- Joined
- Aug 15, 2000
- Messages
- 18,883
Address focusing on Supplier of Choice and Gem Labs by David Marcus,
president, Diamond Club West Coast in Los Angeles.
As you may recall, in September 2004, a delegation from the World Federation went to meet De Beers. At that time, I expressed our concern with the implementation of the Supplier of Choice program. I pointed out that the negative effects on our industry would be:
• Rising prices.
• Scarcity of goods.
• Hurting our profit margin.
Well, here we are, one year later, and I need hardly tell you that each of these negative effects has come to pass.
And there has been another effect. Supplier of Choice was designed to eliminate what DeBeers calls "the spaghetti network" in our industry. This has therefore caused consolidation, meaning that more and more diamantaires are now involved in manufacturing jewelry.
And this means that our World Federation must now start to consider the needs and best interests of a much larger industry segment. We are no longer "only" loose diamond dealers.
The approach that we have taken as a body up until now obviously did not work. So, I suggest that we need a different approach.
For one thing, we need to make a unified representation to the European Union with regard to their still-pending investigation of De Beers on Supplier of Choice and the deal with Russia. We need to make it clear in no uncertain terms that we are one and all opposed to these De Beers programs. As a unified group, we can act in the best interests of our industry without being afraid of De Beers'' potential relation against us individually. The majority of the members of the World Federation is being negatively impacted.
Our leadership needs to take a stand immediately, unequivocally, in person and by written petition. In our leadership role, we must remember that we are representing 15,000 members. Of these, only 100 are sightholders.
Now for my second concern: the practices of gem laboratories. In my view, the gem labs need to have a much more market-oriented relationship with our industry, and i will give you a couple examples of what I mean.
The certificates, as you know, all have disclaimers. But that leads to a basic contradiction. The labs are providing a service that they don''t stand behind. And they can afford to do that, because we as an industry don''t demand the accountability that we deserve when we pay for their services.
One example: there is a pending lawsuit in New York. One lab gave a D Flawless certificate on a stone that allegedly is not of that grade. Because of the disclaimer the certificate, the lab accepts no liability for the monetary damages.
Another example: HPHT-treated stones are not always detected by the labs. But the disclaimer on their certificates indemnifies them when they make this error. We end up being financially liable for their mistake.
We should insist that the labs we deal with carry errors and omissions insurance and that their policy names the certificate holder as the beneficiary in case of a claim. That way, when the labs make a mistake, their insurance pays for it.
I believe we should present the idea to the labs, and those labs [that] adopt this protection for our industry should be the ones we frequent the most.
Another issued is the cut-grade standards. We have labs today that are coming up with what you might call a beauty index. And they have not developed this standard because we want it or because our customers want it. They have developed it to compete with each other for our business.
The problem with this whole concept is that it takes all the romance and illusion out of a diamond. Take the romance out of the stone, and you have taken the greater part of its value away. Since when does beauty get graded in a laboratory? In their craze to compete for our dollars, the labs are actually starting to become dysfunctional. It''s got to stop.
We, as leaders, need to communicate to the labs very plainly that we want them to serve us, because we care about the public as much, in fact more, than they do. The labs need to support our industry, not try to run it. If we cannot evoke a more cooperative attitude from the labs, we need to take back the reins. The World Federation should earnestly consider the establishment of our own, independent lab.
There would be many advantages to this.
We would set reasonable, but scientifically objective, standards that meet the real needs of the public.
We could provide the resources needed to give us the turnaround times our industry demands.
We could use the considerable revenues to invest back into our own industry, for marketing, lobbying, and other kinds of support.
I would like to make a motion to the following effect:
That we establish a liaison between the World Federation and the labs.
That if we do not get satisfactory resolution of these issues from the labs by the next Congress, we establish our own, independent, World Federation Lab.
300x240.png)