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| Gems and Jewelry |
Moral Origins
Jill Newman
04/01/2004
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In the late 1990s, Tiffany & Co. began to worry about its diamond supply.
Political turmoil in diamond-producing countries, the growing proliferation of
fakes, and the emergence of hard-to-detect stone treatments were all warning
signs to Michael Kowalski, Tiffany’s chairman and CEO, whose reputation as an
ecologically minded, ethical businessman had led him to ban coral from his
stores in an effort to help preserve the endangered reefs, and to foreswear any
gems that might hail from Myanmar, whose government is accused of human rights
violations. “It became clear that it was in our best interest to gain some
security and control over our diamond supply,” he says.
 Since diamonds are
Tiffany’s most valuable item, accounting for about $750 million of its $1.7
billion in sales in 2002, Kowalski felt it imperative to develop sources
untainted by repressive governments or black marketeering.
He found the
answer in Canada; last year, Tiffany’s began procuring stones from the newly
developed Diavik Diamonds Project in the Northwest Territories, a mine that
Kowalski describes as “a model for environmental and social responsibility.” The
Diavik mine is positioned in the middle of a fragile Arctic ecosystem where
diamonds are excavated from beneath a lake. Once the diamond supply has been
depleted, which is expected to take about 20 years (and cost about $1 billion),
the environment will be restored to its original status.
Tiffany’s made a
further commitment to Canadian mining last November when it opened its own
diamond polishing facility in nearby Yellowknife, where it intends to maintain
tight control of its stones and help support the community by training and
employing local workers.
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