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Diamond ethical supply chain deconstruction 2010


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Short presentation about the diamond supply chain and associated ethical challenges

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Diamond ethical supply chain deconstruction 2010

  1. 1. Diamondindustry:Ethicalsupplychaindeconstruction<br />deepchi1<br />Swamibu<br />Michael Eich <br />Business & Society - executive MBA - HEC Lausanne 2009-2010<br />
  2. 2. Diamond industry : under scrutiny<br />NGO media campaigns raises public awareness<br />UN sanctions related to conflicts diamond 1<br />Reputation & consumer confidence at risk<br /> Various certifications, ethic codes<br />2<br />Slave & child labor<br />“Blood diamond”<br />Pollution<br /> Aboriginal land violated<br />kaysha <br />FABRICIO_DG<br />
  3. 3. Diamond supply chain and associated challenges <br />Issues: environmental, sociopolitical, human rights, labor<br />Environment, human rights, legal dispute<br />Environment, forced labor, child labor, wages, health & safety, force relocation, price control, corruption<br />Smuggling (war & terrorism financing), stone mixing, price control, counterfeit<br />Heath & safety, child labor, wages<br />Working conditions, child labor, wages<br />Money laundering, training salespeople, policies on conflict diamonds and the self-regulation, several “ethical” certification<br />3<br />
  4. 4. Exploration<br />Environment: dewatering, pollution, deforestation<br />Human rights: Indigenous rights, distort and disrupt the cultural and social lives (Canada 4), forced relocation (Botswana 3)<br />Legal: legal title and rights dispute (« cancel » by the state once diamond discovered 5)<br />4<br />Exploration mainly done by drilling<br />In 2004, 500 projects worldwide (investment USD 250mio in 2003) 2<br />Diamond found in 35 countries ; 65% are found in Africa 2<br />Placer Dome. Western Australia Country<br />
  5. 5. Mining<br />5<br />No One Nels. Argyle Diamond Mine, Western Australia<br />Deepchi. Srilanka<br />Esthr. De Beersdiamond mine in Jwaneng, Botswana <br />
  6. 6. Mining<br />250 tons of ore must be mined and processed to produce a single, one-carat diamond 7 <br />Environment: pollution of soil, water and the all ecosystem (by the removal of the top soil), deforestation<br />Forced labor & child labor: 171 million children (2006) 6<br />Wages: poverty, more than 1 million workers in the alluvial diamond extraction earn only a dollar a day 14<br />Heath & safety: respiratory problems (dust), lack of safety protection<br />Forced relocation: bushmen in Botswana 4<br />Price control: 50% of production controlled by De Beers 8<br />Corruption<br />6<br />
  7. 7. Sorting, distribution & trade<br />Smuggling: war & terrorism financing<br /><ul><li> “Bloody diamond” (fromwar zone): 10-15% of total supply in in 1990s 15 today less than 1% 2 (thanks to Kimberly certification)
  8. 8. al Qaeda in trading network 2003 10</li></ul>Stone mixing : mix illicit diamonds with legal stone<br />Price control: dominant position by De Beers (63% of rough diamond market)8<br />Counterfeit<br />7<br />Rough diamonds market valued at $8.1 billion in 2002 8<br /><br />
  9. 9. Cut, polish & manufacture<br />For India<br />Heath & safety: diamond-cutting in the top 10 “hazardous industries”16, silicosis (diamond dust)<br />Child labor: still exists but declining rapidly 13<br />Wages: cheap labor<br />8<br />Israel, Belgium, USA, Thailand (for color gem), India (for small pieces, highly manual process)<br />Surat (India) cut & polish 92% of the world's diamond 13<br />MrHuevo , Thailand<br />
  10. 10. Retail<br />Money laundering: respect of the law (e.g. US Patriot Act)<br />Training of salespeople: awareness about issues across the supply chain<br />Policies on conflict diamonds and the self-regulation : existence / enforcement<br />Several “ethical” certifications: different scope not always fully independent, confusing for the final consumer<br />9<br />From the extraction to the retailer the price has been multiplied by 3 from its extraction 17<br />The Responsible Jewellery Council, The Diamond Development Initiative, RapaportFair Trade, Kimberly agreement, …<br />Wumpiewoo<br />
  11. 11. Source<br />Quoted<br />1. Resolution on "conflict diamonds" by United Nations<br />2. Diamond Facts by the World Diamond Council<br />3. Botswana Bushman land carved up for diamond exploration<br />4. Editorial: Canada's Blood Diamonds<br />5. Diamonds in the Rough: Human Rights Abuses in the Marange Diamond Fields of Zimbabwe by Human Right Watch <br />6. Diamonds Are Forever, But Not The Lives Of Child Workers by Travis Molina<br />7 How a new generation of lab-grown diamonds is shaking up the jewelry world by By Vanessa O'Connell , the Wall Street Journal<br />9 Weak Controls and “Poverty Diamonds” by Global Witness<br />10 Making it Work, Why the Kimberley Process Must Do More to Stop Conflict Diamonds by Global Witness<br />8, 11 De Beers SA A Diamond is Forever By Scott Reilly & Professor Russell Winer NYU Stern<br />13. Uncommon Brilliance By AravindAdiga, <br />,9171,610100,00.html<br />14. A different kind of diamond mining By Ian Smillie, Partnership Africa Canada<br />15. From mine to mall or mayhem. Thoughts on the Diamond supply chain…, By robjbell<br />16. Grime behind the glitter? By Sakina Sadat Hussain,<br />17. Diamond Global Value Chain By Sean Bani, Stefanie Bohrt, Carson Denny, Courtney Landy, Duke University Global Value Chain.htm<br />10<br />
  12. 12. Source<br />Additional<br />Clear Conscience Jewelry By Jennifer Malkin & WiamHasanain, Berkly University of California<br />London Diamond Bourse<br />HIV & AIDS in Botswana, By AVERT is an international AIDS charity<br />Diamond Development Initiative<br />Diamonds and Human Security annul review 2009 By Partnership Africa Canada<br />Artisanal Diamond Cooperatives in Sierra Leone: Success or Failure? By The Diamond Development Initiative and Partnership Africa Canada BriefJune 2008 (English Version).pdf<br />Diamonds in the Rough By Human Right Watch<br />A praticalapproach of fairtrade and ethicalmining certification By Jean_Claude_Michelou<br /><br /><br /> Broken Vows: Diamond Jewellery Retailers Fall Short on Conflict Diamond Pledge By Global Witness<br />11<br />
  13. 13. Credit<br />Icon<br />Under Common Creatives licence. Author :<br />Pictures<br />Under Common Creatives licence<br />deepchi1<br />Swamibu<br />FABRICIO_DG<br />kaysha<br />Placer Dome<br />No One Nels<br /><br />MrHuevo<br />Wumpiewoo<br />This document islicensedunderCreative Commons Attribution 3.0 by Michael Eich<br />12<br />