F&C acts on conflict diamonds

Despite industry efforts to prevent trade in "blood" or "conflict" diamonds - rough diamonds sold to provide revenues for rebel movements, indirectly financing conflict in Africa - they continue to make their way into the markets.

Thanks in part to Hollywood film Blood Diamond, public concern about the industry's poor practices has grown, putting at risk consumer confidence and, therefore, the long-term success of the sector.

Since F&C's initial engagement with companies in this sector in 2003, firms have made individual progress and a new industry body has been established to promote good practice – the Council for Responsible Jewellery Pratices (CRJP).

"Nevertheless, we remain concerned by patchy implementation of the industry initiatives," said Karina Litvack, head of Governance and Sustainable Investment at F&C.

"We have highlighted to industry bodies that prompt and consistent implementation is critical to the effectiveness of voluntary initiatives."

F&C has called on retailers publicly to support the Kimberley Process – a joint government, international diamond industry and civil society initiative to stem the flow of "conflict" diamonds – but it has also insisted they provide clear evidence that this commitment extends right down the supply chain by establishing strong tracking and monitoring systems.

Signet - which owns Kay Jewellers, Jared, H Samuel and Ernest Jones - Bulgari, Tiffany, Richemont - owner of Cartier - and Home Retail Group – owner of Argos – have all improved their practices, while US low-cost retailer Target has pledged to improve its practices going forward. However, F&C is still waiting for responses from US retailer Costco and Federated Department Stores.

In the meantime, following F&C's recommendations, mining company Rio Tinto has launched its diamond stewardship programme, focusing on working with consumers and policy makers to raise awareness of the issues associated with diamond sourcing and production.