Congress set to close major loophole
In U.S. law banning imports of Burmese gems
By Karla Rosenbusch, Associate Editor

America’s boycott of Burmese gems is about to go from symbolic gesture to substantive action as President Bush signs into law a bill that eliminates a gaping loophole from the previous import ban. The old law allowed Burmese gems cut elsewhere to be exported as products of the processing country. Hence Burmese rubies cut in Thailand could enter America as Thai exports.

Last fall, both the U.S. Senate and House of Representatives passed bills closing that loophole for imports of Burmese gemstones. Now, the only thing that remains to be done is for both bodies to reconcile the bills -- an action that is expected to happen very shortly. So, what do these sanctions mean to the gem industry? As we head to Tucson, what effect will tougher sanctions have on ruby sales at this year’s shows? We asked some industry experts for their thoughts.

With regard to the sale of existing ruby inventory, Doug Hucker of AGTA said, “Everything now in inventory is fine; it’s legal and not contraband. It was imported according to U.S. laws.”

According to Peggy Jo Donahue of JA, “Some of our members have told us that they will decline to add any more Burmese gems to their inventories, but will sell the Burmese gems they have. Other retailers, who are conscious of maintaining consumer confidence in their products, have chosen to remove Burmese gems from their showcases until such time as the Burmese government begins a genuine process of democratic reform.”

Eric Braunwart of Columbia Gem House adds, “My guess is ruby sales in Tucson will be quite good given the looming ban on imports.”

There remain some nagging technical problems with enforcing the Burma gem ban.

The main one, says many dealers and trade association executives, is determining exactly which ruby comes from Burma. As Hucker says, “No one has exact numbers as to how much ruby is exported from Burma, although most does come from Burma -- a huge percentage. Most of the ruby that leaves Burma goes to Thailand to be processed before going to other countries. You can’t definitely identify the origin of all gems with complete accuracy. The U.S. government must come up with a methodology for determining the market origin of gems for the sanctions to be effective.”

That is highly unlikely. Proving origin takes highly specialized gemological expertise which few possess. Furthermore, this expertise is expensive and would add considerably to the cost of gems cleared of being Burma-born. So what are jewelers bent on selling politically correct ruby supposed to do?

They could sell gems whose origin can be definitively proven to be kosher. If the Burma gem ban has any positive outcome besides starving that country’s junta of badly-need revenues, it could be to promote fair traded gems. Braunwart is one of the leaders in this still embryonic movement. “I believe there will be lots of questions from retailers and manufacturers as to the future impact,” he says. “The ban will definitely choke off Burma ruby sales in the future. Whether there will be sufficient ruby from other documentable origins remains to be seen. Columbia Gem produces Nyala Ruby from Malawi in southern Africa, and we are expanding this production.”

The question remains whether import sanctions on gems are truly one of the best ways to fight the oppressive regime in Burma and to protest its stranglehold on the human rights of the Burmese people.

Braunwart thinks so: “At some point we must all make a decision when our philosophical beliefs must override business interests. Columbia Gem House does not import or deal in stones from other countries we seriously politically disagree with, but these are not part of U.S. law. We chose to stop selling Burma ruby six years ago and actively worked to develop other sources we were comfortable with so we could still offer ruby. For those who say sanctions do not work, they are just flat wrong. Sometimes they take a long time (Libya) and with others it is faster (South Africa), but they do have a significant impact. When the elected leader, Daw Aung San Suu Kyi, calls for sanctions, and when the Burmese government in exile calls for them, why is it that we feel we know better? Yes, I support the sanctions and believe it will directly impact the junta.”

Donohue agrees, “Sanctions are one strategy among many that our government can use effectively to pressure the regime in Burma. From testimony in Congress this fall, we know that the government also put enormous behind-the-scenes diplomatic pressure on Burma’s other trading partners, and we believe those measures are important to continue in tandem with sanctions.”

Hucker, however, is more cautious. “Since AGTA is a trade organization of gem professionals, whether sanctions are appropriate or inappropriate is not in our sphere. We rely on the U.S. government to make those calls, and we hope they are in contact with the industry and take into consideration all of the ramifications of the actions. It’s natural for gem dealers to ask why gems were targeted, who sanctions will hurt and hurt more, and whether sanctions will truly impact the Burmese regime. The people who will really suffer are small-scale miners, the monks who deal with them, and local communities. That mining significantly improves the standard of life in those communities. We need to look at whether sanctions help or just exacerbate the situation. No one wants to support the present Burmese government, but we have to understand the full implications of any actions.”

Hucker continues, “Ruby is a significant gemstone. Ruby is not the bad guy; the government of Burma is. What the perception of ruby will be going forward is the big question.”

In the meantime, both Braunwart and Hucker believe that the gem industry must take an active role in addressing the Burma issue -- and indeed other social issues that affect the industry. Hucker comments, “The U.S. response to the Burma regime is an issue that is extremely important. The gem industry is taking a look at political and environmental issues and the social responses to those issues. The industry has worked hard not to react too quickly and to work with the government to come up with an appropriate response.”

In a letter to Colored Stone Editor-in-Chief David Federman, Braunwart wrote, “I know philosophical arguments rarely win battles; guns and money do. Still, we all want to look at people like Martin Luther King and the Selma bus boycott (that hurt the little people), Mahatma Gandhi and Nelson Mandela, who have given us a better way. With the passing of time, we know look at these people as heroes, but many did not in the not-too distant past. Maybe, just maybe, another Nobel Prize winner, Aung San Suu Kyi, should be listened to before it is too late. The consumer, and some in the industry, are crying out for a more ethical, sustainable, transparent way of production for their luxury products. Jewelry and gemstones should represent love, hope and beauty for all those who lives they touch, or they are worth nothing.”

January/February 2008 • 2008 Gemmy Awards • Congress Closes Loopholes in Burmese Gem Bans • Jan/Feb 2008 Index