Rapaport says De Beers destroying transparency in the diamond industry
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De Beers Group is said to be refusing to allow its clients to disclose the legitimacy of diamonds from the company. (Image courtesy of De Beers Group)
De Beers Group is refusing to allow its clients to disclose the legitimacy of diamonds from De Beers. All De Beers’ rough diamonds are now opaque. That’s 42% of the world’s legitimate diamond production in 2017, and $14.993 billion of rough diamonds from 2015 through 2017.
In a letter to clients, De Beers states: “In relation to programmes such as GIA’s ‘Mine to Market’ (M2M), or other downstream entities’ initiatives seeking to make provenance claims. We have declined all such requests.… The Sightholder Signature License Clause 3.6.6 states: ‘you will not represent that any particular diamond or diamonds are sourced, or originate, from us or any member of the De Beers Group except with our prior written consent.’”
The net effect of De Beers’ action is to deny legitimate companies and non-profit organizations such as the Gemological Institute of America (GIA) the ability to track the legitimacy of polished diamonds.
“De Beers is extending its market power from rough to polished markets through exclusive polished distribution networks such as Forevermark. They are making it impossible for independent third parties to source-certify their diamonds, thereby disabling legitimate diamond distribution systems. De Beers is using its market power to restrain competition in the market for legitimate source-certified polished diamonds,” said Martin Rapaport, Chairman of the Rapaport Group.
Rapaport is also calling out De Beers for personally attacking Martin Rapaport with false statements.
In a formal statement, De Beers wrote, “As background, Martin Rapaport had requested to be able to market diamonds from the De Beers Group, using the De Beers brand, on his platform for his benefit.… What Martin wants is to be able to market diamonds from the De Beers Group, using the De Beers brand, on his platform for his benefit.”
Both statements are entirely false. Martin Rapaport and the Rapaport Group have never asked to market De Beers diamonds using the De Beers brand — not on our RapNet platform or anywhere else. De Beers should take notice that the age-old tactic of shooting the messenger does not kill the message. The issue here is not Martin Rapaport, or the GIA, or Richline Group’s TrustChain. The issue is the ability of the global diamond industry to provide consumers with source-certified, legitimate diamonds.
The Rapaport Group calls on De Beers to immediately cancel its restriction on source disclosure. De Beers’ bogus claim that the legitimacy of its diamonds cannot be disclosed, to protect the De Beers brand, is false. De Beers can easily use any other name on its invoicing, such as the Diamond Trading Company or DTC, as it has in the past. Furthermore, its brand is fully legally protected in other ways.
With extensive human suffering in developing countries such as Zimbabwe, the Congo and others, as well as billions of dollars of diamonds not subject to human rights, AML and CTF compliance, the Rapaport Group begs De Beers to do the right thing and allow its clients to disclose the legitimacy of their diamonds.
The Rapaport Group asks all responsible members of the diamond industry to directly email De Beers CEO [email protected] and request that he immediately revoke restrictions on source disclosure. Feel free to CC [email protected] to ensure follow-up.
The Rapaport Group asks all responsible trade associations such as the World Federation of Diamond Bourses, International Diamond Manufacturers Association, World Diamond Council, American Gem Society, Jewelers of America and the Responsible Jewellery Council to take action that will ensure all members of the diamond trade have equal opportunity to disclose the source of their rough and polished diamonds.
Finally, the Rapaport Group asks all members of the Kimberley Process and Non-Government Organizations to take proactive measures to ensure that all members of the diamond trade have equal opportunity to disclose the source of their rough and polished diamonds.
Rapaport Media Contacts: [email protected]