
It is regrettable that such ‘experts’ have manipulated ISO into believing that Lab-grown diamonds are not diamonds. Unfortunately, bourses like BDB are turning blind eye towards consumer preferences and instead solely pushing agenda of Earth-mined diamond producers.
By calling Lab-grown diamonds ‘synthetic’ – a complete misrepresentation, and now even calling them ‘fake’ – an extension of the term ‘synthetic’, gives a clear understanding of these ‘experts’ that the intent is to deceive and mislead consumers.
Ignoring the best interests of consumers
Honesty and integrity should be the backbone of the diamond industry which it extensively lacks now. The false manner in which ISO 18323 has been made is a grave example. Lack of desire for systems like Chain of Custody and transparency to the consumer could be driving sales of Earth-mined diamonds lower and lower. Recent reports clearly indicate large quantities of Blood diamonds in the Earth-mined diamonds’ pipeline. The present consumers however are well informed and knowledgeable before making a potential purchase decision.
Banning Lab-grown diamonds or misrepresenting them robs consumers from a choice. Instead, by making Lab-grown diamonds an integral part of the trade, the industry would not only address many of its challenges but also be able to revive its fortunes. The sooner the Earth-mined diamond industry understands this, and that they are being misled for the benefit of the few, the more secure will be their future.
Inspite of constant efforts on part of the Earth-mined diamond industry to mislead consumers from conflict diamond to reality of Lab-grown diamonds, it continues to forget that in this age of information technology consumers are able to click and know what the truth really is.