Conflict Diamonds
| 5 September 2006 - As part of its recently announced campaign to educate both consumers and the trade about important diamond-related issues, the diamond industry announced today the launch of a new informational website, www.diamondfacts.org along with a major advertising effort that includes full-page print ads in ten major U.S. and international newspapers including The New York Times, USA Today, Los Angeles Times, The Times (UK), International Herald Tribune and Financial Times. |
One of the specific issues facing the Group and the diamond sector is conflict diamonds, which are diamonds sold by rebel movements to fund military campaigns. The Group is a non-voting member of the World Diamond Council which, together with Jewelers of America, has worked with the United Nations, government bodies, commercial interests and civil society to introduce a workable system for the certification of the source of uncut diamonds. This system, known as the Kimberley Process, and Kimberley Process Certification System (“KPCS”) was formally adopted in November 2002 and came into operation during 2003. Details regarding the Kimberley Process are available at www.kimberleyprocess.com.
Click on the links to download a diamond sourcing policy leaflet available at our Kay stores in the US or H.Samuel in the UK (pdf 483kb and 160kb respectively).
Following the adoption of the KPCS, Signet wrote to all of its trade diamond and diamond jewellery suppliers. The text, cited below, requires them to supply the Group with merchandise that complies with the KPCS. Signet has amended its systems, procedures and documentation to take account of the KPCS so that only diamonds that are warranted to comply with the KPCS on invoices, annual agreements, or both are accepted from trade suppliers.
“For any product fabricated from rough diamonds mined from January 1, 2003 onward, the seller warrants that the diamonds have been purchased from legitimate sources not involved in funding conflict and are in compliance with United Nations Resolutions. The seller hereby guarantees that the diamonds are conflict free, based on personal knowledge and/or written guarantees provided by the supplier of these diamonds.
For any product fabricated from rough diamonds mined prior to January 1, 2003, the seller warrants that conflict diamonds will not be knowingly sold and that, to the best of their ability, will undertake reasonable measures to help prevent the sale of conflict diamonds in this country.”
As the Group moves to develop further its rough diamond sourcing and manufacturing capabilities, it has enhanced its KPCS processes in accordance with the requirements relating to rough diamond sourcing. The Group also trained its buying staff with regard to the KPCS requirements and briefed its sales associates on its operation. An internal audit of these procedures is carried out every year, and again this year the audit results confirmed the Group’s compliance even though Signet is not directly governed for polished diamonds by the KPCS. During 2005/06 the US division also reviewed its systems for compliance with the recently enacted US Patriot Act, and updated its procedures where necessary.
In 2005 over 40 countries (including the European Union as a single entity) were Participants in the KPCS and accounted for over 99% of world diamond production. In 2005 Indonesia and Lebanon became Participants, with a further 11 countries wishing to become Participants. Currently Liberia and the Ivory Coast are temporarily suspended from participation.
While the overwhelming proportion of trade in rough diamonds was between Participants in the KPCS, it is difficult to assess the precise level of participation. However anecdotal evidence suggests that unscrupulous diamond dealers are finding it increasingly difficult to sell non-certified stones.
Since the formal adoption of the KPCS in November 2002, further steps to assist in the implementation have been taken. In 2005 these included:
- measures taken to prevent the introduction of conflict diamonds from the Ivory Coast into the legitimate trade;
- further KPCS review visits to participants were undertaken, bringing the total to 25, and a further 11 participants have invited review visits;
- for the first time presentations were made by participants on steps they have taken to implement the recommendations of review visits;
- progress by the Working Group on Monitoring towards ensuring consistent follow-up to all review visits;
- moving towards a standard method of statistical reporting by participants so allowing improved comparability, as well as steps to improve harmonization of valuation methodologies;
- adoption of a methodology to improve traceability of alluvial diamond mining production, as well as steps to help donors to assist in building capacity to further the effective implementation of the KPCS in areas of alluvial mining; and
- increased co-operation with bodies outside the KPCS to improve its efficiency and with Diamond Development Initiative, which aims to improve the working conditions of, and remuneration to, artisanal diamond miners.
In 2006 the three-year review of the KPCS will take place with the results and recommendations to be presented for consideration during autumn 2006.