The World Diamond Council (WDC) has dramatically revamped its System of Warranties (SoW), the scheme that backs up the familiar stamp that appears on most diamond invoices stating the accompanying stones are conflict-free.
While the original warranties were sometimes criticized as a rubber-stamp exercise, the new system requires dealers to commit to a long list of principles before they are allowed to use the guarantees.
The original warranty stated that the diamonds were “purchased from legitimate sources not involved in funding conflict and in compliance with United Nations resolutions.”
The new warranty, three years in the making, also says that the dealer “guarantees that these diamonds are conflict-free,” but it also “confirms adherence to the WDC SoW Guidelines.”
The SoW Guidelines mark the biggest sea change from the original warranty system. In order to use the new SoW stamp on an invoice, users will have to go through an online self-assessment process on the new World Diamond Council’s System of Warranties website.
That process makes them commit to adhering to the United Nations’ Guiding Principles on Business and Human Rights, the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work, the United Nations’ Convention Against Corruption, and relevant anti-money laundering guidelines, including the Financial Action Task Force’s Guidance on Money Laundering for Dealers in Precious Metals and Stones.
If that seems like a lot to take in, WDC president Edward Asscher says the self-assessment tool is designed to be simple, while introducing dealers to these important concepts and guidelines.
“Most diamantaires are just trying to make a living,” he says. “When people talk about sustainable development goals, that is far from their daily life. This is something very practical. It talks about doing your due diligence, and what to look for and what to avoid in the industry. It will make it top of mind for people.”
The self-assessment tool will prove particularly useful for smaller players, Asscher says.
“I don’t want to leave anybody behind. A lot of the small and medium enterprises don’t have money that is required for long audits. Here, the only thing it costs is a little time.”
Complying with the new SoW is currently voluntary, because the WDC doesn’t have the legal ability to force any dealer into compliance, Asscher says. But he believes that most retailers will require that dealers include the new stamps on their invoices, which will in turn make them use the self-assessment tool.
The self-assessments must be done on an annual basis.
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