The Namibian newspaper has raised concerns that a new government independent sales company called Namib Desert Diamonds (Namdia), which is designated to sell stones worth over an estimated US$150 million (N$2.1 billion) per year as stipulated by a 10-year agreement between De Beers and the Namibian government, is allegedly operating without the desired level of transparency when it comes to selling Namibian resources.
In a news release, VULT - a digital diamond exchange platform whose, "revolutionary technology turns diamonds into a modern asset class: liquid, portable and fully fungible" - announced: "Secured Worldwide, the creators of VULT, a unique diamond investment product, has won the backing of the Underwriters at Lloyd’s of London for VULT’s warranty of the authenticity of every diamond in VULT units sold to consumers by Secure Worldwide.
Diamond companies, especially the small and medium-sized firms who make up the bulk of our membership, cannot easily access financing. Diamond manufacturing and trading companies need to finance their operations, however with banks facing higher capital requirements, risk aversion and increased regulatory burden, the financing they make available to diamantaires has fallen significantly in recent years and that has meant reduced operational flexibility and increased vulnerability to market movements for diamond companies.
This afternoon, the Antwerp World Diamond Centre (AWDC) hosted a forum organized by the Federation of Belgian Diamond Bourses (FBDB) to tackle the issue of undisclosed synthetic diamonds and address the legal and technical aspects concerning the disclosure of synthetic and treated natural diamonds.
The World Diamond Council (WDC) gathered in New York City last week for the organization’s 12th Annual General Meeting (AGM), focusing on its proposed new Strategic Plan to guide the organization’s work through 2020 as it continues to serve as the industry voice in the KP. Hosted by the United States Jewelry Council (USJC) and with the support of Signet Jewelers, ABN Amro Bank, De Beers Group, Brinks, UL and JCK, more than 100 representatives from the diamond industry, government, civil society and media came together to study new proposals
ALROSA, the world leader in diamond mining, has become a member of the Responsible Jewellery Council (RJC) since 11 August 2016, writes RJC in a press release. "Consumers around the world are giving great importance to the origin of diamonds in jewelry. We believe it is important to demonstrate to the consumer that diamond mining is a socially responsible business that creates jobs, supports local communities and cares about the environment.
“To Tell the Truth” is the tagline of Chow Tai Fook's brand differentiation campaign designed to generate consumer confidence by enabling customers to track the journey of its diamonds from source to finger. Campaign Asia-Pacific writes, "Chow Tai Fook claims to have developed a patented technology that allows it to emblazon each diamond with a 'T mark'", or a unique serial number engraved on each stone, enabling the traceability of the stone from its source through processing, cutting, polishing, authentication and design.
Andrey Polyakov, President of the World Diamond Council and Vice-President of ALROSA, sat down for an interview with Interfax (translation published exclusively by Rough-Polished), covering everything from the work and mission of the World Diamond Council (WDC), the Kimberley Process (KP), the Diamond Producers Association (DPA) and consumer demand for complete information about jewelry, to the possibility of ALROSA joining the Responsible Jewellery Council (RJC), setting up a diamond tracking program in China and the consumer markets in India, Brazil and the United States
We at ABN AMRO support initiatives that create more insight into the value chain, its key players, engages with the right side of the market and excludes areas which show less transparency or no willingness to learn and improve. We see other banks doing the same more and more. In the end there will only be credit lines available for companies with good corporate standards and track record, whether they are small or big doesn't matter ... We expect more consolidation and certain companies going out of business.
Rapaport News' Avi Krawitz interviewed recently appointed president of the Jewelers Board of Trade (JBT) Tony Capuano, who discussed the health of the U.S. jewelry market, bank lending, Millennials and the JBT itself. Capuano noted the continuing trend toward consolidation and declining numbers of retailers in the U.S. jewelry market. "The industry continues to contract and consolidate. There are still 29,000 jewelry companies across the U.S., of which about 21,000 are retailers. Our data shows 700 retailers left the industry in the 12 months to the end of the first quarter.
Rio Tinto is focusing its global diamond sales and marketing initiatives on tracked jewelry collections "with a clear and transparent chain of custody, from the mine to the market" particularly aimed at the younger generation who want clear information regarding the provenance of gems. Simon Trott, managing director of Rio Tinto Diamonds, said: “Increasingly the value of a diamond is tied to where and how the diamond was mined, how it was cut and polished and the process of bringing it to sale.
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.
The World Federation of Diamond Bourses unanimously elected Ernie Blom for a third consecutive two-year term as president during the recent World Diamond Congress in Dubai, while Israel Diamond Exchange president Yoram Dvash was elected as vice president, reports The Retail Jeweller - India. Blom said he was delighted with the debates and decisions taken at the biennial meeting of the WFDB and International Diamond Manufacturers Association (IDMA).
The system at the Israeli Diamond Exchange in Ramat Gan is built on trust, yet the arrest of veteran diamantaire Hanan Abramovich triggering an investigation into accusations that he defrauded fellow traders of $65m worth of money and stones, writes Financial Times, threatens to have a direct effect on traders who have allegedly lost out.
Uphold CEO Anthony Watson sheds light on how Financial Technology is finally transforming the legacy financial services industry and why it’s here to stay.
While the Internet has brought tremendous efficiencies to nearly every sector in the economy, the financial services industry remains relatively unimproved. Businesses today, in particular those in the diamond industry, are painfully aware of the lack of transparency, the lack of convenience and online functionality, the lack of interoperability between geographies, and the high fees charged by banks.
An UAE-sponsored initiative aimed at standardising pricing mechanisms for the rough diamond trade is due to be launched later this year under the country’s chairmanship of the Kimberley Process, reports UAE daily The National. Some may view this move as ironic, as it comes in response to criticism of trade and transfer mispricing practices within the diamond trade, which NGOs claim has deprived diamond producer states of crucial tax revenue - and UAE is considered the main practitioner of transfer pricing.
Bart De Hantsetters, Chairman of the Syndicate of the Belgian Diamond Industry, discusses the need to embrace the new forces ‘disrupting’ a traditional business like the diamond trade. The ship of innovation is setting sail with or without you, so it is better to get on board – as Antwerp has – and build the new on the foundations of the old.
Nurit Rothmann's most recent blog, entitled “Playing the High Stakes Game with a Marked Deck of Cards,” which considers the lack of transparency in the rough diamond trade as well as measures designed to remedy the situation, has instigated a good amount of debate, much of it positive and constructive. Among the persons who reacted was Ernest Blom, President of the World Federation of Diamond Bourses, who requested that his response be published:
The World Federation of Diamond Bourses (WFDB) will launch its Know Your Customer initiative in May. The news was announced following the WFDB Asia Summit held in Seoul at the end of last month where the WFDB’s executive committee agreed on internal changes, as well as steps regarding increasing transparency in trading and generic marketing by the global diamond trade. The WFDB-supported Know Your Customer aims to increase transparency between the diamond industry and banks and regulators.
Signet Jewelers Limited issued a press release on Feb. 16 announcing that it has launched the Signet Responsible Sourcing Protocol for Diamonds (D-SRSP), a protocol that provides increased transparency and further commitment to the continuous improvement in the integrity of the global diamond supply chain. Signet has collaboratively developed and piloted the D-SRSP with input from experts in the diamond industry, civil society and governments.
The Africa Report writes that John Mangudya, governor of the Reserve Bank of Zimbabwe, has bemoaned the secrecy surrounding the country's diamond industry saying it was difficult to monitor the diamond industry, unlike other sectors such as tobacco farming whose operations were transparent. "If you look at tobacco for example, Zimbabweans grow tobacco, from rural, A1 up to A2 (category) farmers. It is marketed at the auction floors, we all know about it," Mangudya told a symposium on Zimbabwe's economic outlook for 2016. "But we don't know the same information from diamonds.
Transparency International (TI) is a NGO that monitors corporate and political corruption in international development. Its Corruption Perceptions Index (CPI) ranks countries based on how corrupt their public sector is perceived to be. It is a composite index drawing on corruption-related data collected by a variety of reputable institutions, based on views of observers from around the world.
The Financieele Dagblad (Netherlands) takes a look at the level of transparency in the small and middle-sized diamond trade in Surat, India, concluding that traders on the local market still turn a blind eye to demands for official invoicing. The little paper envelopes with scribbled details of the contents and price – so familiar in the diamond trade – are the only paperwork to be found at the dusty street-side Hira Bazar (diamond market) in Surat. “This is how we do business worth millions of rupees,” says local dealer Prakash Kathri.
The World Federation of Diamond Bourses (WFDB) will hold its 37th World Diamond Congress in Dubai from May 16 to 19, and has identified transparency, responsibility and sustainability as the key themes of the meeting.
At Anglo American's December 8 Investor Day Presentation, De Beers CEO Philippe Mellier stated that, "I am very pleased to announce that we would like to increase the transparency of De Beers, and starting with the first sight in 2016 we will communicate after each sight the sales of each sight, so that you don’t rely on rumours and you will understand exactly where we are." The Financial Times sought feedback from industry insiders on De Beers' d
A government decision to consolidate diamond mining companies into the Zimbabwe Consolidated Diamond Corporation (ZCDC) is unlikely to create transparency and accountability in the sector, especially given that the same old players will remain integral to the new corporation, analysts have warned.
Amnesty International has published a new report, together with Afrewatch (Africa Resources Watch): “This is What We Die For: Human Rights Abuses in the Democratic Republic of the Congo Power the Global Trade in Cobalt”, traces the sale of cobalt used in lithium-ion batteries from mines where children as young as seven and adults work in perilous conditions. It claims that major electronics brands, including Apple, Samsung and Sony, are failing to do basic checks to ensure that cobalt mined by child laborers has not been used in their products.
Vocalizing what many in the industry have been whispering in the corridors, jeweler and diamond industry blogger Mel Moss says that the current adversity facing the diamond industry - i.e., the miners and manufacturers - could serve as a catalyst for positive changes, provided a change of attitude. "These sectors need to realise that the diamond industry is a separate entity from the jewelry industry. The predominant attitude among diamantaires is that diamonds are the focus of all jewelry. The truth is that the diamond industry is dependent on the jewelry industry...not vise versa!
As 2015 Comes to an end, diamantaire Ehud Laniado sums up the year and discusses the main issues of relevance for the diamond trade, including transparency, financing, marketing, synthetic stones and pricing. He states that, "Financing and cash flow are among the most important issues we will have to address in the coming year. This goes far beyond transparency.
JCK's "Diamond Dialogues", a series meant to take a wider look at the diamond industry and the forces that shape it, has published a thought-provoking presentation by Erik Jens, head of diamond and jewelry clients for ABN Amro, the largest bank in the industry. Jens discusses how other industries, oil in this case, cope with profitability woes, why bankers are wary of the diamond business, and the disruptive change that is quickly heading our way. Jens' considerations reach far and wide.
The newly elected Chairman of the Gem & Jewellery Export Promotion Council of India (GJEPC), Praveenshankar Pandya and Vice Chairman, Russell Mehta addressed a Press Conference on 20th Oct. and shared the strategy and policy recommendations of the new team to restore the health of the Indian gems and jewelry industry.
The De Beers Group of Companies today announced that the low cost, high volume melee testing service at its International Institute of Diamond Grading & Research (IIDGR) will begin in Surat, India, on 26 October 2015. with an equivalent service to launch in Antwerp, Belgium, on 12 November 2015. The service will provide diamantaires with the opportunity to use IIDGR’s leading proprietary technology to verify the natural diamond content of parcels of melee before they are traded. Goods will be returned in sealed, tamper-proof IIDGR packages, with the content of each clearly labelled.
Bourse leaders don’t understand that the best way to avoid unethical practices is to encourage traders to deal with full disclosure and transparency. Rather than banning the trade of lab-grown diamonds and forcing their trade into dark corners, industry leaders should support the establishment of a lab-grown diamond association, which would open the door to a legitimate product and make sure that it is sold transparently.
- Thierry Silber, CEO, Diamaz International, Antwerp-based supplier of natural and lab-grown diamonds
On October 5, the Organisation for Economic Cooperation and Development (OECD) released their long awaited Base Erosion and Profit Shifting (BEPS) outcomes report, containing the OECD’s proposals for new rules to combat tax evasion by multinationals, and transfer pricing in particular. It represents the first major corporate reform in a century, targeting offshore tax havens and the multinational companies that use them to avoid corporate tax, and aims to raise $250bn.
The American Gem Trade Association (AGTA) has made a few revisions to its Code of Ethics and Fair Business Practices document that are designed mostly to stress the importance of transparent supply chains in the colored gemstone world. AGTA CEO Doug Hucker said that revisions emphasize that members must do everything they can to assure the stones have been sourced in legitimate fashion and to comply with U.S. and international laws.
Yelena Levina writes at Rough&Polished that despite having KP sanctions lifted, diamonds from Zimbabwe, Angola and now possibly rough exports from the Central African Republic carry "reputational risks" that leads to them being available at heavily discounted prices - up to 50% - and suggests that this could be a contributing factor to the current stagnation of polished diamonds prices. "By and large, diamond cutters in Surat cannot be blamed for their willingness to support their own business. The problem rather lies in the lack of regulation.
A local businessman believes the islands are ideally placed to serve as a hub for diamond trading, being almost on the United States' doorstep. However, the Cayman Islands would face a range of hurdles, including being accepted by the KP, which could take two years, being accepted as a member of the World Federation of Diamond Bourses (WFDB), which could also be a lengthy process, and competition from the recently opened Panama Diamond Exchange. And then there is the somewhat negative public perception of the islands as a tax hideaway.
"The sun is the best disinfectant," wrote Louis Brandeis, who later became a United States Supreme Court judge. By saying that, he outlined the principle of transparency in public systems as a remedy for corruption.
But the sun can also cause burns and permanent damage. When transparency of information is implemented incorrectly, it may harm the interests which it is suppose to serve.
Zimbabwe is considering submitting a bid for the chairmanship of the Kimberley Process Certification Scheme which is currently held by Angola. Mines and Minerals Development Minister Walter Chidhakwa said the issue of submitting a bid is being carefully considered. He said Zimbabwe is a proud member of the KPCS and has contributed immensely to the defence of the diamond body. "It is not out of line for us to submit a bid.