Frequently Asked Questions DTC New Supplier of Choice Contract 2012–2015
Please note that newly added questions appear in BLUE Updated – 13/04/2011
TABLE OF CONTENTS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
SIGHTS AND SIGHTHOLDERS...............................................................2 REGISTRATION.......................................................................................4 CONTRACT PROPOSAL QUESTIONNAIRE (CPQ) ...............................5 LEGAL AND GROUP ISSUES ...............................................................12 FINANCIAL .............................................................................................13 SUPPLY .................................................................................................17 OMBUDSMAN ........................................................................................18 BEST PRACTICE PRINCIPLES (BPP’S) ...............................................19 TIMINGS.................................................................................................20 PRODUCER PARTNER DTC’S (PDTC’S)..........................................20
SIGHTS AND SIGHTHOLDERS
What is a Sight? The Diamond Trading Company (DTC) hosts ten sales of rough diamonds a year, called ‘Sights’. These occur simultaneously in London and Kimberley, usually once every five weeks. There are also Sights held at our Government JV partnership DTCs in Botswana and Namibia. At these sales, the DTC’s customers physically inspect their allocations of rough diamonds before deciding whether or not to purchase them. Customers literally have ‘Sight’ of the diamonds, and this is why these selling periods are called ‘Sights’. The DTC does not sell rough diamonds other than at the Sights.
What is a Sightholder? A Sightholder is a customer of the DTC, and is supplied with rough diamonds according to (amongst other things) the DTC’s terms and conditions of supply. To purchase rough diamonds from the DTC, a business must be a Sightholder.
What are the advantages to being a Sightholder? Qualifying as a DTC Sightholder means a 3 year ITO, the key features of which are continuity of supply and access to the DTC’s Supply Planning Services* which include the provision of consistency of boxes, provision of the Sightholder Extranet and provision of Key Account Management. In addition, the DTC offers BPP leadership and other services which include the right to use the DTC IP Sightholder signature, Business Excellence Seminars and the Sightholder Directory. (* some Supply Planning Services are dependent on the jurisdiction of the Sightholder).
How do you decide who becomes a Sightholder? The DTC, to date has awarded fixed-term supply contracts as a result of an open and competitive application process. It will appoint an applicant as a Sightholder if it can offer that business an economically efficient level of supply of the categories of rough diamonds that it requires for the entire duration of the contract period, given the DTC’s intake forecasts and the competing demands of other applicants. The competitive process consists of three key elements: •
The extent to which a Sightholder or potential Sightholder satisfies the DTC “Sightholder Criteria” compared with other applicants for the same goods. The precise categories and quantities of rough diamonds for which a Sightholder or a potential Sightholder applies. The DTC’s forecast availability of these categories of rough diamonds over the course of a contract period.
For the next contract, 2012 â€“ 2015, you will be assessed against the following criteria; Mandatory Criteria: Criterion 1 - Financial Transparency & Compliance Criterion 2 - BPP Compliance Criterion 3 - General Business Reputation Relative Performance Criteria: Criterion 4 - Distribution and Marketing Ability Criterion 5 - Technical Ability Criterion 6 - Core Strengths Criterion 7 - Financial Strength and Reliability
How many Sightholders are you looking for, for the new 2012 â€“ 2015 contract period? We don't pre-determine the length of the Sightholder list. As always, it all depends on forecast availability, the level of competing applications for the same category of rough and relevant applicants' performance against the Sightholder Criteria. If I get a Sight, can I acquire additional goods from other sources or producers? As has always been the case, you can of course apply for goods from the many other sources of rough. In doing so, you should have regard to your contractual commitments under the De Beers BPPs and any other commitments you have made to industry bodies (such as the RJC) in respect of, amongst other things, the trade in conflict diamonds and full adherence to the Kimberley Process and any other regulatory provisions.
Can I still buy from Diamdel if I become a Sightholder? Applying to become a Sightholder does not affect your status in any way with any other parts of the De Beers Group of Companies; you can continue to purchase from Diamdel in accordance with their own requirements.
Who do I contact if I have a problem with registration? You can e mail ApplicantSupport@dtc.com
Is there a fee to register? No.
Do I have to proceed to completing the CPQ after I’ve registered or can I withdraw my application at any time? There is no obligation to submit a CPQ even after registration, and you can withdraw your interest and/or CPQ submission at any point in time up to the deadline of Thursday 7 July 2011 (23:59 (BST)), however, please note that once a CPQ application has been submitted to the DTC, it will not be possible to amend or update the content of the CPQ application for re-submission.
Are there going to be any specific gating criteria before I register? No, only WHEN you register.
My turnover and rough utilisation are below the mandatory thresholds on your website – what are the chances of getting a Sight? If your application does not satisfy the mandatory thresholds, the application cannot unfortunately be considered by the DTC.
Would the applicants receive a confirmation that their NDA has been received by DTC? We will alert any companies who have registered but from whom we have not received NDA’s, just prior to the 18th April.
CONTRACT PROPOSAL QUESTIONNAIRE (CPQ)
What are the Sightholder Criteria? We will provide detailed information on the list of criteria after the consultation period has finished and at the time of the launch of the application process on 3rd May 2011. The Sightholder Criteria have been designed to support the DTC’s “Supplier of Choice” sales strategy. The ultimate objective of this strategy is to drive demand for diamonds. By assessing the relative satisfaction of the Criteria of applicants’ Contract Proposals, the DTC can objectively and fairly identify its customers on the basis of the extent to which they are aligned with its sales strategy. For the next contract, 2012 – 2015, businesses will be assessed against the following criteria; Mandatory Criteria: Criterion 1 - Financial Transparency & Compliance Criterion 2 - BPP Compliance Criterion 3 - General Business Reputation Relative Performance Criteria: Criterion 4 - Distribution and Marketing Ability Criterion 5 - Technical Ability Criterion 6 - Core Strengths Criterion 7 - Financial Strength and Reliability
Are there any minimum requirements? Yes. The DTC is a wholesaler of rough diamonds, which seeks to provide consistent supply at economically efficient levels to its customers; there are logistical constraints to the minimum volume of business the DTC is able to transact with Sightholders. The DTC requires that all applicants meet certain mandatory criteria before their application can be considered: 1
DTC requires all applicants to be able to demonstrate a minimum level of turnover and total rough diamond utilisation in each of the three years 2008, 2009 and 2010 (Namibia and South Africa, 2010 only). These minimum levels vary as follows depending on the location in respect of which supply is required: • • • • •
Canada: $30m annual turnover, $20m annual rough diamond utilisation Namibia: $10m annual turnover, $5m annual rough diamond utilisation (2010 only) South Africa: $15m annual turnover, $10m annual rough diamond utilisation (2010 only) Botswana: $30m annual turnover, $20m annual rough diamond utilisation London: $30m annual turnover, $20m annual rough diamond utilisation
The DTC requires all applicants to be able to demonstrate their full compliance with De Beers’ Diamond Best Practice Principles (the BPPs).
The DTC requires all applicants to be able to provide consolidated or combined audited financial statements for 2010 (with 2009 comparatives) and 2009 (with 2008 comparatives) for its entire Sightholder Group.
The applicant and its key individual have, since the inception of the Kimberley Process Certification Scheme (KPCS) in January 2003, not purchased, sold, exported, imported or otherwise traded in rough diamonds without the full authority of, and in compliance with, the KPCS. For the avoidance of doubt, rough diamonds sourced from the Marange region of Zimbabwe without the approval of the Kimberley Process-appointed monitor - acting under the direction of the relevant KPCS working group) - do not have the full authority of, and are not in compliance with, the KPCS.
Details of the relative criteria can be found elsewhere on the www.newsightholdercontract.com website and are detailed in the video.
Can I apply if I‘ve only being in the diamond industry a year/ or two? No. You need to demonstrate three consecutive years of purchasing at least $20m of rough diamonds per year in 2008, 2009 and 2010. You can of course seek to purchase De Beers rough via Diamdel.
How will the CPQ be assessed? New contracts for the 2012 – 2015 SoC contract period will be awarded on the basis of an open and competitive process in which existing Sightholders and new applicants will be assessed against objective performance criteria, namely the Sightholder Criteria.
When can I get more details on how to apply? We will publish comprehensive guidance notes on 3rd May 2011 on our website; www.newsightholdercontract.com
Will you visit my factory? Factory visits will be undertaken for the purposes of the CPQ assessment at various times throughout 2011.
What’s different from the last selection process? This CPQ is going to be easier to fill in than the last one. There's only one CPQ per applicant; previously we requested a separate CPQ for each category applied for. There are also only three main written questions to answer: * tell us about your technical abilities with rough diamonds - by product category * tell us about your distribution and marketing abilities - by customer segment
* tell us about the core strengths of your whole business The entire CPQ submission will be handled online, including the PDTCs, on a single website.
I’ve been buying actively from Diamdel, does this put me in a better position? No.
Who will score me? A team of expert assessors from the DTC will score your CPQ against a set of objective performance benchmarks which underpin the Sightholder Criteria. Their scores will be moderated by a senior executive panel to ensure all assessors have taken a fair and consistent approach.
How will I be scored? For each relative criterion, there are a number of performance measurements. The component parts of your CPQ will be awarded scores against each of these, using the standard scoring benchmarks. The scores will then be weighted to build up into an overall picture of how well your CPQ satisfies the Sightholder Criteria.
Do you need the average turnover and rough utilisation, or the amounts per year? Per year for each of 2008, 2009 and 2010 (calendar years). Dipping below the threshold in any one of the three years means you fail to meet the threshold.
What standard of performance against the DTC Sightholder Criteria is required? There is no ‘pass mark’ as such. Instead, the required standard is determined by the standards achieved by the other applicants. When the DTC appoints Sightholders, it considers the rough diamonds it has available, together with the particular categories of rough each applicant requires and then, where demand outstrips available supply, it prioritises the requirements of the applicants whose Contract Proposals have shown the best satisfaction of the Criteria.
In the request for a particular Category of Rough based on the last 3 years utilisation does an applicant describe what he has done with the goods by segment over the past 3 years OR what he is currently doing with the goods in terms of distribution etc. ? The description of what they're doing with the segment should be based on what they're doing now.
Will you assess all business models on a level playing field, i.e.; is a rough dealer on equal ground as a manufacturer or polished distributer?
All businesses will be assessed on a level playing field.
How are we supposed to supply evidence or validation to the data we include? Please specify format of the additional data we could attach. You will see full guidance notes on the CPQ website from May 3rd. Please come back to firstname.lastname@example.org after this time if you still have any queries.
Regarding the flow diagram of processes within the factory: How detailed should it be? Are you looking for the big picture or the smallest technical stages? We will be providing full details in the guidance notes to the CPQ which will be published on the website 3rd May.
Are there any constraints for customer segmentation in terms of matching up to a certain percentage of turnover? Yes. Segments can be no smaller than $5m or 10% of group turnover (whichever is the smaller). We would urge you not to overcomplicate your customer segmentation.
When catering to a particular customer segment are we talking about only the products derived from DTC rough or does it also include similar rough purchased from other legitimate sources? Your customer segment information will reflect all legitimately sourced rough from any sources.
What are the weightings for the criteria (financial strength, technical skills, marketing & distribution and Core business strength)? We will be providing guidelines on the website - www.newsightholdercontract.com from 3rd May 2011.
Could you explain the rationale behind the concept of limiting application to the average value of rough utilisation rather than "polished utilisation"? We are a rough diamond distribution business and our aim is to ensure that we put our rough diamonds where they will have the greatest value added. Therefore weâ€™re looking for expertise in rough and not polished utilisation
Is the customer segmentation also based on the last 3 years average or just our current business model? We need to see the history of rough utilisation as it flows into each segment. The most you can apply for is an average of the rough you have provided to each segment over the past three years.
So we’d encourage you to focus on those customer segments where you can demonstrate strong demand for the goods you sell – and not just going for as many segments as possible
Am I disadvantaged, as a Non – Sightholder, in demonstrating utilisation of rough? The CPQ that will be completed by all applicants – Sightholder and non-Sightholder alike – it is not interested in the utilisation of DTC rough diamonds but on utilisation of rough from any and all sources. Therefore, already having a supply from DTC does not convey any advantage on the applicant.
How will you validate the marketing and distribution strength stated by the client in the CPQ? All applications are subject to Third Party Verification
What guarantees that the submission of any information online is highly secured and confidential? All CPQ submissions uploaded on the website are done so using SSL (Secure Sockets Layer) which is an industry security protocol for transmitting private information on the Internet and uses a cryptographic system to securely encrypt and decrypt data transmitted from the user browser to the web server. The DTC agrees to keep confidential all information disclosed to it by an applicant and to use such information for the purposes of the SoC application only.
Can capital that is added to the balance sheet after the financial year end be included in the submission? No.
How do applicants indicate their box preferences and can an applicant earn into a category but a preferred range of boxes? On the CPQ the applicants will be asked to indicate which of the boxes are required for the Contract Proposal by sepcifing the $ value required of each box and also to rank any acceptable substitute boxes in order of preference. The DTC will not allocate boxes that have not been specified as required and will endeavour to allocate most preferred boxes to the successful applicants.
How do we classify outside goods or boxes that do not now exist and how will these purchases be verified? The applicant should estimate how the goods purchased fit to the category list.
If an applicant is not making a Contract Proposal for a particular category can the value of the 2010 purchases, for example, $20m of rough be transferred to another category to provide a higher cap? No. Please note that the previous purchases is not the determining factor in establising the supply level. The quality of the contract proposal is the main driver of whether or not an applicant will be supplied.
How can USA clients complete the questionnaire on-line? As before US applicants, without a non-US subsidiary, may wish to use the services of a Broker, or other third-party, to upload the data on their behalf.
How should international brands be accounted for in the market focus question? Where it is not possible to estimate the final retail destination of the diamonds sold to international brands the sales should be declared as a mid-stream sale.
There will be an element of rough dealing in most boxes. Let's say it is below 10%. Will clients have to segment and provide answers to section 3 for this? I would assume that we would go with the majority? If so what is a majority? The name of the game for applicants will be to put forward a convincing case for why the DTC should provide them with the amount of supply they're requesting in their Contract Proposals. For example, if an applicant is requesting $50m of Commercial High, and let's say $30m of that will end up going to a network of US wholesalers with whom it is doing some high quality co-op marketing, $15m will go into the applicantâ€™s own jewellery brand, and $5m is rough rejections that will be sold to the highest bidder. The applicant must decide how much of the activity is excellent without necessarily shoehorning every last scrap of activity into the Contract Proposal. Applicants will NOT get more simply by providing details of standard stock-clearance selling activities. Applicants will in all probability ONLY get supply if they can substantiate the ENTIRE value of their Contract Proposal with value-creating activities from which they enjoy a demonstrable and sustainable competitive advantage.
Will you be assessing the Contract Proposals by band or by box? I think I have a tremendous proposal for using +2ct Fine but I simply can't use the 48grs goods from the same band. Firstly, it's important for you to specify in Section 2 of the Contract Proposal Questionnaire the boxes you require in each band - and the boxes you don't. We promise never to make selection decisions on the basis of offering applicants goods they have not specifically requested. However, if you do request a box, it must be a box whose value you can maximise as per the activities you have laid out in your Contract Proposal. If we offer you supply of any of the boxes you have requested, these boxes will form the basis of your first ITO in the new contract period, and your continued demand for these goods will be important when we come to re-plan ITOs in early 2013, to the extent that supply of the boxes could be withdrawn altogether if demand for the ITO box is not being evidenced.
The assessment process we will be using this year will enable us to identify the Contract Proposals for each band of rough that have the strongest commercial competitiveness. These will be the Proposals with the best all-round satisfaction of the Sightholder Criteria. Within a band, we will typically prioritise the box requirements of the Proposals with the highest commercial competitiveness, aiming wherever possible to provide these Proposals with their first preferences, or otherwise the closest possible acceptable alternative. We plan to review Contract Proposals in this way in diminishing order of commercial competitiveness, allocating boxes until the availability of all the boxes in the band has been exhausted and the commercial risks outlined in the Sightholder Considerations have been addressed.
LEGAL AND GROUP ISSUES
How many Key Individuals does the DTC expect an average applicant to submit? The number of Key Individuals in a Sightholder Group will vary from applicant to applicant. It is possible one applicant may only have two or three Key Individuals whilst another may have many more. The DTC is looking for declarations from any individual who is actively involved in the management or control of the applicant, as per the definition provided in the guidance notes. This is typically to be (but not limited to) the equivalent of a Board position and will include any individuals who can impact the strategic direction of the applicant
What do mean by Appendix 1 and how does this relate to the definition of Sightholder Group? The Appendix 1 is a simple template that the DTC uses so that Sightholder's can identify and particularise their Sightholder Group structure by reference to simple, logical questions.
What is difference between corporate and individual chain of control? The reference to a corporate chain of control means the chain of control by which each entity can be demonstrated to be part of a Sightholder Group - whether that Group is ultimately controlled by a company or otherwise.
What do you mean by an entity? An organisation or person that possesses a separate legal existence or identity - e.g. a limited company
Is it correct that for submission of the CPQ, the condition of holding at least 1 share has been dispensed with? In other words, the mere holding of majority of the voting rights is adequate to be a part of the Sightholder group? Confirmed.
Why do you need to see my financial statements? The ability to produce audited financial statements for your entire Group (consolidated or combined) is a mandatory requirement as per the Financial Transparency & Compliance criterion. Your financial statements will also be used as the basis for an assessment against the Financial Strength and Reliability criterion.
What foreign exchange rates should I use in answering questions on thresholds and financials? EXCHANGE RATES 2010 Average US DOLLAR $ = ZAR AUSTRALIAN DOLLAR BOTSWANA PULA CANADIAN DOLLAR EURO JAPANESE YEN NAMIBIAN DOLLAR NORWEGIAN KRONER POUND STERLING SIERRE LEONE SWISS FRANC SWEDISH KRONER TANZANIAN SHILLING INDIAN RUPEE HONK KONG DOLLAR CHINESE YUAN (RINMINBI) THAILAND BAHT NEW TAIWAN DOLLAR ISRAELI SCHECKELS TURKISH LIRA RUSSIAN ROUBLE
7.3661 8.2477 7.7496 1.0823 1.3074 1.1977 6.7853 6.9778 6.5230 1.0329 1.1462 1.0817 0.7505 0.7215 0.6829 87.5170 93.4740 103.4310 7.2582 8.1594 7.9247 6.0187 6.3702 5.6666 0.6431 0.6364 0.5431 3,981.8766 3,333.9174 2,961.3965 1.0361 1.1046 1.0961 7.2057 7.6953 6.6395 1,422.3973 1,308.7980 1,192.8003 46.1025 48.5800 43.3180 7.7690 7.7514 7.7880 6.7767 31.8090 31.4697 3.7391 1.5241 30.4541
6.8375 34.4410 33.1027 3.9164 1.5608 30.9755
7.0105 33.5275 31.6995 3.6580 1.2922 25.0278
Given an applicant already has the audited financial statements using a particular currency exchange rate, would it be still required to submit Audited Financial Statements as per currency exchange rates mentioned by DTC? No, just a summary, converted at the exchange rates we publish here (see above)
Can an applicant combine or consolidate figures of an entity whose activities are not wholly from diamonds?
Yes, so long as it is a diamond related business (i.e. it generates some of its revenue from selling diamonds)
How will DTC compare financial information from different applicants who apply different accounting standards in preparation of their financial statements We will use a standard ratio-based analysis of all the financial statements we receive so there is no advantage/disadvantage of the accounting standards used.
The choice of an auditor for a global business is quite important. Therefore, if a business is audited by a globally recognised audit firm versus another business that chooses a small audit firm would it not mean that both businesses are NOT being viewed the same? Applicants using a globally recognised audit firm would not be subject to third party verification of their financial statements. Applicants using auditors that are not internationally recognised will fall within the third party verification regime with respect to their financials.
Do applicants have to submit Audited Consolidated Financial Statements with audit report and notes to accounts or we have to submit only summary of financial statements along with a letter from auditor? Summary statements as per the CPQ template, with the auditor letter, please. We don't need the original statements, but we reserve the right to inspect them on request.
Do you require audited financial statements for US entities as most US CPAs do not give audit opinions? A review opinion will be acceptable for US-based entities.
Can we give financial statements from April to March, as in India our financial year is April to March? Itâ€™s fine to submit financial data according to your financial year. But for all other information, we need this provided by calendar year
What kind of ratios are you looking at? We will be providing guidelines on the website - www.newsightholdercontract.com from 3rd May
What will be minimum application value per band of rough? We will be providing guidelines on the website - www.newsightholdercontract.com from 3rd May
Subordinated Loans â€“ please clarify that you are happy to accept treatment of subordinated loans as capital if the auditors notes support this, as previously? Yes as previously advised.
Please confirm if you will accept audit reports for subsidiary companies carried out by an auditor in another country? Yes, as long as this is specified on the main auditor's sign-off report.
Please confirm if you will accept accounts with different year ends being consolidated together. Yes. The consolidation should meet the accounting standards of the jurisdiction in which the applicant is operating.
On the sheet provided which exchange rates should I use? The conversion should meet the accounting standards of the jurisdiction in which the applicant is operating.
Will the DTC accept differences between the finance data and the CPQ data caused by non-diamond value such as gold and jewellery? Yes.
What is the difference between consolidated and combined accounts? Consolidated financial statements are defined as financial statements that reflect the total economic entity of a group. For example, on a consolidated income statement a corporation having several subsidiaries would report the total of all of its companies' sales that were made to customers outside of its group. Sales to companies within its group of related companies would be excluded as well as the purchases within its group. Combined financial statements are financial statements that merge the assets, liabilities, net worth, and operating figures of two or more affiliated companies, whilst netting-out intra-group sales.
Do Chinese entities need to be audited? The DTCâ€™s requirement is for audited, or in the case of USA, reviewed accounts.
Is there any flexibility on a July 7th deadline for the submission of financial statements? No the most recent year possible should be submitted.
How do we cope with group structures that do not allow consolidated audited accounts? In those cases where it is not possible to consolidate the entire group a combined financial statement should be submitted.
Please clarify in cases where a Key Individual has control over 2 companies/entities, whether such companies/entities would be treated as part of Sightholder Group. In such a case, whether combined financial statements would be accepted of the Sightholder Group which would include both such entities. We have said that the common shareholding of an individual is not on its own sufficient. There needs to be a corporate link for the companies to be included and that private ownership does not, in and of itself, qualify. A key individual cannot include his individual companies unless they are controlled by the applicant group.
If your production’s going to be so much less than last time, is it likely you’ll have fewer Sightholders this time around? Our ability to allocate rough to any applicant continues to depend on forecast availability, the level of competing applications for the same category of rough and relevant applicants' performance against the Sightholder Criteria, bearing in mind that the DTC cannot supply below a minimum efficient level. As always, the 2011 admissions process will be a highly competitive process as applications invariably exceed the goods we expect to have available over the three year contract period. With forecast availability being finite, only the applicants with truly world class capabilities will have a realistic chance of qualifying for an allocation of the DTC's finite availability of rough. However, it remains to be seen how many applicants will eventually qualify.
How will the pending sales negotiation with Botswana affect selection and supply? The Government of Botswana and De Beers are long standing joint venture partners and have a mutual interest in the success and sustainability of the diamond industry. To the extent there are any implications in relation to selection and/or supply arising from discussions with Government, these will be communicated as soon as reasonably practicable.
Apart from being a Sightholder, are there any other ways to access supplies of De Beers’ diamonds? Yes. The Diamdel group of companies sells up to 10% of De Beers’ annual sales. Diamdel operates an open door supply policy and focuses its supply on emerging and developing diamond businesses.
Can any idea be given about the likely availability position of rough for the next few years - the same levels as of now, maybe less than of now or more than what is available now? This information is not in the public domain and/or information that DTC discloses
How do I know that the process is going to be unbiased to new applicants? De Beers continues to be committed to operating a fair, transparent and nondiscriminatory applications and allocations process. Existing Sightholders and new applicants will go through exactly the same objective assessment process and will be scored against exactly the same criteria and benchmarks. The only information taken into account in the scoring process will be the information submitted in the CPQs and subject to any factory assessments undertaken where applicable. There's therefore no inherent advantage in being an existing Sightholder. This is DTC's opportunity to refresh the Sightholder list and ensure it continues to work with Sightholders that truly have the best capabilities to add value to the rough we expect to be able to offer. We want to work with the best, regardless of whether they're currently Sightholders or not. It's simply not in the DTC's commercial interests to disadvantage new applicants (or advantage existing Sightholders). Finally, there's an independent Ombudsman in place to ensure that our admission and supply decisions are made properly and in accordance with the Sightholder documentation.
Why will my application go to an Ombudsman? The ombudsman function is a commitment De Beers agreed to implement with the European Commission. The Ombudsman, who is entirely independent from the DTC, ensures that excessive confidential information contained in your application is not disclosed to the DTC. The DTC will issue clear guidance about the information we need (and don't need) to enable us to properly assess your CPQ in due time. Any excessive confidential information submitted by you will be removed from your CPQ by the Ombudsman's office before the DTC is able to assess your application. If you visit our website www.newsightholdercontract.com (from mid March 2011) you will find a general guide to the Ombudsman, together with written Ombudsman guidance and an Ombudsman video which sets out what amounts to excessive confidential information and which should therefore not be included in your CPQ.
Should I cc the Ombudsman that I have registered? No.
BEST PRACTICE PRINCIPLES (BPP’S)
What is the status of RJC membership within your requirements. Is DTC BPP still a separate requirement? If so doesn’t it defeat the purpose of the DTC support for RJC usp? Compliance with the BPPs through participation in the BPP Programme remains an integral part of the DTC’s supply relationship with Sightholders. At the same time, however, De Beers is committed to reducing any duplication of effort that can occur with having to demonstrate compliance with multiple similar codes of conduct. The RJC Membership and/or Certification is NOT a requirement of the DTC, the same is said about ISO 14001, SA 8000 and OHSAS 18001 certifications. However these certificates, if attained, will only be taken into account when participating in the BPP programme to avoid duplication. They will not however give any applicants any competitive advantage.
For small size diamonds, (mainly below-7), BPP is more costly and time consuming so will there be any rewards for that applicant company in terms of prices or more ITO allocations? Small size goods are labour intensive and that is where the cost differential is found. The BPPs request that Sightholders meet the legal requirements of the countries that they operate in with regards to employment laws, meeting these obligations should not just be viewed as a BPP requirement, it is a legal requirement that is mandatory in the country that you operate in and a reward for meeting legal requirements would not be responsible behaviour.
What do you mean by a ‘reputable business? Those that are ethically sound, adhere to best practice principles that can validated and verified and that follow honest business practices. Full details of De Beers Best Practice Principles can be found on this website.
When will a successful new applicant be audited for compliance with BPP and what are the time frames for that process? All applicable entities must complete workbooks and then approx 10% of these applicable entities will be selected for onsite verification. The process will begin at the start of the new contract period and runs annually over the course of the three year contract. More information and documentation is available on the debeersgroup.com website and www.newsightholdercontract.com.
When can I apply? To apply, you need to have pre-registered by 23:59 (BST) 18th April 2011. Once registered, you may submit a CPQ from 3 May 2011 onward, but in any event the CPQ application must be submitted by 23:59 (BST) 7th July 2011. When do we have to register by? Registration opens on March 1 2011 and will close at 23:59 (BST) on April 18th 2011.
When will I know if I have qualified a Sight? It is expected that the DTC will announce the 2012-2015 Sightholder list in December 2011.
10. PRODUCER PARTNER DTCâ€™S (PDTCâ€™S) (SEE SEPARATE Q&As ON WEBSITE) How will the pending sales negotiation with Botswana affect selection and supply? The Government of Botswana and De Beers are long standing joint venture partners and have a mutual interest in the success and sustainability of the diamond industry. To the extent there are any implications in relation to selection and/or supply arising from discussions with Government, these will be communicated as soon as reasonably practicable.
Do I need an operational factory in Botswana, Namibia and/or Canada to apply and/or to receive supply? You will not need an operational factory to apply for a Sight but you will be required to have an operational factory in order to receive supply if you are successful in your application. What will be the registration process for Producer Partnership DTC supply? Register in the normal way, and specify the locations in which you'd like to be considered for supply. Remember you can only be eligible for supply if you satisfy the relevant national licensing requirements or other licensing requirements and any other mandatory requirements notified to you by the DTC (or Producer Partnership DTC as the case may be).
Applications from companies meeting the Producer Country thresholds and criteria but not the London thresholds may these companies apply for a Sight in London as well as, say, S Africa? No, applicants meeting, for example, RSA minimum requirements are eligible to apply only for supply from the DTC in RSA.
In South Africa will you be selling more goods than produced in certain categories? Applications made for rough not produced within the country are unlikely to be successful, and there will not be any large scale â€˜subsidisationâ€™ from different countries.
DTC Sightholder FAQ