WFDB Presidents Meeting Deliberations in Dubai

The apex body of the world’s diamond bourses discusses many key questions facing the industry as it seeks to adapt to the changing contours of the business. A Diamond World report.

After two days of detailed deliberations, the 2011 Presidents’ Meeting of the World Federation of Diamond Bourses (WFDB) that was held in Dubai in mid April took some important decisions related to certain key areas of the industry’s functioning.

Besides resolving to act against those members who failed to provide full disclosure while dealing in treated diamonds, the body also drew up plans for the expansion of the WFDB Mark, opening WFDB membership to countries and other bodies in the industry and adapting the WFDB's by-laws both for this purpose and to take into account the changes in the new models that have been introduced for diamond trading.

Though it did not lead to any major decisions, the Africa Summit, attended by key leaders of most of the diamond producing countries was also a clear recognition of the increasingly important role these countries will play in shaping the future of the industry.

The summit was attended by leading African ministers, including Susan Shabangu, Minister of Mines of South Africa; Joagim David, Minister of Industry and Mines of Angola; Rui Mangueira, Secretary of State of Angola; Obert M. Mpofu, Minister of Mines of Zimbabwe; Pascale Nyembo Muyumba, representing Martin Kabewlulu, Minister of Mines of the Democratic Republic of Congo, and Edgar de Carvalho, Executive-Secretary of the African Diamond Producers Association.

The discussions focused on the current state of diamond mining and production in their countries and specifically the rough diamond market. Some of the speakers also came out in support of allowing legal export of rough from Zimbabwe’s Marange mines, noting that in their opinion, the country had fully complied with the KP requirements.

Another key discussion followed the presentation by Donna Baker, president of the Gemological Institute of America (GIA) on the lab’s recent decision to cancel accounts with clients who had repeatedly submitted High Pressure High Temperature (HPHT)-treated stones for grading without prior disclosure, or who were in violation of any other clauses in the GIA's clients' agreements. The meeting decided that WFDB's legal counsel will work with the legal counsel of the GIA to find a legal way to disclose the names of those clients and other relevant information and to advise the WFDB Executive Committee about the sanctions that should be taken in such cases. It was decided to take all possible sanctions against members who submitted HPHT diamonds to a lab without proper disclosure.

The meeting also discussed the need to change, update and adapt the WFDB's by-laws, taking into account the changes in the new models that have been introduced for diamond trading and new trading channels that are commonly used today, such as online trading, online sales and auctions.

In addition, WFDB President Paz noted that since the WFDB is to widen its membership circle by offering associate or affiliate membership to diamond producing countries and possibly to diamond mining companies, it will need to review its by-laws and rules to include these new members.

A working group of five bourse presidents, led by Rami Baron, president of the Diamond Dealers Club of Australia, presented a business plan for the expansion of the WFDB Mark in the diamond jewellery retail sector, though details of the proposals and related decisions have not been made public.

Earlier the opening session was addressed by keynote speaker Sultan bin Nasser al Suwaidi, Governor of the Central Bank of the United Arab Emirates, who offered an overview (al Suwaidi speech) of the impact of the economic crisis and how the UAE has weathered the financial crisis.

"In the UAE, we have ample resources to sustain a reasonable economic growth rate - not too high, because too high a rate of economic growth creates inflation, as we saw in the UAE in 2007 and 2008. Growth of our stable deposits is running at a high single-digit and therefore we are able to meet the credit expansion requirements of a medium single-digit economic growth," al Suwaidi said.

Willy Laeremans, Chief Executive Officer of Antwerp Diamond Bank Asia Pacific Ltd., delivered a speech entitled "The need for ethical behaviour and corporate social responsibility in the diamond industry," and industry consultant and analyst Chaim Evan Zohar made a presentation about the past, current and projected supply diamond pipeline of rough and polished diamonds.

Welcoming the recent launch of diamond trading on the Istanbul Gold and Diamond Exchange (IAB) WFDB President Avi Paz noted that "One of the core purposes of the WFDB is to attract new members and unite bourses throughout the world where diamond consumption is on the rise, and Turkey is an excellent example of the kind of bourse we would like to see opening." The IAB has been a WFDB member since 2008.

Paz also said that the WFDB was holding talks with several countries to assist in establishing a diamond exchange. "We have a strong interest in bringing new diamond exchanges into the fold of the WFDB, to facilitate access to our extended family of some 15,000 diamantaires, as well to assure that they operate their organisations according to the rules and regulations of the WFDB," he stated. In this context, the WFDB held talks with a delegation from Ukraine during its meet.

In addition to other routine business matters, the meeting also saw discussions on the critical issue of the KP ban on exports of diamonds from Zimbabwe’s Marange fields. A key speaker on this issue was Vasant Mehta, immediate past chairman of the Gem & Jewellery Export Promotion Council (GJEPC) and a vice president of the International Diamond Manufacturers Association, who said that the diamond trade was being deprived of the supply of some 30 million carats of rough diamonds, at a time when demand for rough is rising. Criticising the decision-making processes in the Kimberley Process, he urged all relevant parties "to sit in the room and hear the voice of sanity and resolve the issue in the next two days, which is acceptable to everybody and of course to Zimbabwe," referring to the KP stakeholder meeting that was held following the Presidents' Meeting, on Thursday, April 14, in Dubai.