D.Murali

Chennai: Diamonds are forever, they say. Thankfully, perhaps, that ring of eternity doesn’t latch on to diamond disputes. Which is what I learn from Suresh Surana, whom I manage to catch up with, during a break at an international tax conference held recently in Mumbai. He is a CA and the founder of RSM-Astute Group.

But the first thing I want to know from Suresh – when we meet at the 24-hour coffee shop in JW Marriott, Juhu, with ‘its magnificent view of the lotus pond and overlooking the Arabian Sea’ – is about his skipping the professional conference.

“I am just back, after representing the Indian sight-holders before the DTC (Diamond Trading Company Limited UK) in London,” says Suresh.

“Subsequently the DTC decided to restore the supplies to these sight-holders with immediate effect,” he adds, even as we get busy with the eats.

Excerpts from a quick interview with Business Line.

What is the latest decision and how has DTC restored the relationships?

The DTC suspended the supplies to four Indian sight-holders pending the result of further investigation under the ‘Supplier of Choice’ programme and non-adherence to the Best Practice Principles (BPP).

This suspension was as a result of a Belgian court judgment given in December 2007 relating to what has become known as the ‘Brenig’ case. The verdict pertained to an old matter.

We clarified to the DTC that none of the Indian sight-holders or their directors and shareholders have been involved in the Belgian legal matter, and supported our stand with documentary evidence.

The DTC adopted a very objective and open-minded approach, which has helped in resolving the issue. Hopefully, with this outcome, the Indian diamond industry is set to regain its momentum and continue its leadership in the global markets.

How big is the gem and jewellery industry, and how important is the DTC to the industry?

The Indian diamond and jewellery industry represents the third largest export industry from India with exports of Rs 70,000 crore. It is one of the largest employers, providing livelihood to over one million workers and artisans.

The diamond industry heavily relies upon the DTC, which is part of the De Beers Group for the supply of rough diamonds. The DTC supplies about 40 per cent of the rough diamonds in the world. The DTC supplies rough diamonds to a selected number of entities generally known as ‘DTC sight-holders’, who thus are assured of continuous and consistent supplies of rough diamonds.

What is the ‘Supplier of Choice’ programme? And BPP?

The DTC due to its leadership in diamond industry has been proactively working at safeguarding the reputation of the diamond industry. For the first time, it came out with the ‘Supplier of Choice’ programme in 2003, providing a transparent mechanism for the supply of rough diamonds.

BPP (or the Best Practice Principles) was later introduced as a part of the Supplier of Choice programme. It is a self-imposed code of conduct from an ethical and governance point of view for the important participants of the diamond and jewellery industry.

BPP is designed with three objectives, viz. building consumer confidence, business practices and commitment. BPP requires compliance with three categories of responsibilities, namely business responsibilities (ethical standards, anti-money laundering, Kimberley process, disclosure, etc.); social responsibilities (employment, health and safety, non-discrimination, child labour, etc.); and environmental responsibilities (best environmental practice and regulatory framework).

What are the takeaways from the amicable ending?

The current developments have sent a clear message that DTC and its sight-holders are committed to the highest level of ethical behaviour and governance standards. The relationship of the sight-holders with the DTC is extremely positive, and the development therefore has a constructive impact on the large workforce employed in the industry.