The World Federation of Diamond Bourses’ (WFDB) presidents and bourse members discussed various issues of concern relating to the diamond industry at the recently concluded 37th World Diamond Congress (WDC). The WDC was attended by the representatives of all leading organisations of the diamond industry, including the World Federation of Diamond Bourses (WFDB), International Diamond Manufacturers Association (IDMA), delegates of major mining companies and countries, as well as by the World Diamond Mark.

Participants Praise 37th WDC For Providing Platform for Wide-Ranging Debates
There was no shortage of important topics on the agenda at the 37th WDC held from May 16 to 19 in Dubai. The biennial meeting of the WFDB and the IDMA looked at everything from bank financing to undisclosed synthetics in parcels of natural mined diamonds, and from price lists to over-grading of stones. In brief, there was a wide range of issues for the two organisations to discuss.

The Congress started with a change to the schedule. The two bodies usually hold their individual, internal meetings on the Sunday of the week of the Congress; however, this was moved forward to Monday to accommodate the travel plans of the Jewish presidents to enable them to travel after the Sabbath.

The WFDB held meetings of its major committees: the Judicial, Trade and Business, Promotion, and the Executive Committees. The Trade and Business Committee were, in fact, meeting for the first time and was chaired by Honorary WFDB President Shmuel Schnitzer. It discussed the issues of profitability, synthetics, banking and finance. Meanwhile, the Promotion Committee heard about the WFDB’s new Communications Strategy and its work in promoting the WFDB via Social Media as well as receiving a report on the work of the World Diamond Mark which aims to promote diamonds generically for the good of the whole diamond trade.

Meanwhile, IDMA elected a new President and Executive Board. Ronnie VanderLinden is the new President, replacing Maxim Shkadov, while Philippe Roolant is Vice President. Kim Lanny is the new Secretary General and Stephane Fischler is Treasurer. IDMA President VanderLinden described the IDMA meetings as “challenging, energetic and sometimes very forceful.”

Outgoing IDMA President Maxim Shkadov was unable to attend due to developments in the Russian diamond market that required his attention. In his speech, which was read out on his behalf by VanderLinden, he again repeated his concerns about the health of the industry.

“The pulse of the manufacturers remains weak. Why? Because we’re undernourished and anemic and while we’re working our fingers to the bone, after a day’s work, we are not making enough to keep our strength up. True enough, the diamond manufacturing business is not dead yet, but we’re very unhealthy,” Shkadov wrote.

Meetings ‘Critical’ in Allowing In-Depth Debate
Meanwhile, WFDB President Ernie Blom said his organisation’s meetings were “critical” in dealing with the many issues that arise between the WFDB’s regular gatherings as well as new topics. “The first day meetings allowed us to hold in-depth talks, and it is always important that we hear perspectives which come from different areas of the diamond world and which are informed by the deep experience of our delegates. The meetings were extremely well attended and there was a great deal of interest from industry stakeholders, as well as our bourse presidents, with many questions raised.”

Among the messages in his speech were that all members of the diamond pipeline, from mining to diamond cutting and polishing, and from jewellery making to retailing, should be sure they are working in a fair and honest way, and strengthening their Corporate Social Responsibility operations.
Blom also said it was critical that the industry proactively deals with issues so that governmental bodies and other agencies did not. “I believe it is time that the diamond industry went on the offensive. It seems to me we have been on the defensive too long – and unnecessarily so. We have one of the most self-regulated industries in the world.” Blom also spoke about the challenges of securing financing and of the Know-Your-Client (KYC) initiative it is supporting for WFDB members to establish a platform to increase transparency in the diamond business.

Meanwhile, Ahmed Bin Sulayem, Executive Chairman of the Dubai Multi Commodities Centre which includes the Dubai Diamond Exchange which hosted the Congress, said: “We often say that our city has a pivotal location between east and west. The important global events here this month show that diamonds are particularly big on the agenda with today’s opening of the World Diamond Congress and the Kimberley Process Intersessional meetings which will take place next week. The fact that the world’s industry leaders are taking part in these conferences also shows that we are united in our pursuit of industry excellence,” added Bin Sulayem who is also Chair of the Kimberley Process.

Dubai Diamond Exchange Chairman Peter Meeus spoke of the growing role of Dubai in the global diamond business, saying it traded more than $30 billion of diamonds in 2015. He added that banks in Dubai are looking at financing options for the diamond business.

At the IDMA closed session that followed the opening speeches, members heard industry reports from the World Diamond Council’s (WDC) outgoing President Edward Asscher and WDC Executive Director Patricia Syvrud. In addition, there was an update on synthetic diamonds from the International Diamond Council and an in-depth, detailed presentation by Krisztina Kalman-Schueler, Programme Director of the World Diamond Mark, who walked the participants through the WDM’s 2017-2019 business plan. IDMA holds a seat on the World Diamond Mark Board.

A fascinating insight into the mindset of the younger generation of potential diamond jewellery consumers – the so-called Millennial generation of 18-35-year-olds – was given by Diamond Producers Association CEO Jean-Marc Lieberherr. He described the work of the organisation, particularly research into the likes and dislikes of Millennials. He said the DPA would provide full details of its marketing plans at the JCK Show Las Vegas in June.

He was followed by World Diamond Mark (WDM) Chairman Alex Popov who told the WFDB Working Session about the WDM’s wide-ranging operations. He said that Authorised Diamond Dealer status has been awarded to 98 stores in 10 countries, and also mentioned the magazine that it publishes, its revamped website and the extra services it provides, and the WDMuseum – Facets of Mankind.

At the end of the first day of the Congress, WFDB Presidents unanimously re-elected Ernie Blom as President for a further two-year term, and Israel Diamond Exchange President Yoram Dvash as Vice-President, replacing Julien Drybooms. Dvash will become WFDB President when he steps down at the 38th World Diamond Congress to be held, fittingly, in Tel Aviv. Meanwhile, India’s Gems and Jewellery Export Promotion Council was accepted as a WFDB member.

Financing for Diamond Trade Top of the Agenda on Day Two
The topic of financing, which is crucial to diamond manufacturers and traders, was discussed in great depth on the second day of the Congress. The session started with a presentation by Geert van Reisen of ABN Amro Bank, the global diamond industry’s leading financier. He stressed the need for the diamond business to improve working capital and reduce the manufacturing cycle time, while increasing its focus on collecting receivables, inventory management and payment terms.

He added that the industry, especially in Antwerp, would benefit from having more banks involved other than those in India. There is also a need to look for alternative funding institutions, such as pension funds, insurance companies, and other international banks. The industry needs to change its operating model, shorten payment terms for rough and credit terms for polished and put a bigger focus on inventory management and lowering inventories.

The next speaker was Howard Davies, the Head of Commercial Development at De Beers, who spoke on financing options and requirements for the diamond industry. Because diamonds are portable and rapid cross-border transactions were possible and many family businesses were involved along together with the number of bankruptcies due to bad debts in recent years, it would be difficult for the banks to see the sector as low-risk, he explained.

The banks were also under pressure due to the massive fines that some have paid for noncompliance issues. Consequently improved industry transparency is critical. “Banks want to finance quality assets,” he commented. “Transactions must all be real with real clients and real invoices. Sustainability multiplied by transparency equals bankability.”

Among the more contentious issues for WFDB delegates at their closed meeting was the issue of Signet Jewelers Ltd’s sourcing protocol. The details of the Signet plan were fleshed out by David Bouffard, the firm’s Vice President of Corporate Affairs.

He said Signet is the biggest jeweller in the United States, and buys $1 billion of polished diamonds annually. He said Signet “wants to know where the diamonds are coming from that our suppliers provide them with, and who touches them along the way from the mine to the company’s jewellery production factories.”

He said Signet is committed to responsible sourcing in terms of the suppliers it works with. He added that the company has mapped 99 per cent of its gold supply and believes that understanding where its diamonds were from was also possible.

There was significant opposition from some WFDB delegates to the proposed adoption of formal WFDB support for the initiative, with representatives saying that the financial cost of such compliance would be too heavy for small and medium size manufacturers.

An innovation at the Congress was the panel format which was introduced for the first time. The aim was to create an interactive discussion rather than simply having speakers delivering their speeches without any feedback. The first panel discussion featured Bouffard, Davies, Panama Diamond Exchange President Mahesh Khemlani, Geert van Reisen and Feriel Zerouki the Head of Government and Industry Relations at De Beers, who described the transparency across all operations that the miner has been requesting for the past 10 years and it’s Best Practice Principles which were ultimately aimed at increasing consumer confidence. Meanwhile, Bouffard said that responsible sourcing is a “must-have issue not a nice-to-have option.”

Young Diamantaires
Among the standout issue of the Congress was the attention paid by the WFDB and IDMA to the issue of establishing a Young Diamantaires group.

“The Congress also saw promising progress in the development of our international Young Diamantaires group,” said Ernie Blom. “These are members of the younger generation of diamond firms from all the main diamond centres, including Israel, India, Belgium, the United States and South Africa, who are taking responsibility for taking on the challenge of leading our industry in the future. I am delighted that we have young people who are bringing their specific generational skills and outlook into the industry,” Blom added.

Meanwhile, VanderLinden added that his organisation was also pleased with the participation of younger representatives. “It was inspiring to meet new delegation leaders and members, and to have them participate actively, and sometimes forcefully, in our discussions. This also was obvious in the extensive and vigorous discussions we held about the future imprint of IDMA on the diamond industry.”

Meanwhile, the WFDB also said that it recognises the importance of increasing transparency and integrity in the global diamond supply chain in order to boost consumer confidence in diamonds. “We are proud that the global diamond business is one of the best regulated industries in the world, and we have been at the forefront in proactively seeking to ensure that this continues. Our members work according to wide-ranging rules and regulations that ensure that diamonds are totally free of any possible suspicion, including U.N. resolutions, the Kimberley Process national legislation, anti-money laundering regulations, Know Your Customer programmes and the WFDB Code of Conduct and chain of warranties requirements,” Blom explained.