An anniversary — the 7th already —is a good opportunity for reflection.

As a business branch rooted in tradition we have withstood the rise of modern finance and e-commerce, resisted economic booms and busts, and even adapted to the ebbs and flows of the pandemic.

I would very briefly like to look back on my experience of the past 7 years, as a highly motivated but also modest contributor to what the board has accomplished.

My particular tasks within the board are focused on conflict resolution, budget management and improving security in the diamond district.

“Your reputation is all you have”

Though credit sales impose some risk on sellers in every business, other industries then ours can much more easily make use of the law to secure their sales of expensive items. Banks attach liens on cars or mortgages on homes, which enable those lenders to recover the secured items if payment is missed. Bonds are routinely administered when expensive products arrive in ports of entry. Sellers are even given assurances by intermediaries for credit card purchases. These legal devices give sellers and lenders the assurance that they can recover funds from a cheating or overextended purchaser.

But none of these modern instruments are as readily available to us as diamond merchants, meaning that if a party were to cheat, there is only very limited legal recourse.

We diamantaires trust each other not to walk away with the world’s most valuable, easily concealed commodity. We protect each other from embezzling only by our character and integrity. Mutual trust is ‘the real treasure‘ of our industry.

A market defined by mutual trust is all well and good. But all merchants know that blind trust is naive. You’re aware that unfortunately the diamond industry – like all others – includes people with less integrity than desirable, and that trust only works when there are repercussions for bad behavior.

The true genius of our diamond business and in particular our cherished Diamond Bourse  is a reputation mechanism that rewards honest behavior and shuns merchants with a blemished record.

The pillars that hold us all accountable

First, our institution imposes economic sanctions on those who fail to uphold their financial obligations. We publicize to the entire industry the identities of anyone reported to have cheated, misallocated funds or exhibited any disreputable conduct. Those who maintain an unblemished reputation are guaranteed a lifetime of lucrative business.

Second, our families and communities police their own. Family businesses form the backbone of our industry, and reputations are bequeathed and inherited. Those who break the code of trust bring harm not only to their own reputation but also that of their family. The reputational stakes are high, since many plan to bequeath their lucrative businesses to their children. Since families and communities have so much to gain by everyone behaving honorably, they bring shame and impose penalties to any of their own who cheat in the business.

The board as ultimate recourse

Conflict resolution are always first attempted through arbitration instead of using litigation (taking someone to court), within the Diamond Bourse.

As the board member in charge of conflict resolution, I always try to take the mediation route first. Mediation is a facilitation, negotiation process in which I work to bring the parties to an agreement. In mediation, there may not be a formal dispute, but just a possible dispute. Mediation is more informal; arbitration is quite formal.

Arbitration is a formal process, binding on the parties. When the board act as arbitrators, we hear the arguments of both sides and make a decision that’s binding (both parties must act as the decision requires). Arbitration is the process of submitting a dispute to an impartial person (in this case the board) for final and binding determination. It’s really a simplified version of a trial with limited discovery and simplified rules of evidence. It’s a is a hearing process in which parties bring their dispute to us for a decision.

Debates and decisions are held behind closed doors. This has the advantage that we as arbitrators often receive a more complete, practical and realistic view of the dispute at hand. The parties jointly determine the time, place and language of the proceedings. Parties settle their disputes quickly and avoid lengthy proceedings by using arbitration.

This is how, in my own little manner, I try to contribute to the ongoing existing of our beautiful and quite unique profession. By helping our members maintain impeccable reputations, the most important ‘currency’ at our disposal in the long run.