Compliance and the Marange diamond



Compliance of a supply chain to various international regulations and certifications is common. Certifications on environmental regulations such as WEEE and RoHS, Carbon emissions etc have been widely documented. However compliance to trade embargoes, international sanctions is something supply chains are still grappling with. An interesting example comes from the diamond supply chain. The Marange diamond field in Zimbabwe has come as a godsend to its rather insular rulers and the government has taken over the mines under Mugabe's control. The resultant exploitation, murder, torture and rape of miners and local populace has been documented by BBC and bought to several human rights commissions. The resultant ban on Marange diamonds (now becoming a synonym for blood diamonds) has thrown up a conundrum for SCM-luxe. How does one identify, track and prevent the sale of Marange diamonds in the markets of the world? The problems start with the very root of the sanction - its validity. The kimberly process (a certifying agency and regulator of diamonds in the market and mainly consisting of NGOs) which certifies diamonds and prevents blood diamonds from being marketed, has been in the process of withdrawing its sanction on Marange diamonds, stating recent checks have indicated no human rights violations occuring in the mines. The BBC report and several other media have argued to the contrary with the Rapaport foundation banning the sale of Marange diamonds in the market.



The Marange Diamond mines



Next comes the complexity of identification of a Marange diamond. Most high street jewellers admitted it was almost impossible to identify the origin of a diamond (atleast 99% of the non-spectacular ones) unless it came with a certificate of origin which in itself could be dubious - say the origin could be India where it is polished and gains the form of a diamond as we know it. Polishers in India again maintained that though they dont go out procuring blood diamonds they have no control over stocks which do originate from there. So in this rather murky scenario the only way compliance can be bought about is to ensure that the diamonds are certified by say a body like the GIA and all others are suspect. But only diamonds which are of a certain size and value (read uber expensive) are certified while the majority of the diamonds in the market do not command a value which will justify the cost of the certification. So, what is the way out? Maybe cheaper certification for smaller diamonds? better visibility and tracking tools for blood diamonds? Also will the customer pay for it?

Most interestingly when London's Hatton Street jewellers were asked about thier customer's response to the issue of blood diamonds - the response was that customer's just could'nt care less as long as they had some bling on thier fingers. In which case will they pay for any kind of certification, leave alone less expensive ones.



What is the way out? what are the other issues confronting compliance in SCM-luxe? Do write in with your thoughts and interests and we'll create more research and articles to debate this conundrum