WFDB Poised To Raise Profile

RAPAPORT… Rapaport Diamond Report spoke to Michael Vaughan, the new executive director of the World Federation of Diamond Bourses (WFDB), in his Antwerp office, immediately after the conclusion of the 2007 Antwerp Diamond Conference, which ran from October 15 to 16.

Rapaport Diamond Report: In what direction do you want to take the World Federation of Diamond Bourses?

Michael Vaughan: It is my intention to raise the WFDB’s profile by assuming a high-profile position, being the professional who delivers speeches, presentations, attends all major conferences, meets with national governments and the EU [European Union]. And in addition, I will be in close liaison with all the major players in our industry. The main aim is to professionalize the WFDB, not only by having a full-time professional representative, but also by implementing the infrastructure necessary to achieve this aim.

We must also try and look at the role the WFDB could play in areas and regions that do not have diamond bourses, but where there is a great need for regulatory frameworks and ethical guidance such as the WFDB offers. The producing countries, for instance, could benefit greatly from the services that the WFDB offers. The WFDB is therefore looking carefully at how it can play a role and find a way to help producing countries benefit from the WFDB’s 60 years of experience.

RDR: In what other ways do you plan to raise the WFDB’s profile?

MV: Traditionally, individual bourse members had little direct contact with the WFDB, which was more a body that liaised with their bourse secretariats and elected leaders. With the introduction of the WFDB Mark,™ a quality mark awarded by the federation to individual bourse members, this modus operandi seems to be changing.

The WFDB Mark is, without a doubt, the most important initiative to be developed in recent times. The idea of a mark was first voiced by Freddy Hager at an executive meeting in 2004. Members have been asking for some time, “What is the member’s bourse doing for them and what is the WFDB doing for the individual members?” The idea of a symbol or mark was then seized upon by then-President Shmuel Schnitzer, who developed a strategic plan that was presented to the 31st World Diamond Congress held in New York in 2004. From then on, a considerable amount of work has gone into the fine-tuning, which led up to the WFDB Mark having its official inauguration and launch at the 2006 Congress held in Tel Aviv. The WFDB Mark is, and will remain, the property of the WFDB. I believe it is important that the WFDB play a more proactive role, pursuing initiatives that directly affect members; this, of course, in turn leads to the WFDB having direct contact with its members.

The WFDB Mark is being presented by the federation as a means by which bourse members can show their clients and suppliers that they abide by the WFDB ethical code. Specifically, each member who applies for the WFDB Mark signs a declaration that they abide by the World Federation Code of Principles (WFCOP), which is based on the resolutions that have been passed at Congresses over the past 60 years.

RDR: How can disputes among members be more swiftly and effectively arbitrated?

MV: I do not think that disputes can be resolved faster than they are today. In a very short period of time, we have moved from being an archaic type of organization that shunned the outside world and had no need for intensive communications tools into a fast-acting and ambitious trade organization that uses all the tools we can to communicate, with our members and with the outside world. We use email to reach the bourses to resolve issues that arise, including disputes and arbitrations; we are about to launch our revamped web site and we have established a website for the WFDB Mark to advance our WFDB Mark program. On the other hand, we’ll continue to rely on the decades-old arbitration system that is the oldest and most comprehensive self-regulating system in the diamond and jewelry trade. Our standards are the highest and the best, we believe.

RDR: Should the standard for WFDB membership change?

MV: A great question that demands a lot of thought, and I can intimate that it occupies our organization’s leaders a lot. First of all, the WFDB has a number of applications in the pipeline from new bourses, and individuals who are in the process of forming a bourse wishing to apply for WFDB affiliated bourse membership. That being so, we must understand that the role of the bourse has changed; it plays an ever-increasing and important role for its members, not in the sense of actual business being conducted on the trading floor — although there are some exceptions — but rather providing a service to its members. Let me stress that there is no excuse for anyone manufacturing or trading in diamonds not to be a member of a bourse. A bourse is the trade association for those in the diamond business, and just as a doctor, architect, chemist, lawyer and the like need to be a member of their professional body, so someone in diamonds must show that he or she is responsible by being a bourse member; it’s all about integrity and responsibility. Bourse membership inspires confidence — it means that you have passed a certain control, that you respect certain rules and regulations, both those of your bourse and also the WFDB. It inspires consumer confidence with not only your customer but also your supplier. Also, being a member of a bourse has become a respected and an essential requirement by the national government. Here in Belgium, a “Protocol” was signed with the government, and each bourse member was allowed to use the approved title of “Diamond Merchant.” In addition, members of bourses are viewed in a more positive and preferential way by the European Union (EU) than nonbourse members. The role of the bourse has changed, but its importance remains the same, if not increased.