The Pit: The Great Synthetic Diamond Debate

Editor's Note: The Debate Centers (The Pit, The Jungle, The Ring) were purposely not recorded so participants would feel comfortable to speak freely. The panelists, however, agreed to let us use their names and quotes to provide more context and perspective to the discussion for our readers.

By Russell Shor

Synthetic diamond producers and dealers of the natural gemstone sparred over what to call man-made diamonds during "The Great Synthetic Diamond Debate."

The executives of the leading synthetic diamond manufacturers agreed that using the word "synthetic" to describe their product was unacceptable, but some members of the natural diamond trade insisted it's their preferred label.

Tom Chatham said the word synthetic is misleading. "The public confuses these stones with other products, in other industries. Synthetic rubber, synthetic nylon and synthetic oil are good examples of this ongoing confusion."

Chatham said his father fought the same issue over his synthetic emeralds with the Federal Trade Commission (FTC) many years ago.

"In the end, the FTC agreed to allow him to use the term 'created' to make sure there was no confusion with other imitation products," he said.

Charles Meyer, a consultant to synthetic diamond manufacturers, said the natural diamond industry wanted to use the term synthetic "as a stick to beat manufacturers of lab-grown diamonds. These products must have a fair chance in the market."

He also argued that many sellers of cubic zirconia and other diamond simulants mislabel their products as synthetic diamonds, adding further confusion about the term.

Shmuel Schnitzer argued that the word synthetic was best, adding that the World Federation of Diamond Bourses (WFDB) has come a long way toward accepting the product.

"The WFDB and International Diamond Manufacturers Association had long opposed using grading reports for synthetic diamonds, but relented at the June Congress," he said.

Indeed, he said, many members were opposed to allowing synthetic manufacturers to use the term diamond in any context, regardless of the FTC ruling that would allow them to do so.

"The WFDB agreed, as a compromise, that reports should only use the term synthetic and that reports should carry a different look and grading terms than used for naturals."

Ronnie VanderLinden said that lab-grown or a similar term would be best because it is self-explanatory. He added that there is a good niche for these products because "they make the purchase of colored diamonds possible for many consumers who cannot afford natural fancy color diamonds."

Moderator: Whitney Sielaff, editorial director, National Jeweler Group
Panelists: Tom Chatham, president and CEO, Chatham Created Gems & Diamonds; Bryant Linares, president, Apollo Diamond, Inc.; S. Clark McEwen, COO, Gemesis Corporation; Charles A. Meyer; Shmuel Schnitzer, honorary life president, World Federation of Diamond Bourses; Dr. James Shigley, director of Research, GIA; Ronnie VanderLinden, CEO, Diamex/Russian Classics Inc.

The Jungle: Locality of Origin – Does it Really Matter?

By Robert Weldon

The issue of origin in gems has been particularly contentious in the past half-year. Not surprisingly, the panel discussion about the importance of determining origin in gemstones was one of the most heavily attended Debate Centers at Symposium.

Much of the debate focused on high-value gems, like cuprian elbaite tourmalines from Mozambique and Brazil; sapphires from Kashmir and other locales; rubies from Myanmar (Burma); and emeralds from several different sources.

Gary Roskin questioned whether designations such as "Burma ruby" or "Kashmir sapphire" have become more of a description of color and quality standards than a statement about where the gem came from. Bill Larson said the designation should always be considered and used geographically.

While many in the trade consider such designations as quality descriptions, it was conceded that sources such as Burma, Kashmir or Colombia also produced mediocre to low-quality goods in their run-of-mine output.

"We're selling sizzle," said Alfredo Molina. "I understand Paraíba originally was considered a source, but consumers don't understand that. For them, Paraíba says more about color than it says about source. Because our business is about providing consumer confidence, we should not confuse them with these differences."

Several audience members argued that if consumers found out that "Paraíba" describes something other than a locality in Brazil, their confidence would be eroded, particularly if they found out they had purchased goods from a less-known locality.

"The trade remains in turmoil over the issue of origin," said Lore Kiefert. She noted that there is ample confusion in the industry. "When people were asked what they thought Paraíba described, nine people stated that it referred to color, and only one stated that it was geographic."

Still, most labs that issue origin reports are careful to point out that the documents are opinions rather than fact, because absolute determination of origin remains elusive in some cases.

"If you are not sure absolutely, why are you issuing reports with origin?" an audience member asked. Molina replied that no part of science contains "absolutes" and that those reasonable tolerances are considered acceptable.

All agreed that the gem market continues to demand reports that contain origin information, but they could not agree on whether consumer confidence would suffer if trade names – "Colombian emerald" or "Paraíba tourmaline" – were used as quality instead of locality designations.

Moderator: Gary Roskin, gemstone editor, JCK Magazine
Panelists: Ahmadjan Abduriyim, manager, Research Laboratory, Gemmological Association of All Japan; Bill Larson, president, Pala International, Inc.; Christopher Smith, director, Identification Services, GIA Laboratory, New York; Dr. Lore Kiefert, laboratory director, AGTA Gemological Testing Center; Alfredo J. Molina, president & CEO, Molina Fine Jewelers

The Ring: Ethical Dilemmas in the Jewelry Industry

By Emily Stegman

Imitation happens in every industry, but panelist and audience member opinions clashed when the discussion turned to mimicking jewelry designs in the "Ethical Dilemmas in the Jewelry Industry" Debate Center.

More than 58 percent of the audience felt that copying a jewelry design at the request of a customer, even if minor changes are made to avoid infringing the copyright, is unethical. When moderator Peggy Jo Donahue asked if imitation was acceptable with other products, 59 percent of the attendees punched "No" on their voter keypads, which tracked the responses through an instant voting system.

Other issues caused even more of a stir, including whether dealers – and their customers – should refuse to buy gems from Myanmar (formerly Burma), considering the country's ongoing human rights issues and the U.S. law that bans products originating from the region.

"The Congressional ban on imports from Myanmar is meant to sanction or punish the country's government, not the people the government is suppressing," said one audience member, who spoke of her extensive work experience with small-scale miners in Myanmar. More than 35 percent of the audience agreed, saying they would buy gems from Myanmar if they were cut elsewhere; 45.7 percent disagreed and 19 percent said they were unaware of these issues.

"I think this issue illustrates the enormous complexity of the ethical and moral questions we are faced with in this industry," Douglas Hucker said. "Sometimes these issues are erroneously presented as 'easy' decisions, but they affect the world immensely and I believe we need to carefully look at who is really getting hurt."

Michael Josephson stood in as special commentator after opening the Debate Center with a discussion on business ethics and how they can be applied to the gem and jewelry industry.

"Ethics includes, but is bigger than, compliance. Ethics includes, but goes beyond, law," Josephson said.

He advised, "ethics is not expediency," and emphasized that acting ethically is not always advantageous to a business; in the jewelry industry, for example, practicing full disclosure may turn paying customers away. Even so, Josephson said virtue is its own reward and the credibility attached to your business is worth the risk.

Ruth Batson had encouraging words for fellow trade members interested in practicing ethical behavior in the jewelry industry.

"Robert Shipley once said that consumer confidence is like a reservoir running dry and it is our responsibility to refill it with every action we take," she said. She also encouraged people to educate themselves and their employees so that they can communicate intelligently with customers.

"Our industry is subject to scrutiny on a much broader range of issues these days; we need to share responsibility for each other's actions," Matthew Runci agreed. "It's not just about what you do anymore."

Moderator: Peggy Jo Donahue, director, Public Affairs for Jewelers of America
Special Commentator: Michael Josephson, founder and president, the Josephson Institute of Ethics Panelists: Ruth Batson, executive director and CEO, the American Gem Society; Frank Dallahan, president and CEO, MJSA; Douglas Hucker, executive director, American Gem Trade Association; Dione Kenyon, president, The Jewelers Board of Trade; Matthew A. Runci, president and CEO, Jewelers of America

Audience Insight: Do you agree with the masses?
Click here to see how attendees at "The Ring" Debate Centers responded to major industry questions with the help of their electronic voter keypads.