Forevermark & Pipeline Integrity

Forevermark & Pipeline IntegrityForevermark & Pipeline Integrity

The ForevermarkThe Forevermark– DTC Forevermark is a ‘Mark of Trust’ that gives you peace of mind DTC Forevermark is a ‘Mark of Trust’ that gives you peace of mind

in your diamondin your diamond

Pipeline Integrity and the ForevermarkPipeline Integrity and the Forevermark– DTC Standard (DTC001:2005)DTC Standard (DTC001:2005)– ““Live” documentLive” document– Sightholders have sole responsibility to ensure its implementationSightholders have sole responsibility to ensure its implementation– Independently verified by SGSIndependently verified by SGS

Timelines & CostsTimelines & Costs

– BeforeBefore stones can be delivered for manufacture Sightholder must be stones can be delivered for manufacture Sightholder must be certified Pipeline Integrity Compliant certified Pipeline Integrity Compliant

– Completion before 31Completion before 31stst March 06 March 06 Target January/ February Target January/ February

– Audit at DTC’s costAudit at DTC’s cost

Forevermark & Pipeline IntegrityForevermark & Pipeline Integrity

What is the Standard?What is the Standard?

What is the Standard?What is the Standard?

Standard developed with British Standards InstituteStandard developed with British Standards Institute Provides framework for evidence of pipeline integrityProvides framework for evidence of pipeline integrity Compliance to Standard a pre-requisite for taking part in the Compliance to Standard a pre-requisite for taking part in the

schemescheme Not a Pass or Fail but an assurance that risks are managedNot a Pass or Fail but an assurance that risks are managed

DOES NOT:DOES NOT: Detail how to meet the criteria Detail how to meet the criteria DOES NOT:DOES NOT: Seek to impose procedures or to change ways of Seek to impose procedures or to change ways of

workingworking DOES NOT:DOES NOT: Cover methods or procedures for the actual Cover methods or procedures for the actual

cutting/polishing of the stonescutting/polishing of the stones DOES NOT:DOES NOT: Confer immediate status for Forevermark Confer immediate status for Forevermark

What is the Standard?What is the Standard?

What is the Standard? – Key What is the Standard? – Key ComponentComponent

Separation:Separation: – Keeping potential Forevermark stones physically separate from all Keeping potential Forevermark stones physically separate from all

others at every stageothers at every stage– Separate processing, packaging, storageSeparate processing, packaging, storage

AND/ORAND/OR

Traceability:Traceability: – Ability to track and locate stones at every stageAbility to track and locate stones at every stage– Ability to track the history of any stone back to Sightbox and identify Ability to track the history of any stone back to Sightbox and identify

each activity and outcomeeach activity and outcome

Routes to ComplianceRoutes to Compliance

Routes to Compliance - What you Routes to Compliance - What you need to do?need to do?

Appoint assessor (internal or independent external 3Appoint assessor (internal or independent external 3rdrd party) to party) to review operations against standardreview operations against standard

Assessor arranges SGS visit - average 6 weeks compliance Assessor arranges SGS visit - average 6 weeks compliance processprocess

SGS Visit - Reviews & reports on operations SGS Visit - Reviews & reports on operations 1.1. Sightholder compliant Sightholder compliant 2.2. Sightholder corrective actions & evidence to SGSSightholder corrective actions & evidence to SGS

a) Submission of documentation or a) Submission of documentation or b) SGS revisit operationb) SGS revisit operation

Compliance then regular reconciliation & 6 monthly internal review Compliance then regular reconciliation & 6 monthly internal review

Retailer Participation CriteriaRetailer Participation Criteria Mandatory Criteria Mandatory Criteria

– Willingness to invest in Forevermark projectWillingness to invest in Forevermark project– Letter of participation commitment to their Sightholder partnerLetter of participation commitment to their Sightholder partner– Agreement to Agreement to best endeavoursbest endeavours to DTC Best Practice Principles to DTC Best Practice Principles

Comparative Criteria Comparative Criteria

– Sales of jewellery containing 30+ point stones Sales of jewellery containing 30+ point stones – Significance of sales of diamond jewellerySignificance of sales of diamond jewellery– Independent source (Television Audience Measurement Independent source (Television Audience Measurement - TAM) on all above the line media spend- TAM) on all above the line media spend

Verification – What is required?Verification – What is required?

What is required?What is required? Management Processes prove Pipeline IntegrityManagement Processes prove Pipeline Integrity Evidenced by Evidenced by

1.1. Systems Systems 2.2. DocumentationDocumentation3.3. Control & Tracking Control & Tracking 4.4. Data IntegrityData Integrity5.5. Security Security 6.6. Pipeline Management Pipeline Management 7.7. Internal Assessment Internal Assessment

1. Systems1. Systems Need to showNeed to show

Sightholder overall responsibility for entire chainSightholder overall responsibility for entire chain Organisation Chart defining responsibilitiesOrganisation Chart defining responsibilities Procedures for reviewing and improving the systemProcedures for reviewing and improving the system Procedures for corrective and preventative actionsProcedures for corrective and preventative actions

2. Documentation2. Documentation Procedures controlling each stageProcedures controlling each stage

– Can be paper or IT-based (simple = flow diagram) Can be paper or IT-based (simple = flow diagram)

Understood by relevant personnelUnderstood by relevant personnel– Evidence that they have been communicated/ trained in the Evidence that they have been communicated/ trained in the

proceduresprocedures

Used at each StageUsed at each Stage– Evidence that the procedures are available and liveEvidence that the procedures are available and live

3. Control & Tracking3. Control & TrackingRegular ReviewsRegular Reviews Systems MUST be able to evidence that stones can be Systems MUST be able to evidence that stones can be

located and trackedlocated and tracked– Both from stone into recordsBoth from stone into records– And from records to stoneAnd from records to stone

Must be traceable to original SightboxMust be traceable to original Sightbox CompletenessCompleteness

– Is every stage covered?Is every stage covered?– Is there sufficient detail?Is there sufficient detail?– Are there any gaps?Are there any gaps?– What happens if an anomaly is found?What happens if an anomaly is found?

4. Data Integrity 4. Data Integrity AccuracyAccuracy

– How is accuracy ensured?How is accuracy ensured?– Who is checking the data?Who is checking the data?– What happens if an anomaly is found?What happens if an anomaly is found?

Cross-checking data across systemsCross-checking data across systems RobustnessRobustness

– Can data be changed?Can data be changed?– Who is authorised to do this?Who is authorised to do this?– Are all changes traceable?Are all changes traceable?

How is data stored to ensure retention periods are met?How is data stored to ensure retention periods are met?

5. Security5. Security Data Security (physical and electronic)Data Security (physical and electronic)

– Storage/RetentionStorage/Retention– Ability to change dataAbility to change data– Back-up/archive proceduresBack-up/archive procedures– Disaster recoveryDisaster recovery

Physical SecurityPhysical Security– Secure pipelineSecure pipeline– Storage of potential Forevermark diamondsStorage of potential Forevermark diamonds

6. Pipeline Management – 6. Pipeline Management – Associated entities Associated entities

Overall responsibility for pipeline compliance remains Overall responsibility for pipeline compliance remains with Sightholderwith Sightholder

Owned entities need to implement equivalent systems Owned entities need to implement equivalent systems – Evidence of internal assessmentEvidence of internal assessment– Potentially open to verificationPotentially open to verification

Sub-contractors Sub-contractors – Choice of implementing systems as above or Sightholder Choice of implementing systems as above or Sightholder

monitoring monitoring – Minimum: Key criteria and controls need to be understood and Minimum: Key criteria and controls need to be understood and

implementedimplemented– SGS reserves right to visit sub-contractorSGS reserves right to visit sub-contractor

6. Pipeline Management - 6. Pipeline Management - Jewellery & RetailJewellery & Retail

Jewellery ManufactureJewellery Manufacture– Responsibility for Record KeepingResponsibility for Record Keeping– Availability of records for review if neededAvailability of records for review if needed

RetailRetail– Potential visits to check on stones being soldPotential visits to check on stones being sold

7. Internal Assessment7. Internal Assessment Assessor - Internal or Third PartyAssessor - Internal or Third Party

– Independent of the Operational FunctionsIndependent of the Operational Functions– Training and Experience Required Training and Experience Required

Audit Experience & Understanding of systemsAudit Experience & Understanding of systems– Authority to implement changes and recommend improvementsAuthority to implement changes and recommend improvements– Ultimate authority to stop productionUltimate authority to stop production– If Third Party Sightholder still retains responsibility for management If Third Party Sightholder still retains responsibility for management

of process of process – Ensure all controls are present and that system is functioningEnsure all controls are present and that system is functioning– System tested with real or test data System tested with real or test data

7. Internal Assessment7. Internal Assessment Assessment plan to ensure all aspects covered over Assessment plan to ensure all aspects covered over

the 6-month period – can be 1-off or staggeredthe 6-month period – can be 1-off or staggered Test the systemTest the system

– Horizontal checks – check a function e.g. record keepingHorizontal checks – check a function e.g. record keeping– Vertical Checks – track Sightbox or Single StoneVertical Checks – track Sightbox or Single Stone

Communicate ResultsCommunicate Results – information sharing is information sharing is criticalcritical to maintenance and improvement of to maintenance and improvement of

systemsystem Obtain and share reconciliation records with SGS Obtain and share reconciliation records with SGS

onlyonly

Main Points to Note……Main Points to Note…… Criteria apply to every stage from receipt of Sightbox to Criteria apply to every stage from receipt of Sightbox to

marking of goodsmarking of goods Particular focus is needed at any stage where physical Particular focus is needed at any stage where physical

transfer of diamonds is involvedtransfer of diamonds is involved Assessment should test the system thoroughlyAssessment should test the system thoroughly Non-compliances are an opportunity to improve the Non-compliances are an opportunity to improve the

system – should be seen as positive not negativesystem – should be seen as positive not negative Assessment should look for evidence Assessment should look for evidence

– DocumentsDocuments– Testimony Testimony

Assessment DocumentationAssessment Documentation

Assessment DocumentationAssessment Documentation

Audit ChecklistAudit Checklist Audit Supplement for Sub-ContractorsAudit Supplement for Sub-Contractors Assessment ReportAssessment Report Assessment Completion RecordAssessment Completion Record Corrective Action RequestCorrective Action Request

Assessment CriteriaAssessment Criteria Completeness and timeliness of internal assessmentsCompleteness and timeliness of internal assessments Availability of Availability of evidenceevidence of compliance of compliance Positive approachPositive approach

– Opportunity to show how the facility compliesOpportunity to show how the facility complies– Not a policing exerciseNot a policing exercise

Evidence that the system is working and is used to drive Evidence that the system is working and is used to drive improvementsimprovements

Non-CompliancesNon-Compliances Three levels of non-compliance recordedThree levels of non-compliance recorded Material – show stopperMaterial – show stopper Major – must be rectified before letter of compliance can Major – must be rectified before letter of compliance can

be issuedbe issued Minor – needs to be rectified in reasonable period Minor – needs to be rectified in reasonable period

depending on issue. If ignored could lead to escalation to depending on issue. If ignored could lead to escalation to MajorMajor

Classification of BreachesClassification of Breaches MaterialMaterial

– any non-compliance issue where there is a total breakdown of any non-compliance issue where there is a total breakdown of DTC001:2005 Management System, with inadequate controls in place DTC001:2005 Management System, with inadequate controls in place to ensure compliance with the requirements of the standard to ensure compliance with the requirements of the standard

– Show StopperShow Stopper

Classification of BreachesClassification of Breaches MajorMajor

– a non-compliance issue where there is an absence or a total a non-compliance issue where there is an absence or a total breakdown of a procedure required as part of DTC001:2005 breakdown of a procedure required as part of DTC001:2005

– OROR a significant occurrence of minor non-conformities against a a significant occurrence of minor non-conformities against a particular element or within a single department or activityparticular element or within a single department or activity

– OR OR where Minor Breaches are not addressed within the timeframe where Minor Breaches are not addressed within the timeframe agreed in the Corrective Action Planagreed in the Corrective Action Plan

– Major non-compliances are subject to re-audit/monitoring by SGSMajor non-compliances are subject to re-audit/monitoring by SGS– The status can change to “minor” when a corrective action plan is in The status can change to “minor” when a corrective action plan is in

place and is being implementedplace and is being implemented

Classification of BreachesClassification of Breaches MinorMinor

– a single observed nonconformity with respect to the standard or a a single observed nonconformity with respect to the standard or a procedure required as part of the Management System procedure required as part of the Management System

– May be able to be corrected on the day or may require a Corrective May be able to be corrected on the day or may require a Corrective Action PlanAction Plan

– Corrective Actions must be followed up or the non-compliance could Corrective Actions must be followed up or the non-compliance could be upgraded to Majorbe upgraded to Major

Typical Assessment ChecklistTypical Assessment Checklist

Group QuestionsGroup Questions

CertificationCertification

ConditionsConditions Certificate of Compliance will be issued whereCertificate of Compliance will be issued where::

– Significant entities or a sufficient sample have been subject to Significant entities or a sufficient sample have been subject to verification auditsverification audits

– Sample of entities to be audited to be agreed by SGS in each case Sample of entities to be audited to be agreed by SGS in each case – No Material non-compliancesNo Material non-compliances– Major Issues with an agreed Corrective Action PlanMajor Issues with an agreed Corrective Action Plan

On-going MaintenanceOn-going Maintenance Regular assessments to be undertaken and evidence Regular assessments to be undertaken and evidence

providedprovided Reports of activity and evidence of completion of corrective Reports of activity and evidence of completion of corrective

actions to be provided actions to be provided Reconciliation records to be providedReconciliation records to be provided Annual Verification VisitAnnual Verification Visit

ReconciliationReconciliation

Why Reconciliation?Why Reconciliation? Important aspect of Pipeline IntegrityImportant aspect of Pipeline Integrity Supports the assessment process and gives the Supports the assessment process and gives the

Sightholder confidenceSightholder confidence Additional layer of security to show that Forevermark Additional layer of security to show that Forevermark

diamonds are of DTC origindiamonds are of DTC origin Applies only to DTC Sightboxes used in the ForevermarkApplies only to DTC Sightboxes used in the Forevermark Reconciliation data will be sent to SGS not DTC for Reconciliation data will be sent to SGS not DTC for

validationvalidation Undertaken at regular intervals or on request from SGSUndertaken at regular intervals or on request from SGS

What is Reconciliation?What is Reconciliation? SGS notifies Sightbox to be reconciled based on a marked SGS notifies Sightbox to be reconciled based on a marked

stone at six-monthly intervalsstone at six-monthly intervals Reconcile Eligible & Non-Eligible diamonds to original Reconcile Eligible & Non-Eligible diamonds to original

DTC SightboxDTC Sightbox Reconcile final polished manufactured from Eligible Reconcile final polished manufactured from Eligible

diamonds to the original DTC Sightbox detailing:diamonds to the original DTC Sightbox detailing:– DTC Sightbox No; Sight No; Year and description of goodsDTC Sightbox No; Sight No; Year and description of goods– No. carats identified as being Eligible & No. carats removed as No. carats identified as being Eligible & No. carats removed as

being Non-Eligiblebeing Non-Eligible– Details of resultant polished from Eligible diamonds by Colour, Details of resultant polished from Eligible diamonds by Colour,

Clarity and Yield, in terms of caratsClarity and Yield, in terms of carats

SGS and Pipeline Integrity - SGS and Pipeline Integrity - SummarySummary

Not pass or failNot pass or fail Key Component - Separation & TraceabilityKey Component - Separation & Traceability Common Gap – DocumentationCommon Gap – Documentation On-going evaluationOn-going evaluation Reconciliation Reconciliation

SGS does not tell you what to do but advise things to doSGS does not tell you what to do but advise things to do