For a number of years, the diamonds on luxury watches, wedding rings, necklaces and earrings have largely come from Russia, from the mines of the Alrosa group in Siberia. The Russian state is the main shareholder in Alrosa, which has replaced the English-dominated De Beers Group as market leader.
The US banned the import of Russian rough diamonds on March 11th. To date, the EU and Switzerland have not adopted the sanctions. The import remains legal. Nevertheless, the most important Swiss watch and jewelry companies now want to do without Russian diamonds, as the Richemont Group (main brand Cartier), the Swatch Group and Rolex explain to the Rundschau. The corporations would act on ethical grounds. And probably also in order not to jeopardize their business with the USA, the most important export market for the Swiss luxury goods industry.
Corporations want guarantees
The three companies did not want to comment on the control mechanisms they use to ensure that Alrosa diamonds no longer enter the supply chain. The former president of the industry association Responsible Jewelery Council, Charles Chaussepied, an industry insider, explained in the Rundschau that the large Swiss corporations demand corresponding guarantees from their diamond suppliers: “You have to sign on the invoice that the cut diamonds do not come from rough diamonds imported from Russia after March 11.”
Handing over the responsibility to the supplier is not enough, says Hans Merket from the NGO International Peace Information Service IPIS in the diamond city of Antwerp: “It’s about the customer’s trust in an emotional product. You can’t create trust with credulity alone.” Banning the world market leader Alrosa from the supply chain is not an easy task.
No conflict diamonds
Internationally, Russian diamonds are not considered blood – or conflict diamonds. This is how the Kimberley Process (KP), a UN organization with 80 member states, has so far only described diamonds that are mined by rebel movements. At the plenary session in June, the US delegation proposed extending the term conflict diamonds to include Russia. Switzerland supported the application, but it failed due to resistance from Russia and China. The KP continues to certify Russian diamonds as conflict-free, and countries like India import them in bulk, industry data shows.
Once in the chain, the Russian bricks can be sent back and forth between major hubs such as Mumbai, Dubai and Antwerp. The stones are sorted and put together in new packages with diamonds of the same size but of a different origin. So the trail of the Alrosa diamonds is lost.
In the cutting workshops in India, where 90 percent of the rough diamonds mined worldwide are processed, the trail continues to get lost. The watch industry needs small and tiny diamonds. After grinding, they are sorted by size and not by origin.
Determination of origin impossible
It shouldn’t be easy for the Swiss watch companies to change their previous practice, says Diamantaire Walter Muff, formerly head of diamond sales at Gübelin: “For practical reasons, it’s almost impossible to reliably determine the origin of the small stones. They are mixed during processing, like the apples from different farmers who make cider. Impossible to say from which farmer the apples in the must come.»