During a Diamond Debates session hosted on his Diamond Press platform, Avi Krawitz invited Feriel Zerouki to address the following question: “Is the diamond industry over-regulated?” In response, Zerouki—former De Beers executive and current President of the World Diamond Council (WDC)—offered a nuanced perspective, pointing to a disordered accumulation of rules, frameworks and requirements that generate confusion and practical implementation challenges, particularly for smaller operators.
A proliferation of standards
While the objectives underpinning these standards are legitimate and widely supported—combating conflict diamonds, ensuring financial transparency, strengthening traceability, enforcing sanctions, and upholding ethical, social and environmental norms—the sheer volume of regulations undermines their clear and effective implementation. In addition to the requirements of the Kimberley Process Certification Scheme (KPCS), the Responsible Jewellery Council (RJC) and the WDC System of Warranties, companies must also comply with those imposed by customs authorities, banks and insurers. Zerouki cites the example of a small parcel of goods for which the cost of obtaining the required guarantees far exceeds its value, with documentation requirements often more extensive than those applied to higher-value exports.
Overlapping frameworks
These standards frequently overlap and originate from different national and international authorities, requiring companies to address each one separately. Moreover, a single standard may be interpreted differently from one country to another, leading to divergent responses—and therefore different documentation—to the same question. Time-consuming redundancies, high compliance costs and administrative burdens become difficult to sustain, particularly for smaller structures. While the perceived weight of these requirements is widely acknowledged, it is unevenly accepted: some stakeholders call for further regulation, while others advocate simplification. There is, however, broad consensus that the diamond sector is subject to particularly stringent requirements compared with other luxury industries.
Limited impact on consumer trust
How are these stringent standards perceived by the general public? In reality, very little. Although regulatory frameworks were reinforced following the release of the film Blood Diamond (2006), their visibility remains low among consumers, who rarely seek tangible proof of guarantees and instead place their trust in the brands from which they purchase diamond jewellery. The act of purchase is primarily driven by image, design and an implicit trust. Regulatory pressure is therefore concentrated at the professional level, where non-compliance can damage reputation and lead to exclusion from a market fundamentally built on trust.
The structuring role of self-regulation
Standards of “best practice” across the entire supply chain were initially introduced by industry leaders—most notably De Beers—and subsequently shared and formalized through collective bodies such as the RJC, often anticipating public-sector regulation. The value of this approach lies in its ability to incorporate the interests and expectations of all stakeholders, from mining to retail, giving these standards a degree of flexibility, legitimacy and acceptability, particularly for actors with more sensitive risk profiles or limited scale.
Does this administrative complexity hinder clear communication to consumers? Likely so. For Feriel Zerouki, the challenge is clear: to harmonize and streamline procedures on the one hand, and to simplify the narrative on the other, in order to better highlight the positive contributions of natural diamonds (Botswana, Namibia, Canada, etc.) and engage consumers more effectively. Ultimately, it is less the volume of regulation than the lack of coherence and readability that is currently weighing on the sector.
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Source : The Diamond Press