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RJC Planning the Next Decade
Q&A with Ashish Deo, CEO of the Responsible Jewellery Council
Mar 6, 2015 5:52 AM
By Avi Krawitz
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RAPAPORT... The Responsible Jewellery Council (RJC) is a non-profit organization set up in 2005 to set corporate social responsibility standards for the jewelry industry through multi-stakeholder engagement. The RJC has more than 570 members spanning the diamond, gold and platinum group metals sectors that have committed to independent audits certifying their compliance. Ashish Deo started as the new CEO of the RJC in September 2014. He recently spoke with Rapaport News about how the jewelry industry is dealing with compliance issues, and RJC’s opportunities, challenges and plans:
 Rapaport News: What is your background and what brought you to the jewelry industry?
AD: I grew up in India where my first job was in marketing for Procter & Gamble, a major consumer products company. I moved to the U.K. in 1993 and worked as a marketing consultant, eventually joining Diageo, which is a large alcoholic drinks company.
My role in Diageo stretched across the entire supply chain, starting out in Duty Free sales and marketing, before moving into their global supply division as the strategy director, and eventually into the procurement function. Supply and procurement gave me experience in dealing with suppliers, and being involved with manufacturing and logistics, while in sales and marketing I dealt with the end consumer.
In 2010, I joined an organization called Fairtrade, which is an ethical mark that is popular in Europe. I was commercial director for the U.K., and responsible for encouraging companies and brands to use the Fairtrade certification and logo on their products.
That exposed me to sustainability issues and the ethical aspect of the supply chain, and afforded me the opportunity to use my business skills for something good. That's why I am now at the RJC. The jewelry industry is doing a lot to show that you can be successful without having to bend the rules. I see the RJC as a very powerful and successful idea with a great future.
Rapaport News: What did you take from the Fairtrade experience that can be applied to the jewelry industry?
AD: The connection between Fairtrade and the jewelry industry is a broad one. The whole trend toward transparency and the importance of responsible business stems from a change in consumer and public attitudes. The reality is that younger consumers are much more orientated toward ethically-sourced products.
Therefore, many industries are moving toward compliance standards because they need to be in a position to fulfill their customer’s expectations. While risk management is a primary motivator for companies to do things responsibly, the bigger prize is that by doing business responsibly, you create a more sustainable business.
Our members start their journey with the RJC in many different ways but they soon realize that it works to their benefit. It really is about following good business practices, which also bring tangible benefits. For example, if you are a manufacturing business that requires skilled workers, treating them well and investing in them leads to lower recruitment and training costs, and a better quality of work.
So it's as much about sustainability as reputation. If everybody in the supply chain makes a reasonable margin, you are likely to have a more sustainable supply chain.
Another direct benefit is that the RJC has provided a platform for members from all parts of the pipeline to discuss emerging risks and stand united in raising industry standards.
The strength of the RJC is that it is an industry initiative. Therefore, I hope that people see the RJC standards not as somebody telling them what to do, but as the industry figuring out by itself what the right course of action is. The self-regulation aspect of the RJC is an important one.
Rapaport News: What are your initial goals as CEO of the RJC?
AD: My obvious mandate is to maintain the rapid membership growth that RJC has experienced. We also want to make the whole process simpler and more efficient. We want to collaborate with other organizations to minimize the duplication of effort for our member companies. We have already done a lot to harmonize, for example with De Beers’ Best Practice Principles, with Signet’s Responsible Sourcing Protocol (SRSP) and with the London Bullion Market Association (LBMA).
We’re also thinking about the next 10 years. Our standard was announced in 2009 but the organization itself turns 10 years old in 2015. So we’re assessing where we want to be in the future. Obviously that's not just for me to do since we are a membership-based organization. The RJC’s board of directors will be actively engaged and will represent the views of our members.
We have a really good standard that is respected and we are now beginning to get data on how the RJC standards have benefited our members. Nearly 200 members are going to be recertified during 2015, which is the largest round of recertification we’ve undertaken to date. Since they have three years of experience with us, they will be able to tell us what is working well and what is not.
I also hope that as we get feedback, we will hear the kind of success stories that will make others recognize the value of our standards.
Rapaport News: Explain the different certifications that a company can have through RJC.
AD: There are two RJC standards, and the anchor is the Code of Practices. The Chain of Custody standard is only applicable to gold and platinum group metals.
The Code of Practices is the main certification mechanism for diamonds, and covers the entire supply chain from mine to retail. In 2013, the RJC Standards Committee reviewed the structure of the Code of Practices to make it easier to navigate. The changes were rolled out to members in 2014 and from this year, all members will be certified according to the 2013 code.
The Code of Practices is divided into six sections which help communicate what RJC standards represent. These encompass: general requirements; responsible supply chains and human rights; labor rights and working conditions; health, safety and environment; diamonds, gold and platinum group metal products; and the responsible mining sector.
The misunderstanding is that everyone has to comply with everything. That’s not the case, as businesses have to comply with the sections that are relevant to them. For example, if you’re not a miner, then obviously the mining section does not apply to you.
We are also trying to help people understand that in many cases the standards are quite closely connected with legislation, such as labor or banking laws in most countries. So the evidence for compliance can often be found by demonstrating that you are legally compliant.
The new Code of Practices enables us to give tailored guidance about what a company needs to focus on to achieve compliance for their type of business.
Another common misconception is that RJC membership is expensive; in fact, for a diamond trader with $10 million turnover, the annual fee is only $300. For a retailer with similar turnover in diamonds, gold, or platinum, it is $450. It really is a great value.
Rapaport News: Is the Chain of Custody initiative for diamonds still being considered?
AD: There are no immediate plans to reactivate that work. There is widespread agreement that the new Provenance Claims provision in the Code of Practices has satisfied those entities that wish to make a claim on the provenance of their diamonds.
This is a key feature of the Code of Practices and was given great attention by the Standards Committee, and we are seeing many members taking advantage of this new feature.
Rapaport News: How does the RJC account for the consumer which tends to look at the compliance of the product rather than the business?
AD: It is true, the consumer thinks through the lens of the finished product. In the past few years, prestigious brands have taken many steps to have most of their supply chains certified.
Some of the leading brands that are RJC members are now nearing 90 percent to 95 percent certification of their supply chains. In a complex business with thousands of stock-keeping units, some units will probably be difficult to cover. But if you take a business that has 50 or 100 products, they can easily move toward full compliance.
However, given the vastness of this industry, it is best done by businesses through their individual supply chains. We have an industry which is very fragmented in diamond polishing, jewelry manufacturing and in the retail space. Therefore, large-scale product certification is very difficult, because of the huge number of people involved. But we have seen some examples emerge like De Beers Group’s Forevermark or Dominion’s Canada Mark, which both offer product certification.
Rapaport News: What has RJC done to tackle the scenario whereby certain divisions of a company are compliant and obtain certification, but not the whole group, yet they claim compliance for the entire group?
AD: Firstly, this is not a legal issue, but often an ethical one. It is not possible for RJC to say you cannot join unless your entire group joins, as RJC is voluntary. Businesses have different structures, and it becomes complicated to monitor everything that is happening in the group.
We have done a lot to address potential misrepresentation, but let’s be clear that many of our members do not join to evade, but rather to recognize what they are committing to – their company, employees and customers. On the RJC website, we present a lot of detail about each member to clarify when a particular entity has been certified.
There are also companies that realize the rigor of the RJC Code and wish to “dip their toe in” to see if it works for one entity before they certify the rest of the group. It is important that RJC is a voluntary mechanism. By working together toward continuous improvement, rather than on a “name and shame” basis, the entire industry benefits.
Rapaport News: What does the 10-year plan and strategy for RJC entail?
AD: Understanding where we want to go in the next decade is something we are now working on so I can’t say too much. We recognize that we need to reach out and explain what we are about more, and engage with people.
Our vision is very clear – to have trust in the supply chain. We need to develop some metrics that we can relate to in terms of checking on our progress toward achieving that goal. Hopefully, by the end of this year we would have done that, and will have new strategies in place.
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Tags:
Avi Krawitz, Rapaport News
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