Tuesday, August 26, 2008

Mahardi Paramita: Cleaning up the gemstones trade


Some may regard the precious gemstones trade a dark industry that requires secret knowledge only made available to a limited circle of people -- but Mahardi Paramita has a different view.


For the 64-year-old gemologist, knowledge about any kind of business, including the gemstones trade, must be disseminated to the public in order to educate people and in turn encourage trade growth.

Born from a Chinese family on March 7, 1944, Mahardi learned about precious stones from his mother, Kema Gunawati, who was a ceng kui (diamond broker).

"As a kid, I liked the sparkling of stones. My mother was just a housewife, but many people knew her as a ceng kui," Mahardi said of his now 99-year-old mother.

Mahardi did not start his diamond business until after earning his bachelor's degree in business administration at the University of Hawaii in 1969, majoring in management, international trade and marketing.

"I was working as an insurance salesman in Hawaii and had no intentions of returning home until my parents visited me and asked me to return."

The first thing Mahardi did after returning to Indonesia in 1970 was set up his diamond shop, Adamas, in the Duta Merlin area of Central Jakarta.

Over time, Mahardi learned that the gem business indeed had its share of dodgy salespeople.

"This business is based on trust but people involved in the business sometimes misuse that trust," Mahardi said

"There are many things I don't like about it. The way they (dodgy salespeople) treat people, the way they provide wrong information about the gemstones they sell. People have the right to know what they are buying."

Upset by such salespeople in the business, Mahardi decided to pay serious attention to gemology by attending the Gemological Institute of America in Santa Monica, California in 1981 and graduated as a gemologist a year later.

After returning to Jakarta, Mahardi set up the Adamas Gemological Laboratory in 1983 to help clients ascertain the quality and authenticity of diamonds and colored stones.

The main aim of the laboratory was to improve public trust in the jewelry industry in Indonesia through certification and consultation.

"Buying a diamond is not like buying a (sports car). In this business, you could pay a sports car's price for a mikrolet (public minivan)," said the man who recently launched his book Kemilau Batu Permata: Pengenalan Asal-usul, Sifat dan Keasliannya (The Sparkle of Diamonds: An Introduction to their Origins, Characteristics and Authenticity).

Mahardi continued to run his diamond shop after establishing the laboratory -- but after being overwhelmed by a conflict of interests, he closed the shop in 1984.

"I thought it wasn't fair. A laboratory service should be professional and independent," he said.

"If you want to be a trader then be a trader, but if you want to provide people with real information, then don't sell diamonds at the same time."

With the opening of the laboratory, Mahardi revealed more cases of fraud, especially during the property industry boom of the 80s.

"Many people from Jakarta's vicinity suddenly became rich because they sold their land. Most of them invested their money in jewelry but many of them were swindled."

Mahardi set up Institute Gemology Paramita in 1989, the first and only independent educational organization sepcializing in diamonds, gemstones and pearls.

The institute provides professional gemological training ranging from basic gemology to diamond grading and treatment, pearl grading and treatment, gem identification, counter sketching, jewelry design and more.

"When I established the institute, I was kind of against the mainstream. People said I was stupid because I was providing rare knowledge about diamonds to the public.

"Without knowledge, business can't grow. It might grow a bit but it won't get bigger. Product knowledge is important for long-term sales.

"In the past, businesspeople only cared about short-term profits. They would hit and run and never pay attention to educating the public.

"Nowadays, the most important thing is to provide consumers with confidence in the products they buy," he said.

Mahardi said running the laboratory and the institution had produced a better diamond industry climate.

Today, Mahardi's US$500,000 laboratory is the most complete gemstones laboratory in the country and the institution has even attracted diamond and gemstone lovers from overseas.

Even state-owned enterprises, such as mortgaging firm Perum Pegadaian, as well as private enterprises, send their appraisers to be trained at the institution or use the laboratory service.

Mahardi's passion for gemstones seems to run in the family: Three of his four daughters are accredited gemologists who now work at the laboratory and as professional trainers at the institution.

Mahardi is one of only a few of gemologists in the country on a mission to build public trust in the gemstones business.

"Once consumers are educated, they will know who to trust. The dishonest (sellers) will be left behind."

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