It's not just the banks that are insisting on stricter compliance standards and diamond pipeline integrity, writes Avi Krawitz on Rapaport, but the largest mining companies and jewelry retailers too. The central themes of the recent World Diamond Congress of transparency, responsibility and sustainability precisely summarized the challenges facing the industry and what it has to aim for. De Beers requires clients to demonstrate transparency by presenting a consolidated corporate structure, proper bookkeeping, transactions they’re able to vouch for, and by adhering to third-party scrutiny, said Howard Davies, head of corporate development at the diamond miner. Sustainability involves a profitable business model and a strong equity base, and transparency and sustainability together lead to bankability. The industry continues to suffer from a 'high risk' status and has little choice but to be more responsible in deciding with whom it does business. Consequently, the WFDB endorsed the ‘know-your-client’ (KYC) initiative of India’s Gem and Jewellery Export Promotion Council in an attempt to more widely establish KYC standards across the industry.
Similarly, Signet Jewelers' Responsible Sourcing Protocol for Diamonds (D-SRSP) to ensure all diamonds that the retail giant acquires are responsibly sourced and can be tracked back to the diamond producer will help diamantaires, explained David Bouffard, vice president, corporate affairs at the jewelry retailer, by minimizing perceived risk. “I can assure you the banks look at Signet’s suppliers differently because of the compliance requirements they’ve adhered to,” Bouffard said. “We truly believe such programs will lead to a more profitable business.”
"The diamond industry simply cannot maintain its old 'traditional' way of doing business. The 2016 World Diamond Congress acknowledged that transparency, responsibility and sustainability are not just goals to work toward, they’re absolutely essential for the industry’s survival. That’s just the reality of today’s consumer and regulatory environment."