The drama over grading standards keeps getting more interesting. It started with Rapnet dropping all EGLI (EGL International) reports from their database. Polygon’s Certnet quickly followed Rapnet’s lead. EGL USA was rightfully indignant in their response. EGLI proclaims there is no single, international standard for diamond grading. Last week’s commentary from Martin Rappaport ignited heated debates on virtually every industry forum.
Last week Ernie Blom, President of the World Federation of Diamond Bourses posted his viewpoint (Open letter regarding over grading certification | 19 Nov 2014) of the issues of grading standards. Now we have the Jewellers Association of Australia (JAA) announcing their list of six accepted grading labs. And to top it all off, EGLUS announced the imminent launch of their own diamond trading platform to go head-to-head with Rapnet for a share of the diamond market itself.
The most creative playwright in the world could not make this stuff up. It has all of the elements of high theatre…wealthy, powerful players battling for dominance in philosophy and market share of one of the planet’s most treasured, romantic, and sexy luxury items. Vast fortunes are at stake. They must be protected or be lost. The fate of the consumer’s hard earned money rests in the hands of these few controllers of this multi-billion dollar industry.
But this is not a movie. It is a reality show. And like most of the popular reality shows on television it lacks one thing…reality itself. Or in the case of the jewellery industry, it is the refusal to see the reality. It does not matter if diamond bourses, both virtual and physical, declare one lab as a standard or refuse to accept other labs. It does not matter who stands in righteous indignation over the lack of ethics in our industry.
As long as we try to stick to grading as we know it, we will never fix this mess. There are millions of reports already out on the market from various labs, including so-called “accepted” labs all using GIA terminology. Very few of them will ever agree on grading standards or even come close. Those existing reports are not going to suddenly disappear. The labs that provide them will still find market share. Sellers at the retail level that regularly use them will not stop. They like the profits that come with them. Some of these retailers have little or no training and legitimately don’t know any better while others simply don’t care or are deliberate in their actions.
Martin Rappaport was almost right when he said that over grading by labs using GIA terminology is a threat to the industry. It is no longer a threat, it is a reality. It has successfully rendered the GIA grading system meaningless. We can’t go back. It is too late. Its value has been broken beyond repair. It is time to start over.
But good drama should have a happy conclusion. The diamond industry will eventually figure something out. It may take a decade or two, it will get there.
(Spoiler alert) In the end, it is the consumer that wins. By the time the diamond industry gets its act together and creates a practical and enforceable grading system, the lab grown diamond industry will take advantage of the chaos and create its own, simplified, easy to understand way of classifying and pricing their goods; capturing the lion’s share of the engagement and fashion markets.