Russian Diamond Sector Establishes Independent Lobbying Group

A small and hardly noticed event in Russia reaffirms the unequivocal direction towards westernization of the diamond mining sector: the governmental policy makers of yesterday have now become lobbyists for change, trying to influence their own very successors and make them undo some of the rules and regulations they themselves had promulgated in the past.

Valery Rudakov, the long time architect of governmental controls on the diamond and precious metals policies, the one-time keeper of the keys to the Gohkran (the diamond reserves of the government), the one-time diamond strong-man, has now assumed chairmanship of the sector's lobbying arm within the Russian Chamber of Commerce. Alrosa's vice president Sergei Oulin is heading the lobby's subcommittee on World Trade Organization (WTO) accession issues. Though lobbying may not be new by itself, there has never before been a united group of producers of metals and minerals who have institutionalized their efforts in order to get government to change issues.  

The WTO requires transparency. One of the first tasks of the new lobbying group is to convince government to change the secrecy laws, which are still in effect on subjects such diamond production (carats, etc.), values of inventories, etc. Alrosa, for example, knows exactly how many carats it mines - but is not allowed to say so. It is now (through the lobby) petitioning government to drop the secrecy and to secure publication of the data. In essence, Rudakov, Oulin and colleagues want to abolish rules and regulations they initially made themselves.

For too long the Russian diamond industry has been considered an integral part of government. Too often we view Alrosa, which is largely government owned, as a state vehicle. Sometimes it is overlooked that De Beers concluded its latest marketing agreement solely with the Alrosa company and not with government. And now the same Alrosa is ascertaining further independency by becoming an activist against government policies - by becoming part of democratic frameworks bent to change disadvantageous secrecy, currency and mining laws.

It essentially means that Alrosa is supporting policies that may run directly counter to policies followed by the government - its own major shareholder. It is further confirmation that Alrosa indeed is independent. It may seem like a little event in Russia. But in the larger context it is quite significant - and, for the diamond industry, a reason to applaud its Russian colleagues. How effective this lobbying will be is hard to say - but, I guess, we may well be in for a surprise.