Meeting at the 2013 CIBJO Congress, the Precious Metals Commission heard from Cecilia Gardner, President and CEO of the U.S. Jewelers Vigilance Committee, about the Dodd-Frank Act in the United States and how it affects the jewellery industry’s use of gold.

The law relates to a wide range of industries and the sources of their gold supplies. Publicly traded companies must report to the Securities and Exchange Commission on the gold they use in their products and where it is sourced.

Ms. Gardner explained that the supply chain for gold is complex and that, while some of the reporting requirements that relate to recycled gold and gold refined after a certain date were eased, the rest of gold production is covered by the act.

She said that one American firm affected by the gold provisions reported that it has 300 suppliers of products with gold content, and those suppliers also have their own suppliers. Ms. Gardner noted the complexity of the law’s provisions. No gold can be used that originates in the Democratic Republic of Congo and nine neighbouring states, she explained.

Ms. Gardner stressed, however, that there is information available for how to comply with Frank-Dodd. The JVC has created an essential guide to how to comply for the jewellery industry which, unlike big miners and refiners, do not have compliance officers. She said there are around 25 to 30 publicly traded firms that are affected by the act.

The European Union is looking into creating a similar law and has asked the JVC for its comments. CIBJO plsns to take leading role in the industry’s response to the EU, she said.

Gardner also explained that the Federal Trade Commission in the Unitd States is revising its guidelines and CIBJO and other bodies had submitted proposals. At a meeting in June, the FTC will hold discussions relating to precious metals.

The commission also heard about the price of gold and the demand from specific countries as well as usage in jewellery. In consumption terms, there have been large rises in India and China, while the United States has fallen and Russia is steady, but Turkey is continuing to see a decline.

Gold supply from scrap has risen hugely in United States, Italy, China, India, UAE, United Kingdom and Ireland and Mexico since 2008. Increasingly, mixed metals are being used to make jewellery affordable for consumers. The Danish jewellery company Pandora has been successful in this respect. Costume jewellery becoming increasingly popular around the world.

There was also a discussion on the issue of nickel and the EU nickel directive in 1998 that is being replaced by a 2011 directive. It was proposed that CIBJO members urge their National Standards Bodies to seek a temporary suspension of Appendix 1 of EN1811:2011 and a reintroduction of the 1998 directive.

The commission urged members to seek agreement from national governments that products already in the supply chain before March 31, 2013, be considered as compliant with EN1811:1998.

Photo Caption: Cecilia Gardner, President and CEO of the U.S. Jewelers Vigilance Committee

Meeting at the 2013 CIBJO Congress, the Gemmological Commission followed up on a decision taken at its previous meeting in Vicenza in 2012, where it was decided to review Annex A of the Gemstones Blue Book to ascertain whether the corrections that were made previously are correct, and maketo amendments where appropriate. The commission’s proposals would then be submitted to the Coloured Gemstone Commission.

Annex A of the Gemstones Blue Book lists all the gemstone materials and their varieties, including their commercial names, and describes the modifications and treatments that have been accepted.

Gemmological Commission President Hanco Zwaan displayed the draft Annex that contains the amendments agreed by the commission’s steering committee for the assembly’s review.

James Riley explained that ‘Blue John’ fluorite is commonly resin impregnated. It was agreed to incorporate this as an option in the Annex. Sector A President Roland Naftule said that natural blue to bluish green common opal should also be added.

On the Gemmological Laboratory Book, it was explained that no proposals were received through the year, but the president welcomed further remarks for improvement.

The issue of how laboratories worldwide can work together and harmonise with the trade, to improve consistency, reliability of information and consumer confidence was raised, and Mr. Naftule asked the commission to put this on the its agenda. The concern is that, due to a lack of close cooperation between the labs, inconsistencies occur in both nomenclature and results, such as in the area of origin determinations, by which neither the needs of the industry nor the public are met.

It was agreed that CIBJO should look into this matter to see what can be done to improve consistency between labs. A first step could be to send a strong signal to the laboratories worldwide that they should take note of the sheets produced by LMHC, and consider what nomenclature they can comply with and can implement in their own organisations.

Photo Caption: Gemmological Commission delegates (from left): Claudio Milisenda, Gemmological Commission Vice President Ken Scarratt, and Gemmological Commission President Hanco Zwaan.

CIBJO’s Diamond Commission has met at the 2013 congress of the World Jewellery Confederation in Tel Aviv. On the agenda was a discussion of the work done by the CEN Diamonds Norms TC 410 committee. CEN is the European Committee for Standardisation.

The Diamond Commission is headed by Udi Sheintal.

Diamond Commission Deputy President Harry Levy presented a report on CEN Diamonds Norm TC410. He said that the commission members had been asked by industry leaders to come up with nomenclature for consumers on the subject of synthetic diamonds. He said committee members had been chosen who were believed to be most appropriate for the discussions.

Levy explained that several meetings had been held to discuss names that consumers could easily understand. He said that synthetics meant different things to consumers, usually a man-made product that could even be a piece of glass.

He said the committee came up with a paper that it sent out for a vote to around 20 European countries, however there had been a poor response, possibly because recipients through it related were from the diamond industry rather than from the retail level. As a result, the paper was being sent out again, he said.

“The process takes a long time. It has taken almost three years up to now. I hope by the next congress there will be a result.”

The commission also heard a presentation on how the social networks could put out their messages more efficiently.

Photo Caption: From left, Harry Levy, CIBJO Diamond Commission Vice President; Udi Sheintal, CIBJO Diamond Commssion President; and Moti Besser, CIBJO Diamond Commission Vice President.

The opening session of the 2013 CIBJO Congress in Tel Aviv concluded with a panel discussion that looked at the role of the jewellery industry in promoting economic development in the countries where diamonds are mined.

The discussion was moderated by Eli Avidar, Managing Director of the Israel Diamond Institute, the host of the 2013 congress, who also is a member of CIBJO’s President’s Council.

The discussion started out by looking at the issue of whether the industry was simply defending its reputation by doing what appears to be the minimum necessary to defend itself in the eyes of the world’s consumers.

“Today, the beneficiation policy that was initiated in South Africa has been adopted in one form or another in the other countries of Southern Africa,” Mr. Avidar said, during his introduction. “There are functioning diamond cutting industries in a number of African nations, financed in part by diamond companies in the major cutting centres, including Israel, Belgium, India and the United States. The Diamond Trading Company is in the process of transferring the bulk of its operation from London to Botswana. Whatever way you look at things, there have been some very significant changes.”

“But there still are questions to be asked.,” he continued. “What is the industry’s obligation, and is it being met successfully? Has the emphasis been predominantly on the measures being taken to defend the reputation of products, and not on what need to be done so that the diamond achieves its full developmental potential?”

Brad Brooks-Rubin, the Special Advisor for Conflict Diamonds in the Bureau of Energy, Economic, and Business Affairs at the U.S. Department of State, said Corporate Social Responsibility should look beyond just defending the industry and its products, and take a more holistic approach that promotes business success throughout the supply chain.

He also said there were many standards, with the gold industry, for example, having four to five organisations each with different standards. In addition, there are OECD guidelines for multinational enterprises.

Mr. Brooks-Rubin said that artisanal mining was a critical sector which was open to widespread exploitation. The industry must engage with other groups to make the sector open to long-term development.

Commenting on the situation in South Africa, World Federation of Diamond Bourses President Ernie Blom said the country’s large production of diamonds, gold and platinum had enabled the development of a jewellery industry but sales were mostly to tourists. The industry had also suffered from imports of cheap jewellery. He added that the government’s beneficiation strategies had not always led to the results required. He also said that although modern technology plays a large role, many companies still use old-fashioned techniques.

Jacob Thamage, Director of the Diamond Hub at the Botswana Ministry of Mining Energy and Water Resources, said there were still gaps in the knowledge of the diamond sector in his country and elsewhere in Southern Africa. “We have a young population with many unemployed people who are well educated and that leads to great frustration. They see their jobs being exported.”

Ambassador Sisa Ngombane, South Africa’s Ambassador to Israel, said his country “had not always done the right thing and we need to try and spread the benefits of beneficiation across the population. Beneficiation needs investment, and we need more foreign participation.”

Andrei Abramov, Chief of the NGO section of ECOSOC, the United Nations Economic and Social Council, said sustainability was key and there are big challenges facing the world. There are 1.5 billion people living on $2 a day and one million artisanal workers living on $1 a day.

There are around one million child labourers in gold mining, which is extremely dangerous and with extremely low pay. In addition, there is environmental degradation. “Gold mining creates terrible mercury poisoning problems. Leaks of cyanide contaminate the environment. I know CIBJO is working on security, but mining is dangerous due to workplace injuries from mine collapses and other dangers. The profits do not benefit all levels of society.,” he stated.

“Natural resources create the opportunity for corruption which not the fault of industry but good governance is needed. Companies can assist governments. There is a great deal of social responsibility on the shoulders of the companies. “The Kimberley Process is excellent and stabilized the situation in many countries, but it is a regulatory body not a development body,” he said.

Akiva Caspi, Vice President of Marketing and New Business Development at Sarin Technologies, said there are big challenges for emerging cutting centres compared with mature centres. “The way to close the gap is by using technology to enable people in new centres to get the same value and with the same profitability. We want to close the gaps quickly.”

Master diamond cutter Gabi Tolkowsky closed out the session, stating that it was important not to lose sight of the jewellery industry was about. “Throughout today I have noticed that one word has not been mentioned,” he stated, and that is ‘beauty.’ That, ultimately, is what we create,” he said.

Speaking to the opening session of the 2013 CIBJO Congress in Tel Aviv, Eli Izhakoff, President of the World Diamond Council and Honorary Life President of CIBJO, dedicated his address to the subjects of leadership and responsibility in the in the jewellery and gemstone industries.

“A good deal has been written on these subjects in recent weeks, particularly in respect to the diamond industry, and not all of it has been complimentary,” he stated. It has been suggested that while we were ahead of the curve when the Kimberley Process was launched, we are now slipping back – preferring to rest upon our laurels, instead of being open to new initiative and projects.”

“So let us consider the subject: what is a leader?” he continued:,

The following is the text of Mr. Izhakoff’s address:

According to the Wall Street Journal Guide to Management, being a leader is less about process and more about social interaction. While a manager focuses on systems and structure, a leader focuses on people. Leaders do not simply define tasks; they assign purpose.

The entire CIBJO philosophy is based upon this. The organization does not impose nor enforce its rulings. It rather provides guidance and frameworks with specific end goals in sight. This is true in respect to the industry standards and accepted nomenclature contained in its Blue Books, as well as in its approach to ethics and Corporate Social Responsibility, where the emphasis has been upon education.

At the end of the day, our community is made of autonomous individuals, each of whom has the privilege of deciding independently how he or she wishes to run a business. As leaders, we can provide them with direction, and we can initiate the development of common tools that will enable them to act in the manner that we suggest.

We are business leaders, not governments. We do not have at our disposal armies or police forces, courts of law or tribunals. We do not have the resources to monitor all that happens.

We work in an environment where common sense prevails. Successful businesspeople by nature are rational; they are not extreme. They will accept leadership if it is provided in the context of what they do, and what they understand to be true. This does not mean that their minds cannot be changed. But to do that, one needs to provide a coherent and convincing argument, presenting the facts in an open manner.

Successful leaders, in business like in politics, are rarely absolutists. They understand that people perceive truths differently, and that change is best introduced gradually, so that it can take root and not be rejected by the environment.

In our community, the rank and file are small and medium size businesses, whose first responsibility is to provide a decent living to their families and employees. They do not resent policies that are advocated by the larger players, but they are cautious. This is not an irrational approach, but rather an instinctive one that comes from a need to protect what they already have.

In the same way that smaller and medium size companies have only limited ability to compete with the larger-sized firms when it comes to discounting and the cutting of prices, the same is true when it comes to the creation of “so-called” voluntary monitoring and regulatory systems.

But I am not suggesting that we do not discuss such processes. Systems that protect our chain of distribution are important and relevant to our industry and our consumers in this day and age. But what I am saying is that we design them to be as inclusive as possible, and part that process is engaging the entire industry, irrespective of a company’s size, turnover, geographic location and personnel.

Leaders will be successful if their communities perceive them to be devoid of personal or narrow interests. They will be able to sway opinion if people are convinced that their primary interest is that of the community, and not just part it.

I accept the meaning of the statement that it is impossible to please everybody at the same time. But good leaders strive to do just that. That does not means that they should not take bold steps or break new ground. If they always play to the court of popular public opinion, then they are followers and not leaders.

But leadership is about style as well as substance, and successful leadership is about convincing people to do willingly what you suggest.

Business communities can take great leaps of faith if they have confidence in their leadership. Had it first been suggested in 1998, the Kimberley Process Certification Scheme, most probably would have been rejected out of hand by the industry. But five years later, after a long and inclusive process of negotiation, discussion and debate – and all within the context of the reality at the time – it was embraced by the industry.

As leaders we have the ability to do great things. We also have great responsibility.

Addressing the opening session of the 2013 CIBJO Congress in Tel Aviv, the organisation’s president, Dr. Gaetano Cavalieri, reiterated the World Jewellery Confederation’s commitment to Corporate Social Responsibility, and emphasised that all companies must be provided a fair chance to become CSR compliant.

“What we are not prepared to agree to is a situation in which jeweller is assumed guilty through non-association,” he said. “In other words, if you are not part of the club – possibly because you cannot afford the membership fees, or, even worse, you were not invited to join – then it cannot be automatically assumed that your product or your moral standards are beneath those who are associated. CSR should be a universal code of practice, not a paid-for brand symbol that is used to enhance product value, like a crocodile on a Lacoste shirt.”

The following is the full text of Dr. Cavalieri’s address:

Ladies and gentlemen, Brukhim Haba’im Le’ Yisrael!

As members of an ancient craft and trade, it is likely that, for thousands of years, people just like us have met and discussed the business of jewellery, right on the very spot where we today have gathered.

Not much more than a kilometre south of here is located the ancient port of Jaffa. It is a place that archaeologists have shown was inhabited already 9,500 years ago, and it is mentioned in both the Old Testament and New Testament of the Bible. We learn that it from where the prophet Jonah set sail, and it is a town in which the apostle St. Peter lived and worked.

Jaffa was one of a series of ports in the eastern Mediterranean that were located at the axis of the Spice Route, which linked the peoples of Asia – including the regions that today comprise the Arabian and Persian Gulf, India, China, Indochina, the Koreas and Japan – with North Africa and Europe. Needless, to say it was not only spices that were carried along the route, but a variety of other materials, including diamonds and coloured gemstones, and precious metals like gold and silver.

In “The Dealer’s Book of Gems and Diamonds,” the Israeli gemmologist Menachem Sevdersmish includes a chapter on the Jewish high priest’s breastplate, which is described in chapter 28 of the Book of Exodus. Made of gold, it is said to have included a variety of gemstones, among them possibly topaz, onyx, jasper, amethyst, sapphire, emerald and diamonds. Some of them may have been mined locally, but others almost certainly would have been brought in along the trade routes.

This is an area where people of different nations have mingled and mixed through centuries. At one time or another Jaffa was controlled by the Canaanites, the Philistines, the Egyptians, the Israelites, the Babylonians, the Persians, the Phoenicians, the Greeks, the Romans, Saladin’s Moslem forces, the Crusaders, the Ottoman and the British. Even Napoleon passed through and held the port city briefly in 1799.

This clearly is an appropriate setting for a CIBJO Congress, for we are organization that brings together people from countries from around the world, linked by a common trade that unites east with west and north with south.

I would like to express the gratitude of those present to our hosts, the Israel Diamond Institute, IDI President Moti Ganz, IDI Managing Director Eli Avidar, and the women and men who staff the organisation and who took on the massive task of organising two diamond, gemstone and jewellery conferences in one very intensive week.

For those of you who are may be less familiar with IDI, similar to CIBJO on a national scale, it is an organisation that brings under its umbrella the various bodies that make up the Israeli diamond sector, providing services to all and representing this great industry at shows and events around the world. It is fair to state, therefore, that we are guests of the entire Israeli diamond industry, and we thank you most sincerely for your generous hospitality.

This is the second consecutive year that the CIBJO Congress has taken place in the same venue, immediately following the Annual Meeting of the World Diamond Council. There is a natural symbiosis between the two organisations, with related issues on the agenda and common goals and objectives. Both bodies, I believe, reflect our industry at its every best.

Yesterday’s Annual Meeting was significant in a number of respects, one of which was the agreement that was signed between the WDC and the Kimberley Process, for the establishment and creation of a permanent Administrative Support Mechanism to back the work of the KP. It will be operated by four industry organisations, one of which is our host today, the Israel Diamond Institute. The others are the Gem and Jewellery Export Promotion Council of India, the Antwerp World Diamond Centre and the Diamond House of the Government of Ghana.

The agreement exemplifies the commitment of our industry and the lengths to which we are prepared to go in order to ensure the integrity of the products we handle and the reputation of our business community. I congratulate the WDC and the four organisations for stepping and doing the right thing.

Another note of significance of yesterday’s meeting was that it was the final WDC Plenary Meeting to be presided over my colleague and close friend Eli Izhakoff. It is not yet time to record the history of Eli’s contribution to our industry, for I know that there are additional chapters that will be written. But it is fair to say that there are few individuals who had such a significant impact upon our business, and to whom we owe so much.

The industry’s campaign against conflict diamonds has been one of the proudest periods in our history. It not only preserved our business, but saved thousands of lives that potentially would have been at risk. That is a tremendous legacy, Eli, and it is not yet over.

I would point out that Eli is an office holder in CIBJO, and he is not going to get away from us that easily. That is because we made him Honorary President for Life. He will be around here for a long time to come.

Eli is an extraordinary example of the men and women who give of their time to the public service of our industry. CIBJO is blessed with a good number of such individuals, many of whom have devoted hours and hours in preparing for this congress, and who have been meeting since Sunday in pre-congress steering committees.

They do this not for personal gain. Indeed many take time from their own businesses in order to contribute. They do so because of their love of the business, and because of their deeply held belief that our success is vested in a sense of fair play, and in the confidence that our consumers show in us and our products.

I would briefly like to mention a couple of these people by. The first is Gerard Grospiron, who, with the assistance of our always hardworking Vice President and Sector A President Roland Naftule, has worked toward the harmonisation of the nomenclature in the Diamond, Coloured Gemstone and Pearl Blue Books. This is a project of tremendous importance and it will serve the interests of members of our industry, as well as consumers, around the world.

The second individual who will get special mention is Rudi Biehler, who could not travel to Tel Aviv this week, but is with us in spirit if not in person. As many of you will remember, Rudi played a key role in the decision in October 2004 by a district court in Munich, Germany, to accept the terminology and definitions about synthetic diamonds contained in CIBJO’s Diamond Book. It was a milestone in our history, and was one of the many contributions that Rudi made to this industry. He is missed, and we wish him well.

I have spoken a great deal over the years about the grass roots of the jewellery industry, for it is from there – and only from there – that CIBJO derives its authority. It comes through our national association members, who bring under our umbrella literally hundreds of thousands of companies and individuals across the globe, and at all levels of the business.

We are an inclusive organisation. Our meetings are open. All interested parties are invited to participate and voice their opinion. And when a decision is taken, it is done so in the full light of day.

At this congress, eight professional commissions will meet, discussing a range of issues that is as diverse and intricate as our industry. Among them is the Trade Show Commission, which will be assembling for the first time, and another is the Ethics Commission, will be meeting after a hiatus of several years.

They and the other commissions are all committees of the industry. They are made up of individuals who, when they are not here, are involved in the daily life of the jewellery and gemstone business. They produce, review and update the most definitive and widely accepted set of industry standards and nomenclature – the Blue Books – which are a reflection of the knowledge and experience that they have gained from the ground up.

On a number of occasions over the past several years, there have been attempts by outside groups to set the agenda of our industry. Often, they have been managed by professional consultants who are beholden to no one, nor subject to the oversight of any specific organisation. Their tactic frequently has been to suggest that, if we do not do as they demand, then we must have something to hide. It is case of the tail wagging the dog.

This is not to the say that all the issues raised by these consultants are not important, nor do I suggest that they are matters that we should not address. Our industry, I believe, has proven its readiness, time and time again, to look inward and make changes. This is an on-going process, and indeed is a hallmark of our CIBJO Congresses.

But what we are not prepared to agree to is a situation in which jeweller is assumed guilty through non-association. In other words, if you are not part of the club – possibly because you cannot afford the membership fees, or, even worse, you were not invited to join – then it cannot be automatically assumed that your product or your moral standards are beneath those who are associated.

CSR should be a universal code of practice, not a paid-for brand symbol that is used to enhance product value, like a crocodile on a Lacoste shirt.

The defence of our chain of distribution is of vital importance, and it has to be achieved without imposing unreasonable financial or logistic demands, which may exclude or undermine law-abiding members of our business. We will hear later this morning a presentation by Dr. Donald Fever, of the Graduate School of Business and Law at RMIT University in Melbourne, Australia. He has been working with CIBJO in developing a fully inclusive programme that will enhance the protection of the chain of distribution.

CIBJO is fully committed to Corporate Social Responsibility, and to the development of tools and practices that ensure that this is a way of life for all members of our industry. Last December, at the GIT conference in Bangkok, I articulated a doctrine for responsible business practices in the jewellery industry. There are three basic rules of practice:

One is to be fully transparent in the way we operate our businesses and about what we sell. In this respect, he CIBJO Blue Books are invaluable guides, and the work that is done by our commissions at CIBJO congresses and in between them is of vital importance.

The second is to defend the industry from the various challenges that could threaten our reputation and integrity. This, of course involves the work of the Kimberley Process, as well as a range of other challenges, which will be addressed by Dr. Feaver.

The third is to function as a positive influence, serving as a means for sustainable economic and social development in the communities and countries in which we are active. This what CIBJO committed to when it was recognised in 2006 as an affiliated NGO by the Economic and Social Council of the United Nations, from which we are privileged to have with us today Mr. Andrei Abramov, the chief of the ECOSOC NGO section.

CIBJO took upon itself the task of creating educational tools about proactive Corporate Social Responsibility for the entire jewellery industry. It was what led us to set up the World Federation Educational Foundation, or WJCEF, in 2009, to initiate the creation of a UNITAR-operated Centre of Excellence for CSR Education in Antwerp in 2011, and in March of this years, together with Fiera di Vicenza, to begin planning and implementing a new Corporate Social Responsibility programme for the international jewellery industry.

This most recent project has been endorsed by the UN Alliance of Civilisations, and when it is ready will be made available to members of the industry across the globe.

Ladies and gentlemen, the third and concluding section of our agenda this morning will comprise of a panel discussion, during which we will consider the role of the jewellery industry in promoting economic and social development, particularly in countries that for decades were regarded as mainly sources of rough supply. It goes to the heart of what I have spoken about today.

Fine jewellery is a luxury product – of this there is no dispute. Unlike food, water, clothing or housing, it is a non-essential item, which we could live without. But the jewellery business is an essential industry, providing food, water, clothing and housing and the promise of a better life to millions of people around the world. And we are its primary guardians.

Thank you.