Boycott clouds gem show in Myanmar

Merchants inspecting a large piece of Burmese jade at the Gems Emporium in Yangon.

(Aung Hla Tun/Reuters)

By Thomas Fuller

In recent years, gem dealers from across the globe have flocked to auctions in Myanmar, where huge piles of jade and chunks of unpolished rubies are put on display by a government eager for hard currency.

But this time the Gems Emporium, which opened Wednesday and continues through Nov. 26, is clouded by worries that the global market for the colored stones, which dealers call some of the world's most beautiful, may slump in the face of corporate boycotts and government sanctions in the United States and European Union.

Some of the world's largest and best-recognized jewelers, including Cartier and Tiffany, have told their suppliers they will no longer buy gems of Burmese origin.

A bill in the U.S. Congress backed by Jewelers of America, an industry association, seeks to bar the import of Burmese gems that are polished or cut in a third country before being shipped to the United States.

Gem dealers long accustomed to dealing with the authoritarian government in Myanmar say business uncertainties, more than moral imperatives, make them reluctant to buy Burmese gems.

Adisak Thawornviriyanan, director of the Gems and Jewelry Traders Association of Chataburi, a province east of Bangkok that is a major center for cutting and polishing Burmese gems, has taken part in auctions for the past four years. But he decided to not to attend this Gems Emporium, the first since the government's crackdown on demonstrators in September.

"We will wait and see if we can sell our old stock, but I wouldn't dare buy more," Adisak said. "We don't know how strong the U.S. ban will be."

The 27 countries of the European Union agreed in October to ban the import of Burmese gems and timber. But Japan, China and other major gem-buying countries have no restrictions.

Brian Leber, a jeweler based outside Chicago who has been active in seeking to close down imports of Burmese gems, compares them to the "blood diamonds" that were blamed for financing or fueling civil wars in Africa.

"If the U.S. and the EU were to cease buying all Burmese gemstones, I think it would take a huge chunk out of the regime's pocket," Leber said.

Rubies are the most popular Burmese gem in the United States, with official imports calculated as $87.4 million in 2006, mostly via Thailand, which is the main trading and polishing center for Burmese gems. Unofficial imports of the gems, which are easy to carry into the country, are probably much higher.

Leber says if the ban passed through Congress, U.S. jewelers would be reluctant to stock rubies. Unlike diamonds, rubies often have a chemical signature that allows gemologists to trace their origin, sometimes with enough precision to determine the mine where they were excavated, experts say.

Cartier, which announced its in-house ban on Burmese gems last month, says it will conduct random checks on stones like rubies.

"While this is not an exact science, especially for smaller stones, laboratories are able to provide feedback on the credibility of the supplier's claim," Katharina Feller Baignères, a spokeswoman for Cartier, said by e-mail in response to questions.

Some suppliers have told the company they cannot guarantee the provenance of their stones and have stopped submitting any type of gemstones that can be found in Myanmar, Baignères said.

More often than not, rubies come from Myanmar, which supplies about 90 percent of the pink and red stones on the world market, especially the larger and most prized varieties.

"If it comes from Burma it has magic to it," said Peggy Jo Donahue, a spokeswoman for Jewelers of America. "It's very difficult and painful for a lot of gem dealers to think about not having Burma as a source."

Donahue says partly because of the blood diamond issue, jewelers are being "held to a higher standard," in understanding the consequences of buying gems from certain countries or regions.

"There's an expectation in today's world that retailers will know more about their supply chains than they did in the past," she said.

Jewelers of America, which represents 11,000 jewelry shops in the United States, about a third of the total, announced its backing for a strengthened ban on Burmese gems on Oct. 9, two weeks after the Burmese government's crackdown on protests by monks and students.

The bill was introduced Oct. 18 and passed by the House Foreign Affairs Committee on Oct. 31. It awaits approval by the Ways and Means Committee before being submitted to the full House.