Loose Suspenders

I had genuinely committed not to write about the DTC's decision to suspend supply to six clients, a.k.a sightholders. However, after seeing the announcement after their meeting with the suspended, that the suspension of supplies to the suspendees has been suspended…

For those unfamiliar with the main points; senior managers of six sightholding companies, two with contracts due to expire in March this year, were convicted in December 2007 by Belgian court for a series of fiscal offences.  According to the DTC's Best Practice Principles, it has the right to suspend supplies or even terminate contracts in such circumstances.

BHP and Rio Tinto also suspended supply to the convicted customers.

The DTC's justification for revoking the suspension of the six read:

"The DTC has now conducted interviews with the Sightholders concerned. Considering each separate case on its merits, the DTC can confirm that it is lifting its suspension of supply to the Sightholders concerned, on confirmation, where relevant, that appropriate remedial action has been taken. The DTC would like to thank all Sightholders concerned for their prompt and full cooperation in assisting the DTC with its enquiries."

As a qualified accountant, despite not signing on statutory audit reports, I nevertheless have to abide by the rules of my association.  If convicted in a court of law for any offense, other than a minor traffic offence, I am obliged to inform my association within 30 days.  Failure to do so is in itself a disciplinary offence.

The secretariat of my association has published guidelines for determining which cases are referred to the disciplinary committee, and each month the association's magazine lists the committee's decisions.  In a minority of cases, the member is not referred to by name.  Usually however, and especially where the reputation of the profession has been harmed, the member's name is published in the national, local and professional press along with the punishment and costs.  The punishments include suspension, removal from the register and monetary fines.

The felonious member is always entitled to a hearing before a disciplinary committee.  Not to do so is inequitable. And there is also an appeal procedure to the disciplinary process. Such disciplinary procedures are common to most professional and trading organisations and there is no need to reinvent the wheel to adopt such a system.

It is cause for laughter and tears that the DTC "conducted interviews" only after issuing the suspensions.  Although the six were not named, the rough brokers and customers, so eventually everybody in our tiny industry, knew who they were when they failed to get their regular boxes.  That all six were ultimately unsuspended indicates that the DTC's knee-jerk 'due process' showed serious flaws.

Whether the DTC should suspend supply following convictions for 10 year old crimes that have laboured through Belgium's legal process and predate BPP, or for civil offences that still bring the industry into disrepute is a debate worthy of a conference all of its own. But certainly, if the DTC's ‘thanks’ to the six unsuspended for their cooperation was intended as an apology, it hardly suffices.

What the industry needs is more transparency.  Clear criteria of how clients are selected, consistent imposition of penalties for BPP breaches, and defined and equitable disciplinary procedures. Discreet disciplinary hearings should be the norm prior to any announcements of suspension and the DTC should act wherever a sightholder has brought the industry into disrepute rather than hide behind the 'lack of conviction' - pun intended - before issuing a summons.

socrates@diamondfinance.info