Problem in Diamond Industry Is to Maintain the Industry’s Image
2006: Problem In Diamond Industry Is to Maintain the Company’s Apparent Position
The diamond industry has a lot of problems these days — including serious issues with profitability throughout the pipeline. But significantly, the number one issue at the recent World Diamond Congress in Tel Aviv was not about profits, it was about image.
So many of the subjects discussed were not about what is going on internally in the industry, but how the industry appears to the outside world. Take a look at the main topics of the meeting, according to the press releases issued by the two groups meeting at the Congress:
"The Blood Diamond" movie, and the $15 million advertising campaign De Beers will spend to counter it.
Synthetic diamonds (and the new GIA reports.)
Anti-money laundering procedures.
The "WFDB Mark," meant as a "quality assurance" mark for WFDB members.
The industry is clearly in the midst of a public relations offensive (or shall we say, defensive.) Consider the headings of De Beers’ recent annual report: "Corporate Responsibility and Global Citizenship"; "the Diamond Development Initiative"; and "The Partnering Against Corruption Initiative of the World Economic Forum." It talks about the good work De Beers is doing for African countries, with the Jewelers Charity Fund and fighting HIV.
On the one hand, this is good news. It’s great that the industry is becoming more socially responsible, and if it wants to let the world know about it, that’s fine by us. But it is also unfortunate that the industry— which did an honorable thing in agreeing to the Kimberley Process and has always been generous and charitable — has fallen into a position that it needs to defend itself at all.
Recently, in the club, one large cutter hung a sign with a quote from Scripture that said, "Watch your tongue from speaking bad words, and your lips from saying lies." No doubt, M. Fabrikant and Sons agrees; recently, a report in Globes speculated that the company owed $400 million. The company has denied these reports, and, while we don’t know have access to their private financials, it’s safe to say that we —and everyone else in the trade—expect, hope and pray that Fabrikant will be able to work out any troubles they have, as problems with a big company seriously impact the whole trade.
Yet the fact remains: Once you are in a position where you have to disprove something bad, you are at a substantial disadvantage. It is shame that because of years of bad PR, an at times unfair media, and —yes—some genuine ethical breaches, the entire diamond industry now has been put into this position.