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October 06, 2018

Critical Industry Issues at 38th WDC agenda

Critical Industry Issues at 38th WDC agenda

WFDB Set to Discuss in Mumbai

Now Bharat Diamond Bourse is quite ready to host the World Diamond Congress (WDC). WDC, where global diamond leaders & delegates of about 16 IDMA members & 31 member bourses representatives from 22 countries would gather under the one roof to discuss the well set agenda & it is full of critical issues of global diamond industry & trade!

Even the President of WFDB Ernie Blom also believes & says, “There is certainly no shortage of issues to be debated by our bourse presidents and delegations from across the world.” During the October 23-25 Congress, delegations, representatives from a range of industry bodies at the  biennial meeting would look at issues in depth and receive global input in order to decide on future policy!

It is likely to see the critical issues including,

1: US FTC Revised Jewelry Guides that has created numbers of question against mined diamond!

2: US FTC Revised Jewelry Guides that has said many things like a benefit Laboratory-Grown Diamond (LGD)

3: All about specific diamond terminology that to made acceptable to the globe!

4: Generic Diamond Promotion & marketing

5: Banking and financing to the diamond industry & trade

Apart from the above, WFDB & IDMA both may focus on their internal rules & systems for the smooth running of the body & to play effective role in the industry & trade.

The WFDB participates in the promotion of world trade and encourages the establishment of new diamond bourses. Members of affiliated bourses pledge to uphold the traditions, principles of mutual trust, consideration and friendship which prevail among the members of the bourses worldwide. They also pledge themselves to abide by and hand down these principles and to ensure that they will forever serve as a basis in business relations between members of affiliated bourses.

The International Diamond Manufacturers Association (IDMA) is committed to fostering and promoting the highest ideals of honesty and best practice principles throughout the diamond industry worldwide, as well as full compliance with all relevant national and international laws.

IDMA also works to encourage fair and honourable practices and decent working conditions for those employed in the diamond industry; and to preserve, protect and promote the trust and confidence of consumers in diamonds and diamond products. It encourages and supports social responsibility on the part of the industry in respect to all citizens of the world.

Just ahead of the WDC meeting, it would be an interesting to know the focussed thoughts of the WFDB President, Ernie Blom who expressed at Heera Zhaveraat.

The 2018 World Diamond Congress (WDC), the biannual meeting of the WFDB and IDMA is being announced to take place in the month of October. And at the juncture, would you say where the Congress would focus most among several key points?

Blom: We will of course take a general look at the state of the global diamond industry. Specifically, we will discuss issues of vital relevance to diamantaires such as financing. This will have added significance due to the state of the Indian diamond market in the aftermath of the Nirav Modi affair and the decline in available finance which has resulted as mentioned by the GJEPC in a press release.

I am sure we will also want to debate the revised FTC Guides relating to the diamond, gemstone and jewellery sectors and the possibility of engaging with the FTC in a bid to make some changes, along with many other issues.

The host of WDC 2018, Bharat Diamond Bourse (BDB) has adopted the system & under that system, no Laboratory Grown Diamond (LGD) is allowed in the BDB boundaries. They say ‘zero tolerance.’ Here I am drawing your attention that when System is working why the WFDB Charter shifts onus on every member to act responsible & transparent with proper disclosure by following good practice principles in the context of LGD?

Blom: The WFDB does not have one, single, stand as an organisation regarding trading in lab-grown diamonds. As you mention, the WFDB allows each of its 30 affiliated bourses to decide for itself what its position is. The BDB does not allow synthetics anywhere on its premises. On the other hand, the Israel Diamond Exchange forbids such stones only on its trading floor.

We believe this is a policy that makes sense and provides maximum flexibility for our members on their home ground. As for people carrying out illegal activities, we always press for them to be prosecuted to the full extent of the law in the country in which such activities are carried out.

How do you look at KYC Bank, the initiative commenced by the Gem & Jewellery Export Promotion Council to bring value to all members of the diamond pipeline?

Blom: We believe that this is a very worthwhile and important initiative. Banks are today looking for full transparency in deciding on whether to provide credit to diamond firms. The KYC initiative is important in showing diamantaires how they should provide all the relevant information to the banks in order to ensure they receive financing.

How do you look at Blockchain for WFDB to bring every Bourse diamond under the ambit of blockchain?

Blom: Blockchain is a technology that is clearly going to play an important role in many industries, including diamonds. It provides a tamper-proof system for tracking a diamond from the mine to the consumer. A wide range of industry bodies are involved in blockchain solutions from miners to labs to retailers. These include De Beers, the Antwerp World Diamond Centre, Rio Tinto Diamonds, the Gübelin Gem Lab and jewellery retailing giant Chow Tai Fook.

I believe that a well-thought out and fully developed version of blockchain can help the diamond industry enormously by boosting consumer confidence.

Always, banking & Financial institute wishes to fund any quality Assets, why diamond industry is not offering them & faces financial issues? What is the way-out to get easy finance for industry growth?

Blom: It has clearly not been easy to persuade the financial sector of our case. Unfortunately, we have seen several instances of banks withdrawing from the financing of the diamond and jewellery business. I believe that they wrongly see the diamond industry as high risk. The vast majority of diamond companies operate very prudently, ordering goods that they need and only when they need them.

I believe we need to persuade more actors in the financial sphere that providing credit to diamond companies is not high risk and that it is worthwhile for them. Indeed, we have seen new banks entering the diamond industry, and that is something that we obviously welcome.

There is a sentiment in general in African continent that they earn just poverty even after 100 years of mining diamonds & minerals. What is an accountability of diamond pipeline?  Is any tangible initiative?

Blom: Clearly, there are still many miners, specifically in the artisanal sector, who are earning very low wages and we need to work hard to change that situation. But I would also stress that diamonds do good across Africa, providing a livelihood and putting food and drink on the table for miners and their families.

The WFDB supports the work of the Diamond Development Initiative and the Diamond Empowerment Fund in providing education and training for young people in diamond mining areas. In addition, we must also mention widespread sustainable development programmes run by mining firms to provide work and health facilities.

I do not believe that consumers are aware of the widespread good that diamonds do for people across the African continent. It is critical that we tell this story because diamonds literally save lives.

All those questions to Blom are around their well set agenda yet it was asked well before!

The current role of the World Federation of Diamond Bourses (WFDB) and how it can move forward is being discussed just ahead of this WDC, Mumbai. It was focussed at Asian Summit/Executive Committee meeting held in Vladivostok. The well-attended meeting saw around 40 representatives from across the world had attended.

Blom believes that they are very keen to see how they can forward the role of the WFDB on the global stage. The Federation is by far the largest diamond industry body and the diamond trade's go-to group. This WDC would also focus on Kimberley Process!