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A new brand has come to the Russian market - LA VIVION

How this had happened was disclosed in an interview with Rough&Polished by Andrey Yanchevskiy, CEO of LA VIVION, who, having turned from a programmer into a jeweler, proved that algorithms and diamonds are a promising combination in business.

14 august 2017

KGK says Botswana lacks capacity, expertise to produce diamond jewellery

KGK Diamonds Botswana opened its operations in the southern African country and the world’s second largest diamond producer in value terms, in 2014 and it is currently cutting and polishing rough sourced from De Beers’ Diamond Trading Company. Company...

07 august 2017

Jewellery might not come under the category of basic necessity, but for women it is a need

Enchanted by the City of Gold-Dubai, brothers Kiran Pethani and Anil Pethani travelled from their little village in Gujarat, India to Dubai in search of a better livelihood. In 1993, they started working for a jeweller in Gold Souk where they learnt...

31 july 2017

"The government should financially support the setting up of skills development units and Gems and Jewellery parks" suggests Sanjeev Agarwal, CEO, Gitanjali Exports Pvt Ltd.

Sanjeev Agarwal has a unique combination of experience encompassing FMCG, Banking & Finance and the Luxury Retail Sectors with Unilever, Cadburys and Deutsche Bank. Sanjeev’s next move to World Gold Council as Managing Director (India-subcontinent)...

24 july 2017

Virtual Possibilities of Jewellery Market

Online jewellery trading in Russia – since it started boosting and becoming more popular among the consumers - is of keen interest among the market players and is a topical issue. Dmitry Zamyshlyaev, Deputy Head of the Federal State Enterprise ‘Assay...

17 july 2017

Godlike pontification

12 june 2017

I love stories about distorting facts to please business interests. Dear readers, I have prepared another one for your attention.

From time to time, every one of us wants to feel being God, or at least a preacher, and pronounce fiery speeches, full of truth, to inspire others and stigmatize unworthy people. And all this to enjoy the way people listen to you open-mouthed and believe every word you say without reserve.

Previously, this was difficult to achieve. Not everyone was lucky to be born into the family of a pastor or diplomat and not everyone was lucky to become a superstar, or to have studied at Harvard to become an expensive lawyer. Most people had only to be satisfied with the attention from friends and co-workers. Now, of course, it is much easier, as there is the Internet. Everyone (for instance, even me) can become a preacher on the Web, as it is just enough to write catchy articles and not stint on their promotion.

Take, for example, my younger sister. She is a freelancer writing reviews on restaurants and nightclubs in which she has never been, because a freelancer’s income does not allow her to go there. Her reviews are always sarcastic and cold, as if they were written not by a 25-year-old giggling girl, but by an elderly and frustrated woman. "How do you do this?" I ask. And she says, "Very simple! I comb through reviews on the Internet, then take three negative and one positive, adding to this a description of the menu." "Why so many negative things?" I ask. "Very simple!” she replies. “Firstly, people do not believe good reviews - they immediately feel that they are being deceived. And secondly, if some restaurant will feel badly hurt by my negative review, they will call me for a free lunch to fix the impression."

Or take for example Michael Fried. Together with a team of like-minded people, he created the Diamonds.Pro portal, which gives consumers absolutely free advice on how to choose diamonds and in which store to buy them at the best price. Until some time, the reviews on Diamonds.Pro were confined to describing the advantages and prices offered by retailers, but a couple of weeks ago something changed. Michael wrote an amazingly devastating article, "Brilliant Earth Review", where he broke loose wiping his boots on their problems with tracking raw materials and general imperfection of the diamond mining industry. Everyone got their share of resentment: It appeared that Botswana diamonds are bad because, as it turns out, they are mined by way of children’s slave labor. And Canadian diamonds are also far from being all good. Whereas Russian diamonds are just the quintessence of evil.

However, there is one problem, Michael. If a person speaks to people as an expert, it would be not at all bad for him to collect facts. Lying, negligence and gathering rumors on the Internet are impermissible even for a freelancer focused on restaurants, but these are certainly bad qualities for an expert.

I have never been to Botswana, so I do not feel entitled to talk about it. But I can definitely speak about Russia’s diamond mining, which, I humbly hope, I understand better than many other people in the world.

Various Russian government bodies own 77% of ALROSA.” And a link to Wikipedia, confirming these words. Indeed, why use the official website of the company, which carries correct information due to the stock exchange requirements, if you can use Wikipedia, which is compiled by everyone who is not too lazy to do this? Of course, ALROSA’s official website is not that interesting - it is written there that only 58% of the diamond miner’s shares belong to the government: 33% to the federal authorities and 25% to the Republic of Sakha (Yakutia). I agree that it is still government control, but your approach to numbers betrays your interest in a bad picture.

However, let us put aside these numbers. The arguments resorted to by Diamonds.Pro further in their article are much more fascinating.

Michael believes that Russian diamonds cannot be called non-conflict, because Russian President Vladimir Putin is "one of the biggest violators of human rights in the world" and that “Russian diamonds are themselves not clean of human rights abuses.”

Let's leave aside politics - each person is free to decide whether he or she likes or does not like this or that political system. But the accusations of violating human rights in diamond mining look intriguing. To bring such charges one should have proofs. Let's take a closer look at the facts cited by Michael Fried as evidence of human rights violations in Yakutia.

“There are some 40,000 employees in Alrosa. In many of the Siberian (Yakutia) mining communities (where temperatures may reach even minus 50o Celsius) where workers make long shifts and are without families (which remain in the south) the conditions are extremely harsh.”

In the words of modern teenagers, all this is just "Godlike pontification."

Apparently, the major violation of human rights in this case is the outside temperature of minus 50° Celsius. I wonder if the Russian government is to be blamed for this as well? Just like White Walkers from the Game of Thrones torment unfortunate workers by cold!

Michael, I have some bad news for you: the average temperature in Canada (which you do not accuse of violating human rights) is not much better than the average temperature in Yakutia. And Canada's lowest temperature reading was registered at minus 63° Celsius.

In his horrendous story, Michael refers to well-known industry analyst Chaim Even-Zohar, but for some reason does not give a link to his publication. Naturally, he doesn’t, because Chaim’s words are taken out of their context. In the last 10 years, Tacy's only visit to Yakutia was in 2013, and we know this because Rough & Polished also took part in it and heard all the same things that Tacy’s correspondent heard.

The "long shifts without families" boil down to a standard 15-day shift, after which the worker has at least 15 days of rest. Exactly the same shifts are practiced by the workers employed at Canada’s diamond fields - for example, the above link describes the working conditions at the Ekati Mine. Moreover, only the workers of ALROSA’s Nyurba Mining Division - 1533 people – are engaged in shifts in Yakutia. The rest operations of ALROSA are located in close proximity to the cities built by the company, so the workers do not fly there for two weeks by helicopter, as it takes them just 30 minutes by bus to get to their work in much the same way as it is for millions of ordinary clerks. And there is even more to it. As you aptly noted, this work is well paid: the average wages of workers in Yakutia are about 110,000 rubles a month, while the average salary in Russia is about 35,000 rubles a month. Probably, the triple wages are also a violation of human rights?

But that is not all!

“Please have a look at the very detailed annual reports of Alrosa, you don’t see a single statistics on mine fatalities, etc. Information is extremely tightly controlled in Russia. The Kremlin’s crackdown on civil society, media, and the Internet is taking an ever more sinister turn in recent years.”

Oh, Michael. Obviously, the Kremlin and only the Kremlin is to blame that you do not know the subject and are unable to read published data. The statistics on incidents are rarely given in the company’s annual reports - for this purpose there is its Social Report, which ALROSA publishes every year, like any other company. Here is the report for the year 2015 and the "carefully hidden" statistics of accidents: two deaths, and 17 incidents in total, in which 23 people suffered to varying degrees. Approximately similar statistics are offered by other diamond mining companies - now that you know about the existence of social reports, you can independently verify this, and I hope that Russian hackers will not hamper you to do this.

The description of "violations of human rights in Russia" takes 2 paragraphs in Michael’s article. And, as I proved above, there are 4 factual errors in these two paragraphs. This is - how to put it mildly? - raises some doubts about the quality of the rest of his expertise.

However, many questions will disappear, if you look closely at the activities of Diamonds.Pro. So, the portal writes "independent" reviews about diamonds and retail, and also gives free consultations to anyone who wants to have them. The pattern works like this: you give their consultants the parameters of your desired diamond and your budget, and they offer you several options for jewelry in different stores to choose from.

It sounds great, but it's very difficult to believe in such philanthropy. The work of several experts on the phone plus the work spent on producing articles requires money, which must come from somewhere. Apparently, understanding that this pattern raises questions, Diamonds.Pro even mentioned it in their official FAQ:

“The most common question we get goes something like this: “Not to be rude, but why are you offering this super-helpful, friendly advice to strangers for free? Where’s the catch? What’s in it for you?” That’s a totally valid question. The simple answer to the question is that we aren’t doing it for free. The service is completely free to you (the reader), but don’t worry – we do get compensated for our time.”

In another answer, this pattern is revealed in more detail. “Another question we often receive is “Are you affiliated somehow with James Allen?” Again, a very fair question deserving an honest and open response. The truth is that we actually affiliate with 6-8 sites on a regular basis. … So the straight answer is yes, we are affiliated with James Allen, but no more than we are affiliated with any other diamond vendor. We recommend James Allen most of the time because, simply put, they are the best.”

"Because they are the best" is again a very well-reasoned statement. Well, they are apparently really good: James Allen is mentioned on virtually every (!) page of Diamonds.Pro. No other company has received such an honor.

It remains only to find out how it happened that experts in price comparison across different stores suddenly became interested in human rights in different countries?

Let me guess how it was. First, someone opens a website to "help consumers," choosing several large retailers, and - for a certain commission, of course - promises to send consumers to their stores. The stores advised to consumers are chosen strictly in turn, so as not to create the impression that you work only for one jewelry company. In addition, it would be much more profitable to take money from several retailers at once, and not just from one. In this way, you can work long enough, as everyone gets used to your pattern and you start to be recommended to customers’ friends. In general, this is even a good business, if you free the consumer from the tedious browsing of the Web and choose really the best money-saving options.

Let us suppose that at this point one of the key sponsors happens to have an Event: this very sponsor signs a deal on exclusive sale of diamonds, the origin of which can be traced. This is a new promising deal, but the stones covered by it are expensive enough, because marking and guarantees of origin cost money. Not every consumer will be willing to loosen the purse strings without a good reason. So, the consumer needs to be persuaded. He needs to be told that diamonds from Botswana are being dug out by unhappy dark-skinned children, and that Russian diamonds support tyranny. And that only CanadaMark relieves the buyer of ethical torment. And, of course, it would be appropriate to give him a link to the right store.

In a recent interview taken by Rob Bates, Oded Edelman, CEO of James Allen said that the company was ready to “put a lot of money” behind the brand of CanadaMark. James Allen is known as an aggressive marketer, and in theory this kind of promotion through an "independent expert" fits perfectly into the company's task. Actually, it kills two birds with one stone: you get articles on the given topic and an increase in direct sales. And consumers feel rapt opening their ears, as they get absolutely free help to make an ethical choice.

“I strongly believe that we, as consumers, have a responsibility to make moral choices about the impact our purchases make,” writes Michael Fried proudly, starting the article in question. “That said, no one (at least no one that has gotten to the point where they are searching online for a diamond) lives completely off the grid. I, like everyone else, make a decision (actively or subconsciously) whether something adds enough value to our life to balance any negative impacts it may have.” The articles written on someone’s order do add some value to one’s bank card. And this added value is, perhaps, even able to compensate for the ethical inconveniences experienced by all people if they have to distort facts.

Elena Levina, Rough&Polished

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