New luster for Colombia's gem industry

In a country permeated by the cocaine trade, keeping legitimate businesses free from taint can be a daunting task. Colombia's emerald industry is no exception.

Emeralds once accounted for as much as 6 percent of Colombia's exports, peaking in 1995 at $452 million. But a history of violence, drug ties, and a lack of quality control have left the industry in shambles. Last year, exports bottomed out at $74 million, a mere half a percent of the country's $16.5 billion in exports.

Now the government of President Alvaro Uribe is looking to shore up the emerald trade. In April, the government ironed out the final details of the new National Emerald Federation, the country's first association of miners, exporters, dealers, and jewelers. The Federation is designed to administer a long-dormant 1 percent tax on emerald exports and reinvest the money in the industry.

Also, hopes are that by November, the Center for Technical Research on Colombian Emeralds (CDTEC), which will help modernize the gem trade, will begin operating with federation funding. Industry officials say that this and other investments in education, technology, and infrastructure will go a long way toward restoring the Colombian emerald's credibility and value.

"The history of the emerald industry has been split in two: before and after the signing of [the federation] contract," says Carlos Arboleda Otalora, first president of the Federation. "Our goal is to return to the level of over $400 million in exports."

But restoring the industry to its previous luster won't be easy.

"No one knows the amount of emeralds in Colombia," says Juan Guillermo Zuleta of Ingeominas, the government body that oversees emerald exports and registers origin and carat weight.

The tax levy, which was passed way back in 1996, may have pushed a significant portion of the trade underground. And inspired by the DeBeers diamond cartel, mining bosses tried unsuccessfully to boost prices by limiting production, controlling "leakage" from the mines, and sitting on undeclared stock.

Through much of the 1990s, Colombians became notorious for trying to hide gemstone flaws with various inexpensive, unstable solutions. Flawless stones are only 1 in 100,000. Yet unscrupulous dealers attempted to pass off stones packed with palm and cedar oils, injected with natural and synthetic resins, or painted with green enamels.

"People buy and sell [emeralds] here as if they had a death certificate for tomorrow," says Colombian gemologist and gem dealer Gonzalo Jara. "As for any export product, the consumer, out there, in some remote first-world of luxury and means, has to be the goal. But if you're poor and you have an emerald in your hand, all that disappears."

Carlos Emilio Osorio, director of the CDTEC, has called the recent organization of the industry a "miracle." His lab will allow geologists, gemologists, and other interested scientists to study emeralds and centralize information about the disparate mines, previously controlled by rival parties jealous of their claims and reticent about granting access to outsiders. An independent branch of the CDTEC will be responsible for certifying the origin and quality of Colombian stones.

"You have to understand the stones in order to understand what can be done with them," says Jaime Rotlewicz, a gemologist and emerald exporter who has been at the forefront of industry reforms. Mr. Rotlewicz describes how many of the Colombian mining bosses had never seen the inside of an emerald through a microscope until he showed his own slides of interesting flaws.

Rather than try to prohibit enhancements, which are a routine part of the gem industry, Mr. Osorio and other exporters and jewelers are looking for a stable, effective beautifier to improve the Colombian emerald's market appeal. New certification practices would disclose alterations but leave appraisals to the dealers and buyers.

"Creating a reliable product and stabilizing prices and demand can help everyone in the industry share profits," says Osorio. "But certification will only work until the day a bad certificate is issued. That day, the whole business falls apart again."