This is the third and final installment of a three part articles series on ethical issues related to the jewelery industry.
Part 1 examined the global context and problems, ethical as well as ecological, related to the mining of precious stones, while part 2 examined the controversial Kimberley Process. This third installment presents the concrete business challenges and experiences encountered in the Japanese market – and experience that may well apply to most Far Eastern countries.

The author has recently co-founded a diamond jewelry business in Japan. One problem he is facing is what to do about the ethical issues involved.

By: Michael Werneburg, @mwerneburg, founder of Caritas.

From the very beginning, my partner and I got into the business of selling engagement rings not with a mission to change the world, but rather to capitalize on a business opportunity. Today, prices for bridal jewelry in Japan are too high, and we can do better by selling quality products directly on the Internet. Quoting our business plan, “Our customers are people who research their purchases, value quality over brand, and who want more jewelry for their money.”

There’s no explicit mention of ethics in that description. As a fledgling business we have an imperative to grow, and Japan is a country where the ethics of fashion has not been a major consideration for consumers. If we get too far ahead of our client’s interest in ethical issues, we risk losing them simply because our message doesn’t connect. We certainly won’t sell many rings showing people photos like this. But at the same time it’s hard to talk about genuine quality if the products can be in any way questioned. Our targeted “People who research their purchases” will learn that diamond jewelry involves persistent issues of environmental degradation, intensive resource consumption, economic exploitation, and even human rights violations.

The industry’s mining and manufacturing sectors seem unlikely to take the lead on issues of fair trade and ecological impact. And it’s becoming clear that we can’t rely solely on labels such as “the Kimberley Process” to deal with the human rights issues. For an informed buyer of diamond jewelry, business-as-usual can look downright unappealing. Where does that leave a retail newcomer who wants to provide a product that clients can feel good about?

The answer, we believe, is to take a leadership role as a business. Believing that a steady hand will be more effective than flag-waving, we’ve simply made ethical sourcing and production a part of our definition of quality. We won’t try to change the mindset of those clientele who aren’t concerned with ethical issues. Instead, we will take a leadership role by simply doing the right thing and provide the information for those customers that do share our concerns.

In this way, we can explain the importance of these issues with the quiet confidence of someone who knows their business. It’s a sound business approach and one that we can sustain while we grow. Going back to our business plan, our marketing strategy states “…rather than aim for a specific market share, we define success in terms of:
- happy customers
- products and service we can be proud of
- steady and significant revenue”

This brings us to implementation. As Aristotle said, “We are what we repeatedly do. Excellence, then, is not an act, but a habit.” Applying his words to our business, solid ethics must be a habit.

Clearly, the foremost issue is that of human rights abuse in diamond production. To ensure that our diamonds are produced with respect for human rights, we are developing relationships with suppliers whose diamonds are ethically sourced and produced. We’re currently working with wholesalers and manufacturers in Japan and elsewhere, and welcome new contacts.

We will also look at fair trade and environmental issues. To minimize the ecological impact of our products, we are looking for jewelry manufacturers in Japan that have the ability to incorporate post-consumer precious metals. As we develop deeper relationships with our manufacturers, we will push them to adopt whatever green and fair trade practices we deem necessary, and encourage them to take the initiative in improvements as well.

It won’t be a trivial task. But happily, we’re not alone in pursuing a message of ethics as a way of doing business. We are in some ways following the lead of retailers who have taken a strong ethical stance, such as Cred and Leblas in the UK, Brilliant Earth and Fair Jewelry in the US, and Hasuna in Japan. We’ve also contacted industry stake-holders such as the Rapaport Group and Partnership Africa Canada. We’ll learn what we can from their example and their teachings, and because this matter is genuinely important we’ll assist their efforts wherever possible. To that end, we’re also participating in a new initiative here in Japan that aims to develop an “ethical fashion brand”. This brand will serve to communicate the relevance of ethical issues to consumers. It will also serve to identify those companies that have adopted ethics as a habit. It’s an initiative still in its infancy but we think that it will help us effectively communicate our stance.

Adopting ethical practices can be a big job, but clearly it’s a job worth doing and we believe that we’ve found an approach that we can sustain and build upon.

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This is the third and final installment of this three parts article series. The first part was published in early April 2010; the second installment in late May 2010.

Michael Werneburg, Twitter: @mwerneburg, is the founder of Caritas, an ethical jewelry business based in Tokyo, Japan.