Waldman Diamond Company

With launch of Kimberley Process pending, diamond supplier develops warrantee system
October 2002

With the participants in the Kimberley Process, who are scheduled to meet in Interlaken, Switzerland on November 5, expected to ratify a final protocol for the system for stemming the infiltration of gemstones from conflict areas into the legitimate diamond pipeline, individual companies in the diamond trade are readying themselves for the new regime.

As it is envisaged, the Kimberley Process system will involve rough diamonds being certified by recognized government agencies, in the country's where they are mined. As the goods then move through the pipeline, and are cut, sold as polished and set in jewelry, it will be possible to trace their legitimate origins via a chain of warrantees to be issued by the trade. What this means is that, to a large degree, the ultimate success of the Kimberley Process will greatly depend on the ability of the trade to comply with the rigors of the new regime. It also means that jewelry retailers who want to guarantee that the merchandise they are selling is free of conflict diamonds must be confident that their suppliers have institute effective and efficient control systems.

Transparency for diamond suppliers must become a way of life, says Simeon Lee Loon, a senior sales manager at Waldman Diamond Company (WDC) Group, in Ramat Gan, Israel. "To continue our fight against conflict diamonds and to ensure that none of our diamonds are traded without the proper documentation, we have for some time already included declarations that are attached to each invoice of polished diamonds sales as well as to all purchases, sales and shipment documents of rough diamonds, emphasizing that we have complied with all the rigors of an anti-conflict diamonds regime, " he stated.

The statements used by WDC are based on materials prepared by the office of the Diamond Controller, which is part of the diamond, precious stone and jewelry administration at Israel's Ministry of Industry and Trade.

Invoices issued by WDC include a statement that declares "..none of the diamonds in this shipment were purchased in breach of UN resolutions nos. 1173, 1176 and 1306. In other words, none of the diamonds in this shipment was purchased from unrecognized or unofficial sources operating in Angola, Sierra Leone, or Liberia. None of the diamonds in this package/shipment purchased by us and being sold into the market include any diamonds which come from any area in Africa controlled by forces rebelling against the legitimate internationally recognized government in which it is located. In addition, we declare that these diamonds have not been treated or enhanced in any way."

For rough diamonds shipments, the company uses an additional statement. It notes that "according to the best of our knowledge, the rough diamond shipment/package no. (NUMBER ADDED), from: (COUNTRY NAME ADDED) with a value of U.S.$ (DOLLAR VALUE ADDED) and a total weight of (WEIGHT OF PACKAGE ADDED) carats comply with the following conditions: No diamonds in this box/shipment/sale were purchased in breach of UN Resolutions No.1173, 1306 and 1343. In other words, none of the diamonds in this shipment was purchased from unrecognized or unofficial sources operating in Angola, Sierra Leone, and Liberia. None of the diamonds in this shipment originated from any area in Africa controlled by forces rebelling against the legitimate internationally recognized government in which it is located."

"Clearly, the diamond trade is about to enter a new era, in which it will be expected to vouch for the reputation of the product it sells," Loon said. ""Essentially it will operate on a honor basis, where the consumers' guarantee of what they buy is only as good as systems being used by suppliers that serve the stores from which they make their jewelry purchases. Retailers will have to be prepared to look long and hard at their supplier's modus operandi. Our company, for one, is doing all that it can to live up to our side of the agreement."

"Of course, we confident that both rough diamond suppliers downstream and polished diamond customers upstream will comply and follow suite in installing similar control systems. For our part, we have received and continue to receive very positive feed back from our clients, including from customers in Asia," Loon stated."