Antwerp’s New Policy Agenda

The Antwerp diamond industry is lobbying its government to extend the diamantaire’s “favorable tax regime” to the Belgian jewelry distribution sector. This aim was highlighted in a recent presentation given by HRD managing director Peter Meeus on Antwerp’s choices in a global world. “Our answer will determine whether our future is ahead or behind us,” he said. Extending the tax assessment system to the jewelry sector will enhance the likelihood of vertical integration, even though Meeus limited the applicability to “distribution”.

The anti-money laundering diamond industry compliance regime in Belgium is probably the most severe in the world. The industry wants to relax some of the law’s provisions, and, in the speech, Meeus notes that “it is fair to say that the diamond sector has made considerable efforts in recent years in terms of regulation. Maybe the industry has been regulated a bit too much and that the time has come to evaluate certain regulations on their efficiency and need.” He then disclosed that, along with his colleagues, he met with the Antwerp prosecutor Mr. Van Lijsebeth this week. "The prosecutor acknowledged the fact that new regulations have made things quite difficult and gave hints for changes in the legislation”

There is nothing “sensational” about the Meeus speech, but, in the Antwerp context, it contains very significant messages. The future of the Indian, Jewish and Lebanese communities in Antwerp has dominated part of the local discourse. Meeus highlighted a passionate plea in favor of multi-culturalism and multi-nationalism. Says Meeus: “One of the things people tend to forget in thinking about how strong economies are built is the economical nature of immigration and integration into a country. New York would never have been built the way we know it today, if it would not have taken in people from all different cultures and backgrounds but with one common goal and that is to make a living and a future for themselves and their families.  People who have the ambition and the guts to go and live in other places, are people who are essential for a country’s economy.  And the more you can attract, the stronger your economy becomes.”

To make sure he is well understood, Meeus stresses that “cultural diversity today is sometimes seen as a threat to prosperity.  This vision is completely wrong and actually contradicts all these successes, which especially we have seen in America where the combination of hunger, intelligence and skill have brought creativity, innovation and in the end have brought prosperity, which is unseen and which builds a new world.”

Meeus stresses the need for diamond centers to excel in specific areas. “Instead of saying we’re the biggest and the most important, we should analyze in what segments we outperform our partners in creating added value. In a global vision, everyone has a unique role to play, a role that should be complementary to that of others.” He then elaborates and says “Antwerp’s role might be the one of servicing the market:

About success and failures in achieving objectives, Meeus recalls strategy elements that have been vetoed in the past – and it is clear that he wants some of them to be reconsidered. Chief among them is the plan “to make our certificate Antwerp’s first ambassador by opening overseas labs to grow consumer awareness for Antwerp as a synonym for tradition and craftsmanship.” He candidly notes that failure to open labs in New York and elsewhere may stem from “fear of changes. Maybe the analysis was wrong or the remedies not efficient enough. I could accept that. But it should not be an excuse to close our eyes for reality and to content ourselves in being against all changes.”

Embracing De Beers and others…..
The speech was presented at the farewell party organized in honor of soon-to-retire De Beers' managing director Gary Ralfe. In recent years, the HRD and various organizations have severely criticized Supplier of Choice and associated policies. It is clear that Meeus is trying to get a new and far more conciliatory message to the rough producer. “I say it’s high time we learn to embrace again! Antwerp should embrace the globalization of the market and see the opportunities of it to grow global demand rather than to dream that the good old days will come back,” says Meeus

“Antwerp should therefore embrace the producers – De Beers, Rio Tinto, BHP, Alrosa and the outsiders - as they and only they will decide whether this city will remain the world’s first distribution center for rough diamonds or not.” Then he exhorted “that means you take them on Board rather than to Court.”

Continuing the theme of reconciliation and extending a hand to foreigners, Meeus said, “Antwerp should also embrace strong players in the market, including Indians, Lebanese and others, and attribute leadership positions on the basis of skills and merits instead of excluding people because of their label, because of their color, because of their religion or because of the fact whether they are a Sightholder or not.” Wow, the latter is a hint to the controversy surrounding Indian representation in the board of directors of the HRD. Meeus is calling a spade a spade, even though some will question the wisdom of the salaried chief executive of a public organization commenting on the composition of his own board of directors.

Meeus was clearly using the platform to try to unite and even to appease. “Last but not least, Antwerp should embrace unity. Our ancestors probably choose the wisdom that “L’union fait la force” as Belgium’s motto because they remembered how for centuries we have been ruled by foreign empires or because they remembered the Fall of Antwerp in 1585 where a lack of unity between the Antwerp guilds allowed Alexander Farnese, head of the Spanish troops to beat up Marnix of St.-Aldegonde, mayor of Antwerp and close the river Scheldt for more than a hundred years. Unity is the only weapon at our disposal if we want to keep things in our own hands.”

After having taken De Beers “on board”, Meeus now wants to get “off its knee”. Says the HRD managing director: “We all know De Beers is not the granduncle any more that distributes cookies to the children every time they come and sit on his knee. Just as we do not want to go begging for cookies anymore but want to receive them because we deserve them.

 “I am convinced that De Beers appreciates the fact that all major players are headquartered or have sales offices in Antwerp. Antwerp further remains the only diamond center offering real political stability. Antwerp achieved its position thanks to new regulations and a unique industry self-regulation. It is a place of transparency that doesn’t have its equal. In the era of Best Practice Principles these are elements that become increasingly important and I know De Beers is very well aware of this.

 “On the other hand,” said Meeus, “De Beers should accept that, since they are not our granduncle any more, Antwerp is not the grandchild either and that the Antwerp market consists of more than just DTC - Sightholders.  Therefore, new initiatives like the Diamond Development Initiative or the Council for Responsible Jewelry Practices as well as existing policies like SoC will be watched carefully to see whether they really add value to the chain, rather than to individual companies.”

….and turning to Government
 “The diamond sector has found in government a partner, willing to listen to its concerns and ready to act when necessary… We should indeed avoid shooting ourselves in the foot by leaving the existing level playing field of competition.  We cannot go and play all on our own in the Prime League while others are in the provincial competition.  Or as I said earlier this year ‘It is nice to be a white knight but I am afraid to end the race without a horse.’  After all, this business accounts for seven percent of Belgium’s exports and employs 30,000 people in the Antwerp region.”

Then, addressing Belgium’s Minister of Foreign Affairs De Gucht and Antwerp Governor Paulus directly, he concluded: “there have been times when things were different and the diamond industry didn’t know who to turn to. We haven’t forgotten those days and therefore appreciate even more your personal efforts on our behalf. Thank you very much!”

The speech sounded innocent – but the messages weren’t lost on the audience. The managing director implicitly took issue with the BVGD, a trade organization that has filed complaints with the European Commission against Supplier of Choice and De Beers. His pleas for unity seemed to be an attempt to end the severe divisions that have characterized (and in a way paralyzed) much of the “organizational and institutional life” of the Antwerp diamond sector.

Who knows – the retirement of Gary Ralfe may well coincide with a new dawn for Antwerp. Meeus has shown guts in making this speech which will either take him to new heights in leadership or pave the way to join Ralfe. Time will tell.

Have a nice weekend.