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The Canadian Diamond Code Committee's Annual Report
to the Commissioner of the

Competition Bureau

ANNUAL REPORT 2010

Date of Report: February 4, 2011

Review Period: January 1, 2010 - December 31, 2010

In 2010 the Canadian Diamond Code Committee (CDCC) consisted of the following representatives:

 

Chairperson: Phyllis Richard

Industry Association:

Industry Representative:

Mining Companies representatives:

Phyllis Richard/Jewellers Vigilance Canada

Ken Mulhall/Canadian Jewellers Association

Pierre Leblanc/Canadian Diamond Consultants Inc.

Martin Leake/BHP Billiton Diamonds
John Hall/Rio Tinto Diamonds.

Trader of rough diamonds representative:

Cutter and polisher representative:

Jewellery manufacturers:

Retail representative (chains):

Retail representative (independents):

Consumer representative:

Natural Resources Canada Advisor:

Administrative Advisor:

Uri Ariel/HRA Investments Ltd.

Uri Ariel/HRA Investments Ltd.

Howard Shanfield/Libman & Co.

John Orrico/Birks & Mayors Inc

Judy Richards/Davidson's Jewellers.

Jenny Hillard/Consumer Interest Alliance Inc.

LouisPerron

Carla Adams/Jewellers Vigilance Canada

The number of registered Signatories to the Code as of December 31, 2010 is 51 non-retailers (including 16 International Signatories) and 62 retailers (including 3 US , 1 Australian retailer, 1 United Kingdom ) totaling 469 stores.

These Signatories comprise of the following:

    4 Mining companies

    33 Traders

    9 Cutters and polishers

    17 Jewellery manufacturers

    62 Retailers (representing stores)

    1 Other

    126 Total (some companies are registered in more than one category)

Code Committee Meetings:

In 2010 the CDCC held four meetings. Annually the CDCC holds a meeting with the majority of the Committee members present in person. A face-to-face meeting took place in Toronto , January 28, 2010.

All CDCC meetings include a segment when all Code signatories are invited to call in to the meeting to provide feedback, raise issues or ask questions of the CDCC.

The Committee engaged in the following activities to create awareness of the Code outside the signatory base:

  • 132 hard copies of the Code and 2113 copies of the Code consumer brochure were distributed.
  • The Code web site received 23,637 unique visitors in 2010.
  • The retail signatory base expanded internationally to include retailers from the US , Australia and United Kingdom .
  • The CDCC amended the Code to include two new signatory categories; Associate Members for Canadian laboratories and e-commerce businesses and also incorporated the new "Product of Canada " and "Made in Canada " Claims Enforcement Guidelines.
  • The Canadian Jewellers Association's Guide to Suppliers of Canadian Diamonds, which is produced and distributed at the largest trade show in Las Vegas , noted and featured Code signatory suppliers upfront .
  • Representatives of the CDCC participated in trade shows and industry events including the Prospectors and Developers Association of Canada trade show, one U.S. jewellery tradeshow and five Canadian jewellery trade shows.
  • The CDCC members actively recruit signatories from the trade through their day-to-day activities.

Industry Issues

Incorporating the "Product of Canada " and "Made in Canada " Claims Enforcement Guidelines

into the Code has given rise to some confusion in the Canadian diamond industry. Most of the confusion appears to be with section 3.1.4

    3.1.4 Goods Wholly Obtained or Produced in Canada

    Goods that are wholly obtained or produced in Canada (for example: mineral goods extracted in Canada or goods harvested in Canada ), will be considered to have undergone their last substantial transformation in Canada .

The confusion seems to be that if diamonds are "mineral goods" then they are a "Product of Canada". The CDCC's understanding of this issue is that the criteria for making a "Product of Canada" and/or "Made in Canada " claim still applies.

We would ask that the Competition Bureau update the July 2006 "Interpretation Bulletin on the Marketing of Canadian Diamonds" to reflect the new Guidelines.

Complaints:

The CDCC did not receive any consumer complaints in 2010. Six trade complaints were filed with the Code office. Five have been resolved and one is pending legal action (Heritage Auctioneers Alberta Ltd.).

The CDCC is in the process of filing a lawsuit against Heritage Auctioneers Alberta Ltd for its unauthorized use of the Code logo. In addition the CDCC informed the Competition Bureau and Treasury Board of Heritage Auctioneers Alberta Ltd use of the Competition Bureau's logo. It is our understanding that the Treasury Board sent two cease and desist emails to Heritage Auctioneers Alberta Ltd.

Authentications

The CDCC received 14 consumer requests for authentication with the following results:

13 completed with confirmed Canadian origin; 1 still in process.

Initiatives:

All operating Canadian diamond mines are now signatories to the Code.

There were no signatory fee increases for 2010. The fee structure was revised in 2010 to take into consideration the addition of new categories and to increase the resources available to increase awareness of the Code outside the signatory base. Fees will increase by 25% starting in 2011. It will be the first increase since the inception of the Code in 2002.

The CDCC updated the Operating Procedures.

The CDCC amended the Code Logo Guidelines so that a signatory may use a Code Signatory Identification Number (CSIN) in place of the company name when using the Code logo.

In light of jewellery mounted with Canadian rough diamonds appearing in the marketplace, a rough diamond Working Group was formed to make recommendations to the CDCC whether rough diamonds mounted in jewellery should be included in the Code. The consultation process with the signatories is on-going.

The CDCC continued with the Active Monitoring Program requesting 20 authentications from selected signatories. All were authenticated as Canadian.

Changes to the Code.

The CDCC revised the Code to incorporate the "Product of Canada " and "Made in Canada " Claims Enforcement Guidelines.

In addition, two new categories of signatories were added; one for Associate Membership for Canadian laboratories and one for e-commerce signatories. The revised Code was posted on the Code web site www.canadiandiamondcodeofconduct.ca.

In order to save costs the CDCC decided not to reprint the Code in hardcopy. The consumer brochure will be used as a means to promote the Code at trade shows and with signatories.

Support from the Competition Bureau

The CDCC wishes to thank the Bureau for the ir continued endorsement of the Code.