Edward Asscher: WDC’s Revised SoW Has Raised The Bar Of Minimum Standards For Supply Chain Integrity

Edward Asscher, President, World Diamond Council (WDC), gives Solitaire an exclusive interview on the recently upgraded WDC System of Warranties that references 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 national AML guidelines that comply with the FATF’s 40 Recommendations on money laundering for dealers in precious metals and stones.

Edward Asscher, a member of one of the diamond industry and Amsterdam’s most well-known families, was elected President of the World Diamond Council in June 2020 for a two-year term.

Mr. Asscher is serving a second time as WDC President, having led the organisation from 2014 to 2016. He currently is also Vice President of the European Council of Diamond Manufacturers and is a former President of the International Diamond Manufacturers Association (IDMA) and the International Diamond Council (IDC), a diamond standards-setting organisation affiliated to IDMA and the World Federation of Diamond Bourses (WFDB).

In public life Mr. Asscher has also served in functions outside of the diamond industry. A past President of the Liberal Party in Amsterdam, he was elected Senator for this party in the Dutch parliament, serving in the upper house from 2007 to 2011.

Will broadening the scope of the SoWs have any impact on the Kimberley Process and on WDC’s efforts to broaden the KP’s ‘conflict diamond’ definition?

EDWARD ASSCHER: It’s important to appreciate that there is no direct connection between a decision taken by WDC and one that is taken by KP. As industry’s representative in the forum, we along with civil society hold Observer status. Actual decision-making privileges in the KP are held exclusively in by government Participants, and resolutions need to be passed with full consensus.

That said, over the years the WDC has been an influential participant in the KP, both in terms of the policies and actions we have lobbied for, and by example – in other words by our own actions. In this respect we have worked together with civil society and government representatives in the KP.

We have definitely seen a shift in recent years, with a majority of government Participants ready to expand the “conflict diamonds” definition, although not as yet provide the full consensus that is required for that to happen.

But the broadened scope of the upgraded SoW is creating a de-facto situation that almost all goods that are passing through the distribution chain, carrying a SoW declaration each time they are sold, should be in compliance with stricter requirements than those of the KP. One can hope that these facts on the ground will also help provide the impetus needed to finally reach consensus on a new “conflict diamonds” definition in the KP Core Document.

What new issues will the upgraded SoWs address?

The original SoW, which was created in 2002 ahead of the launch of the Kimberley Process Certification Scheme on 1st January 2003, provided a warranty by the company or individual selling rough and polished diamonds that the stones in question were KP-compliant. In other words, they could be traced to a parcel of rough diamonds carrying a certificate issued by an official KP Authority.

The upgraded SoW continues to do just that, but it also declares that the companies dealing in diamonds have procedures in place in accordance with international conventions relating to human and labour rights, anti-corruption, and anti-money laundering. Furthermore, although it is self-regulatory like the original SoW, it does prescribe specific due diligence that needs to be carried out. This includes registering on the dedicated SoW website, and once a year successfully completing an online self-assessment that one complies with the requirements listed in SoW Guidance document.

© De Beers

Will the World Diamond Council raise awareness of the new SoWs, particularly at the downstream level?

We have been preparing an extensive communications and educational program, which was launched on 21st September together with the upgraded SoW, and it will continue to be rolled over the weeks and months ahead. Our goal is to reach as large a percentage of participants in the industry, encourage them to implement the new SoW, and also assist them in doing so.

To do this we are working closely with a group of industry leaders, who have enthusiastically agreed to support us in spreading the word, and also industry associations, through which we will communicate to their members at the grass roots level.

We plan to run, together with the various industry associations, webinars that will assist their members implement the upgraded SoW and do the necessary due diligence. Where necessary, these will be conducted in the language of the people participating.

More information about the program will be made available shortly.

Is there a penalty/sanction system for companies that don’t comply with the SoWs?

As I said the revised SoW is self-regulatory. However, we trust that the World Federation of Diamond Bourses (WFDB) and the International Diamond Manufacturers Association (IDMA) will make it obligatory once they are able to convene a World Diamond Congress.

The WDC’s efforts to promote industry standards, harmonisation and cross-recognition is also aimed at not overburdening companies and individuals involved in the diamond industry and preventing increased cost procedures. Thus, SoW is an inherent part of a range of international and corporate industry standards. They envisage strict compliance with SoW and regular independent third-party audits to prove it. These, for instance, include the RJC Code of Practices, De Beers’ Best Practice Principles and the Signet Responsible Sourcing Protocol for Diamonds.

While WDC does not have the means to monitor compliance, these various organisations often do.

Implementation of the original SoW has become an effective condition of doing business in our industry, and, as it is phased in, so will the upgraded version of the SoW.

Will the updated SoWs lead to increased compliance costs for companies?

In principle no. Registration on the dedicated SoW website at www.wdcsow.org is free of charge, and so is the ability to conduct the online self-assessments. Webinars and other educational materials are provided at no cost to the user.

I would note again that the compliance systems of the RJC, the large mining companies and some large retailers are already recognised by the WDC, so those who are compliant with them will not have to do the self-assessment once they have registered on the SoW website.

This is not a profit-generating exercise for WDC. Our sole interests are to maintain the integrity of our supply chain, protect the interests all our stakeholders, take them to the new level of self-regulation, and to enhance the confidence of consumers in our products and our industry.

Any other comment you would like to share.

The launch of the upgraded SoW is an inflection point for our industry. Nineteen years after the launch of the Kimberley Process Certification Scheme, we have taken matters into our own hands and raised the bar in terms of minimum standards for supply chain integrity.

I have often stated: we do not want to leave anyone behind. This revised SoW is meant especially for the Small and Medium-sized Enterprises (SME), of which there are so many in India. At no cost they can join the responsible diamond world.

Disassociating rough diamonds from civil conflict, as the KPCS has done, is massively important, but so is ensuring human and labour rights, applying anti-money laundering principles and preventing corruption.

The significance of this moment should be underestimated.

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