Major United States (US) and international retailers selling diamond jewellery are falling short on their promises to combat the trade in conflict diamonds, according to a new report by Global Witness released today at a World Diamond Council Annual Meeting in Dubai.(1)
The new report from Global Witness is Broken Vows: Exposing the “Loupe” Holes in the Diamond Industry’s Efforts to Prevent the Trade in Conflict Diamonds. It reveals that major players in the US diamond jewellery retail sector, which accounts for over half of global diamond jewellery retail sales, are not carrying out the basic steps of a self-regulation which aims to stop the trade in conflict diamonds. The self-regulation requires all sectors of the diamond industry to implement a system of warranties and a code of conduct to keep conflict diamonds out of legitimate trade and to support the Kimberley Process.(2) The diamond industry has also committed to educating company employees about the self-regulation so that consumers can be given appropriate assurances that diamonds are conflict free.
“Diamond jewellery retailers are the industry’s public face and they have a special responsibility to tackle conflict diamonds by complying with the self-regulation and by actively promoting compliance by their suppliers. But some of the largest US and international retailers are paying only lip-service,” said Corinna Gilfillan of Global Witness. “This continued failure means that diamonds can continue to fuel conflict, human rights abuses and terrorism. It is even more disturbing given that the industry will soon be required to implement anti-money laundering regulations under the USA PATRIOT Act to help combat terrorist financing.”
Global Witness surveyed 30 retailers in Los Angeles, Miami, New York and Washington, DC, including international luxury jewellery companies, national department stores, national jewellery chains and independent stores.(3)
The report reveals that:
• Salespeople were well-informed about their company’s policy and the system of warranties in only four out of 33 stores visited by Global Witness investigators. There was generally a low level of awareness among company employees about company policies on conflict diamonds, showing that companies have failed to implement a basic requirement of the self-regulation.
• Out of 30 companies, 25 have failed to respond to Global Witness in writing about their policies on conflict diamonds and the self-regulation. They include international luxury jewellery companies like Bulgari, Cartier, Harry Winston, Van Cleef & Arpels and Wempe, US jewellery chains like Littman Jewelers and Whitehall Jewelers and US department stores like Federated Department Stores, Inc. (parent company of Bloomingdales and Macy’s), and Saks Fifth Avenue.
• Only five companies out of 30 informed Global Witness in writing that they have a policy on conflict diamonds and are implementing the system of warranties: Fortunoff, Pampillonia, Tiffany & Co., the Signet Group and Zale Corporation. Tiffany & Co. stood out because it described how it has strengthened its sourcing and auditing policies to help ensure that it is not dealing in conflict diamonds.
The report also shows that the World Diamond Council, which is responsible for co-ordinating industry’s efforts to combat conflict diamonds, has not adequately monitored compliance with the self-regulation, nor have other trade associations. Global Witness is urging governments participating in the Kimberley Process to directly regulate the diamond industry’s compliance with the self-regulation. Global Witness is also calling on the World Diamond Council and other key industry bodies to develop a common standard for verifying compliance with the self-regulation and to promote its adoption throughout the diamond industry.
A copy of the report can be found at www.globalwitness.org/reports/
(1) The World Diamond Council is holding its 3rd Annual Meeting from 29-31 March 2004 in Dubai, United Arab Emirates.
(2)The Kimberley Process Certification Scheme (KPCS) is an international governmental certification scheme aimed at preventing the trade in conflict diamonds. Launched in January 2003, the scheme requires governments and the diamond industry to implement import/export control regimes on rough diamonds to prevent conflict diamonds from fuelling conflicts and human rights abuses. The KPCS was negotiated by governments, civil society organisations and the diamond trade, in response to civil society campaigning against the trade in conflict diamonds.
(3) The survey and investigations involved the following: For each company, two undercover investigators posed as shoppers and asked salespeople questions in order to ascertain whether the company had a policy on conflict diamonds and was implementing the self-regulation. In the majority of cases, each company was visited once. A formal letter from Global Witness was sent by mail to each company surveyed requesting information on its conflict diamond policy. Each letter was followed up with a telephone call.
Press Release / March 30, 2004