WDC Presents Revised System of Warranties To OECD Forum

Compliance
25/04/2019 16:04

Senior officials of the World Diamond Council (WDC) have provided an overview of the organization's revised System of Warranties (SoW), during two sessions on April 24 at the 13th Forum on Responsible Mineral Supply Chains of the Organization for Economic Cooperation and Development (OECD) in Paris. During the briefings, WDC President Stephane Fischler described the revised SoW as an "essential building block" for participants in the diamond supply chain towards implementing the OECD's due diligence guidance for minerals from high-risk areas. "The revised SoW has to be seen within the context of a range of responsible supply chain opportunities being offered to a very diverse industry," said Mr. Fischler. "The ultimate objective for all of us is the same - ensuring consumer confidence in the products we sell. The different systems need to be complementary, being building blocks on the road to full compliance."

Like the earlier version of the SoW, it requires all participants in the diamond and jewelry value chain, from mining companies to jewelry retailers, to issue warranty statements on their B2B invoices and memos, testifying that the diamonds being sold originated from sources in compliance with the Kimberley Process Certification Scheme (KPCS). But the statement now also verifies that the participants adhere to the revised SoW, which requires that they conduct a self-assessment to ascertain whether they comply with universally accepted principles on human and labor rights, anti-money laundering (AML) and anti-corruption. The revised SoW Guidelines specifically reference the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the UN Convention Against Corruption, and also national AML guidelines that comply with the FAFT 40 Recommendations on Money Laundering for Dealers in Precious Metals and Stones.

"The revised SoW is designed to support the KPCS, covering not only the trade in rough diamonds, but polished diamonds as well, and also trading between every participant in the diamond and jewelry value chain, and not only trade between participants in different countries," explained Peter Karakchiev, the WDC Board member who chaired the side event on April 24. "We are hoping that the KPCS will be expanded to include provisions related to human rights, labor rights, anti-corruption and AML, but we are not waiting for it to happen, and have already incorporated those elements in our own system." Mr. Fischler and Mr. Karakchiev both explained that diamond companies are not permitted to pick and choose what elements to implement. "Members of the trade who implement the SoW are required to fulfill all of its elements depending on their size and sector, as they are outlined in the Guidelines," Mr. Karakchiev said. "The self-assessment toolkit that is being developed will help them do that."