The man who can’t stop talking about Russian diamonds – JCK
Continuing my resolve to talk to more people I don’t fully agree with, I was happy to chat at JCK Las Vegas with Tom Neys (pictured), media relations manager for the World Diamond Center of ‘Antwerp (AWDC).
Since joining the Belgian industrial group in November, Neys has had the unenviable task of trying to convince the world that, after the invasion of Ukraine, Belgium should continue to import Russian diamonds. (Russian jewels have been excluded sanctions from the European Union, but not from the United States.)
I doubt our heated conversation changed my mind, but his thoughts on a diamond grading system – reminiscent of the once unpopular KP Plus – were intriguing.
Edited highlights of our conversation follow.
Can you explain why you think this is important and why you think people like me– and now the Kimberley Process Civil Society Coalition– are wrong when we say that people should not buy Russian diamonds?
I am not advocating Russian diamonds. I defend the right of companies to choose what they do with their business.
First, there is the legal aspect. In Europe, it is perfectly permissible and legal to trade these diamonds.
Second, ethically, it’s a complicated situation. It cuts both ways. If you stop selling Russian diamonds in Antwerp, it will impact the lives and livelihoods of thousands of people.
If we completely stop the trade in Russian diamonds, you are going to disrupt the market. And that’s never a good thing. I don’t think it’s up to trading hubs to decide how you’re going to disrupt a market.
The third thing is that if we stop doing this, we know a lot more diamonds will go to other trading centers or be traded directly. If you stopped selling Russian diamonds [altogether], you’re going to create a new black market, and we’re going back 20 years, to a situation where we have no control over what’s going on. And that is what we absolutely want to avoid. It is better to be in control and see how we can fix the situation than to throw everything away.
You mentioned that it is legal to import Russian diamonds into Europe. But this is something that, from what I understand, the Belgian industry has deliberately put pressure on the EU. To correct?
We do not lobby. Even before the start of the conflict, I gave several interviews where we expressed our opinion very clearly [on sanctions].
The European Union has a philosophy on how it applies sanctions. When Ukraine was invaded, it was decided to apply sanctions only when the effects will be greater for the adversary than for yourself. If you have no impact [the adversary], it’s not even a penalty, so you don’t do anything. And then you lie to people and say, “Hey, we’re trying to do something.” But in fact you do nothing.
You said that if these diamonds do not go to Antwerp, they will go to Dubai, which “opens its doors to Russian oligarchs”. Yet even if they go to Dubai, which I think most are now anyway, you may not be stopping the trade, but at least making it harder. There must be a reason why companies considered Antwerp their first choice.
Of course, because it’s a matter of relationships. Companies want to be in Antwerp. Why? Because it’s a good market, you get the best value for your product. It is very simple.
I’ve often heard that Antwerp can’t necessarily compete with everything Dubai does. Why doesn’t Antwerp stand out as the most ethical center, starting with this one?
I think that’s exactly what we’re doing. Putting Russian diamonds on a sanctions list will have the opposite effect. We think long-term, not short-term. We want to ensure that our industry remains transparent over the next 20 years. And the problem is that if you make these changes, you will create a situation where you have no control over what will happen in 20 years. And it is very dangerous.
But let’s talk about the short term, because obviously people are being killed in Ukraine right now. The Russian government owns a third of the dominant miner there, so Russian diamonds directly contribute to the war. When you see the atrocities in Ukraine, doesn’t that make you think?
It gives us all pause. It makes no difference, in the sense of our responsibility. And I totally believe in the power of the consumer. I don’t push Russian diamonds here. I say, let the consumer decide. And it’s something that companies now have the opportunity to take advantage of.
But what I am [also] say is, give these companies the opportunity to adapt. If you apply sanctions tomorrow, [they will need to be implemented] in 24 hours. Businesses will be blocked.
[Note: The United States sometimes gives “licenses” that allow companies time to implement sanctions.]
What we want is for businesses to have the ability to say, “Hey, the consumer wants something very different. Alright, let’s do this. Let’s find new suppliers. Let’s find new contracts, new diamonds.
We have to start believing in the power of the consumer. The consumer is smart enough to make decisions. The only thing they need is more information. And that is what we lack today.
Let’s talk about the consumer. I think we can all agree, at least in the United States and in Europe, that there is a general revulsion against the Russian invasion. Americans were pouring Russian vodka in the sink.
Consumers want to hit those who do things wrong in this war. They want to hit Putin, they want to hit the oligarchs who profit from this war.
Don’t you think some of these people are involved in Alrosa? Alrosa CEO Sergei Ivanov is the son of Putin’s former chief of staff.
I don’t think you can say right now that he’s involved in the conflict. This is something I cannot comment on.
But don’t you think most consumers wouldn’t want to support a company so tied to the Russian government? He has a one-third stake.
The consumer must be informed. It is absolutely true. I constantly say that we should do more to let the consumer know where the diamonds come from.
But the consumer must know the value of this [information]. A good example of how quickly you can change an industry is in Europe. At some point, every washing machine had to have a little [energy label]. Is it an A grade, a B grade, a C grade? In one year, this whole industry has completely changed. Because consumers had an easy way to tell if a washing machine was good for the environment. So if I buy an E washing machine, it will be cheaper, but if I sell it second-hand, I won’t make any money from it. And it will gobble up more electricity and use a lot more water than a better quality washing machine.
In one year, there has been a total change. Just by informing the consumer independently, where he could have information, he changed his behavior. I think that’s the way to go.
What is the likelihood that Alrosa will currently be sanctioned as it is in the UK and the US?
I don’t see it evolving that way, just because I think most people are now convinced that it doesn’t solve the problem, not economically. not ethically.
Let’s not be naive in thinking that if we don’t sell these diamonds, they won’t end up being sold. You will therefore have no impact. And then you can feel better that you’ve taken an ethical stance. But how badly do you take an ethical stand when you’re not creating any impact?
I hear a lot of people say, “You have to be able to cut your flesh to harm the other party.” But in this case, you do not damage anything. Just your own country.
If there are EU sanctions against Russian diamonds, couldn’t people say: “I buy a diamond from Antwerp, I have more insurance”?
It’s already the case. Commercial hubs absolutely must have certain standards. And this standard should be very simple. It should have a good anti-money laundering and anti-terrorist financing [controls]…
The jewelry industry should say that we don’t buy from malls that don’t meet certain standards.… We saw what happened with the [Financial Action Task Force putting Dubai on the gray list]. It’s not us; it’s in the public domain. We said there is a difference between how we regulate our exports and how they do.
How many Russian diamonds arrive in Antwerp? From what I heard, March and April were calmbut in May they began to be sold again.
I do not know. Simply because the Diamond Office is separate from the AWDC. We have no access to office data, for privacy reasons.
The only information we have comes from the street. People are very tight-lipped about what they’re doing now, because they don’t know what’s going to happen.
I know shipments take a long time. But that’s just typical for every situation today. Everything must be checked three times. Some companies are very cautious in their decisions, given the uncertainty.
Is it safe to say that you were a bit criticized by your post? Was it difficult?
I think you are wrong there. If you put all the pieces of the puzzle together, I don’t think we’re defending a difficult position, in the sense that you’re not creating a solution with sanctions, you’re just creating more problems. I have no problem defending Antwerp’s position.
And yet, your position has generated a lot of negative reactions from the local press.
Do you see that as a negative? I see that it is also curious.
OKAY. Well, I’m curious too.
That’s how it should be, Rob.
Photo courtesy of World Diamond Center Antwerp
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