Hoge Raad Diamant HRD: Whose Voice Will Be Heard and Who's in Charge? 

The motto of Belgium might be ‘L'union Fait la Force’, meaning strength lies in unity, but theses days Antwerp seems anything but united, and it's harming its strength. Battles in and around the city’s diamond umbrella organization, the Hoge Raad voor Diamant (HRD), reached a pinnacle last week.

(January 19, '06, 16:31 Edahn Golan found at http://www.idexonline.com/ ) 

After a long round of discussions with various Antwerp insiders, it is difficult to pinpoint exactly what the argument is about. But last week it reached a new peak, when Dilip Mehta quit the HRD board of directors, following the resignation of CEO Peter Meeus, and followed by four political figures representing the public and the channel through which the industry speaks to the government,.

Rosy Blue CEO Dilip Mehta and a major Diamond Trading Company (DTC) Sightholder, announced he was resigning from the board, saying he could not recognize himself anymore in the HRD, adding that “large players are apparently not welcome anymore.”

According to Mehta, the polished diamond traders association BVGD has been very aggressive in its actions. BVGD filed various legal complaints against the DTC and even against the HRD over Mehta’s board appointment.

With strong rumors about wrong doings at the HRD (all denied by the supposed allegers or accused when asked to comment) that sent emotions high, and continued ill communications that are preventing the HRD from carrying out some of its activities – the annual Antwerp Conference didn’t take place in 2005 – the departures of Meeus and Mehta were followed by that of another Sightholder, Chaim Pluczenik who also left the board. This string of resignations was followed by those of public officials on the board: the Governor of the Province of Antwerp, Camille Paulus; Antwerp’s mayor Patrick Janssens; alderman for diamonds, Leo Delwaide; and former Flanders Prime Minister Luc Van Den Brande. They reportedly resigned out of disenchantment with the organization.

An outcome of the new situation in the market, Sightholders did not bring their goods to the Diamond Office this week. On the one hand, this is not an official requirement, since the goods came from within the European Union, from London, but it is a custom remaining from pre-EU days. On the other, however, it’s more then mere symbolism: the HRD collects a small fee when diamonds pass through the office, a fraction of the value of the diamonds, which generates millions of euros annually, that will not enter its coffers. 

In a further sign of the HRD's lost footing, Mehta is now suggesting the formation of a parallel organization. “We are socially responsible people,” he says, offering to form a separate association where he and like minded diamond traders could “decide on our own destiny.”

According to the opposition voices, the big companies have a separate agenda to promote and as a result the small and medium size companies have different needs that are not being addressed. 

“The crucial task is that there is a delicate balance to be found between the large Sightholders and the small and middle players to keep a healthy market going,” says the BVGD in a release.

“The next Director-General of HRD will have to find that delicate balance: satisfy the needs of the large players and at the same time firmly prevent their desire to eliminate other players as demanded by their ‘Supplier of Choice.’”

But despite these reasonable sounding words, the Handel Group, which incorporates the BVGD, the rough traders, the industrial diamond traders, and the color gems traders, have succeeded in angering many in the industry. 

Daniel van Dievoet, who is in many ways the face of the Handel Group, will probably be a leading candidate for the vice president post at the HRD elections next week. He opposed the HRD plan to open a grading lab in Mumbai, claiming that it would take business away from Antwerp. 

Resigning HRD managing director Meeus express irritation over efforts to prevent him from implementing a large scale marketing effort to promote Antwerp as a brand and to strengthen its position in the global market. “I challenge anyone to come up with a better plan for Antwerp,” he says.

The underlying reason for Meeus' resignation is the thwarted international marketing campaign, for which he blames van Dievoet. Marketing the HRD certification, he says, would have helped the small and medium size companies. With lab created diamonds and consumers' increased knowledge, Antwerp sourced diamonds are highly regarded in the world; an advantage Meeus wanted to capitalize on. 

Frustrated by his inability to do the work, even though the plan that included NYC and Mumbai offices was approved twice by the HRD, at his last board meeting Meeus declared, “I do not want to be the captain of a sinking ship.” 

This brings us back to Mehta and his plan for HRD ‘B’ and the new vision for Antwerp. Is this the right solution? Getting away from what one called in disgust “dwarfs” and forming a parallel organization to Antwerp’s diamond umbrella organization?

Even clear supporters of Mehta fear such a drastic move. One of the main jobs Mehta is planning for the proposed new entity will include what he calls “proper legislation”, which means talking with the government. He does not want to create new research or grading labs. This echoes what Meeus calls ‘the important question’: “Where is the vision?”

While one HRD insider said that the big guys don’t really need the HRD, “they have branding, and don’t need an Antwerp brand,” a board member said the solution to Antwerp’s problems could meet some relief if the city is declared a tax free trade zone. This could resolve some burning financial issues that current legislation does not address.

This is a hushed and explosive topic that no one wants to talk about directly. Nonetheless, how the center resolves its bad habits from yesteryear is currently on the operating table, with hopes that the operation succeeds and the proverbial patient lives.