Coping with Conflict Diamond Issue

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Jewelers of America (JA) has recently released information regarding the conflict diamond situation. In the following pages you will find background information on the conflict diamonds crisis. JA also offers pointers to help retailers discuss the conflict diamond situation with their customers in such a way that consumers feel comfortable.

For the complete JA training kit on conflict diamonds see www.diamonds.net and enter the conflict diamonds forum.

Recent International Activity

In July, members of the World Federation of Diamond Bourses and the International Diamond Manufacturers Association, representing all the principal players in the diamond industry, met and approved a resolution to address conflict diamonds worldwide.

The meeting led to the establishment of an oversight organization, the World Diamond Council, comprised of industry representatives from around the world. The council will be responsible for enacting the Antwerp resolution and monitoring compliance.

Details of the Antwerp Resolution and the Industry’s Steps

1. Each exporting country will establish an office or board to seal the parcels of rough diamonds and to register them in an international database.

2. Each diamond importing country is to enact legislation, ensuring no parcel of rough diamonds may be imported unless it has been sealed and registered in the database.

3. Countries consuming polished diamonds will enact legislation to forbid importation of polished diamonds from countries without the above controls.

4. Each and every country involved in any process of the diamond supply chain will

enact legislation bringing criminal penalties on any individual and/or company proven to be knowingly involved in illegal rough diamonds.

5. Each and every diamond organization will adopt an ethical code of conduct regarding conflict diamonds, labor practices and good business practices in general. Failure to adhere to these standards would lead to expulsion from all relevant organizations.

6. All relevant and interested parties will promote adherence to the code of conduct.

7. The industry will enlist the support of banks, insurance and shipping companies as well as other pertinent providers to expose and cease business relations with any entity that is found to knowingly violate these principles.

8. That compliance with the above will be monitored and controlled by the World Diamond Council.

Recommended Actions

oTrain your sales associates. Make sure they are aware of this issue and know how to address it with customers if it arises.

oWork with you suppliers to have them sign a JA Vendor Agreement. Call JA at (800) 223-0673 for a copy.

Your customers may be concerned that:

oThe diamonds they buy or already own may be from one of these countries.

oWhen buying or wearing diamonds, they may somehow be supporting subversive activities and human rights violations.

The press may contact you:

oTo learn if you are aware of the issue.

oTo learn what steps you have taken to protect your customers.

Talking Points – Answers for Your Customers

Q: What exactly are “conflict diamonds”?

A: The term conflict diamonds refers to diamonds coming from parts of Africa where diamonds are sold to fund rebel activities.

Q: What are the chances that I am either wearing or buying one of these stones?

A: Very slim. Less than 4 percent of the world’s diamonds are from these areas. Virtually all diamonds are mined and sold through legitimate channels. They contribute very substantially to the economic and social development of countries like Botswana, Namibia and South Africa.

Q: What’s being done to stop the sale of these stones?

A: Stopping the flow of conflict diamonds is a top priority of the diamond and jewelry industries in the U.S. and worldwide. Proactive steps are being taken worldwide to end the sale of these stones. The jewelry industry is currently working hand-in-hand with the United Nations and with the governments of countries around the world to stop the trade of conflict diamonds, through combined and coordinated efforts.

Q: How can you tell where a diamond comes from?

A: It is not possible to look at a cut diamond and know where (which mine or which country) it was mined.

Q: What are you doing to help stem the flow of conflict diamonds?

A: We are doing everything possible to assure our customers the diamonds we sell are not conflict diamonds. Our store will not knowingly buy or sell these stones. We require that our diamond vendors sign an agreement pledging that they will not knowingly buy or sell conflict diamonds.

Additional Worldwide Steps

oThe U.S. is pledging $1 million in the fight to halt conflict diamonds.

oThe Democratic Republic of Congo is partnering with a rough diamonds trading group to channel their entire production.

oThe United Nations ratified UN Security Council Resolution 1306, banning all Sierra Leone diamonds, until it is established that those exported diamonds are not from a conflict area. Subsequently the UN approved a plan by the Sierra Leone government to certify their diamonds for export.

Your Store Meeting

1. Communicate your store’s and the industry’s philosophy. Diamonds are an expression of love, not a means to violence. The industry deplores the efforts of rebel forces to smuggle and sell diamonds to finance their acts of war and terror. We are doing everything possible to ensure that we don’t knowingly sell diamonds from conflict areas.

2. Make sure each of your sales associates understands the enclosed information and is able to answer your customers’ questions and reassure them about their diamond purchase.

3. Post this information in an easy-to-find, heavily trafficked place for easy review and reference.

4. Role play and answer questions. Ask and answer the hard questions. Be familiar with the material and the steps the industry is taking. Don’t let answering a customer’s questions be the first time you address conflict diamonds!

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