Dubai:
Systems are going to be put in place across Dubai’s gold and jewellery trade to ensure retailers are in full compliance on their sourcing of the yellow metal. It would mean that all of their transactions will be through “official” channels alone, and which would mean there is no place in Dubai’s jewellery stores for gold taken from strife-torn countries. (A similar process is being followed — scrupulously — in the local diamond trade by signing up for the Kimberley Process.)
“A fully accredited process should be in place for the jewellery trade in the next 18 months — split into six months to make retailers aware of the need for ‘ethical’ sourcing and around 12 months to effect open contracts with all stakeholders related to the trade,” said Tawhid Abdullah, Chairman of Dubai Gold & Jewellery Group. “By the end of the next 18 months, Dubai’s jewellery retailers will have full implementation of the accreditation requirements.
“These processes will be more of a self-regulated set of best practices, rather than imposed regulations.”
While nobody is saying that Dubai’s gold and jewellery industry has a surfeit of supplies from questionable sources, what the new plan aims to do is create a foolproof sourcing and selling system for the future.
According to Abdullah, apart from the retailers, the key stakeholders will be the DMCC, the mandating agency in the emirate’s commodities trade, Department of Economic Development, Dubai Customs, local refiners, the Central Bank, bullion banks, exchange houses and independent auditors. (The DMCC has a regular monitoring regime in place for the local industry’s adherence to the Kimberley Process.)
“If you look at it, the bullion that comes into the country and then gets distributed into the system is not a retailer issue as such,” Abdullah said. “But retailers can do their bit by signing up for a process that will ensure full transparency.
“Dubai has built an enviable reputation as the ‘City of Gold’ ... it was not done overnight but built on rigorous self-discipline. What is planned over the next 18 months takes the step forward.”
The template that the trade — and other industry bodies — will use is that set forth by the Paris based OECD (Organisation for Economic Cooperation and Development). On the ethical sourcing in gold, OECD has in place a ‘Due Diligence Guidance for Responsible Supply Chains of Minerals’ from conflict affected areas. (All refineries in the UAE are already signatories to the OECD guidelines.)
Now, local jewellers will be “educated” to follow similar guidelines and audit their supply channels and procedures to ensure such guidelines are followed.
Individual retailers too have already incorporated this as part of their operations. According to Abdul Salam K.P., Executive Director at Malabar Gold & Diamonds, “We ensure that the gold we use in our manufacturing divisions and supply chain are obtained through ethical sources only. To ensure this, we source only from authorised banks and financial institutions, and strictly monitor our suppliers to confirm each one meets the stringent criteria.
“We have take an extra step by analysing two levels in the supply chain of our bullion dealers to ensure that the source [of the bullion] is clear.”
