Is Banning Lab-Grown Diamonds Really a Victory?October 15, 15
The Bharat Diamond Bourse (BDB) recently voted to ban lab-grown diamonds following a vote by members at the bourse’s annual general meeting (AGM). The vote was carried 182 to 23, a decisive victory in any book, but is it really a victory?
While it may be true that as BDB president Anoop Mehta told the Times of India, the majority of traders in the BDB are in favor of banning lab-grown diamonds, I am not sure that his statement that it is better for the traders to ban the trading in synthetic stones at BDB is completely true.
One of his concerns was that detection of lab-grown diamonds is very slow, expensive and cumbersome. However, there a number of companies out there working to make detection faster and more cost effective; which is certainly a victory for every honest trader.
Following the BDB’s decision, World Federation of Diamond Bourses (WFDB) president Ernie Blom said that each WFDB-affiliated exchange was within its rights to decide on its policy on the issue. Crucially, he also clarified the important point that the WFDB is not opposed to the trade in such stones as long as they are fully disclosed.
The words “as long as they are fully disclosed,” bear repeating.”
As Blom reiterated, “We only insist that such stones are fully disclosed so that the trade and consumers know exactly what they are being offered. This is critical in ensuring consumer confidence.”
Lab-grown diamond trader Thierry Silber got in touch with me following the publication of the story about the BDB’s decision. His reaction was one of dismay. “It is my opinion that this decision is another sign that bourse leaders don't understand that the best manner of avoiding unethical practices is to encourage traders to deal with full disclosure and transparency,” he wrote. “The best way to stop this [unethical] practice is to welcome the people who want to deal in an ethical manner.”
Writing about the decision taken last year by the Israel Diamond Exchange (IDE) to ban lab-grown diamonds from the trading floor, although not from the bourse itself, he said, “It is absurd to ban the trade of laboratory grown diamonds on a diamond trading floor in Israel and allow them to be traded throughout that same building. Isn’t it more logical that instead of pushing traders away that industry leaders support the establishment of a laboratory grown diamond association?
“Such an organization would attract all legitimate traders and set rules, standards and have the power to discipline members. Rather than banning the trade of laboratory diamonds and forcing their trade to dark corners, a trading organization would open the door to a legitimate product and make sure that it is sold transparently. The organized sale of laboratory grown diamonds will benefit the diamond industry and increase consumer confidence in both natural and laboratory grown diamonds.”
I can’t but agree. I’ve written a number of times here about my feelings regarding lab-grown diamonds.
As I wrote in April, “[The] diamond industry seems bent on not letting consumers decide what sort of diamond they want to buy – a mined diamond or a lab grown diamond. It seems to want to make this decision for the consumer by not giving them anywhere near as much as choice as it should. There is a fear that if lab-grown diamonds were to become less of a specialized and more of a common item then the very foundations of a very traditional industry would begin to crumble.
We have to remember that consumers are a varied bunch, and they have varied desires and opinions – and some of those opinions include the belief that mined diamonds are more harmful and destructive to the environment and the people mining the stone than are lab-grown diamonds. Until we have a fully functioning promotional body that effectively works to address these issues and show consumers otherwise, then we have to accept that this is the situation.
Given that the industry is facing something of a tough time at the moment, with rising rough prices, falling demand, tightening financing, and so on, why not recognize that lab-grown diamonds are a potential source of new markets and potential new revenue? Banning their trade is not the answer to the ills currently facing the industry.
Have a fabulous weekend.