The Burmese Ruby Boycott: Who Does It Really Hurt? Who does It Really Help?
With the Tucson Gem and Mineral Show just around the corner many dealers will be looking to purchase rubies. In this, my third post on this subject, I discuss the implications and the politics of Jewelers of America’s boycott of Burmese rubies
A few years ago, at the Tucson Gem Show, my wife and I purchased from our Thai suppliers some rubies that were probably from Burma. They were too small to warrant the expense of a gemological origin report, so they sat in the safe. We wondered what the conditions were under which they were mined and cut, and if owning rubies from Burma was out of alignment with our values.
This fall, after the brutal squelching of the Burmese pro-democratic movement resulting in scores of deaths, Burmese rubies have made the headlines.
In October, the press, such as Reuters, CNN and Fortune Magazine picked up the term, “blood rubies,” suggesting a comparison to the situation surrounding “blood diamonds.”
Sound bites may rule, but this one is misleading at best. Ruby mining in Burma, unlike diamond mining in Sierra Leone and Liberia ten years ago, is not resulting in the deaths of millions of people.
However, with the blood diamond issue still fresh in the minds of the consumer, Jewelers of America, (JA) which represents 11,000 jewelers, urged a US boycott of Burmese rubies. This push for a boycott took place while the new term “blood rubies” was awash in the mainstream press.
An article in Fortune Magazine quotes Matt Runci, CEO of Jewelers of America. Referring to the blood diamond tragedy, he said, “We learned a lot from that. Public trust is a very fragile thing.” Runci is also the Chairman of Council for Responsible Jewelry Practices, the trade group representing almost all the major US jewelry corporations, from Tiffany to DeBeers which formed in 2005.
The New York Times also picked up the ruby story, quoting staunch members of the ethical jewelry movement who I met at the Ethical Jewelry Summit including Brian Leber of Leber Jewelers have come out strongly in favor of the boycott. In the NY Times article, Leber states that the biggest beneficiary of the gem trade is the military-controlled government.
Without question, from a surface media point of view, JA’s boycott idea is savvy. It protects the jewelry trade’s image and is free of moral subtleties. The boycott proposal was even picked up by the authoritative voice of the left, Amy Goodman on Democracy Now!
Yet my research into the issue of the gem trade in Burma has given me an alternative perspective. For JA’s boycott to really affect the oppressive Burmese government, large ruby mines would have to be centralized and controlled, with a focused channel of distribution, such as government sponsored trade shows.
Before the Ethical Jewelry Summit, I had been hearing people in the trade question the boycott. This led to an email correspondence with Joe Menzie. Menzie, who is against the boycott, is the former president of the International Colored Gemstone Association, (ICA).
Menzie put me in touch Edward Boehm, the current Vice President of ICA who has been visiting Burma for years. Boehm wrote in a letter to the New York Times that there are two primary ruby mining areas in Burma, and that most of the rough material is brought across the border to Thailand where it is sold to Thai dealers and cutters.
Boehm wrote that, the “lives of hundreds of thousands of Burmese would be dramatically impacted by a boycott on all gem materials. Many of these independent artisanal miners and gem dealers directly or indirectly support democratic reforms. They are also often the ones who provide food and financial support to the monks and students who have been leading the protests. Therefore, the collateral damage of an all encompassing ban could negatively affect the very people we are trying to protect.”
Boehm in his letter goes on to suggest a boycott of government controlled auctions, rather than all gems from Burma, would be the most effective means to impact the regime’s coffers without harming artisanal miners. In a National Jeweler article published in Dec. 07, Joe Menzie said , “Probably less than five Americans actually go to the auctions.”
Menzie and Boehm are not alone among industry experts who are concerned about the boycott. David Federman, editor of Colored Stone, vows to present both sides of the issue in a level headed way, and expresses, “personal misgivings and ambivalence about the growing Burma gem boycott.”
In a story published in Colored Stone, Federman gives sound reasons why the boycott might not be that effective, including the fact that most Burmese rubies are cut in Thailand and sold as Thai. Even if this loophole were eventually blocked by Congress, it would be virtually impossible to enforce because the ruby forming belt stretches across several central Asian countries, from Tajikistan to Northern Viet Nam. Pinpointing the actual origins of stones is difficult at best. Think about the thousands of small trays at the Tucson gem show, each with hundreds of rubies, some of which are selling for under fifty dollars a carat. Who is going to pay to test those?
In an email widely circulated after the article’s publication, Federman states that a previous ban on Burmese products by the US Congress, “just provided the Thai, Chinese and Indian dealers, who will rush to take the place of Americans, a new excuse to pay less.”
He writes that dealers who regularly buy in Burma believe that the rubies are one of the most uncontrolled commodities in that country and that generals don’t get a “normal share” of the proceeds.
In late fall, the Senate and House passed bills to ban importing stones from Burma, even if they are cut and polished elsewhere, and it is just a matter of time before the bill becomes law. This will have little effect on the Burmese government’s revenues, most of which are derived from the highly centralized international oil, gas and timber corporations which are not covered in the boycott.
If Menzie, Boehm and Federman are right, the ruby trade is so uncontrolled that the boycott will have little effect on what really finances the Burmese military government. The Asian market will probably pick up the slack from the American boycott, perhaps paying the artisanal miners less for their goods. That may allow them to make an even higher margin when they enter the American supply chain as imported from Thailand or the some other ruby producing country. Ultimately, the Burmese artisanal miner will lose.
Most of the jewelry sold by JA members is produced in China, a country with arguably a far worse record on human rights and environmental degradation than Burma. Chinese buyers, according to Joe Menzie, supply most of the Burmese government’s gemstone revenues through the purchase of Burmese jade. Yet we must be grateful to the Chinese because they continue to finance our war in Iraq and the American way of life by purchasing treasury bonds which may well never be paid back.
Jim Fiebig, of Sellmorecolor.com. has been following this issue closely. He urges everyone to buy more Burmese rubies and is vowing to boycott BP (British Petroleum) who have significant oil interests in Burma.. In my email correspondence with him, he quoted Winston Churchill who said, “The Americans always do the right thing…after they’ve tried everything else.”
Three Possible Conclusions.
I know there has been a lot of hesitation among many people in the industry to come out against JA’s and CRJP’s position. These organizations represent just about every big player in the jewelry industry: men and women held in the highest regard, many of whom are deeply involved in pushing the ethics of the Madison Dialogues forward. Thus, I offer three possible conclusions to why they support the boycott and why I and a growing number of gem experts do not.
First, I may be wrong. My sources could be too narrow in their scope or too interested in protecting their own interests to be objective and reliable. Indeed, the Burmese ruby trade may be highly centralized and funneled through government sources. In this case, Congress and the Bush administration are doing the right thing and the jewelry industry is correct to follow. An ethical argument can be made that a boycott is best even though it is going to negatively impact the artisanal miners.
The second possible conclusion is based on the fact that it is very hard to sort out what is going on in a foreign land without actually being there. In my youth, I spent two years as a volunteer in Haiti, directing an orphanage funded by the diplomatic corps. The news reports from major American publications shockingly distorted the facts when Baby Doc fled the country in 1986 and there was shooting in the streets. Therefore, it may well be possible that JA’s information, from which they called for a boycott, could be poor. Perhaps JA is misled by their sources, and has thus misguided Congress and the Bush administration.
The third conclusion I hesitate to make, given the integrity of our jewelry industry leaders, is that JA, and by extension, CRJP, sees the Burmese ruby boycott as a public relations issue rather than as a humanitarian crisis. Thus, the appearance of being politically correct and protecting the image and profits of the jewelry trade becomes paramount in decision making, even if it means undermining one of the economic roots that supports the pro-democracy movement in Burma. In essence, it is another situation where corporate profits trump true moral and ethical concerns. The lesson gleaned from the blood diamond tragedy concerns merely public relations, not morality.
Any way you look at the three conclusions above, the impoverished Burmese artisanal miners and their families will continue to suffer.
