By Charles Wyndham.
It is not too often that I have the pleasure of having lunch with someone for the first time and finding that apart from myself agreeing with most of what I say, they appeared to as well…most of the time.
This chap is on the peripheries of the diamond business and our principal cause for agreement was the laughable lack of transparency within the diamond industry.
Indeed, I think the first public airing of the word ‘transparency’ as a clarion call to bigger and better things, probably popped up around 2000/1 when De Beers launched its Supplier of Choice initiative, and the jargon of management speak imported by Bain suddenly swamped De Beers.
Of course the word ‘transparency’ was not really meant and in fact did not mean what someone on the outside of our hill billy world of incestuous relationships might expect, that is if they expected anything, which they probably did not.
Nearly a decade and a half later, the first Botswana sight is taking place Gaborone.
You may recall some of those wonderful acronyms with which we were deluged at the time.
Apart from SoC, Supplier of Choice, there was also PoC, Partner of Choice, and even EoC, Employer of Choice and a few other gems of clear sighted intent that escape my memory.
PoC was clearly prescient in that De Beers and its clients or sightholders are having to learn to be partners with the Government of Botswana as they flog down to Gaborone for the sight.
There were all those huffing and puffing sounds before, that sightholders would not be bothered to make the journey; reality, I am told is that Gaborone is swamped with hordes of individuals trying to work five mobile phones at the same time when at best the signal is only intermittent.
But as substance to the cliché that a change is as good as a rest, the mood in Gaborone is, I am told, delightfully up beat.
Added to the novelty of the experience there has, so the rumour machine goes, been a fairly healthy doling out of goodies by the DTC to lighten peoples’ mood from what remains a pretty dire rough market.
However slowly, and heavens it has been slow, some change is creeping into the business, but it is going to be interesting to see if the change is simply cosmetic or substantive.
The first signs are at best blurred.
With much brouhaha a couple of months ago, the Okavango Diamond Company (ODC), set up by Government to handle the +/- 15% window goods from the Debswana production, had its first trial tender.
The tender was small, but the published results showed a 51% premium over the reserve prices, which clearly gave a powerful message given that the reserve prices were taken to mean the DTC prices, and, from the point of view of the ODC, must have been a most welcome vindication of its existence and methodology.
However, the results of the second and first full tender conducted by the OCD a couple of weeks ago were not published.
The results were, in fact, in sharp contrast to those of the trial, where the prices achieved in the first full blown tender were much closer, very much closer, and indeed, I believe in some instances even below the reserve prices.
I would hasten to add that I certainly do not take this to negate the principle of having a window. As I have said before, I would suggest it would be best if pretty much everything was sold through this window, or rather through a properly constituted tender or auction mechanism, not a view that wins overall approval.
Clearly, this ‘window’ from the point of view of providing transparency to the market has remained firmly shut.
There is so much that the Government of Botswana can justifiably feel aggrieved about their treatment from De Beers, and yet, here they are mimicking some of the worst tendencies of that organisation.
An opportunity for a clean break has, it would appear for the moment, been tossed into the nearest dustbin.
By Charles Wyndham.