RAPAPORT... De Beers new sight locations are discussed and the WFDB Mark is launched at the Presidents Meeting.
Marking its 60th anniversary, the World Federation of Diamond Bourses (WFDB) addressed issues of sustainability and consumer confidence during its annual Presidents Meeting, cosponsored by the International Diamond Manufacturers Association (IDMA) and hosted by the Amsterdam Diamond Exchange. The increasing political and economic pressures challenging the diamond industry underscored debate at the meeting, held in Amsterdam in June. Specific issues covered included the changing role of De Beers and the need for industry bodies to work in tandem with each other and present a united front.
In her presentation, Diamond Trading Company (DTC) Managing Director Varda Shine spoke about the importance of encouraging African nations to develop employment and economic opportunities through resource beneficiation. Beginning with the new sightholder contract period in 2008, DTC plans to move its sorting and aggregation operations to Botswana and expand the number of its sightholder locations. In addition to sights in London and Johannesburg, the DTC will offer Botswana and Namibia.
The sight additions are not expected to affect the selections for the sightholder list as many major players and current sightholders already have international manufacturing operations in the African countries. By holding sights in these mineral-rich countries, the DTC hopes to encourage sightholders to manufacture their rough supply locally, providing jobs for the region’s impoverished populations. The southern African governments are not taking chances, however, and have instituted various systems of rewards and penalties that will encourage local production.
In particular, South Africa has already decreed that its newly established State Diamond Trader (SDT) will buy 10 percent of all diamonds produced locally and sell them to the country’s diamond cutters and polishers. Additionally, the government will impose a 5 percent export tax on all diamonds that are shipped out of the country for polishing if the resources exist to cut them within the country. During an informal address to the Presidents Meeting, however, Louis Selekane, chief executive officer (CEO) of the South African Diamond Board, acknowledged that the government had not yet created standard criteria to determine which diamonds could be cut in the country and which ones would be better served outside.
MARK OF TRANSPARENCYRecognizing the current purchasing climate toward ethically sourced products, the WFDB paid significant attention to the long-expected rollout of the WFDB Mark. The mark is an effort by the organization to brand itself along ethical guidelines as well as offer value-added services to its bourse members.
As a trademarked logo, the mark can be displayed and used by approved members of affiliated bourses to indicate their commitment to ethical business practices, including full disclosure, fair labor practices and human rights protections. WFDB President Ernie Blom used the meeting as an opportunity to finalize funding and marketing details for the mark, three years in the making, and garner support from other bourse presidents.
David Rosenberg, president of the Diamond Bourse of the Southeast United States, said he was undecided before the meeting whether to support the mark because the details surrounding governance and funding had not yet been determined. Following the meeting, however, he said he fully supported it. “It is a project that has been put on the back burner for many years, and I’m really excited and delighted to have the WFDB go into a full launch that will give the diamantaires around the world international recognition and ensure retailers and consumers that they have conflict-free and clean diamonds,” he said.
DTC’s Shine praised the mark but called on WFDB members to demonstrate its practical effectiveness for consumer confidence and protection. “A mark on its own — however prestigious the issuing authority may be — will not satisfy the court of public opinion nor survive the scrutiny of consumer watchdogs,” she cautioned.
The WFDB budgeted $500,000 to launch the mark officially, raising money through membership fees and from last-minute donations during the meeting by the Antwerp World Diamond Centre for $50,000 and the Bharat Diamond Bourse for $30,000.
Article from the Rapaport Magazine - July 2007. To subscribe click here.