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Jun 25, 2018
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Rapaport and De Beers trade blows over transparency in the diamond industry

Jun 25, 2018

After heated exchanges at the beginning of the month, the Rapaport Group has released a statement accusing international diamond mining and retail corporation the De Beers Group of "destroying transparency" in the industry.

Rapaport has accused De Beers of "destroying transparency" in the diamond industry - Instagram: @debeersofficial

The statement claims that all of the corporation's rough diamonds, which account for 42% of global legitimate diamond production in 2017 or $14.993 billion of rough diamonds between 2015 and 2017, are now opaque.

At issue is a clause in the De Beers "Sightholder Signature License Agreement", which reads, "you will not represent that any particular diamond or diamonds are sourced, or originate, from us or any member of the De Beers Group except with our prior written consent."

Citing Rapaport Chairman Martin Rapaport, the statement alleges that as De Beers expands its market power through exclusive distribution networks such as Forevermark, it is also undermining legitimate distribution systems by preventing independent third-party dealers from source-certifying their diamonds. 

"With extensive human suffering in developing countries such as Zimbabwe, the Congo and others, as well as billions of dollars of diamonds not subject to human rights, AML and CTF compliance, the Rapaport Group begs De Beers to do the right thing and allow its clients to disclose the legitimacy of their diamonds," says the statement. 

Martin Rapaport first highlighted the issue on June 3, during the JCK 2018 Rapaport Breakfast in Las Vegas, making a highly charged speech in which he dubbed De Beers' policy "the mother of evil", before emphatically stating, "De Beers no longer leads the diamond industry. They lead De Beers. Their interests are not aligned with ours." 

De Beers hit back two days later with a statement alleging that Rapaport's speech was, in fact, a response to failed negotiations seeking to market De Beers-branded source-certified diamonds on the network's platform, a claim that the Rapaport Group also denied in its most recent statement. 

The argument comes as De Beers continues to develop its end-to-end diamond blockchain Tracr. The industry-wide initiative purportedly aims to certify both the authenticity and origin of all stones registered on the platform – a project that seems somewhat at odds with the position apparently adopted by the corporation over the course of this latest controversy. 

The Rapaport Group is a global network supporting the development of ethical diamond and jewelry markets. It operates Rapaport Information Services, Rapaport Magazine and Diamonds.net, and has offices in New York, Las Vegas, Antwerp, Ramat Gan, Mumbai, Surat, Dubai and Hong Kong.

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