David Bouffard, Vice President of Public Relations with Sterling Jewelers spoke at the SEC Conflict Minerals Panel on Tuesday, detailing the firm's efforts, and concerns, regarding chain of custody, gold trading and the situation in the Democratic Republic of Congo.

 

Following is the full text of his presentation:

 

Oral Statement of Signet Jewelers Ltd.

SEC Roundtable on Conflict Minerals

SEC File Number S7-40-10

October 18, 2011

 

Good afternoon. My name is David Bouffard, Vice President of Public Relations with Sterling Jewelers Inc., headquartered in Akron, Ohio, the US operations of the world’s largest specialty retail jeweler, Signet Jewelers Limited.

 

We appreciate the invitation to appear at today’s Roundtable facilitated through the National Retail Federation, and commend the Commission for bringing together a wide array of divergent viewpoints to discuss this important topic. Today, I am speaking on behalf of Signet in describing our on-going efforts to comply with the applicable requirements of Section 1502.

 

Importantly, we are committed to the goals of this legislation, and we sincerely hope sharing our efforts today in preparing for compliance will be helpful to the Commission. I want to make clear from the outset, that we at Signet, and the jewelry and retail industries as a whole, abhor the horrific human rights abuses in the DRC. And while Signet has no reason to believe that any of our products contain gold sourced from DRC conflict-ridden areas, we nevertheless take our responsibilities under this legislation very seriously.

 

To that end, we have decided not to await the Commission’s adoption of the final rules. As leaders in our industry and in the area of responsible gold sourcing, we have already begun developing - despite the absence of an existing global infrastructure - a responsible supplier chain of custody program.

 

Our goal is to ensure - to the maximum extent possible - that the products sold in our stores do not contain any gold originating from conflict mines in the DRC. Therefore, Signet has already instituted the following compliance measures:

 

1. We have already informed our supplier partners, over 300 companies world-wide, that Signet is implementing a program to identify our suppliers’ gold supply chain, with a view, over time, toward establishing a traceable source of conflict-free gold and other metals included in products sold through our retail stores in the US, as well as the UK.

 

2. We are working from the ground up - essentially starting from scratch - to create an auditable supply chain mechanism to confirm that the gold we sell at retail originates through banks defined as “good delivery” by the LBMA, and refineries which will follow the GeSI-EICC refinery validation program, currently in development. Also, very importantly, we intend to follow OECD Guidelines on gold, that are only now being developed. It’s worth noting that the OECD established a separate working group for gold, and has made gold the last in developing mineral-specific diligence guidelines, recognizing the unique complexities of the gold supply chain. 3 of 4

 

3. We have been working with the Responsible Jewellery Council, the world’s leading jewelry trade association dedicated to a responsible supply chain, in establishing robust chain-of-custody standards, and implementation guidance, applicable throughout the gold supply chain, and one that non-RJC members can adopt, as well. The RJC chain-of-custody work also aims to support implementation of the OECD Guidance.

 

While the OECD, GeSI-EICC and RJC initiatives were all underway well before the legislation was enacted in 2010, it’s important to emphasize that final standards and other guidance from the OECD and the various private-sector initiatives will not be in place until next year at the earliest, and we cannot reach our goal until the standards are finalized. Supply chain testing and implementation would then follow over the years to come.

 

And although we are committed to complying with section 1502, we face some significant obstacles:

First, there is no reliable infrastructure within the DRC and neighboring countries to track the origin of minerals from any potentially conflict-tainted mine, and we understand that such an infrastructure may be years away from implementation.

 

Second, we have no direct relationship with refineries closest to the source of the raw material that are many points removed down the supply chain from the final product sold at retail.

 

Third, even after we obtain information from our suppliers, we are dependent on them for the accuracy of that information, there is currently no viable certification and validation system at the mine, refinery or intermediate-supplier level. And, it will take time after development to ultimately implement a refinery validation, or any other supply chain traceability protocol, which can provide a reasonable basis for disclosure. This is why a phased-in approach to reporting and disclosure is so important.

 

I want to be clear on that point. We are not advocating loopholes that would absolve companies from any responsibility to comply with the law. Nor are we seeking any delay in the effective date of the final Commission rules. Again, we believe a reasonable phased-in approach to reporting recognizes the complexities of the global gold supply chain.

 

In closing, I want to emphasize that we are committed to the goals of the legislation and that we have a process currently underway to try to meet those goals. While it will take time to fully implement the process, we believe it can be done - and done effectively. We are pleased to offer our direct assistance to the Commission and its Staff to share our detailed work plan and progress. We offer that assistance beginning today, and for as long as it takes the SEC to adopt its final rules.

 

Thank you, and I would be happy to answer any questions.

 

DRC mined gold