In an extraordinary warning to all its 93 Sightholders, DTC managing director designate Varda Shine reacts to the Certifigate scandal and puts her clients on notice that “the DTC will not hesitate to take action where it transpires that any rumors are substantiated in relation to a DTC Sightholder or any relevant associated business.”

 

In a most diplomatic manner – without mentioning the word GIA as such –Shine makes it clear that she looks beyond those who are suspected of malpractice and reminds Sightholders that they have a responsibility to ensure that their clients and suppliers adhere to Best Practice Principles.

 

In reply to my specific question whether this means that a Sightholder who knowingly trades with a company suspected of malpractice also puts his sight at risk, the answer was an unequivocal “yes, you understand that correctly.”

 

Reminding of the interrelationship among all the sectors of the diamond value chain, she stressed that a specific problem in a specific sector affects all – and may even have a domino effect.

 

The six-paragraph DTC letter, dated October 26, 2005, reads as follows [emphasis added]:

 

“Dear Sightholder,

           

In the run-up to this all-important holiday season, I thought it would be an appropriate time to write to remind you of the importance of seeking to maintain consumer confidence in our very special product – the diamond. We all have an interest in promoting consumer confidence, not just individually, but for the benefit of the wider industry. We must all strive ensure that the integrity of both the diamond and the industry is, and is seen to be, beyond reproach.

 

You will all be aware that our industry is diverse in the range of activities it encompasses – from mining through manufacture to retail. Each individual sector faces scrutiny and potential challenge from its various observers and interested stakeholders. Any issues that may affect consumer confidence in one sector may have a domino effect on the others. It is therefore important that each part of the diamond pipeline is able to demonstrate that it is acting responsibly by not engaging in business practices that risk bringing the industry into disrepute and which might have the effect of damaging consumer confidence as a result.

 

It is for this reason that the DTC introduced the Best Practice Principles (BPPs). As you know, the De Beers group is committed to complying with the BPPs and compliance with the BPPs is a condition for the supply of rough diamonds by the DTC. By signing the Sightholder Policy Statement, you have formally agreed to adhere to the BPPs and to use your best endeavors to ensure that your “Tier 4” entities, that is, your suppliers and customers, also abide by the principles of best practice. To that end, by now you will have produced self-assessments pursuant to the BPP Assurance Program, which SGS will verify in due course.

 

As you are aware, rumors of malpractice do circulate within our industry – largely from the fringes; this is regrettable and can potentially seriously damage, by association, the vast majority of reputable businesses. Some rumors may have no bearing in fact, but others may indicate the existence of practices that could present serious challenges to consumer confidence in diamonds.

 

The DTC takes compliance by its Sightholders with the standards of conduct required under its supply arrangements very seriously indeed and urges you to ensure that you adhere to the highest ethical and professional standards in all aspects of your activities.

 

The DTC will not hesitate to take action where it transpires that any rumors are substantiated in relation to a DTC Sightholder or any relevant associated businesses.

 

Irrespective of the BPPs, there is a moral duty for us all to aspire to the highest standards in respect of our business, social and environmental responsibilities as industry leaders, particularly given that we are dealing with the ultimate luxury product, in which so much human emotion is bound.

 

Yours sincerely,

 

            Varda Shine”

 

The DTC wants to make it clear that it will not tolerate any bribing. Sources within the DTC intimated to this writer that there are some suspicions that in a major manufacturing center, some polished suppliers may have bribed an employee of an overseas buying company to induce him to “overpay” for the polished. If Sightholders would be involved, and there is yet no indication that this is the case, the letter would also apply to them.

 

Shine expresses confidence that Des Cavanagh, her successor as Sales Director of the DTC, will also rigidly pursue adherence to the Best Practice Principles. A Sightholder, whom we asked for an immediate comment, only remarked, “The lady isn’t even in her new job yet – but she makes it clear she means business.”

 

IDEX Online will continue to report further developments and reactions of this developing story as they become available.