De Beers Ready to Relax Its Provenance Rules

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 sightin Botswana, proposing to let them refer to its supply as "DTC diamonds" whenthey sell the goods further along the pipeline, a company spokespersonconfirmed. De Beers will decide whether to implement thenew system from around February.That would partially lift a controversial ban onidentifying a polished diamond or jewelry as a De Beers piece. However, sightholderswould still not be allowed to use the "De Beers" name, which the company preservesfor its own consumer brands, De Beers Jewellers and Forevermark."The weird situation we're in is that De Beers is boththe brand name for the supplier of rough diamonds, and a very well-recognizedbrand at the retail level," explained David Johnson, De Beers' senior managerfor media and commercial communications.The company wants to allow customers to disclose that their diamondsare from a reputable source, but there is potential for brand damage if anyonecan 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" onits invoices, with a footnote saying that DTC is a trading name of its De BeersGroup Sightholder Sales (GSS) division. Those documents will also contain a provenancestatement saying they are DTC diamonds from Botswana, Canada, Namibia or SouthAfrica, where De Beers' mines are located. Clients would then be able to usethat line to make claims about the origin of their polished supply manufacturedfrom that rough.Until now, De Beers labeled invoices with the name of therelevant entity selling the rough - for example, GSS or De Beers Auction Sales - butthe miner prevented the buyer from disclosing the company of origin. Clients couldonly state that diamonds were from one of the four countries where De Beersmines, as that's what appeared on the source-of-origin statement on theinvoice.De Beers' current invoices show that its diamonds arefrom 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 comebackThose rules have been contentious because they preventthe trade from telling consumers from which mine, producer and specific countrya diamond came - especially as several diamond-provenance blockchain programs arebeing developed.Sightholders have increasingly raised the issue of DeBeers' disclosure restrictions, Johnson reported. This week's proposal respondsto their demands for the right to state the corporate provenance of theirdiamonds, while still protecting the De Beers brand, Johnson claimed.It would also enable companies to use "DTC" as the sourceof origin for diamonds they place on traceability platforms, so long as theycan provide their own evidence that they are indeed DTC diamonds. The minerchose 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 ultimatelyconsumers, to DTC.com, a revamped website that will present information on theprovenance 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 stillfind it valuable to be able to provide some kind of company-of-originassurance," Johnson said. "So, we've looked at how we can do that, and this isthe solution we think works."Image: A De Beers sight box. (De Beers)