WDC urges enhanced due diligence in respect to rough diamond exports believed to have originated from the Central African Republic
WDC urges enhanced due diligence in respect to rough diamond exports believed to have originated from the Central African Republic
FEBRUARY 24, 2021
In light of recent reports by the international media, observers on the ground and NGOs about political unrest in the Central African Republic (CAR), the World Diamond Council (WDC) reiterates its call to members of the diamond industry to carry out enhanced due diligence when considering the purchase of goods that are known to have originated or are suspected of having originated in the country.
Over the past several weeks, it has been reported that the CAR capital of Bangui and other major towns have come under fire from rebel fighters. The officially elected government and its allied forces are strongly fighting armed rebel groups siding with the political opposition. The situation has caused many civilians to seek refuge in other parts of the nation or neighboring countries, such as the DRC.
Due to the political unrest, and in accordance with the special operational framework that was approved in November 2019 by the Kimberley Process, the WDC urges all members of the trade to continue conducting enhanced due diligence, regarding the import of rough diamonds from the CAR and its neighboring countries. Although diamond production from conflict-affected areas in CAR represents only a very small percentage of global diamond production, diamond businesses should exercise the utmost caution.
The only rough diamonds sourced in the CAR that currently can be purchased legitimately are those that meet the minimum requirements of the Kimberley Process Certification Scheme (KPSC) and are accompanied by official CAR Kimberley Process (KP) certificates. These indicate that the diamonds were mined in KP-compliant “green” zones, which are areas under secure CAR-government control that show no evidence of armed rebel group activity.
The WDC calls on the entire industry to uphold the integrity of the diamond supply chain by proactively implementing the guidelines contained in the WDC’s new System of Warranties. These include addressing risks in areas beyond those covered by the Kimberley Process Certification Scheme, including human and labor rights, AML and anti-corruption.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Udi Sheintal, WDC Secretary and CAR MT Representative
STANDARDS, TRANSPARENCY AND GRASSROOTS INVESTMENT
CORNERSTONES OF TIFFANY’S RESPONSIBLE SOURCING STRATEGY
ABOVE: A worker at the Laurelton Diamonds cutting and polishing plant on the Indian Ocean island of of Mauritius. Laurelton is a wholly-owned subsidiary of Tiffany and an essential part of its vertically integrated supply chain. (Photo courtesy of Tiffany & Co.)
Although the celebrated jewelry chain Tiffany & Co. became a member of the World Diamond Council in 2000, its strategic commitment to responsible sourcing can be traced back to 1995, when it decided to advocate against a proposed gold mine that threatened the fragile ecosystem of the Yellowstone National Park in the United States.
It was a watershed moment for the iconic firm, which was founded in New York in 1837. Tiffany’s management came to the understanding that the best way to ensure a socially and environmentally responsible supply chain was to control as much of it as possible, while working to create broader impact. Consequently, for the past two decades, it has been investing in vertical integration and supply chain transparency, as well as improving responsible mining standards to create positive change in the sector.
In 2000, the same year that Tiffany became a member of the WDC, it established The Tiffany & Co. Foundation, with the specific goal of managing its its philanthropic giving. Over its two decades of operation, the foundation has distributed more than $85 million in grants, much of it to programs that are dedicated to preserving the natural environment. This has included responsible mining through remediation and land preservation, and coral and marine conservation, where it has a particular focus.
The Tiffany & Co. Foundation has also supported the development of responsible sourcing standards at the artisanal and small-scale level, strategically focusing on funding the development of standards and credible certification systems that will contribute to a fair and viable future for small-scale and artisanal miners (ASM) and their communities.
In addition to its work on gold, colored gemstones and pearls, in Sub-Saharan Africa the foundation has advanced responsible practices in the ASM sector through grants to organizations such as the Diamond Development Initiative, which is an NGO that Tiffany played a key role in establishing and has supported since 2007, and which created the Maendeleo Diamond Standards, the first set of responsible mining standards specifically tailored for artisanal diamond mining. It has also supported the International Institute for Environment and Development, which maintains dialogues between artisanal mining communities, large-scale mining companies and governments.
To drive its own supply chain transparency, Tiffany today sources 100 percent of its rough diamonds directly from known, responsibly-managed mines or from responsible suppliers, receiving goods from a limited number of known mines and sources. The majority of its rough stones are procured from Namibia, Russia, Botswana, Canada and South America. It purchases rough diamonds and sources, cuts, polishes and supplies finished stones through […]
“Women of the Diamond Industry” focuses on the issue of gender equality along the entire diamond and jewelry supply chain. The series provides a platform for women in the industry to tell their own stories and describe the particular challenges they have faced in their careers.
The fourth article in the series is authored by Jo Mathole & Khomotso Ramodipa, founders and co-owners of Kwame Diamonds, a diamond cutting and polishing company in Johannesburg, South Africa.
TWO WOMEN IN THE NEW SOUTH AFRICA:
TORCH BEARERS FOR THE NEXT GENERATION
Jo Mathole (left) and Khomotso Ramodipa, who started out as diamond brokers in the South African diamond trade, during the years that the country’s business sector first opened up to Black entrepreneurs, and are today among a handful of women worldwide owning and operating a diamond manufacturing firm.
We are the owners of Kwame Diamonds, a South African diamond cutting and polishing company that was founded in 2008. We have nine employees – six women, ourselves included, and three men. We are currently part of a De Beers beneficiation project and are working towards becoming a Sightholder.
We were born and bred in Diepkloof, Soweto, a large township in the southwest of Johannesburg. Khomotso is a calm and reserved spirit, who loves nature, while Jo is more of an outgoing risk taker. Khomotso would rather go on a hike while Jo would opt to cycle.
The difference in our personalities has made us perfect partners, as we complement each other very well. We are sisters, friends and the best support system for each other. Growing up together in the tough township environment prepared us to withstand life’s challenges.
Kwame Diamonds became a reality after a great deal of trial and error, which included street trading and continental travels in African diamond producing countries, where we learned about the impact of the gemstone in those areas.
There are many lessons that gave character to the foundations of Kwame, which ultimately set us on a unique path to success in a challenging diamond industry – not only in South Africa but in Africa as a whole. Changing the narrative of blood diamonds into a story about the positive change that diamonds can create is what has driven our company to become what it is today.
Given our country’s history, conditions have been difficult for ordinary Black South Africans. With a democracy that is only 26 years young, plus the problems of high youth unemployment and national inequality, the odds were stacked high against two women with a vision to make their mark in the diamond industry.
Kwame Diamonds’ cutting and polishing plant in South Africa, staffed by six women and three men.
Starting out in the new South Africa
With the dawn of democracy in South Africa in 1994, our country opened up for business, […]
HOW DIAMOND FOOTPRINTS FOUND THEIR WAY
INTO THE KIMBERLEY PROCESS TOOLBOX
By Mark Van Bockstael
Chair, KP Working Group of Diamond Experts
Chairman, WDC Technical Committee
A fact that most members of the global diamond community are possibly unaware of is that diamond production footprints have always been an integral part of the Kimberley Process (KP). This has been the case from the very beginning.
For clarification purposes a footprint refers to distinct physical characteristics that make up the particular profile of the rough diamonds mined at a specific geographic location. They are the result of both chemical and geophysical processes that occurred naturally at the site over sometimes millions of years, affecting diamonds from the same deposits in common ways.
At the landmark first meeting of the Kimberley Process, which took place in South Africa on May 11 and 12, 2000, Andrew Coxon, a renowned diamond expert from De Beers, delivered a presentation on how representative samples from different diamond deposits from various countries – whether from primary, kimberlite deposits or secondary, alluvial or marine deposits – may be used to verify the authenticity of a stated origin. What he suggested then was, if the importing authorities and customs experts in the trade centers had access to these diamond samples for comparison, then false origins as stated on import customs declarations could be detected more easily, and contamination of the legitimate diamond pipeline be avoided.
Images of representative samples from two distinct diamond deposits, as presented by De Beers at the inaugural meeting of the Kimberley Process in 2000. Such samples are also commonly referred to by diamond experts as “run of mine.” The photo on the left is a sample from the Cuango region in Angola, while the second photo is “run of mine” from Mbuyi-Mayi in the DRC.
The first “African Diamond Industry Forum,” as KP’s inaugural meeting was called, ended with conclusions and recommendations that three years later gave rise to the Kimberley Process Certification Scheme (KPCS). However, the proposal to verify origin claims using representative samples of known diamond deposits was not retained.
From representative diamond samples to footprints
When the KPCS officially was launched on January 1, 2003, its core document prescribed internal controls to be performed by the KP export authorities in diamond producing countries, but it did not even suggest, let alone advise, the use of representative production samples for comparison. Indeed, following the peaceful resolution of the conflicts in Angola, Sierra Leone and Liberia in the early years of the certification scheme, little attention was devoted to the topic.
This changed abruptly in 2006, when a report issued by a UN Panel of Experts blamed Ghana for certifying contraband conflict diamonds from Côte d’Ivoire. The 2006 KP Plenary in Gaborone reacted promptly, adopting an Administrative Decision that included an action plan. In its concluding paragraph, Ghana was urged to share detailed packing lists of […]
SOFT LAUNCH OF WDC’S NEW SYSTEM OF WARRANTIES
HERALDS FINAL REVIEW STAGE BEFORE OFFICIAL DEBUT IN 2021
Peter Karakchiev, SoW Reform Project Leader in the WDC’s Strategic Planning Committee.
The World Diamond Council’s new System of Warranties (SoW) has entered the beta-testing phase, comprising a soft launch of the process, with the participation of a representative sample of companies from across the diamond supply chain. It is the ultimate stage of an extensive review that will conclude at the end of the calendar year. This will allow for final adjustments and fine-tuning to take place before the official launch, which is scheduled to occur during the first quarter of 2021.
200 large, medium and smaller sized companies were selected to participate in the soft launch, with care taken to ensure that the mining sector, rough and polished diamond trading sectors, diamond manufacturers, jewelry manufacturers, wholesalers and retailers were all represented. They were invited to introduce the new system into their own organizations and then review the user experience. Much of the attention is being focused on a self-assessment exercise that all participants must complete successfully, in order to implement the new SoW.
The soft launch comes at the tail end of a more than three-year process, which began at the WDC Annual Meeting in Dubai in October 2017. It was then decided to review the existing SoW, with the objective of expanding the warranties to encompass a broader set of principles related to the “duty of care” for responsible business practice. The process was conducted by office holders and members of the WDC’s Strategic Planning Committee, with the team leader being Peter Karakchiev, a WDC Board Member representing ALROSA.
Original SoW predates the launch of the KPCS
The original SoW was introduced by the WDC in 2002, as an industry-applied system that would indicate that diamonds being sold comply with the minimum requirements of the Kimberley Process Certification Scheme (KPCS), which was scheduled to be launched at the beginning of 2003. In essence, it required buyers and sellers to include a warranty statement on B2B invoices and memos, assuring the buyer that the diamonds originated from sources in compliance with the KPCS.
Where the SoW differed from the KPCS, was that it covered not only the trade in rough diamonds, but also the trade in polished diamonds and jewelry set with diamonds. Furthermore, it had to be applied each time diamonds changed hands, and not only when they were exported from one country or region to another, as was the case with the KPCS. Members of the industry were recommended to maintain a record of all SoW warranty statements issued and received for a period of three years after a transaction.
While in all KP participating countries compliance with KPCS is a legally binding condition for participation in the diamond trade, the SoW is referred to as being self-regulatory. Nonetheless, within the trade, […]
A YEAR TO FORGET, OR ONE TO LEARN FROM?
Dear colleagues and friends,
As 2020 comes to an end, I am sure you are also asking yourselves – was it a year to forget as quickly as possible, or was it a year from which we have learned a lot?
The first point I would like to stress is that we should not underestimate the suffering that numerous people have been subject to. The COVID disease caused a general sense of depression, experienced by many, and especially those from younger generations. It also caused great financial burden imposed on companies and individuals, and above all the loss of life of so many, dear to us. This indeed makes it a period that one would prefer to forget.
But 2020 was also characterized by industry’s enduring resilience. Retail sales did dip, but then rebounded, even in countries where infection and casualty rates were high. Never before have we seen such a fast fall in polished diamond inventories and such a rapid return in demand.
So, apart from the irreplaceable loss of life, it was not all doom and gloom. The moratorium on rough imports into India brought a lot of liquidity back to the trade. Bank debt was reduced, inventories were cut, and shortages of certain goods meant that demand for polished sometimes outpaced supply.
The Natural Diamond Council was established in this year and collected a good deal of data. In short it suggests that diamonds remain clearly top of mind with consumers as a symbol of love, both in the United States and China. But the data also indicates that, when it comes to product integrity, there are standards that consumers demand their diamonds meet, in addition to being non-conflict and Kimberley Process-compliant. Today the modern consumer asks whether the diamonds they buy contribute to the well-being of all concerned. To them, “responsibly sourced” means that that the diamonds were mined, cut, polished and set under circumstances where human rights, labor rights, social rights and environmental impacts are verifiably respected.
There is a big difference to the situation that exists today and the one that I observed six years ago, when I was first elected president of the WDC. Then, industry was supply oriented. Today it is demand oriented. Consequently, when consumers demand specific guarantees, we need to be attentive, particularly if we want to maintain the market share of natural diamonds.
For the past three years, the WDC has been working to expand the scope of its System of Warranties (SoW) to encompass the broader perspective of responsible sourcing. We also have been developing a SoW Toolkit, which is designed to assist all participants to self-assess their degree of compliance and get a better understanding of what is expected of them.
The new SoW is in the final stages of testing, which is a process that we aim to complete by the end of the year. The feedback we are receiving is being used to […]
WDC’s 2020 AGM focuses on the latest KP developments and industry’s efforts to source responsibly, despite pandemic
WDC’s 2020 AGM focuses on the latest KP developments
and industry’s efforts to source responsibly, despite pandemic
OCTOBER 26, 2020
ABOVE: Participants during the virtual 2020 WDC Annual General Meeting, clockwise from top, center: David Prager, Executive Vice President Corporate Affairs, De Beers Group; Edahn Golan, industry analyst and the panel moderator; Ronnie Vanderlinden, WDC Treasurer; Elodie Daguzan, WDC Executive Director; and Edward Asscher WDC President.
Members of the World Diamond Council assembled for the organization’s Annual General Meeting on October 19, 2020, joined by invited guests, among them representatives of the governments involved in the Kimberley Process and members of civil society. In contrast to previous WDC AGMs, this gathering was not held in person but rather by videoconference, a consequence of the many travel restrictions in place worldwide because of the COVID-19 health crisis.
The new format of the AGM allowed for an abbreviated 90-minute session, comprised of a keynote address by David Prager, Executive Vice President Corporate Affairs at the De Beers Group, on the industry’s role to meet the expectations of the changing consumer, and a panel discussion led by Edahn Golan, a noted industry analyst, with Mr. Prager and Mr. Asscher, the WDC President. It was followed by the more formal AGM agenda, with reports by the WDC President, WDC Executive Director Elodie Daguzan and WDC Treasurer Ronnie Vanderlinden.
The dominant theme of the 2020 AGM was the industry’s obligation to maintain and grow consumer confidence in the sector. It focused on the critical role that institutional organizations like the KP and the WDC, through its System of Warranties, have in providing a backbone to this mission, particularly in a market that is being fundamentally impacted by the global pandemic. In his report to the AGM, Mr. Asscher spoke about the act of gifting a natural diamond as a symbol of love and appreciation for those who are closest to you. This is due to the emotional connection of consumers to diamonds, and it is a connection that is underpinned by trust.
“Today’s consumers understand very well that loving relationships are so important in these difficult times,” the WDC President said. “Diamonds are still considered symbols of loving relationships but now consumers all over the world are asking for more. The key words today are sustainability, ethically sourced diamonds, and proof of respect for human rights. The WDC is key to setting those conditions, together with the KP member governments and the NGOs.”
This sentiment was underscored in his keynote address by Mr. Prager. Recent developments, he said, “…have reinforced the importance of brands not only to take a stand, but for brands to take action. It can be demonstrated today that being a brand is more than just selling a product that consumers want. It is also about understanding what matters to those consumers and how your brands align with their values in a meaningful way.”
Research today […]