The GIA Team Talks Backlogs, Synthetics, and Standards

Susan Jacques and Tom Moses speak to JCK about how the Gemological Institute of America is preparing for the future

Nearing her second anniversary as president and CEO of GIA, Susan Jacques spoke with JCK in a joint interview with executive vice president and chief laboratory and research officer Tom Moses at GIA’s New York City office in 47th Street’s International Gem Tower. Jacques, who previously headed Omaha, Neb., retailer Borsheims (and attended GIA as a student in 1980), and Moses talked about present and past controversies and what Jacques sees for GIA’s future.

JCK: You are just coming off a significant backlog at your grading lab. How did you manage to tame that?

Susan Jacques: We hired 50 percent more graders. We opened more labs, we utilized additional technologies. We are building for the future. And that is Tom’s plan: a predictable turnaround time for our clients to service their needs as quickly as we possibly can.

JCK: Can you assure us GIA won’t be in this situation again?

Tom Moses: I have been around for a while. It’s happened a lot, more than I would l like. We are doing everything to ensure that this will never happen again.

I projected 10 percent growth in 2013; it turned out to be 70 percent. I made a big mistake. I’m not sure anyone in our industry expected their business to increase 70 percent coming off of the fourth quarter of 2012. Susan and the board are talking about building beyond existing demand so we have elasticity to take these spikes that come in our industry.

Jacques: We were very fortunate to have started the expansion globally, when we opened our lab in Mumbai in 2009. The impetus is to get closer to our clients…so they don’t have to ship their goods to the United States in order to get serviced. The Mumbai lab has become our largest lab. It’s Mumbai, Carlsbad, and New York City.

JCK: Do you see more global expansion?

Jacques: We get many requests for GIA labs, from all sorts of places. We announced that we were doing a feasibility study for a lab in Surat [India]—getting closer to the manufacturing side. But that is the only one we are currently looking at. We believe we have all the locations of significant importance on the diamond side.

JCK: There is a perception in the trade that grading is less strict in some overseas labs.

Moses: Last year we shipped 700,000 stones out of India to other labs, about half of those submitted there. No one knows which stones [leave], or where they go. We own between 1,000 and 1,500 diamonds and have dummy accounts in every country we are in. Those dummy accounts submit diamonds blindly to different locations, and they are moving around the world all the time. We are looking at the output quality of each lab, and looking at individuals. Do we ever flesh out variances? Yes. But it allows us to address those. In some cases we partially grade the stone in one location and then ship to another to be finished.

JCK: Why does the perception of different standards exist?

Moses: There were more of certain stones in the marketplace that were challenging to grade—kind of a Cape yellow series as well as browns and greens. That kind of diamond is harder to grade consistently.

JCK: Have you noticed an increase in undisclosed synthetic diamonds?

Moses: Yes. We have seen more in smaller sizes and in colored diamonds. This makes sense; they are being grown by more people. It’s only natural we would see an increase.

JCK: Has law enforcement been involved?

Moses: We had one incident when law enforcement contacted us—there was an international event that drew their attention. They took the information and the remainder of the inventory.

JCK: Do you feel that the GIA grading scale is the standard for the industry?

Moses: We feel that using the GIA terminology and not using the criteria that underpins that terminology is a deceptive practice. I am not suggesting that everyone should use GIA’s terminology. But if they do use it, they should abide by that standard.

JCK: Do you see the amount of automated grading increasing?

Moses: We see it expanding. But the human visual system is a very complex thing that is hard for a machine to replicate. Some things an instrument can do better than a human. But there are other situations when that human experienced grader is more consistent than an instrument.

We do quite a bit of automated color grading today. Most smaller stones are done through colorimetry. Colorimetry is used for larger stones, but it is done in combination with human visual observation.

JCK: Will we see automated clarity grading?

Moses: We did a 10-year research project on it and learned a lot. I do think that we will use instrumentation for clarity grading in the future. Not the near future, but I see it coming.

Jacques: Along with automated grading comes the necessity for extraordinary calibration, training of the folks that work these instruments, interpretation of the results.

What GIA brings to the table is such a rich history and the trust factor. I know there is this talk of the black box of grading and the diamond will go in and it will spew out the Four Cs. I don’t know that that is the trust factor the consuming public [wants]. A grading report with GIA written on it gives them that trust.

JCK: For a while there was talk of a cut grade for fancy shapes. Where does that stand?

Moses: It’s an ongoing research project that we are exploring. We have a significant team working on that.… I think it probably will be something that will come into the system in the coming years.

Jacques: One of the interesting things is how dramatically [GIA’s research on cut] impacted the quality of the cut on the marketplace today. When we look for stones to show students what a fisheye or nailhead looks like, today we have to have them cut specifically to bad proportions for us, because they are not readily available in the marketplace.

JCK: Can you talk about your beneficiation plans?

Jacques: We have done some tremendous work in Africa. We partnered with the Nelson Mandela Foundation in July of 2013, and we committed to four gemological libraries in rural schools that are close to the mining centers in southern Africa. We have worked on a rough-diamond course that we taught in Côte d’Ivoire when they were looking to be reaccepted as part of the Kimberley Process.

We did a pilot program partnering in Kenya with two aid organizations to distribute this rough gemstone booklet to the alluvial miners that helps them identify the crystal form of different gem materials, so they don’t get taken advantage of. The buyer can’t just say this is worthless and you can have a buck.

JCK: Will GIA play more of an advocacy role?

Jacques: I don’t think it is GIA’s role to have an advocacy role. There is a great debate on supply-chain integrity. That is a very important issue, because it goes right back to consumer trust in the products of the gem and jewelry industry. We will be a participant and we have many people serving on many boards, like RJC [Responsible Jewellery Council] and JVC [Jewelers Vigilance Committee]. That is a role we are very comfortable playing.

JCK: What do people not know about the GIA?

Jacques: We haven’t touched much on the remarkable research that we do on identification of treatments, on synthesis—on colored stones and pearls as well as diamonds. The focus is often on our grading services, but the dollars that the board and GIA spend on research and education are very important.

Moses: The thing people may not realize is we have an experimental program in all three areas—pearls, colored stones, and diamonds. We have a whole crystal growing operation, so we can understand and identify treatments. We have pearl treatment experiments, pearl growing experiments.

JCK: What is your vision for the future?

Jacques: Our mission is to ensure the public trust in gems and jewelry. We do it through research, through education, through our lab services, through the development of specialized instruments. We will continue to build on that foundation and the four pillars.

Our vision is to be the global authority in gemology. It’s the same vision I remember my teachers talked about back in 1980.

JCK

Susan Jacques and Tom Moses speak to JCK about how the Gemological Institute of America is preparing for the future

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