A fair trade approach to Africa's diamonds

Recently, I learned about The Clarity Project, an effort to bring fairly-mined, fairly-sourced diamonds into the jewelry market. Impressed by the venture and the website, I did an email interview with Jesse Finfrock, one of the founders. In addition to making diamond engagement rings a possibility again, The Clarity Project is a fascinating exercise in making the market in luxury goods work for the people who literally pull the luxury out of the ground.

As the Congo Minerals Act continues to generate attention and controversy, The Clarity Project may have a thing or two to show us -- not just about how to deal with minerals responsibly, but about how ordinary concerned citizens can educate themselves into savvy business-changers.

JM: Where did this all begin?

TCP: Like many progressive, socially aware people in our generation, we long had the impression that the diamond industry was hopelessly corrupt, superficial, and should probably just be boycotted altogether. But as we met with miners and visited their communities we were introduced to people whose livelihoods and social systems depended on diamonds. We heard from them that boycotting the industry would hurt their communities, which are already struggling with urban migration. Indeed, it was happening all around as the diamond industry shrank due to the global recession. Boycotting, we learned, wasn't going to help anybody.

JM: Tell me about the first mine you visited.

TCP: The first "mine" we visited wasn't really a mine at all. Throughout the diamond rich regions of Africa, self-employed people are illegally digging and sifting through the tailings of old mines. At one such site alongside a road in South Africa, we were able to stop and speak with some of these workers, who were happy to share their experiences. Some were recently unemployed from the recession, and others had been digging at this location for months in hopes of striking it rich. They told us about one man who, from a single stone he found, was able to build his mother a big new house in the community across the road.

But we also heard stories of despair. Many had never found anything, or if they had, they had kept quiet for fear of being robbed. We learned of one neighbor who unknowingly sold a large stone for very little and upon later discovering that it had been worth tens of thousands, took his own life. These workers also risk long prison sentences for mining on land owned by large and sometimes foreign companies. And although they often come up empty handed, it is a risk they are willing to take in the face of very few income options. At this site in South Africa, the workers had long desired to form a collective through which they could formalize their work, but their efforts have come up short time and again. So they continue without permission.

While this type of work is officially illegal and we do not support it, it produces many of the diamonds that enter the world market. These miners told us that foreign dealers would occasionally stop and buy their stones, something we witnessed later on. So we could see first hand that the official story of how diamonds enter the market can be quite different from the reality on the ground. It's impossible to know the number, but it's clear that many such stones are finding their way onto today's jewelry.

JM: Where do you work?

TCP: We are developing strong relationships with a handful of mining initiatives across Namibia, South Africa, and Sierra Leone. Some mines are cooperatives and are community owned. Others are owned by small companies or single landholders. These types of artisanal, or small scale, mining projects are our ideal sources, where we feel we can have the biggest impact. In each case it is a process of reinforcing their good work while helping them move toward increasingly responsible practices. As you can probably imagine, it takes a long time to build trusting, productive relationships in this industry – with miners, their communities, and their allies. We work with our customers on an individual basis to inform them where their diamond came from.

JM: With no background in the business at first, how did you learn to do this?

TCP: We're actively educating ourselves – we're studying gemology and taking diamond evaluation and licensing courses. We also work with people we trust who can evaluate our stones.

JM: The diamond business doesn't seem all that warm and fuzzy; who did you get to teach you what you needed to know, and how?

TCP: There are people who have worked in the diamond industry for many years (literally decades) trying to get more socially responsible diamonds to market. We've had a few great mentors, one of which is a German geologist and anthropologist named Thomas. Coincidentally, he is a big fan of Mother Jones and recognized my name from the masthead when we first reached out to him. We instantly bonded. We've traveled with Thomas throughout several countries in Africa, and through him we've met a lot of incredibly inspiring people, with whom we've developed deep, trusting relationships. He's been kind enough to take us under his wing. There are several others too, and because the industry tends to be secretive, it's taken a lot of research and effort to build these relationships, and we value them immensely.

JM: What kind of premium can consumers expect to pay for the vetting you've done?

TCP: Our prices are comparable to high-end jewelers, but lower than the most high profile luxury brands. Our prices are higher than your typical department store, but this is mostly the result of the quality craftsmanship (rated excellent by New England Gem Lab) and not any fair trade or "vetting" premium.

There is a common misconception that because we cut out a lot of middlemen our prices should be lower. I understand this tendency, and it's something we're working to address. In reality, however, the mines we've been working with are implementing new social and environmental programs and their cost is built into the price of their stones, making up the difference.

We do not compete on price, as there is absolutely no way for us to compete with the cheap prices of the online world. That isn't our mission either, of course -- if we wanted to provide the lowest priced diamonds on the market, we would obviously be doing things very differently. We're on a whole other mission to maximize the benefit for miners and their communities.

To accomplish this, we go out of our way to provide our customers with stones that we are proud of, not only from a sourcing perspective, but also in terms of quality. We want to give our customers the best of all worlds. If our quality is inferior, people will stop purchasing from us and we will not succeed in our mission at all. Quality is a very important factor in driving success in the jewelry industry, and we want to exceed people's expectations.

JM: Are they also paying a little bit more because you reinvest the profits in the local community?

TCP: No. Profits are pretty high in this industry, and we don't need to charge extra to be able to reinvest. People are paying for the high-quality craftsmanship and the quality of the stone. We're just using our profits to build schools, where traditionally they would just make the middlemen and business men wealthier.

JM: It's hard to imagine why everyone wouldn't buy their engagement ring from you.

TCP: Ha! We couldn't agree more. When people hear about us, they almost universally respond very positively. Even critics, once we talk through our process and our vision, usually come around. But we are still small potatoes in this industry, and most people haven't heard of us. Although, we're happy to report that this is beginning to change.

JM: What's your capacity at this point?

TCP: Well, we're not entirely sure. We're actively building our capacity and refining our business process -- growth pains that any start-up faces. At some point we hope to grow enough to leave our day jobs and do this full time. But we think that's a ways off.

Currently there are limits on the diamonds coming from the mines we support. Since we are concerned with all of our raw material origins, our supply of specific diamonds (cut, clarity, size, color) is more limited than the open market, and this does affect our capacity to a degree.

JM: Do you want to outgrow your status as a self-described boutique company, or is there a limit to how far you can scale up a business like this?

TCP: At its heart, this is activism. Our mission is to maximize the benefit to small-scale miners. So we will try to grow as much as possible while adhering firmly to this mission. I'm not sure when a boutique stops being a boutique exactly, but growth itself is not our goal. We realize that our company will likely never come to dominate the industry in any significant sense. However we also realize that there is an important role to play for smaller, more nimble companies that are interested in pushing the industry in a more fair and transparent direction. And realistically, we think there always will be this role to play. Ideally, sure, it would be nice if in the future, companies like ours were the norm rather than the exception. But this is a long way off. And by putting pressure on the industry, we can generate much larger impact than we ever could by ourselves alone.

JM: There's a favorite cliche about the resource curse in Africa. It seems like you're trying to reverse that curse.

TCP: We are pretty idealistic but we are not blind idealists. We are trying to do the absolute best we can; to use our model, to apply our mission, to make the industry more fair and open, and to support people who are working really hard to provide for their families and pursue their goals. While there is a very long history of corruption and greed in this industry, as consumers, we must all take responsibility for the roles we play in this curse.

We would certainly like to become one of many models that can be employed by communities and organizations in poverty alleviation efforts. Beyond working with mines to implement socially fair and environmentally responsible practices (which in turn pressures the industry to raise the bar, benefiting even more people), there are at least four other initiatives that ideally we will use to help break the destructive cycle of resource extraction through reinvesting our profits. We have already begun working and contributing on the first two, I'm currently researching the third, and the fourth is soon to come:

1. Building schools and providing educational opportunities for both children and adults allows people to move past the extraction industry -- education is key to any effort to reduce poverty.
2. Rehabilitating old mining land and turning it into agricultural land provides new livelihood options and food that can help people stay in their communities rather than moving to city slums -- environmental degradation is a major factor in this mass migration.
3. Funding microfinance programs can provide people with increasing alternatives to mining and new sources of income while helping teach people how to run small businesses.
4. Opening health clinics can teach safe practices and provide resources for reducing illness, child-birth complications, and even simple injuries that can result in depressed wages or worse.

It's important to understand our role in this as well. We are not doing this work ourselves; other organizations have been working for years in these areas and know how to do it best. We are working with a few nonprofits that we feel are doing solid work and that need funding. We think we can help these organizations do what they do best by providing them with a reliable source of capital.

I also think it's important to point out again that The Clarity Project is just getting started. We have invested a lot of energy, hours, and personal income to develop the business. We have not taken loans, or salary, and initially all development was paid for by us three founders. As we started to generate sales, we saved up some working capital, and are currently implementing a process for posting a quarterly score card of our giving -- what we are reinvesting, to whom, and the impact. This all comes back to our goal of transparency and fairness, in our broader effort to do what most benefits miners and their communities.

JM: Why do you think there aren't more companies, especially those already established in the business, doing the same?

TCP: In some ways this is an easy question – because it's really hard. But it's actually a question we've thought about a lot and have asked ourselves from the very beginning. In fact, this is why we created The Clarity Project. When we were first doing our research into the industry, we were kind of flabbergasted that there was nobody else doing this. We kept looking and looking, but couldn't find anyone. I think this is for a couple reasons – basically it's a tough industry to break into, and most people and companies are in the business to make money. For many of them it's working well – they're making tons of money, so why fix what ain't broken? Certainly some are making good improvements, but by their nature, they are slow to change. Many larger companies also face an additional challenge of bifurcating their inventories. How do they distinguish between "fair" diamonds, and those other things they sell...? It's a tough one.

We are just fundamentally different, and I think it's a product of our generation, location, and community. We three cofounders are childhood friends, and for us, this is a project started simply to meet our needs and the needs of our closest friends. ... We have not paid ourselves anything (although, clearly for this project to be sustainable we will need to at some point) and we each still have our day jobs. And ironically, this has worked to our advantage. And because we're starting from scratch and aren't in it just to get rich, we don't have to overcome the reputation issues that a lot of for-profit and better established jewelry companies are saddled with.... At its heart, this is activism, and in this case, I really think our sincerity shines through.

For some good background reading on conflict free diamonds and industry efforts at social responsibility, see Fair Jewellry Action. (Yes – that's actually how they spell it.)

-- Jina Moore blogs at To Africa, from New York.