Can Global Talks Create National Solutions?

It is with some trepidation that I admit that I did it for the first time last week. Technically, there was no problem carrying it out, and I even had fun. I am referring, of course, to attending the 36th World Diamond Congress (WDC), the biennial meetings of the World Federation of Diamond Bourse (WFDB) and the International Diamond Manufacturers Association (IDMA) held in Antwerp.

It is somewhat embarrassing to admit that this was the first time I have attended the Congress. I must say, however, that I can heartily recommend it. For one thing, there is full access to the WFDB meetings as well as to the heads of all the WFDB-affiliated bourses – which now number 30 – as well as the presidents of the 15 diamond manufacturing associations from across the globe. It’s difficult to think of a more cost-effective way of bringing together the elected officials of all the bourses and manufacturing associations to spend a concentrated period of several days discussing in depth the hottest topics on the industry’s agenda.

In addition, there were other diamond and jewelry industry figures in attendance, as well as ministers from Zimbabwe and Namibia, and senior Belgian officials. All of these people and the discussions they hold give excellent insights into the direction industry leaders are leaning on key issues.

It was also refreshing to see the excitement and enthusiasm of the participants and their evident deep concern for the matters under discussion – from how to leverage social media to how to secure more bank financing.

More cynical observers suggested that the event is a talking shop, with well-known themes coming up for debate again and again: shrinking bank credit, undisclosed lab-grown diamonds being mixed into parcels of natural stones, razor-thin margins making survival an everyday issue for some companies, particularly the small and medium-size operations.

Then there was a short explanation and debate on the World Diamond Mark – again, not exactly breaking news, but a useful refresher for some. Similarly, mention was made on several occasions of the contentious Precious Stones Multi-Stakeholder Working Group (MSWG). Large jewelry organizations attempting to crush smaller firms and even the suggestion that the U.S. State Department is trying to run the world were among the more emotional responses from some attendees.

The announcement of the formation of a Presidents Forum, made up of the presidents of CIBJO, World Jewellery Confederation, the WFDB, IDMA, and the World Diamond Council (WDC) suggested a broad response could be harnessed to hold talks with the MSWG. However, WFDB President Ernie Blom said that although the WFDB and IDMA would be taking part, he was not so sure about the positions of the WDC and CIBJO. “We have decided that we need to be part of the process so that we can work from within and not without.”

That appears to be an eminently sensible position, and perhaps should have been adopted earlier in order to put a halt to the scheme which is generally regarded as unworkable and destructive.

Despite the re-working of several themes, there were powerful statements. One such came at the very beginning of the Congress, when Minister-President of Flanders, Kris Peeters, warned of the "catastrophic" impact that sanctions relating to the diamond industry could have. The European Union has discussed possible sanctions against Russia, and that would clearly be disastrous for Antwerp where around two-thirds of Alrosa's diamonds are marketed.

As Peeters pointed out: “Diamonds are our region’s [Flanders] and country's calling card. They provide work for 35,000 people in the Antwerp area alone. Sanctions would be a catastrophe."

Blom took up the issue on the final day, saying: “Alrosa is one of the most important players in the diamond world. We value their support and input. I do not believe that sanctions have ever helped [any issue], and I hope that they will not be imposed on Russia diamonds.”

In similar vein, AWDC President Stephane Fischler said: “I believe that the EU understands the importance of Russia and Alrosa. We do not believe that sanctions will be imposed. They are counter-productive. Sanctions would hit the whole diamond pipeline, not just the Antwerp industry.”

But are these and other views being heard only by an audience of the converted, or also by the policymakers who are making the decisions that affect our industry? This week during a visit to Israeli Sightholders as part of a global tour by senior De Beers officials led by Paul Rowley, De Beers Vice President of Global Sightholder Sales, the delegation received a detailed briefing from Israel Diamond Exchange President Shmuel Schnitzer on the discussions held at the WDC meetings. In a separate meeting, Rowley commented that it was important for De Beers to hear this industry-related information.

Can one, therefore, assume that other producers, banking officials, retail jewelers, government officials and members of our industry are keeping a close eye on the discussions and the issues of concern? One WFDB president said the talks will simply join those of previous WDC meetings held over the past 70 years or so, documented at length and then kept in a dusty drawer somewhere for diamond industry historians to pore over at a later date.

“I may just be cynical, but one never really sees any practical outcomes from these meetings,” said the bourse president. “There are different countries and groupings that have different interests. There is no real cohesion that would enable firm steps to be taken. On the issue of bank finance, for example, diamantaires in some countries receive credit relatively easily while in other countries it can be close to impossible, especially for small and medium-size firms. Some leaders take the view: ‘Why should I fight to make it easier for my competitors to receive financing?’”.

Meanwhile, another exchange president, while admitting that no firm action on any particular issue was likely to be taken, explained that was not necessarily the aim. “Let’s be honest, when it comes down to it, it’s dog eat dog. Competition is unbelievably difficult. I’ve been in the business for more than 30 years and I have never known it as tough as now. The Congress, as with the other international meetings, is a time for smiles and handshakes, of course, but also for earnest discussion. You hear many different opinions, some of which you had never thought of yourself. That is not only useful, it can sometimes spark an idea that can help your bourse.

“The bottom line is that we are all fighting for our individual bourses, but we also show solidarity by coming together to think of ways of helping the industry all around the world. And, it’s important to remember, we are all doing this voluntarily. None of us is getting paid. On the contrary, we are spending days away from our businesses because the health of the industry worldwide is dear to our hearts. We may not be fixing the diamond world, but we are debating issues and spreading awareness among other industry players about the fears and concerns of our members.”

Many of his comments were echoed by Schnitzer, who also serves as Honorary President of the WFDB. “Clearly, nobody believes that we are going to come up with solutions overnight. We discuss issues that we see as critical. One of those, at last week’s meeting, was bank finance for the diamond industry. This is absolutely critical for diamond firms across the world. We are all working to achieve this for our members whether large or small firms. If we can secure financing for diamond companies around the globe, then we would all be delighted. Of course, we all fight for the good of our individual bourses, but we also come together to talk and find solutions that will help us all.”

What are your opinions on the issue? Let me know, and IDEX will be pleased to publish them. Write to: news@idexonline.com