Short presentation about the diamond supply chain and associated ethical challenges

1. Diamondindustry:Ethicalsupplychaindeconstruction deepchi1 Swamibu Michael Eich Business & Society - executive MBA - HEC Lausanne 2009-2010

2. Diamond industry : under scrutiny NGO media campaigns raises public awareness UN sanctions related to conflicts diamond 1 Reputation & consumer confidence at risk Various certifications, ethic codes 2 Slave & child labor “Blood diamond” Pollution Aboriginal land violated kaysha FABRICIO_DG

3. Diamond supply chain and associated challenges Issues: environmental, sociopolitical, human rights, labor Environment, human rights, legal dispute Environment, forced labor, child labor, wages, health & safety, force relocation, price control, corruption Smuggling (war & terrorism financing), stone mixing, price control, counterfeit Heath & safety, child labor, wages Working conditions, child labor, wages Money laundering, training salespeople, policies on conflict diamonds and the self-regulation, several “ethical” certification 3

4. Exploration Environment: dewatering, pollution, deforestation Human rights: Indigenous rights, distort and disrupt the cultural and social lives (Canada 4), forced relocation (Botswana 3) Legal: legal title and rights dispute (« cancel » by the state once diamond discovered 5) 4 Exploration mainly done by drilling In 2004, 500 projects worldwide (investment USD 250mio in 2003) 2 Diamond found in 35 countries ; 65% are found in Africa 2 Placer Dome. Western Australia Country

5. Mining 5 No One Nels. Argyle Diamond Mine, Western Australia Deepchi. Srilanka Esthr. De Beersdiamond mine in Jwaneng, Botswana

6. Mining 250 tons of ore must be mined and processed to produce a single, one-carat diamond 7 Environment: pollution of soil, water and the all ecosystem (by the removal of the top soil), deforestation Forced labor & child labor: 171 million children (2006) 6 Wages: poverty, more than 1 million workers in the alluvial diamond extraction earn only a dollar a day 14 Heath & safety: respiratory problems (dust), lack of safety protection Forced relocation: bushmen in Botswana 4 Price control: 50% of production controlled by De Beers 8 Corruption 6

8. al Qaeda in trading network 2003 10Stone mixing : mix illicit diamonds with legal stone Price control: dominant position by De Beers (63% of rough diamond market)8 Counterfeit 7 Rough diamonds market valued at $8.1 billion in 2002 8 Photos8.com

9. Cut, polish & manufacture For India Heath & safety: diamond-cutting in the top 10 “hazardous industries”16, silicosis (diamond dust) Child labor: still exists but declining rapidly 13 Wages: cheap labor 8 Israel, Belgium, USA, Thailand (for color gem), India (for small pieces, highly manual process) Surat (India) cut & polish 92% of the world's diamond 13 MrHuevo , Thailand

10. Retail Money laundering: respect of the law (e.g. US Patriot Act) Training of salespeople: awareness about issues across the supply chain Policies on conflict diamonds and the self-regulation : existence / enforcement Several “ethical” certifications: different scope not always fully independent, confusing for the final consumer 9 From the extraction to the retailer the price has been multiplied by 3 from its extraction 17 The Responsible Jewellery Council, The Diamond Development Initiative, RapaportFair Trade, Kimberly agreement, … Wumpiewoo

11. Source Quoted 1. Resolution on "conflict diamonds" by United Nations http://www.un.org/peace/africa/Diamond.html 2. Diamond Facts by the World Diamond Council http://www.diamondfacts.org/ 3. Botswana Bushman land carved up for diamond exploration http://www.survivalinternational.org/news/37 4. Editorial: Canada's Blood Diamonds http://www.diamonds.net/news/newsitem.aspx?articleid=16235 5. Diamonds in the Rough: Human Rights Abuses in the Marange Diamond Fields of Zimbabwe by Human Right Watch http://www.hrw.org/sites/default/files/reports/zimbabwe0609web.pdf 6. Diamonds Are Forever, But Not The Lives Of Child Workers by Travis Molina http://ihscslnews.org/view_article.php?id=162 7 How a new generation of lab-grown diamonds is shaking up the jewelry world by By Vanessa O'Connell , the Wall Street Journal http://www.post-gazette.com/pg/07016/754167-28.stm 9 Weak Controls and “Poverty Diamonds” by Global Witness http://www.globalwitness.org/media_library_detail.php/350/en/weak_controls_and_poverty_diamonds 10 Making it Work, Why the Kimberley Process Must Do More to Stop Conflict Diamonds by Global Witness http://www.globalwitness.org/media_library_get.php/260/1274133589/GW_Making_it_work.pdf 8, 11 De Beers SA A Diamond is Forever By Scott Reilly & Professor Russell Winer NYU Stern pages.stern.nyu.edu/~rwiner/De%20Beers%20case.doc 13. Uncommon Brilliance By AravindAdiga, Time.com http://www.time.com/time/magazine/article/0,9171,610100,00.html 14. A different kind of diamond mining By Ian Smillie, Partnership Africa Canada http://www.madisondialogue.org/SmilieDDI_DifferentKindofDiamondMining.pdf 15. From mine to mall or mayhem. Thoughts on the Diamond supply chain…, By robjbellhttp://transformationallogistics.wordpress.com/2009/04/11/just-diamonds/ 16. Grime behind the glitter? By Sakina Sadat Hussain, MSNBC.com http://www.msnbc.msn.com/id/15842528/ 17. Diamond Global Value Chain By Sean Bani, Stefanie Bohrt, Carson Denny, Courtney Landy, Duke University http://www.duke.edu/web/soc142/team7/Diamond Global Value Chain.htm 10

12. Source Additional Clear Conscience Jewelry By Jennifer Malkin & WiamHasanain, Berkly University of California www.madisondialogue.org/Clear_Conscience_Jewelry.pd London Diamond Bourse http://www.londonmondialbourse.com/ HIV & AIDS in Botswana, By AVERT is an international AIDS charity http://www.avert.org/aids-botswana.htm Diamond Development Initiative http://www.ddiglobal.org/pages/issues.php Diamonds and Human Security annul review 2009 By Partnership Africa Canada http://www.pacweb.org/Documents/annual-reviews-diamonds/AR_diamonds_2009_eng.pdf Artisanal Diamond Cooperatives in Sierra Leone: Success or Failure? By The Diamond Development Initiative and Partnership Africa Canada http://www.ddiglobal.org/contentDocuments/Policy BriefJune 2008 (English Version).pdf Diamonds in the Rough By Human Right Watch http://www.hrw.org/en/node/83957/section/12 A praticalapproach of fairtrade and ethicalmining certification By Jean_Claude_Michelou http://www.gemstone.org/congress/panyu2009/speakers-presentations/Jean_Claude_Michelou/JC_presentation-ICA_Panyu_revised.ppt https://open-site.org/Business/Retail_Trade/Loose_Diamonds/Diamond_Mining Broken Vows: Diamond Jewellery Retailers Fall Short on Conflict Diamond Pledge By Global Witness http://www.globalwitness.org/media_library_detail.php/330/en/broken_vows_diamond_jewellery_retailers_fall_short 11

13. Credit Icon Under Common Creatives licence. Author : http://www.gentleface.com/ Pictures Under Common Creatives licence deepchi1http://www.flickr.com/photos/deepchi/ Swamibuhttp://www.flickr.com/photos/swamibu/ FABRICIO_DG http://www.flickr.com/photos/_fabriciodg/ kaysha http://www.flickr.com/photos/kaysha/ Placer Dome http://www.mining.ubc.ca/cimarchive/index.php?image=10000381 No One Nelshttp://www.flickr.com/photos/dan_and_claire_nelson/ Photos8.com http://www.flickr.com/photos/publicdomainphotos/ MrHuevohttp://www.flickr.com/photos/mrhuevo/ Wumpiewoohttp://www.flickr.com/photos/wumpiewoo/ This document islicensedunderCreative Commons Attribution 3.0 by Michael Eich michaeleich@gmx.ch 12