RAPAPORT… This article appeared in the June 2006 British Vanity Fair PLUS JEWELLERY special supplement under the title “Rough Justice.”
One of the most important and challenging aspects of the diamond industry is how we deal with ethical issues. The secret of the diamond lies in its value as a symbol, not its physical utility. If you were to get a pair of sneakers made with child labor, you could still play a pretty good game of basketball with them — they have complete functional utility.
However, if you are wearing a diamond and when you flash the diamond at your girlfriend, she says, “Ah, blood diamond!” that immediately destroys the entire purpose of the diamond, which is to make you feel good.
Jewelry and diamonds are very much “feel-good” products, and therefore highly sensitive to anything that would destroy their value as symbols. Diamonds symbolize love, commitment and all that is good in the world. Humanity needs tokens and symbols that commemorate and signify ideals that are beyond the physical needs of people.
That’s why a soldier will die for a flag. The flag may be worth nothing in terms of its fabric, but the idea behind a flag is something that a person might be willing to die for. We must understand the fantastically important role that jewelry plays in society, not just as a source of financial security, but, more importantly, as an emotional symbol.
MORE THAN MONEY
We must look beyond money to the great need people have for gifting — a need that is fundamental to human nature. We gift jewelry to elevate our relationships above and beyond mundane material utility.
You could buy a woman a washing machine — and sure, in developing regions like India, China and Africa, women may get washing machines before they get diamonds — but once a society passes a certain level of wealth accumulation, material needs are replaced by emotional needs. And meeting the very real emotional needs of society is the core purpose of the jewelry industry.
We are not really in the diamond business. We don’t sell the diamond; we sell the idea behind the diamond. A woman wants you to give her something that doesn’t have immediate functional utility because that means that your relationship with her is beyond pure functionality. The emotional, altruistic aspect of the relationship is what is most important.
The value of a diamond to a woman is not its resale value, but the fact that someone she loves, and who loves her, gave her the diamond. A young woman’s excitement upon receiving a diamond engagement ring is not just about the diamond. She has received much more than a diamond — she has got a man.
A woman may want a man to suffer a bit when buying her a diamond. If a simple worker spends $2,000 on a diamond, the emotional value of that diamond to his girlfriend will be greater than the $1 million diamond given by a billionaire. A woman projects the relative cost of the diamond to the man onto herself. She believes that if he spends more on her, she is worth more to him. The more financial pain he feels, the happier she is with him and the diamond.
So diamonds are a powerful concept. Diamonds are a very exciting product because demand for them transcends materialism, is based on symbolism and latches onto the most fundamental and powerful of human needs — love.
Now that we know this, how can we make a better, more beautiful diamond? Should we concentrate solely on the diamond’s physical characteristics — its cut, color, clarity and carats? Perhaps not. Our challenge is to enhance the intangible idea behind the diamond and to elevate the symbolic value of the diamond to a level that’s worthy of representing man’s most sacred and beautiful emotions.
Let us consider the ethical aspects of the diamond equation. The high value that society places on diamonds enables the transfer of wealth from the world’s richest countries to some of its poorest.
The fact is 65 percent of the world’s diamonds, $6.7 billion per year, are produced in African developing countries. Botswana, the world’s largest diamond producer, has the second-highest incident of AIDS, with 37 percent of the adult population HIV positive and 160,000 orphans, as of 2003.
Diamonds provide 75 percent of Botswana’s foreign earnings. Sierra Leone is ranked the world’s poorest country by the United Nations (UN) Human Development Index, with about 70 percent of its people living on less than a dollar a day. Diamonds account for 94 percent of its exports. The fact is, diamonds are keeping these millions of people alive today.
Our story cannot end here; we must dig deeper. While Botswana is blessed with kimberlite pipes that enable an efficient, well-organized diamond mining industry and the beneficiation of diamond revenue, Sierra Leone, Angola, the Congo and other countries have alluvial diamonds that are scattered throughout their region in ancient riverbeds. The random distribution of diamond wealth in an impoverished society creates incredible problems and, in the case of Sierra Leone, enabled a horrible war.
The problem is that unprotected wealth is a curse. Imagine if you give your wife a $1 million necklace and you do not provide her with any security? Robbers then come, beat up your wife and steal the necklace. Was that gift to your wife a blessing or a curse?
Imagine a world where Sierra Leone’s government is corrupted by diamond dealers. Liberia attacks the diamond areas that cannot be well protected because the diamonds are scattered all over the border region.
Liberian soldiers and local rebel teenagers, powered by drugs and armed with AK-47s, turn the local population into slaves who dig for diamonds. The diamonds are then sold to raise money for more guns to enslave more people to dig for more diamonds. Welcome to Sierra Leone 1998 to 1999.
A DIAMOND TALE
Let me tell you a story. In 1998, Global Witness, a nongovernmental organization (NGO), takes on the issue of conflict diamonds. In 1999, Charmian Gooch of Global Witness comes to Israel and we meet. She tells me that the diamond industry is responsible for a terrible war in Sierra Leone. I believe her. She wants to trace the smuggled diamonds.
I don’t think this is possible and suggest we follow the trail of the legitimate diamonds so we can make kosher diamonds. At first, people think this is an impossible idea, but by 2000, people are talking about a certification scheme that eventually evolves into the Kimberley Process (KP).
Early in 2000, the U.S. State Department asks me to go to Sierra Leone as part of a diamond reconciliation meeting with rebel leader Foday Sankoh. The idea is to get Sankoh’s Revolutionary United Front (RUF) rebels to leave the diamond-rich areas and pass control to the UN. I fly into Freetown on a World Food Programme (WFP) helicopter, bringing in sacks of rice. It’s the only way in or out of the country.
I meet Sankoh at his home. He smiles a lot and wants us to tell his story of government corruption and why he became a rebel. The next day, I visit the amputee camp. I see Sankoh’s work: thousands of people missing limbs — men, women, children. A school in a shack with a dirt floor and blackboard, teachers and kids, everyone missing a limb. Babies sleeping in milk crates. Intelligent people wanting to tell their story, showing me their severed limbs. I think of my parents in Auschwitz. I think — never again.
In 2000, I publish the article “Guilt Trip” and put pictures of dead bodies in the Rapaport Diamond Report. The diamond industry is shocked and angry with me — how dare I publicize this dangerous issue? Then-Congressman Tony Hall of Ohio reads part of the article into the Congressional Record and calls for the Clean Diamond Act. The World Diamond Council (WDC) is established. I speak at the first meeting in Kimberley, which later turns into the Kimberley Process. The diamond industry begins to buy into the idea of international controls over all rough diamond imports and exports.
It is not easy, this diamond story. The KP is working well, doing what it is supposed to do: preventing the flow of bad diamonds from rebels in the Congo and Cote D’Ivoire from entering the diamond markets, protecting the legitimate diamond markets from “conflict diamonds” and formalizing exports from places like Sierra Leone so that the government can collect taxes on exports. The KP helps the diamond trade, governments and NGOs, as it shows that we are doing something that works.
But what about the people of Sierra Leone? How can it be that tens of millions of dollars are exported from diamond areas and yet there is no electricity, no plumbing, no wells, no major improvements in the lives of the people? Why aren’t the diamonds benefiting the local population? What are we waiting for — the next war?
What role should the diamond industry play? What role should diamond consumers play? Do we owe anything to the people of Africa just because we buy their diamonds? Is it our fault if governments are corrupt? Are we responsible for what we buy?
Yes, of course we are responsible for what we buy. And we are also responsible for what we do not buy. Actors, rappers and marketers of nonartisanal diamonds who try to establish boycotts of diamonds from Sierra Leone are doing evil.
They are hurting the very people they are trying to help. What are these people trying to accomplish? We are already dealing with the poorest country on earth. Are they now trying to take away 94 percent of its foreign income? People need to learn the first rule of development: “The road to hell is paved with good intentions” — their good intentions.
So what can we do? I think we need to take a positive, rather than negative approach. We need to help people, not hurt them. We need to create a new competitive diamond product category called “fair trade diamonds.”
Fair trade diamonds are diamonds whose profits are fairly shared with the people who create them.
They are diamonds whose purchases are carefully monitored to assure they come from legitimate sources, that fair wages are paid and a fair level of benefit is returned to the local community from where the diamonds originate. And to ensure that the processing of the diamonds does no harm – to anyone or to the environment.
This past year, our Rapaport Group worked with USAID to create four digger cooperatives in the Kono area of Sierra Leone. This was part of the Kono Peace Diamond Alliance (KPDA) program supported by the U.S. and U.K. governments. Monitoring was provided by Global Witness. We funded four cooperatives totaling some 240 people. Costs to our company were over $60,000 and we found only $3,000 worth of diamonds.
We learned that Sierra Leone does not need more diggers and that the best way to promote development is by establishing sustainable economic development. We learned that industry must work together with government and NGOs to create new economic realities. We learned that there will be tremendous demand for fair trade diamonds and that no matter what the cost or the loss we have encountered — we are doing the right thing.
People assume that governments can change the world. But I say governments cannot regulate development. All they can and must do is create an enabling environment for business to establish sustainable development. I challenge the value system of Africa to change. Africa should be the next China, but African leaders must learn to do what China has done — create an enabling economic environment.
Our goal is to turn Sierra Leone’s curse into a blessing. To use economic power to change the world. To go into the most difficult areas of the world and give people a fair deal. And then to package and sell that fair deal to consumers who want to buy the best diamonds in the world.
Some people add value to diamonds by cutting them better, others by putting them in magnificent settings. My goal is to add value to diamonds by expanding the diamond dream, creating a diamond that brings as much joy to the woman selling the diamond in Africa as it does to the woman receiving the diamond. My goal is to expand the idea behind the diamond — to sell a diamond that makes the world a better place.
Imagine a woman looking at her diamond and knowing that her diamond has helped people who really needed help. That her diamond has brought light and happiness to the people who found it for her. A fair trade diamond transcends money. It is about sharing, caring and love. It is about spiritual sparkle.