Opinion: Sightholder Supply Suspension - A Cut-Off Date Is Needed

In the past decade, the working practices and the nature of the diamond industry have changed dramatically. The rate and pace of change has been remarkable. Equally remarkable has been the ability of industry players to embrace change and to react to those changes in a positive and constructive manner, ultimately to the benefit of the industry and those employed by it. The introduction of the Kimberly Process is testimony to the industry’s desire and commitment to genuinely improve the working practices of the industry in the modern era. The diamond industry is looking forward and evolving responsibly.

The introduction of mandatory compliance with ‘Best Practice Principles’, or BPP, into the DTC’s own working practices, in the 2003-2005 contract period, is another example of change positively impacting the industry and the consumers’ image of the industry – upholding the image of the diamond itself. The impact of BPP has contributed to a genuine behavioral change amongst many of the industry’s diamantaires and has rippled way beyond just the DTC’s own clients. Working practices that may have been generally accepted as common place a decade ago have been confined to history, and in its place is a significantly more transparent and reputable marketplace – a change for good.

However, the recent fallout from the Brenig case, which has resulted in the suspension of supply to a number of DTC Sightholders, raises the question of from when exactly Sightholders need to be compliant with BPP. The Brenig case relates to the period 1995-1999 when the industry and its practices were very different to those of today. That those practices, almost a decade ago, deemed not to be legal were called to account by the judicial system is both right and proper. However, the retrospective application of the BPP compliance requirement seems to be somewhat unreasonable, particularly given that the compliance declaration applicants have been required to sign clearly states "Since 7th July 2003".So what does this date mean or signify if not the amnesty, of potential transgressions before that date, or cut-off date? Just how retrospective is the application of compliance likely to be, 10-20 years?

The contribution of BPP to the modernization and improvement of the industry is considerable. Compliance with BPP should indeed be strictly enforced for the good of the industry. But surely, common sense and wisdom should prevail? The diamond industry has changed and so too have the practices of diamond industry players. Those Sightholders that, ‘since 7th July 2003’ can be proven to continue to fail the strict BPP compliance requirements should have their supply suspended or withdrawn. For those who may have transgressed a decade or so ago and are now wholly BPP compliant, they should perhaps be congratulated for their efforts in changing, both their own practices and those of the industry. They should be encouraged to go still further and to be acknowledged as an example of the industry’s future.

Few laws reaching the statute books, in most jurisdictions, are retrospective – perhaps DTC, on this occasion may have been just a little too hasty when suspending supply?