Transparency, responsibility and sustainability: these are the words that play in every summit of the main associations of the diamond market players either at the production or commercial level: rethinking of activities to face the new challenges imposed by the market; reduced margins; the threat of synthetics; the “escape” of banks from diamond.
Targets are good, but how to put them into practice?
De Beers has set out the guidelines for its Sightholders to show the transparency of the relationships in the rough market. The basics are the highlight of a clear governance, transparent accounting, control over third parties that occur in the process of transformation of rough diamonds.
In any case, it seems essential that operators must re-discover the sense of sustainable and profitable business that can not go on with reduced margins and the absence of new capitals, therefore, the ideal would be to find a new spirit of challenge including new marketing systems and new resources: a real revolution!
“Mazal!” will no longer be enough to ensure the existence of our world. The rules of the game have changed and consumers are completely different from those that were satisfied with minimal effort.
While it required to the most important companies operating in the crude market, the respect of international accounting standards to gain the respect of the banks transmitting it, as well, to the entire chain involved in the diamond trade. But, without new marketing tools, financial resources and skilled traders and aware of the new challenges of the market…will be hard to win the game.
Without mentioning the constant accusations and complaints against the diamonds that are used to fuel conflict, on human rights violations in the production and processing of rough, on the terrorism financing or money laundering.
From this point of view we have to admit that there is a big difference about compliance law respect among the major markets compared to what happens in the other market places. If, for example, in Antwerp district, in force of one the hardest law on anti-money laundering where each supplier is obliged to “know his customer” proving it implementing a real process of acquiring information (KYC – Know Your Customer), elsewhere the procedures are less stringent.
One consequence of this lack of self-regulation is the demand for synthetic diamonds. In fact, with “sustainable and environmentally friendly” slogan, the industry that produces this type of product, tries to hit the Millenials on issues dear to them. Creating conditions for a future and independent market distinct from the “natural.”
Antwerp, 2nd June 2016
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