The global diamond industry is coming together, under the auspices of the Organisation for Economic Co-operation and Development (OECD), in a special summit in the UAE to tackle the issue of rough diamond valuation, a problem that has bedevilled the global gems trade for years. The “special forum" will take place in Dubai on May 23, on the sidelines of a regular meeting of the Kimberley Process (KP), the global organisation that aims to restrict the flow of “conflict diamonds" on to world markets.
An agreement on pricing would be the “most significant transformational change the KP has experienced within the last ten years", said the UAE Ministry of Economy. The ministry is leading the KP for the duration of this year. It has appointed Ahmed Bin Sulayem, the head of the Dubai Multi Commodities Centre free zone, as the KP’s chairman. Governments of diamond-producing countries, large diamond corporations and non-governmental organisations representing civil society will take part in the forum.
The presence of civil society is regarded as particularly significant. Some have been critical of the UAE’s position as one of the big centres of global diamond trading and have threatened to boycott the KP while the UAE is in charge. Mr Bin Sulayem said: “The OECD is an institution with unparalleled global experience related to valuation common approaches and corporate supply chain due diligence. “If we can come to a set of best practice principles on valuation, which could contribute to better living conditions of the many people that make living from diamonds around the globe, we will have accomplished something significant."
A statement from the UAE Ministry of Economy said that the special forum will be used as the platform to drive discussion and contribution towards a better understanding of rough diamond valuation. “The initiative is aimed at reinforcing and strengthening the debate and agreeing on a consensus for universal conformity," it said. “The forum will bring together global industry players – from institutions, sovereigns and civil society – to experts and miners."
Unlike commodities such as oil and metals, there is no universally recognised price mechanism for rough diamonds. Establishment of a global benchmark would go a long way to tackling issues such as smuggling and mispricing, which critics say robs diamond producers of profits from the sale of their natural resources.
Lack of transparent pricing was one of the issues that led Global Witness, a founder of the KP in 2003 and one of its most prominent activists, to withdraw from the process and boycott its activities in 2011. Representatives of the big diamond companies, such as De Beers of South Africa and Alrosa of Russia, will join heads of national diamond industries at the forum. These will take the form of “workshops" on diamonds pricing.