This content was first published on IGR – Italian Gemological Review no. 2 in 2017. The information provided here is therefore current as of the original publication date.
The sudden wealth after a long search
In 1991, Chuck Fipke and Stewart Blusson became two lucky geologists. In fact, they had smelled out the right occasion for years. All happened when they discovered kimberlitic chimneys 300 km north-west of Yellowknife. From there they activated the first Canadian diamond pits of Ekati, opened by BHPz Billiton. Each of the two maintained 10% of the value in shares until 2014. Straddling two millennia, a true rush for the diamonds of the new world started in Ontario, in the North Western Territories, in Nunavut. Diavik, owned by Dominion in partnership with Rio Tinto, is the second and most promising Canadian diamond area with further extraction lines that will be activated in 2018.
The positive outcomes of the surveys caused a chain reaction that attracted De Beers, which operates on the sites of Victor Mine (Ontario) and Snap Lake (NWT). Since the first phases of the development, the valorisation of Canadian deposits has been based on the possibility to build an image opposing that of the so controversial diamonds coming from Sub-Saharan Africa, a region where serious issues were reported connected to abuses on working conditions, financing of conflicts and indiscriminate exploitation. Canadian gems appeared just in the years of the scandal of the denunciations by the NGOs that advocated the approval of transnational policies to oppose the financing of weapons through diamonds in Angola. The simultaneousness of events – ethical alarm/Kimberley scheme and launch of the Canadian stones – ended up to characterise the American diamonds as flawless gems, healthy fruits of a honest management respectful of the parties that only a democracy relying on an advanced economic system can ensure. In fact, they had to proceed with environmental and social cautions, financing and planning the settlement of workers in unexplored and not accessible areas where polar temperatures make it very hard to create infrastructure and services. The prohibitive weather conditions, the fragility of an intact ecosystem, the rights of native people (40% of the workforce) led to objective difficulties.
However, at the same time, this evidenced, in a developed country full of resources like Canada, the capacity to adopt procedures respectful of the involved parties, being also able to strictly regulate the impact of extraction activities on the territories. Canadian diamonds basically develop within a virtuous cycle that shows them as socially responsible, directed towards the winning trend of eco-sustainability, of the meeting of needs while respecting workers. Moreover, the control on the raw material has very soon allowed the management to look for the conditions required to certify the traceability from the mine to market. The aim is so well clear since the very beginning, that, as back as 2003, the Professional Jeweler headlined: “Grasping the Canadian Pedigree. How Canada tracks and certifies its diamond bonanza will dictate how the gems are perceived around the world”. What does this ethical plus, that can be actually considered a competition advantage, consist of? How does Canada trace and certify?
The government of the Northern Western Territories catches the opportunities to produce diamonds with and Ethic Pedigree
The system is based on a control room able to follow a strategic direction. The costly development of hundreds of roads infrastructure that can be exploited only few weeks a year, the massive investments needed to get extraction operate, an extremely specialist know how are all elements that, in the nineties, drove the Canadian Government of Northern Western Territories to intervene as leader in a series of operations favouring the cooperation between public interests and private investments. It implies the adoption of a particularly flexible mining legislation along with regulations able to limit the risks and then attract resources of big companies. In this way all investments in infrastructure can be paid back. The extracted material is selected in two facilities in the capital, Yellowknife (Dominion Diamond Corporation ex BHP Billiton for Ekati material and Diavik Diamond Mine of Rio Tinto and partners). Once the royalties are paid to the Government, a percentage of about 10% of the rough is delivered, as by agreement, to HRA, a group of companies specialising in cutting and polishing, again based in Yellowknife, to which they grant the status of ANDM (Approved National Diamond Manufacturer). The national manufacturers of finished diamonds are also entitled to use of the Polar Bear Diamond trademark, applied on diamonds by laser inscription. However, the government authorities of the Northern Territories made a further step ahead in the process for consolidating the value of Canadian diamonds: by adhering to a Code of Conduct (The Voluntary Code of Conduct for Authenticating Canadian Diamond Claims) all diamonds extracted in the country, even though cut and polished elsewhere, can be authenticated as Canadian. This allows the government administration to activate, to the advantage of the production system, a tracking with two methods. First of all the GNWT Certificate (Produced in Canada, diamonds extracted and cut in Canada) states the ethical qualification that today is undoubtedly critical: all the passages can be verified and traced, from the mines to the polishing. The second method is the Canadian Diamond Authentication Process (Made in Canada is a status extended to all the diamonds extracted in the country, even if they are worked abroad) by which a series of passages ensures that the Canadian stones, given back after the cutting outside the country, perfectly match the batches of raw material exported for working.
Canadian diamonds, the ethical wild card at the basis of Brilliant Earth success
Fortune was not only in the side of the two geologists who discovered the rich Canadian kimberlitic chimneys. The meticulous work of the government managers was able to give the diamonds of the Northern Territories rather incisive and sought after credentials – when compared to others – as for traceability. This favoured the project of two former students from Standford, Beth Gerstein and Eric Grossberg, who founded Brilliant Earth in 2005. It is a company trading in conflict free jewellery realised with diamonds that at first came only from the mines of Ekati and Diavik. The bet of these young men coming from California was won: the time is ripe to meet, with certified products, the new demand for diamonds with working phases free from abuses or exploitation. The intuition of Brilliant Earth is right. In little more than a decade the Company that had relied on Canadian diamonds branches, increases its income, is listed on the stock exchange and shows to be able to compete with the most prestigious operators of American jewels. Brilliant Earth is also particularly active online with rather massive proposals of loose diamonds with a Canadian denomination of origin. How? The “Product of Canada”? No, the diamond extracted and cut in the Country (with higher costs than the average ones) represents a little important fraction of the available product. The selected procedure is the second method for tracing, the Made in Canada, the one that simply means “extracted in Canada”.
A viral video questions the geographic authentication of Brilliant Earth diamonds
The Made in Canada brand of diamonds work well for all the parties involved – not only Brilliant Earth – that in the jewel trade can, therefore, concretely propose themselves with a distinct ethical vocation. Something new happened in 2017, when Jacob Avital, the American owner of a company named “I Want What It’s Worth”, operating in the purchase of used jewellery, uploaded on the net a video entitled “The Brilliant Earth Diamond Scam”. It is a rather articulated reprimand that strongly questions the full-blown Canadian origin of diamonds sold by the company from California. Worth orders a diamond from Brilliant Earth and makes some remarks. First of all the gem has, from the gemmological point of view, a GIA certificate, but comes with a document of traced provenience that only offers a mere unilateral statement without a registered and verifiable authentication. Moreover, the manufacturer indicated by Brilliant Earth, to which the diamond set on the ring was given back, stated that they were not able to guarantee the Canadian provenance. The database of the stones put on the market uses a great number of intermediaries, mainly from Mumbai (India) to which the platform connects to increase its own warehouse.
Worth notices that whole lists of goods with a univocal gemmological identification number (namely the stones themselves) are simultaneously present on the Brilliant Earth platform and on the Blue Nile one, another big trade operator on an IT platform. While the list of Brilliant Earth insists on the qualification of the Canadian origin, Blue Nile sells the same stones without specifying their origin, though at lower prices. This renunciation to the ethical title is considered suspect by Worth. If these diamonds really own those sure and incontestable ethical credentials that are so appreciated by the new consumers, shouldn’t they be marketed by everyone aptly playing the winning card of the provenience certification? Why doesn’t Brilliant Earth, so involved in the process that must guarantee the supply passages, underwrite the Code of Conduct that will open the ethic route prepared by the government authorities? Many intermediaries interviewed by Worth and then by Bryan Clark, author of a further investigation on behalf of TNW, deny that they are able to guarantee the Canadian origin of the sold stones, though they change their mind just a few days later. The video becomes viral, with nearly 800,000 views at the moment of writing and questions the main trade activity of Brilliant Earth. The reaction doesn’t take long to arrive: “Because transparency and ethical sourcing are so central to our mission, we conducted a third-party audit last year to independently certify the origin of our diamonds. The audit by SCS Global Services examined the diamonds we offer and found that our diamonds are traceable to their origins”. Then as back as in 2016, before the video reportage questioned the true Canadian provenance of its diamond, Brilliant Earth had decided to set upon its own. To claim for them the seducing title of Canadian Diamond, it uses a third party audit (certified audit), through SCS Global Services, a company from California collaborating with RJC in the field of diamond traceability. It is a basically formal audit of contracts and transactions with suppliers, a standard procedure of audits meant for verifying the diligence of the supply chain. Will the government code, already generously inclined to the brand generation, be then put off? If so, due to what reasons? Should we think that, as the toils of the Code are too tight, they invented a shortcut?
All diamonds can be ethical but some diamonds are more ethical than others
A legal dispute is being started between Brilliant Earth that sued him for damages in July 2017 and its denigrator. Avital is also an entrepreneur in this sector and, therefore, he could have specific business interests. We are now in the field of judiciary news and this risks to make the analysis diverge from the main issues: How is the power of ethical attraction of “Made in Canada” diamond generated? On which legitimation basis? But first, we should go a step back. Each diamond that we legally buy in any jewellery in the world, should theoretically already have the diligence stamp required by KPS, the Kimberley scheme that gives the green light to those countries manufacturing raw materials that properly meet the required procedures. The judgement on the success or failure (we could just mention the sensational withdrawal of Global Witness) of the procedure activated by the Kimberley Process is very controversial. However here we are focusing on another point of interest: the diamonds with Kimberley passport have equal dignity and ethical value regardless the geographical area of provenance. The Canadian government authorities that first made a reflection on the methods to verify the congruity of their own diamonds to the procedures of Social Responsibility, did not limit to a strategy of a mere and generic certification of the proper manufacturing process, of the compliance with KP. Since the beginning they have also insisted on the promotion of the geographical origin. Yet, as 90% of the raw material must be delivered elsewhere for the cutting and polishing phases, the Canadian diamond is structurally in the same position – just to make two general examples among the many – of the one coming from Russia or, let’s say, Botswana. We can equally verify that the extraction in these countries has been responsible, but then, all raw items (Canadian and not) must enter the transnational supply chain. And here everything starts back as you should prove – in a new working phase – of being diligent in Mumbai or Tel Aviv, no matter if you cut diamonds coming from Canada or Congo. At the end of the cycle, the window shops of a jewellery display geographically indistinguishable consumer diamonds. No one thought that tracing a Russian or Botswanian origin label was useful as credential of social responsibility. The Canadian Diamond Authentication Process, instead, provides for a further attribute that should sound ethically neutral: these stones, beside complying with the Kimberley Scheme (the only obligation, required as a standard) beside being cut respecting the rules, are also Canadian (further information). This leads to a problem of meaning as the limit between CSR (satisfaction of intangible values) and marketing (penetration on the market to maximize the income) is crossed. They no longer focus on the establishment of shared regulation systems of Social Responsibility to ensure the diligence of the production cycle. Instead they, apply these new forms of territorial branding that some researchers don’t hesitate to define “commodity racism”. The immaculate, polar, pure, innocent, responsible, intact and white Canada – according to these researchers – is opposed to the ferocious red of blood diamonds, to the dark black of the fearful Sub-Saharan territories. Under this perspective, the Canadian diamond could mean simply this: not African, and as such able to exempt the weary machine of legitimation from the costly work required to acknowledge proper practices, traced routes, sustainable environmental impacts. These are all things that should be made in the impenetrable jungle of shadows, promiscuous trades, unsafe borders, conflicts and dangers, mosquitoes and crocodiles of the Dark Continent.
Ethical plants and marketing climbers
The study of the process of ethicalization of Canadian diamonds, as economists and geographers see it, is quite interesting. We will have to take it into consideration, but in such a case it would take us too far. It is better to shift our lens back to the legitimation procedures that Canadian diamonds have activated at multiple stages. The process is started by the government authorities, the policy makers of the big North American Country working on the coded authentication and depicting Canadian diamonds as a paradigm of the gems extracted with higher costs and worked responsibly. This implies an increasing of the ethical value that amortizes more rapidly the investments costs. The highest cost is gladly incurred by the consumers who are more sensitive to the subject, as shown by the success of Brilliant Earth. It is acknowledged with official statements: it’s true, they are more expensive, but the price includes the guarantee of the Fair Trade. However, this Fair Trade can be evident to the public only through a precise type of ethical marketing positioning based on the building of two polarized images: the Canadian identity will express positivity and fairness when more in opposition to that linked to African diamonds, perceived or made perceived as gems manufactured in conditions of instability and lack of transparency. This perception is superficial, generic, even completely wrong. It is the fruit of prejudices or approximation as African manufacturing companies are manifold and today many African countries offer advanced guarantees in the production chain and diligent traceability practices. Brilliant Earth itself, in order to balance the initial emphasis fully focused on Canadian diamonds, started to propose Botswana diamonds as example of responsibly sourced gems. Even though the game of the authentication system of the Canadian government, offers beneficial assists for the commercial finalization, it can not be certainly considered as technically approximative or hasty. The passages are regulated, the controls are carried out, at any time the consumer can ask for checks. As we have seen, we should object on the scope, that is the self assignment of an identity thanks to the exclusion of others party involved. But it seems that the means, the Code, could be considered as a valid example of traceability of the Supply Chain. This is why we are surprised by the fact that they still authenticate diamonds on their own, company after company, with traditional audits by third parties. This is a rather old system, often criticised by experts: the controls are carried out by a single auditor, hired and paid by the buyer, whose role merely consists in looking at the documents to give them back with a stamp after a formal check. All in all the crucial issue is always the same. There is no connection among the parties involved in the ethical certifications: governments, bodies, companies and NGO, all play a self-referential script in a port of shadows where the ethical plants and the marketing climbers intertwined in an embrace from which they can be hardly freed.
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Article by Paolo Minieri, published on Rivista Italiana di Gemmologia #2, September 2017.
