Signet’s Plan for Tracing its Diamond Sourcing

of different sources, with some percentage of the diamonds deriving from identified and verified sources. This category would include melee.

4) Other identified and verified sources. This category applies to diamonds that derive from a producer country or particular mine, originally sourced from companies other than De Beers, Alrosa, Rio Tinto or Dominion. This category includes diamonds mined by artisans.

In 2017, the second year of the protocol, supply chain audits likely will begin.

Bouffard said during the press conference that because Signet is conscious of potential “audit fatigue” among suppliers, it harmonized its audits with those already required by the RJC and De Beers’s Best Practice Principles, or BPP, so they all can be done at the same time.

Tuesday’s announcement raised a number of questions about the implementation of such a system; chief among them were the feasibility of sources reliably reporting the origin of their diamonds and the potential impact the protocol could have on smaller suppliers, particularly in a market where the midstream players already are struggling to remain profitable.

The one manufacturer present at the press conference, Michael Steinmetz of Leo Schachter Diamonds, said while he doesn’t dispute that the fact that there are going to be extra costs involved in implementing the protocol, they haven’t turned out to be significant for his company, although he added that he “can’t speak for those small manufacturers who can’t tell you where their goods are from.”

The speakers at Tuesday’s press conference also reiterated several times that the protocol is a work in progress.

“We don’t pretend that this is the perfect approach,” said John Hall, who worked as a consultant for Signet on the project. “We know it can be improved.”

This is the third sourcing protocol established by Signet.

The other two--for gold and for the “three Ts,” tin, tantalum and tungsten--were established after the federal government passed the Dodd Frank Act and its so-called conflict minerals provision in 2010.

The provision required that all publicly traded companies essentially map their gold supply chains and report to the Securities and Exchange Commission if any of the minerals they use originated in the Democratic Republic of the Congo or one of nine neighboring countries.

Bouffard said Signet did not lose a single supplier in implementing its sourcing protocol for gold.

When asked if he expects the same for diamonds, he said, “We intend to do everything we can (to keep them all) but we’ve got to understand the supply chain better.”

Signet’s entire Responsible Sourcing Protocol for Diamonds is available on SignetJewelers.com. The retailer said all companies involved in the diamond industry are free to adopt the protocol and apply it to their supply chains.