Mega CFCs Planned for Mumbai, Kolkata & Other Cities

Mumbai: A Special Forum on “Artisanal Mining: From Smaller Steps to Larger Outcomes” was held at the ongoing five-day Kimberley Process Intersessional Meeting 2019 in Mumbai today. The session provided the participants a glimpse of various opportunities and challenges facing the sector and expressed solution ideas drawn from experiences within as well as outside the sector.

Senior Economic Advisor, Department of Commerce of India Ms. Rupa Dutta said that Common Facility Centres (CFCs) have emerged as a great best practice for socioeconomic transformation, which could be replicated by participating countries. “We encourage friends from diamond-producing countries to adopt similar models for alluvial and artisanal mining. Facilitating projects such as CFCs makes it easy for informal miners to access facilitation, training and support; enables unorganized miners to come together and helps them become a larger part of the organized sector. They can work with traders’ associations who can play the role of a mediator between government and miners. We invite participating countries to visit CFCs of India; we can offer you support in formulating project proposals based on this and implementing them. We are passionately exhorting you to study this since this is a good example of out-of-the-box thinking, creativity and empowerment of workers in the sector.” Ms. Dutta noted that it is important that besides working for welfare of diamond miners, we also enable them to move up the value chain. She called for the building of a repository of best practices in the sector.

She said that the CFCs are supported by the Government of India, and implemented by GJEPC for the gem and jewellery sector. The basic idea of CFCs in the diamond sector is to promote MSMEs, given that the sector is dominated largely by them. She explained to the international delegates that CFCs provide technical support and other forms of capacity building assistance to the 1.2 million plus workers in the sector. It enables to further develop the nurtured skill of these workers, which is a competitive advantage for the Indian diamond industry.

Ms. Dutta underlined that the CFCs require no investment in land, the space is rented and local diamond associations are taken on board. The identification of location, feasibility study and design are undertaken by the GJEPC, while the Government of India gives a one-time grant, after which the centres are expected to become self-sustaining.

Ms. Dutta informed that there are four operational CFCs in Gujarat, while four more are planned in the state. She said that dedicated clusters will be set up at high-potential locations in the country, with at least one CFC in every potential cluster. She announced that the Government is planning to set up Mega Common Facility Centres in Mumbai, Kolkata and other cities; such mega-CFCs will cater to the skill development, R&D and other needs of the value chain. She added while CFCs are being set up for the jewellery sector, the goal is to replicate this model in other manufacturing sectors as well.

The CFCs drew inspiration from a 2013 survey by GJEPC which highlighted the challenges of the gem & jewellery sector, such as shortage of skilled manpower, deficiencies in quality and productivity, non-affordability of costly machinery and equipment, and low exposure to technology and global industry trends. It was realized that investments required pooling of resources, leading to the concept of CFCs.

President, Mumbai Dabbawalas Association, Mr. Ullhas Shantaram Muke was present on the occasion. On his behalf, Mr. Ritesh S. Andre, great-grandchild of the founder, said that it is the internal excellence upheld by the Dabbawalas which have enabled the external excellence of the organization. For the Dabbawalas, the customer is God, and this inspires them to do anything for the good of the customer, he said.

Mr. Andre said that a unique coding system and distribution flow are two factors that form the basis of the supply chain management excellence of the organization. Giving a glimpse into the specially designed coding system for recording information about transactions, he said that it will take 5-6 months of training for someone to learn the system.

He said that the organization does two lakh deliveries per day, resulting in four lakh transactions, at an error rate of one in 6 million transactions, with an employee strength of 5,000, 80% of whom are illiterate. He said that they provide lunch box pick-up and delivery services all over Mumbai at minimal charge, without using any technology, paper, plastic or private vehicle. He informed the international delegates that the organization has had a record of no strike and no resignation in the 128 years of its existence; it has no age limit too for its employees (an 85-year-old Dabbawala is still working). The organization has won more than 1000 certificates, more than 500 awards and has taken more than 2000 sessions all over the world, he added.

President, All India Angadias Association, Mr. Mahendra Patel gave a presentation on the operational model of Angadias and its role in the gem and jewellery industry. Shri Patel explained how the Angadias originated out of the need for kings, royalty, traders and financiers to transport precious goods. He said that Angadias were critical in the growth of the diamond cutting and polishing industries. He informed that the modern Angadias use technology, including GPS and other software. They make 10,000 shipments daily, with a strength of 5000 employees, making deliveries within 24 hours. Currently, Angadias transport mainly diamonds, gold and jewellery. Various measures are taken to ensure maintenance of customer trust and employee commitment, he said.

Senior Vice President, De Beers Group, Ms. Feriel Zerouki brought to light the need to change the narrative and perception of Artisanal and Small-Scale Mining (ASM), to make ASM a source of development. She reminded everyone that ASM is an extremely important of sector for social development, since it provides livelihood for 1.5 million people in Africa alone. Stating that a stigmatized sector negatively impacts diamonds, she pointed to an online video shared by a customer to drive home the point that consumers are going to listen to what others say about the industry, and not to what the sector has to say about itself.
Speaking on the subject of “Transparency in Artisanal Diamond Mining”, Ms. Zerouki stated that it is critical to engage with the ASM sector to create consumer demand and address the stigma. She informed that the miners themselves often lack an understanding of the value of the product they are mining.

She informed the audience of Gemfair, an initiative by De Beers Group, which aims to improve diamond equity, by creating a secure route to market for artisanal and small-scale mined diamonds. “We developed a technology solution that started informing miners on the site and teaching and training them on evaluation; it is a digital solution to support traceability. Gemfair is built on the three pillars of certification, production and transactions. The digital solution enables provenance, transparency and traceability. We believe the future of the diamond industry is going to be built on blockchain. Community engagement is extremely important; solutions such as Gemfair will also help formalization of artisanal mining sector. Sierra Leone has provided us the right framework to turn Gemfair into a success.” Ms. Zerouki said that governments, industry and civil society stakeholders need to support ASM as a tool for development.

Executive Director, GJEPC, Mr. Sabyasachi Ray highlighted the central role of worker communities in the sector and how other players such as GJEPC play a primarily catalytic role. He spoke about Swasthya Ratna Policy, a health insurance policy by GJEPC for the gem and jewellery workforce, aimed at providing them quality healthcare of their choice. 25% of the premium will be contributed by GJEPC. He informed that the policy covers 5 lakh lives and claims worth 100 crore rupees have already been disbursed.

Mr. Ray informed that besides this, a fund Swasthya Kosh has been created to cater to the needs of contract workers who are not represented by any organization. To bring in auditability of public funds, GJEPC launched the Parichay Card, an ID card for all workers of gem & jewellery sector. Fifteen associations have already enrolled and 80 thousand cards have been processed. 75% of the premium is paid from the fund and the card-holder needs to pay only 25%. Anyone can donate to the fund. Mr. Ray announced that the plan is cover 5 million workers in 3 years, which requires a fund worth 100 million US dollars. He said that the goal is to ensure that the well-being of the workers is provided by the industry itself in which the workers are engaged.

Dr. Shayequa Zeenat Ali, consultant of the National Council of Applied Economic Research (NCAER) presented a case study on Cluster Mapping for Gem & Jewellery Sector, which is now underway. She said that the study is important since no plausible statistics are available on the exact number of clusters, units and workers in the sector, despite the immense importance of the sector to the nation’s economy and development. The cluster mapping exercise aims to map the Gem & Jewellery units and clusters by region and product segments. This will result in data such as the number of workers by region and product segment, which will contribute to more informed and evidence-based policy decisions for the sector. She said this would help decisions such as choice of locations for jewellery parks, mega and standard-sized CFCs and training institutes. This would also enable more targeted delivery of social benefits to the workers involved in the sector. Opinions of all stakeholders – including owners and artisans – would be considered in conducting the mapping study, informed Ms. Shequa.

Chief Executive Officer, My KYC Bank, Mr. Pranay Narvekar, who moderated the Special Forum, said that the purpose of the Forum is to look at practices across different sectors and see how they can be applied to arrive at solutions for the artisanal mining sector. Noting that artisanal mining has always been a focus area for the Kimberley Process, he asked the audience whether we can have solutions developed for the industry with minimal resources. He said that discovery, transport, valuation and ensuring that the stone is tracked right through the chain are some of the key challenges of the sector. He said that the Forum explored solutions under the broad themes of cooperatives, assisted groups and enablers.

The Kimberley Process Certification Scheme (KPCS) Intersessional Meeting 2019 is an annual mid-year event of KPCS, which unites administrations, civil societies and diamond industry in reducing the flow of conflict diamonds used to finance wars against governments around the world. India is the KP chair for 2019 and is hosting the KP Intersessional meeting in Mumbai during June 17 – 21, 2019.