The Jewellers Association of Australia (JAA) announced on 19 December 2014 that its National Industry Advisory Council (NIAC) had decided to delist Sydney-based Diamond Certification Laboratory Australia (DCLA) from its endorsed list of international and local diamond grading laboratories.
At the time, the JAA stated DCLA did not meet the submission criteria whereby a laboratory must have independence of the selling process.
“The NIAC deemed a reasonable consumer would consider that DCLA trades in diamonds, as they can purchase direct from the DCLA diamond exchange website,” a JAA statement explained.
However, following further investigation and clarification of their independence, the JAA has now placed DCLA back on the “approved” list.
JAA president Selwyn Brandt explained to Jeweller that it might have appeared to “some people” that the laboratory in question had ownership or interest in the stones traded on its diamond exchange platform, but this in fact was not the case.
“DCLA has no interest in those diamonds that appear on their platform. They basically facilitate the sale between dealers and other members of the industry or possibly the public,” he said.
It’s interesting to note that the JAA’s original press release stated that DCLA had “elected not to make a submission addressing the JAA’s full selection criteria” following its removal from the list.
Brandt confirmed this was correct and added that DCLA believed they should not have been required to make a submission in light of the fact that none of the other internationally recognised laboratories, such as the GIA, had done so. Many of the laboratories were automatically placed on the original published list in November, without making a submission – DCLA included.
Gaining approval, again
Despite removing it from the list, Brandt said the JAA still thought the local business was worthy of being reinstated and consequently had been working with DCLA staff since December in order to rectify the situation.
He explained that the association suggested it make changes to its website – the most pertinent of these was a notification on its diamond exchange website that clearly outlined its independence from trading activity.
The following statement now appears on the website’s homepage: “The DCLA and the DCLA Diamond Exchange trading platform facilitates your purchase directly from the Diamond merchant or Jeweller who has listed their diamonds or jewellery. DCLA Diamond Exchange has NO ownership or interest in the stock. DCLA guarantees that all diamonds are natural and untreated.”
Brandt added that the DCLA diamond grading certificate was probably the most commonly traded Australian report, which meant that it didn’t make sense from a commercial point of view for them not to be on the list.
“It was important for us to rectify the situation as quickly as possible because they probably should be at the top of the list.
“They have international recognition – by Rapaport and CIBJO for example – and they’re up there with GIA and some of the other international laboratories so it kind of doesn’t make sense that they were taken off the list. Once we realised what the issue was, we rectified it and now they’re back on [the approved lab list].”
DCLA explains
Roy Cohen, a director of DCLA, was somewhat confused about the whole matter and the way in which it had been handled.
“We first became aware that we were on the JAA’s list of ‘approved’ diamond grading laboratories when we read a press release issued by the JAA. We had not applied to be on the list and we were not contacted or consulted by the JAA prior to the list being finalised.
“After the list was published and reported on, the JAA then sent a list of questions about our services and we were invited to make a submission. We chose not to make a submission because the overseas, internationally recognised laboratories were not asked to make a submission, and because we are equally recognised we did not feel there was a need,” Cohen explained.
He said some of the issues raised by the JAA – after being included on the list – surrounded the independence of the laboratory service. Cohen said he called the JAA’s office and explained the services, while also inviting JAA representatives to visit the DCLA office to witness the operation firsthand.
“No one took up our offer and the next thing we know is that we received an email asking whether DCLA’s core business is the production of diamond grading reports or a supplier of gems. I replied to the JAA’s email and explained that we are an independent grading laboratory and not a supplier of diamonds,” Cohen said.
Commenting on the main area of confusion – which, as previously stated, seemed to be whether the Diamond Exchange service offered by DCLA was a seller of diamonds – Cohen explained: “DCLA Diamond Exchange is a trading platform we set up to enable merchants (or retailers) to sell their certified diamonds.”
“We don’t own the diamonds, we simply facilitate trade between a buyer and seller and receive a fee from the seller for the service,” he added.
He said he was quite astonished to find that soon after he explained the service and outlined its independence, he received an email from the JAA advising that DCLA had been removed from the “approved” list.
Cohen said, “The JAA’s reasoning was that a reasonable consumer would consider that DCLA trade in diamonds because they can purchase direct from the DCLA Diamond Exchange website.”
Confused callers
He said the matter escalated from there.
“After it was reported that we were removed from the approved list we immediately began receiving phone calls from clients asking what was going on.
“Some people thought we had been removed because of ‘over-grading’ issues when in fact it was because the JAA thought we sold diamonds even though we had already explained that we don’t,” he said.
Cohen said he then contacted the JAA again to advise that his business was an independent grading laboratory and not a supplier or seller of diamonds. At that point, reference was made to the appearance of the company’s website and its wording.
“We were more than happy to make changes to the website to ensure our practices are clear and explain our operation. In fact, we told the JAA that the wording that now appears on the homepage was always on our website, albeit on another page, which is why we had no problem giving it greater prominence on the first page,” he explained.
Cohen is still mystified about the JAA’s process but hopes all the confusion has been resolved. He also adds, “We never asked to be on the list and my invitation to the JAA staff and board to visit our office any time is still open. In fact DCLA will willingly verify our transparency to anyone, at any time.”
In the mean time Brandt has also confirmed that there had been no changes to the criteria in light of the recent decision.
The current list is available on the JAA website.
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