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De Beers Ready to Relax Its Provenance Rules

Miner proposes to let sightholders refer to its supply as “DTC diamonds.”
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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