Apr 25, 2019

WDC, CIBJO Present G&J Industry Plans for Responsible Sourcing at Special OECD Forum

Two leading global bodies of the gem and jewellery industry, the World Diamond Council (WDC) and The World Jewellery Confederation (CIBJO) presented details of their efforts towards strengthening responsible sourcing practices within the industry at the ongoing 13th Forum on Responsible Mineral Supply Chains of the Organization for Economic Cooperation and Development (OECD) in Paris.

While the CIBJO presentation took place on April 23 at the plenary session of the forum, the WDC spoke at two sessions, one a special side event and the other part of the main agenda of the forum, both on April 24.

WDC President Stephane Fischlerprovided an overview of the organization's revised System of Warranties (SoW), describingit as an "essential building block" for participants in the diamond supply chain towards implementing the OECD's due diligence guidance for minerals from high-risk areas.

The revised SoW, which was approved by the Board of Directors in October 2018, requires all participants in the diamond and jewellery value chain, from mining companies to jewellery retailers, to issue warranty statements on their B2B invoices and memos, testifying that the diamonds being sold originated from sources in compliance with the Kimberley Process Certification Scheme (KPCS). This statement now also verifies that the participants adhere to the revised SoW, which requires that they conduct a self-assessment to ascertain whether they comply with universally accepted principles on human and labour rights, anti-money laundering (AML) and anti-corruption.

The revised SoW Guidelines specifically reference the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the UN Convention Against Corruption, and also national AML guidelines that comply with the FATF 40 Recommendations on Money Laundering for Dealers in Precious Metals and Stones.

"The revised SoW has to be seen within the context of a range of responsible supply chain opportunities being offered to a very diverse industry," said Fischler. "The ultimate objective for all of us is the same – ensuring consumer confidence in the products we sell. The different systems need to be complementary, being building blocks on the road to full compliance."

"The revised SoW is designed to support the KPCS, covering not only the trade in rough diamonds, but polished diamonds as well, and also trading between every participant in the diamond and jewellery value chain, and not only trade between participants in different countries," explained Peter Karakchiev, the CIBJO Board member who chaired the side event on April 24. "We are hoping that the KPCS will be expanded to include provisions related to human rights, labour rights, anti-corruption and AML, but we are not waiting for it to happen, and have already incorporated those elements in our own system."

They also explained that implementation of the SoW is already required by a range of industry bodies, including RJC, the World Federation of Diamond Bourses (WFDB), De Beers' Best Practice Principles and CIBJO's new Responsible Sourcing Blue Book.

They also explained that WDC is a creating a toolkit based on self-assessment questionnairesto assist in the implementation of the new SoW. It will take into consideration the stage or stages of the diamond and jewellery value chain in which the member is involved, the size of the member's business, and whether the member is already compliant with other due diligence systems, like that of the Responsible Jewellery Council.

A day earlier, speaking at the plenary session, CIBJO President Gaetano Cavalieridelineated a comprehensive plan for promoting responsible sourcing practices throughout the jewellery, gemstone and precious metals sectors, which includes the release this past January of CIBJO's new Responsible Sourcing Blue Book, and an online platform that will provide a set of dedicated due diligence tools free of charge to the industry.

In his presentation, the CIBJO president pointed to factors that molded CIBJO's strategic approach. The greater jewellery industry is overwhelmingly comprised of SMEs, many of which are family-owned and run, he noted, pointing out that, while on the one hand that means that they are more likely to remain committed to the business over the long term, on the other hand many are limited in the amount of resources and personnel they can commit to detailed compliance systems.

"This paradox has become more apparent over the past decade and a half, as awareness of responsible practices has grown, both among our members and our consumers. As an organisation, much of our attention has been concentrated on meeting the requirements of a socially aware business community, while trying to protect the fabric of our industry," he stated.

A key step step in CIBJO's programme was the release this January of its Responsible Sourcing Blue Book, which provides a framework and guidance for ethically sourcing gems and precious metals responsibly in the jewellery sector. It references the OECD's Due Diligence Guidance for minerals from high-risk areas, insists on compliance with the Kimberley Process Certification Scheme and the World Diamond Council System of Warranties, and it supports the United Nations Guiding Principles on Business and Human Rights.

"An operating principle was that it would be inclusive, meaning that there is an expectation that the standards, guidelines and systems that it describes can reasonably be applied by all members of the industry, irrespective of size or financial capacity," the CIBJO President stated.

To support members of the jewellery industry in implementing the principles laid out in our responsible sourcing document, CIBJO is now in the process of setting up an online platform that will educate them about the due diligence steps that should be taken, and at the same time will provide a set of downloadable tools and templates, which they can adapt for their use, Cavalieri added.

A dedicated suite of due diligence tools will be available at no cost via the new platform, Dr. Cavalieri explained, and helping CIBJO develop this service is the Coloured Gemstones Working Group, facilitated by the Dragonfly Initiative. The Dragonfly Initiative is an advisory firm that supports businesses in the precious metals, gemstones and raw materials sectors create interconnected systems of environmentally, economically and socially responsible companies.

"Our ultimate goal is to support the principles expounded by the OECD and to introduce them to thousands of companies in the jewellery supply chain, so creating environments in which those companies may responsibly trade and manage the minerals they use," Dr. Cavalieri said.