Is Rappaport chasing an impossible dream?

In an article titled: “Honest Grading The truth, the whole truth and nothing but the truth,” Martin Rappaport once again lashes out at EGL International and the problem of overstated diamond grading reports. He brings up valid points on the effect to our industry of applying common terminology with varying standards. I share his dream of cleaning up the fetid mess we see in the market. But is it possible?

GIA created the terminology for communicating diamond qualities using D-Z for colour and FL-I3 for clarity. They apply their own standards to the use of the system and produce diamond grading reports. GIA never patented, trademarked, copyrighted, or set into place any formal protection to the terminology leaving it open to interpretation. EGLI is correct, there is no international standard. The market may have determined that GIA reports bring a higher price and therefore may be considered as a standard but that is just common usage and has little legal weight.

We could even call into question the use of GIA as an industry standard. A standard should be consistent at all levels. GIA labs are usually consistent but most people in the diamond business have at some point resubmitted stones to different GIA labs hoping for and getting a better grade.

GIA is also the most recognized name for gemmological education. They teach the GIA nomenclature and standards. Unfortunately the standards they teach are not the same standards used by their lab. They teach an eye-visible inclusion should be an I1 but might reach as high as SI1. Yet there are plenty of examples of GIA reports with eye-visible inclusions up to VS1, mostly on larger stones. That can be an expensive inconsistency for someone relying on their GIA training to grade a stone for sale.

Even if GIA was perfect and consistent, getting everyone to adhere to GIA standards would be nice…but impossible. That genie will never go back in the bottle. It’s too late. There is too much junk paper already on the streets using GIA terminology. We can’t wave a wand and make it go away.

We need to start over with three basic requirements:
Consistency, Precision, and Accountability.

Consistency and Precision can both be handled through technology. We need properly calibrated grading devices that are able to deliver precise numerical results. These should be the same every time on any unit. Numerical grading will eliminate the problem of grading ranges; getting rid of one of the hidden fudge factors found even in the most honest grading where a “High G” will sell for a bit more than a “Low G.”

Precise, repeatable grading leads to precise and consistent pricing. Without that precision we can forget about a diamond ever being a commodity.

But none of this will work without the one thing that is sorely lacking in the diamond grading industry: Accountability. We simply don’t have it. Every level of the industry relies on lab reports to make important financial decisions. Though the reputation of a jeweller or diamantaire may ride on these reports, not one single lab will stand behind their grades. Every lab, including GIA, has a disclosure paragraph stating that this is only an opinion and the lab holds no responsibility for anything…even errors. They hold their own customers responsible for the lab’s mistakes. The lab screws up, the diamond seller gets sued.

Don’t blame one lab for misuse. Blame all of the labs for cowardly hiding behind fine print and not having the courage to stand behind their grades. Until a lab comes forward that can eliminate subjectivity, produce precise repeatable results backed by the willingness to guarantee their reports …we will never end the problem of misuse of grading.

Without accountability, Mr. Rappaport’s dream is sadly impossible.

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