For gem merchants, a new focus on purity

New York Times

Tracing the path of a colored stone through the vast and largely unpoliced gem trade is a complicated affair, even for the experts. Unlike diamonds, most of which are marketed by a handful of mining juggernauts through a supply chain that is under increasing scrutiny, gems follow a haphazard and opaque route to market that lends itself to smuggling.

That has not discouraged a growing number of gem cutters, dealers, jewelry manufacturers and retailers from demanding to know that the gems they buy and sell have been handled with social and environmental integrity.

"We're selling something nobody needs," said Earl Allen, co- owner of 1700 Ocean, a jewelry store in Santa Monica, California, that recently started a line using Fair Trade Gems. "If you're going to buy stones that finance terrorism or send 9- year-olds into holes, I don't want to be a part of that."

Allen's supplier, Columbia Gem House in Vancouver, Washington, started the jewelry industry's first Fair Trade initiative in 2004. By promoting stones with a clean provenance, the vertically integrated gem miner, cutter and manufacturer hopes to encourage others to follow suit. "Five years ago, you never heard of this in the jewelry industry," Eric Braunwart, president of Columbia Gem House, said. "But it's caught on. If they can tell you where coffee in a cup came from, we ought to be able to do that with a gemstone."

Braunwart sells gems including Tashmarine, a brand of green diopside mined in the remote Xinjiang Province of China, and Nyala Ruby from the Chimwadzulu mine in Malawi, where the company helped build a school for 450 pupils, the children of mine workers. Both gems are cut in his factory in Shenzhen, China by workers who are paid three times the minimum wage and receive paid vacation, room and board, and medical, disability and unemployment insurance.

Braunwart is not alone in his efforts to restore the ethical standing of the industry. The Council for Responsible Jewellery Practices - formed in May 2005 by industry heavy hitters like Tiffany, De Beers and Rio Tinto - now has 33 members and is headed by Michael Rae, a 17-year veteran of WWF, the world wildlife fund.

The council is not tackling the gemstone pipeline, preferring, at least initially, to focus on diamonds and gold, the sources of more than half the global jewelry industry's $120 billion retail value. "We want an overall impression of the supply chain that's favorable," said Matthew Runci, president and chief executive of Jewelers of America, a U.S. trade association and a founding member of the council. Concentrating attention on the larger companies handling gold and diamonds "gives us a huge leg up," he said.

It can take a consumer confidence crisis to make the far-flung and disparate community of colored stone dealers take notice of the supply chain, as in 2002, after trading in smuggled tanzanite, a blue-violet gem mined in the foothills of Mount Kilimanjaro in Tanzania, was linked in U.S. media reports to Osama bin Laden. The reports led to boycotts of the stone by U.S. retailers.

The gemstone trade rallied to call for companies to provide written assurance that their sources were legitimate. In 2003 the Tanzanite Foundation was formed, a nonprofit organization whose members sell tanzanite inscribed with a "Mark of Rarity" symbol guaranteeing the stone's source and ethical provenance. $@- Victoria Gomelsky

Governments are getting in on the act, too, if only because a transparent supply chain means more taxable revenue. Tom Cushman, an American gem dealer who helped the World Bank in 2003 with a $32 million project to establish a legal framework for the lucrative gem trade in Madagascar, said the governments of Nigeria, Brazil, and even Greenland had approached him for help in setting up similar models.