{"id":7755,"date":"2013-02-14T02:00:12","date_gmt":"2013-02-14T10:00:12","guid":{"rendered":"http:\/\/ietransfer.wpengine.com\/?p=7755"},"modified":"2013-02-14T02:00:12","modified_gmt":"2013-02-14T10:00:12","slug":"why-the-jewelry-supply-chain-is-becoming-more-transparent","status":"publish","type":"post","link":"https:\/\/inspiredeconomist.com\/articles\/why-the-jewelry-supply-chain-is-becoming-more-transparent\/","title":{"rendered":"Why the Jewelry Supply Chain is Becoming More Transparent"},"content":{"rendered":"

\"WhyA guest post by Gregory Krauss of Brilliant Earth<\/a>, a brand The Inspired Economist loves. Brilliant Earth is \u00a0a purveyor of socially responsible, conflict free jewelry<\/em><\/p>\n

With today being Valentine\u2019s Day, one of the most popular days of the year for marriage proposals, Inspired Economist<\/i><\/a> asked us to take a closer look at how socially-conscious consumers are faring in the search for that classic symbol of love and commitment: the diamond engagement ring.<\/p>\n

Almost every engagement ring has two main components: a setting, usually made of gold or platinum, and a center gem, usually a diamond. \u00a0Now suppose you were about to buy a diamond engagement ring and wanted to be sure that every component came from ethical sources<\/a>. How would you check? And would you be able to find out?<\/p>\n

Unless you chose a jeweler that makes a point of offering jewelry that is traceable to its source \u2013 our company, Brilliant Earth<\/a>, is one of them \u2013 you\u2019d probably be out of luck. Most jewelers today do not know where their diamonds come from. Nor do they know where the gold or platinum in their rings is mined. Although diamonds are prized for clarity<\/a>, and even scrutinized by expert gemologists for the slightest blemish, the supply chain for diamond engagement rings is, remarkably, almost totally opaque.<\/p>\n

This lack of transparency presents a dilemma for the most ethically-minded consumers, not to mention those who simply want a ring they can be proud to wear. Although some of the worst blood diamond wars are now over, diamond mining today is still beset by spasms of violence<\/a> and inhumane working conditions<\/a>. Mining for precious metals, especially gold, is no less problematic. A surge in gold mining caused by rising gold prices is wreaking environmental havoc<\/a> throughout the world. Gold and other precious metals are also helping to fuel a brutal civil war<\/a> in the Democratic Republic of Congo.<\/p>\n

What concerned consumers can do<\/h3>\n

We believe that one of the smartest ways to address these problems, and to raise ethical standards in jewelry production, would be to make the jewelry supply chain more transparent. If more consumers had the ability to choose jewelry from ethical sources, many more would. Consumers would benefit from more choice. And pressure would build for the jewelry industry to disassociate itself from violence and raise labor and environmental standards.<\/p>\n

The good news is that the cloudiness hanging over the jewelry supply chain may be starting to clear up \u2013 at least for precious metals. \u00a0A new certification system for gold and platinum<\/a>, launched in 2012 by an industry coalition called the Responsible Jewellery Council (RJC), creates a mechanism for tracing how gold and platinum moves through the supply chain. Another very promising initiative, a fair trade gold<\/a> certification system, made its debut in 2010. Although it\u2019s too early to say whether these initiatives will be effective, they presently look like very positive steps forward.<\/p>\n

Unfortunately, the same can\u2019t yet be said for diamonds. This article continues<\/a>…\u00a0\"ConflictAlthough various proposals are in the works, much less progress has been made in making diamonds traceable. When the RJC became serious about implementing a system for tracing diamonds in 2011, just like it is starting to do for gold and platinum, the diamond industry struck it down<\/a>. Meanwhile, despite some pilot projects<\/a>, fair trade diamonds<\/a> have yet to become a reality.<\/p>\n

To some extent, the jewelry industry\u2019s apparent progress on tracing gold and platinum \u2013 and its foot dragging on diamonds \u2013 is counterintuitive. Diamonds occupy a special place in our romantic imaginations. They are laden with emotional significance. If the jewelry industry were to make any part of engagement rings traceable, you would think it would be diamonds.<\/p>\n

Furthermore, in 2003, public outcry over blood diamonds led to the establishment of an international diamond certification scheme known as the Kimberley Process<\/a>. The Kimberley Process, which brings together governments, NGOs, and the diamond industry all in one forum, has been in operation for 10 years. By now, it would be reasonable to expect that the Kimberley Process would have made diamond traceability a requirement. It hasn\u2019t, however. As this excellent article<\/a> describes, diamonds from all over the world still get mixed together once they reach cutting and polishing centers such as Surat, India. Their origins are completely unknown by the time they reach jewelers\u2019 showcases.<\/p>\n

Enter Dodd-Frank<\/h3>\n

So what explains the slowness of the diamond industry in creating a transparent supply chain<\/a>? One possibility is that, as a result of the Kimberley Process, the diamond industry has become complacent. The Kimberley Process, although deeply flawed, seems to have provided the diamond industry with the political cover<\/a> it needs to resist reforms.<\/p>\n

But the more interesting question may be: why has the jewelry industry taken steps to make gold and platinum more traceable? The answer almost certainly lies in a provision inserted into the Dodd Frank financial law of 2010. The provision requires certain publicly-traded companies <\/a>to issue periodic reports to the Securities and Exchange Commission stating whether their products may contain \u201cconflict minerals\u201d \u2013 tin, tantalum, tungsten, as well as gold \u2013 that may be contributing to the war in the Democratic Republic of Congo.<\/p>\n

This disclosure requirement has sent the jewelry industry into a scramble. The ripple effects have been extraordinary. Although the law was intended only to reduce funding for the Congolese civil war, the jewelry industry has responded by creating a system for tracing all gold and platinum back to its source. The impact of Dodd Frank on the gold and platinum supply chains now has some observers wondering whether Congress should pass a similar law for diamonds<\/a>. We think this option is worth considering. Regardless, the fact that gold and platinum are becoming more traceable gives us optimism that the diamond industry will eventually agree to a traceability mechanism too.<\/p>\n

Summary<\/h3>\n

What are the takeaway lessons from all this? One is that despite some protests to the contrary, creating transparent supply chains is feasible if industry has the will to do it \u2013 and particularly if the law requires it.<\/p>\n

But a more basic point is that the jewelry supply chain is undergoing some very promising changes. This Valentine\u2019s Day, finding an engagement ring with traceable components may have been difficult. We hope that on some future Valentine\u2019s Day, every newly-engaged couple will be able to celebrate with an engagement ring that is transparently beautiful.<\/p>\n

Jewelry pictures from Shutterstock<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A guest post by Gregory Krauss of Brilliant Earth, a brand The Inspired Economist loves. Brilliant Earth is \u00a0a purveyor of socially responsible, conflict free jewelry With today being Valentine\u2019s Day, one of the most popular days of the year for marriage proposals, Inspired Economist asked us to take a closer look at how socially-conscious 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Brilliant Earth is \u00a0a purveyor of socially responsible, conflict free jewelry With today being Valentine\u2019s Day, one of the most popular days of the year for marriage proposals, Inspired Economist asked us to take a closer look at how socially-conscious…","_links":{"self":[{"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/posts\/7755"}],"collection":[{"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/comments?post=7755"}],"version-history":[{"count":0,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/posts\/7755\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/media\/7757"}],"wp:attachment":[{"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/media?parent=7755"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/categories?post=7755"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/tags?post=7755"},{"taxonomy":"adace-sponsor","embeddable":true,"href":"https:\/\/inspiredeconomist.com\/wp-json\/wp\/v2\/adace-sponsor?post=7755"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}