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De Beers Ready to Relax Its Provenance Rules
Dec 13, 2018 10:58 AM
By Joshua Freedman
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RAPAPORT... De Beers is planning to loosen its source-disclosure restrictions for sightholders following requests for increased transparency, Rapaport News has learned.
The company consulted with clients during this week’s sight
in Botswana, proposing to let them refer to its supply as “DTC diamonds” when
they sell the goods further along the pipeline, a company spokesperson
confirmed. De Beers will decide whether to implement the
new system from early next year.
That would partially lift a controversial ban on
identifying a polished diamond or jewelry as a De Beers piece. However, sightholders
would still not be allowed to use the “De Beers” name, which the company preserves
for its own consumer brands, De Beers Jewellers and Forevermark.
“The weird situation we’re in is that De Beers is both
the brand name for the supplier of rough diamonds, and a very well-recognized
brand at the retail level,” explained David Johnson, De Beers’ senior manager
for media and commercial communications.
The company wants to allow customers to disclose that their diamonds
are from a reputable source, but there is potential for brand damage if anyone
can freely label a product as a “De Beers diamond,” he added.
What’s in a name?
To overcome that challenge, De Beers plans to use “DTC” on
its invoices, with a footnote saying that DTC is a trading name of its De Beers
Group Sightholder Sales (GSS) division. Those documents will also contain a provenance
statement saying they are DTC diamonds from Botswana, Canada, Namibia or South
Africa, where De Beers’ mines are located. Clients would then be able to use
that line to make claims about the origin of their polished supply manufactured
from that rough.
Until now, De Beers labeled invoices with the name of the
relevant entity selling the rough — for example, GSS or De Beers Auction Sales — but
the miner prevented the buyer from disclosing the company of origin. Clients could
only state that diamonds were from one of the four countries where De Beers
mines, as that’s what appeared on the source-of-origin statement on the
invoice.
De Beers’ current invoices show that its diamonds are
from countries that are compliant with the Kimberley Process —
without revealing the exact origin — and that they have met the miner’s Best Practice Principles, Johnson said.
DTC’s comeback
Those rules have been contentious because they prevent
the trade from telling consumers from which mine, producer and specific country
a diamond came — especially as several diamond-provenance blockchain programs are
being developed.
Sightholders have increasingly raised the issue of De
Beers’ disclosure restrictions, Johnson reported. This week’s proposal responds
to their demands for the right to state the corporate provenance of their
diamonds, while still protecting the De Beers brand, Johnson claimed.
It would also enable companies to use “DTC” as the source
of origin for diamonds they place on traceability platforms, so long as they
can provide their own evidence that they are indeed DTC diamonds. The miner
chose to use DTC on its invoicing because of its recognition within the trade, he explained, as the Diamond Trading Company (DTC) was the former name for GSS.
Sightholders will be able to refer their customers, and ultimately
consumers, to DTC.com, a revamped website that will present information on the
provenance of DTC diamonds. The site, which is currently under construction,
will contain the sustainability credentials of the company’s mines.
“Our customers came to us and said [they] would still
find it valuable to be able to provide some kind of company-of-origin
assurance,” Johnson said. “So, we’ve looked at how we can do that, and this is
the solution we think works.”
Image: A De Beers sight box. (De Beers)
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Tags:
best-practice principles, Blockchain, Botswana, BPP, Canada, David Johnson, De Beers, De Beers Group Sightholder Sales, De Beers Jewellers, Diamond Trading Company, DTC, DTC.com, Forevermark, gaborone, GSS, Joshua Freedman, Kimberley Process, Namibia, provenance, Sightholders, South Africa
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