The Guy in the Office Next Door Reports and rumors are circulating throughout the cutting centers that "ethically-challenged-politically-incorrect” diamonds have entered the rough diamond pipeline and polished value-supply-chain through Antwerp, Israel, and South Africa.
And this is an unacceptable situation.
The question must be asked - in the name of transparency and the ethical code specifically with reference to the “WFDB Mark” - why wasn’t the subject of the Zimbabwe goods (that are already known to be in Israel, Antwerp and South Africa) addressed at the WFDB meeting held last week (June 2007) in Amsterdam?
Rough Diamonds
These are the rough diamonds that will be turned into polished goods that will be in the pipeline (as loose goods or set in jewelry accompanied with a Series of Warranties) just in time for Christmas 2007. And if this doesn’t directly effect all the issues of consumer confidence (that have become so important to the industry with all its declarations and codes of ethics) I haven’t a clue what does.
The Spin Must Stop Here & Now
As Fox’s Bill O’Reilly would say, “The spin stops here.”
Because this is current (not Sierra Leone circa 1999) and it is all spinning out of control.
The silence and lack of outrage about the subject will come back to haunt the majority of diamantaires (across all markets and continents) especially those not involved, just as the minority (of those involved) are laughing all the way to the bank. Polluting the Environment
There will be no plausible denial of culpability – it won’t be tolerated by enlightened consumers and educated jewelers.
A willing seller needs a willing buyer situation at every stage of the pipeline – and consumers and jewelers will raise a lot of questions as to when the subject was known about in the cutting centers – and why nothing was done (or said about it) to warn them of the consequences.
The World Diamond Council has been tasked by the industry to educate jewelers and consumers about the Kimberley Process and the conflict diamond problem.
But consumer confidence is more than that – it is about a serious issue not just a convenient bunch of buzzwords.
It’s not just about what Is happening in the producing nations – it’s also about what is happening in the cutting centers. If “illicit” goods are smuggled out – and in - without an official Kimberley Certificate, then the Series of Warranties issued in one of the cutting/trading centers (starting with the paragraph printed on the invoice) will not be worth the paper it is printed on.
Kimberley Process Documentation
So what is the true purpose of the WDC World Diamond Council ?
To lull the industry into a false sense of security?
At the WFDB annual president’s meeting, in Amsterdam, Ernie Blom described it this way, “I recently joined a WDC task force trip to Zimbabwe, from where I am sure that many of you know there have been ongoing reports about attempts to infiltrate rough diamonds into the legitimate pipeline without adequate Kimberley Process documentation.”
In his speech at the annual president’s meeting, Ernie Blom said, “The World Diamond Council continues to be a source of pride and strength for all us, and greatly because of the man that has stood at its his head since it was created almost seven years ago.”
Lavishing praise on the chairman of the WDC, he said, “It is doubtful whether the World Diamond Council and the Kimberley Process would have been able to achieve what it did, without Eli’s leadership, negotiating and diplomatic skills, powers of persuasion, ability to calm frayed nerves, and his insight into the diamond business and the various parties with which it must coexist. One of his and the World Diamond Council’s greatest accomplishments was to demonstrate to the world that we, the diamond business community, consider the wellbeing of citizens in the diamond producing countries as a prerequisite for both the economic and ethical health of our industry. We did not consider the existence of conflict diamonds as merely an a inconvenient difficulty, but rather as a cancer which needed to be attacked and excised, and then monitored to make sure that it did not raise its head again.”
At the same meeting, in June 2007, Eli Izhakoff, president of the World Diamond Council (WDC), gave the closing report. In it, he said that the preliminary findings of an unofficial report on diamond smuggling out of Zimbabwe are fairly positive as the local government is working to stem the trade. However, in February 2007, one of the diamond industry’s magazines, Israel Diamonds, reported, “Eli Izhakoff, chairman of the World Diamond Council, has expressed concern that rough diamonds from Zimbabwe are being smuggled into South Africa without legitimate Kimberley Process certification.“
In April, SAPA news agency, polishedprices,com, as well as the official portal of the Israeli industry reported, “Zimbabwe's central bank governor Gideon Gono estimated Zimbabwe's cash-strapped economy had lost $400 million worth of revenue due to smuggling of diamonds out of Marange. The country's security minister has said diamonds looted from Marange have been sold in places as far away as Israel.”
And then there are the more-than-reliable-unofficial-rumors coming out of Antwerp (the home of the WFDB) that Zimbabwe goods have “successfully” infiltrated the market in Antwerp – one way or another – some with certs and others without certs.
Let’s remember one thing – diamonds cannot “infiltrate” the pipeline all by themselves – they need the help of couriers, messenger, real live people to get them where they are going – and buy them when they get there.
Those who are buying them once they arrive in the cutting centers are said to be members of bourses affiliated with the WFDB.
The Times Are Changing
It’s a timely reminder of Nicky Oppenheimer’s speech at the World Diamond Congress in 2006.
• We must understand and accept that today’s world is very different from the past.
• Accountability and transparency are the watchwords, and we - as all other industries - have to accept that some of the ‘traditional’ practices of the past are simply no longer acceptable.
• Whether we like it or not, true or not, the public perception of the diamond industry remains one of secrecy, of hidden dealings, of tax evasion, of political intrigue, of money laundering, of undisclosed treatments and substitution, of false certification, of wilfully misleading the consumer and, indeed, even of connections with the funding of terrorism.
• I wish I could say with complete confidence that this is all utter nonsense, but the truth is that there are still elements in our industry that operate with blatant disregard for the law, for the rules that govern our business, for the norms of acceptable behaviour in today’s society.
• If we are to ensure that our children can inherit our businesses, that the children of Africa can benefit from the great blessings that diamonds can bring to their communities, that the livelihoods of everyone working in diamonds across the world are protected, we must adopt a policy of zero tolerance towards those - and their activities - who bring our industry into disrepute and jeopardise our future.
• I look to the leaders of the industry assembled here - and all diamantaires of good faith - to drive out, isolate and eject from our business those who refuse to accept and embrace the absolute imperative to operate - in all we do - in an ethical and morally responsible manner. We will be judged not by our words, but by our actions.
• We must demonstrate clearly and publicly that the diamond business is a great business, devoting its efforts - of course through making money, providing employment and paying its taxes, but also through its active engagement in social, economic, environmental and development investment - to a real and sustainable contribution both to the societies in which we all live and work and to those less fortunate than ourselves.
Nicky Oppenheimer was even more forceful in his speech at the CIBJO Congress in Capetown – March 12, 2007.
• This is why today I call for us all to reunite in a new effort to secure and safeguard our business.
• We must not only work even closer with the relevant authorities to identify and report any wrongdoing.
• We must also ensure beyond any possibility of doubt that everything we - and others in the industry - do is absolutely proper and appropriate.
• Turning a blind eye to so-called ‘traditional activities’ by others on the grounds that ‘I’m not doing anything wrong’ is simply not acceptable.
• The guy in the next office who operates in blatant disregard of the law and ignores the rules that govern our business is not a ‘naughty colleague’ or a ‘rogue element’ unconnected with the respectable trade, but your enemy - he has the ability to destroy your business and will do so, and disappear back into the shadows with his ill-gotten gains.
• Thus part of the renewed effort must be to make sure that we and our suppliers all use the System of Warranties that is the industry’s commitment in the Kimberley Process.
• It is also an essential part of our defense against those who say the industry is not doing enough. It is such a simple matter to require warranties from suppliers and to issue them to customers, and to be able to show you have done so.
• I really do not understand why anyone running a legitimate business cannot see a positive commercial advantage in being able to demonstrate to their customers that their product is free of the taint of conflict, organized crime or terrorism!
Zero Tolerance
Think carefully about Oppenheimer’s zero tolerance reference about the “guy in the next office who is not a naughty colleague or a rogue element” who can ruin it for the rest of us.
And then tie this in with Chaim Even Zohar’s article, “Will Diamdel become a Mini-Enron?” about the restructuring of Diamdel.
www.diamondintelligence.com/magazine/magazine.asp?id=5174
The Diamond Dream
“Spero Optima” as Nicky Oppenheimer would say – or to those of us who are foreign language challenged – Hoping for the best.
But in this case – it will take much more than hopes and dreams to keep the diamond dream from gradually turning into a nightmare scenario from which it will be most difficult to awake.
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