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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 />Photos8.com<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 http://www.un.org/peace/africa/Diamond.html<br />2. Diamond Facts by the World Diamond Council http://www.diamondfacts.org/<br />3. Botswana Bushman land carved up for diamond exploration http://www.survivalinternational.org/news/37<br />4. Editorial: Canada's Blood Diamonds http://www.diamonds.net/news/newsitem.aspx?articleid=16235<br />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 <br />6. Diamonds Are Forever, But Not The Lives Of Child Workers by Travis Molina http://ihscslnews.org/view_article.php?id=162<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 http://www.post-gazette.com/pg/07016/754167-28.stm<br />9 Weak Controls and “Poverty Diamonds” by Global Witness http://www.globalwitness.org/media_library_detail.php/350/en/weak_controls_and_poverty_diamonds<br />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<br />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<br />13. Uncommon Brilliance By AravindAdiga, Time.com <br />http://www.time.com/time/magazine/article/0,9171,610100,00.html<br />14. A different kind of diamond mining By Ian Smillie, Partnership Africa Canada http://www.madisondialogue.org/SmilieDDI_DifferentKindofDiamondMining.pdf<br />15. From mine to mall or mayhem. Thoughts on the Diamond supply chain…, By robjbellhttp://transformationallogistics.wordpress.com/2009/04/11/just-diamonds/<br />16. Grime behind the glitter? By Sakina Sadat Hussain, MSNBC.com http://www.msnbc.msn.com/id/15842528/<br />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<br />10<br />
  12. 12. Source<br />Additional<br />Clear Conscience Jewelry By Jennifer Malkin & WiamHasanain, Berkly University of California www.madisondialogue.org/Clear_Conscience_Jewelry.pd<br />London Diamond Bourse http://www.londonmondialbourse.com/<br />HIV & AIDS in Botswana, By AVERT is an international AIDS charity http://www.avert.org/aids-botswana.htm<br />Diamond Development Initiative http://www.ddiglobal.org/pages/issues.php<br />Diamonds and Human Security annul review 2009 By Partnership Africa Canada http://www.pacweb.org/Documents/annual-reviews-diamonds/AR_diamonds_2009_eng.pdf<br />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<br />Diamonds in the Rough By Human Right Watch http://www.hrw.org/en/node/83957/section/12<br />A praticalapproach of fairtrade and ethicalmining certification By Jean_Claude_Michelou<br />http://www.gemstone.org/congress/panyu2009/speakers-presentations/Jean_Claude_Michelou/JC_presentation-ICA_Panyu_revised.ppt<br />https://open-site.org/Business/Retail_Trade/Loose_Diamonds/Diamond_Mining<br /> 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<br />11<br />
  13. 13. Credit<br />Icon<br />Under Common Creatives licence. Author : http://www.gentleface.com/<br />Pictures<br />Under Common Creatives licence<br />deepchi1http://www.flickr.com/photos/deepchi/<br />Swamibuhttp://www.flickr.com/photos/swamibu/<br />FABRICIO_DG http://www.flickr.com/photos/_fabriciodg/<br />kaysha http://www.flickr.com/photos/kaysha/<br />Placer Dome http://www.mining.ubc.ca/cimarchive/index.php?image=10000381<br />No One Nelshttp://www.flickr.com/photos/dan_and_claire_nelson/<br />Photos8.com http://www.flickr.com/photos/publicdomainphotos/<br />MrHuevohttp://www.flickr.com/photos/mrhuevo/<br />Wumpiewoohttp://www.flickr.com/photos/wumpiewoo/<br />This document islicensedunderCreative Commons Attribution 3.0 by Michael Eich michaeleich@gmx.ch<br />12<br />

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