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Eileen McClelland

Ethical Challenges and Opportunities in the Jewelry Industry

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Martin Rapaport, a popular speaker at the American Gem Society Conclave in New Orleans on Wednesday, called on AGS members to create an added-value ethical market for socially responsible jewelry.

The title of his talk was “Ethical Challenges and Opportunities in the Jewelry Industry.”

Although there is no simple solution, the AGS is uniquely situated — by way of tradition and avowed adherence to ethical standards — to meet those challenges head on, he said, and influence others. “Good drives good,” he said. “If not you, then who?”

To emphasize that point, he distributed the American Gem Society’s code of ethics, which includes a mission statement to promote high standards of ethical conduct, as well as a pledge to protect the consumer.

The AGS was created in the 1930s in order to set guidelines for the diamond industry, which at the time was made up of “a bunch of liars,” he said.

Today’s challenges he sited include: synthetic diamonds identified as natural, unfair labor conditions, including child labor and human rights violations in African countries, money laundering, and inflated grading reports. He also discussed “green washing,” or misrepresenting the true ethical condition of products.

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A jeweler’s most vital asset is the trust and confidence of their customers and community. Maintaining that trust while sourcing from a competitive global supply chain and serving increasingly socially conscious consumers is no easy task.

Jewelers who ensure legitimate sourcing while honestly representing the quality of their products, create “ethical added value” that should be communicated to customers and incorporated into their brand.

“Industry leaders try to avoid the problem instead of solving it,” Rapaport contends. “This leads to deep, long-term ethical problems. It’s your responsibility to stop this kind of abuse. You are the barrier between the trade and the consumer.”

“We need to think of us as an industry and the solution has to be broader than one guy or one brand,” he said.

One way to begin being socially responsible is to know your supplier.

“Whatever you sell in your store you need to stand behind,” he says. “You are responsible for what you buy and sell.”

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It’s no longer acceptable, he says, if it ever was, to adopt the philosophy of don’t ask, don’t tell, in regard to suppliers. “Deniability has become one of the things we use, and it’s wearing a little thin.”

Rapaport says it’s worth considering that a brand is defined by what it doesn’t do at least as much as it is defined by what it does.

“Can we add value to ethical sourcing? If it pays to be good, in terms of money, people will be good. With market power, we can change the world. Begin to differentiate yourself and your products by branding your social responsibility.”

The AGS Code of Ethics includes the following:

In order to maintain membership, jewelers in the American Gem Society agree to:

Provide full disclosure of all facts pertaining to the products they sell.

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Never intentionally deceive their employees, consumers, vendors, or business partners.

Compete fairly and never speak unprofessionally about their competitors. Likewise, encourage their colleagues in the jewelry industry to embrace these principles.

Resolve any customer complaints relating to the sale of a product.

Not sell conflict diamonds. AGS jewelers must make every effort to fully comply with the Kimberley Process Certification Scheme and the World Diamond Council System of Warranties.

Continue their gemological and jewelry education, always improving their knowledge and keeping up with trends in jewelry and ethical business practices.

Adhere to anti-money laundering program, designed to comply with the U.S. Patriot Act.

Under the guidelines for Social and Human Rights Practices, AGS jewelers are required to respect the fundamental human rights of all their employees, business partners, and of course, their customers. They must adhere to all applicable laws related to work hours and compensation and they must conduct business in an environmentally responsible manner.

Eileen McClelland is the Managing Editor of INSTORE. She believes that every jewelry store has the power of cool within them.

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