Rapaport Magazine
Industry Views

From De Beers

Industry’s focus must be on building new tools to address new challenges, not tearing down old ones.

By Stephen Lussier
Diamonds and responsible diamond producers have helped transform economies and livelihoods in diamond producing communities. As an industry, we can be proud that the vast majority of the world’s diamonds are produced by reputable businesses in accordance with international human rights standards, and in a way which undeniably benefits the people and places where they are discovered.

Like any large scale industry, there are individuals actively working to exploit people for profit. Significant progress has been made over the past two decades to exclude these individuals from the legitimate diamond industry. While this effort began with the Kimberley Process, it certainly has not ended there. As the threat has evolved, the tools at our disposal have expanded. And while the challenges are complex, the industry has demonstrated that the threats are addressable if it continues to invest in innovative solutions, grounded in an understanding that, no matter their numbers, bad actors anywhere are bad for businesses everywhere.

The industry has worked tirelessly to enhance practices, right across the value chain, to ensure trade participants and consumers can have confidence in the diamonds they buy. Beyond the KP, which should be considered the baseline of responsible sourcing, industry has introduced various compliance programmes — aligned with international best practice pertaining to human rights and ethical sourcing — which trade members can participate in. These include the RJC Code of Practices, the WDC System of Warranties and De Beers Group’s own Best Practice Principles to name a few. As with any industry, trade participants must be responsible for conducting due diligence on their own supply chains and for passing that assurance on to customers and consumers.

Key to providing this assurance will be traceability and provenance programmes which help consumers better understand where and how their diamonds were sourced. At De Beers, we’ve committed to providing the origin and impact of every diamond we discover and sell by 2030 as part of our Building Forever sustainability goals. An ambitious commitment, particularly when considering the complexities involved in tracing a product that often changes both form and hands throughout its journey. Our recently launched De Beers Code of Origin pilot programme, which provides consumers with proof their diamond was discovered by De Beers and responsibly sourced, will help us achieve this. The programme is supported by the Tracr blockchain platform — a truly unique traceability platform, underpinned by artificial intelligence, Internet of Things and high-grade security features, which can immutably trace a diamond as it travels through the value chain. These initiatives are evidence of hard actions for real solutions. They’re not easy, but we’re investing significantly in them as we recognise that enhanced transparency will be the foundation for preserving long term consumer trust in diamonds — while also limiting the potential for bad actors to realise profits.

The artisanal diamond mining sector presents unique human rights risks due to its lack of formalisation. We believe industry has a responsibility to support formalisation of this sector and in 2018, introduced our GemFair programme to provide a secure-route-to-market for ethically-sourced ASM production. The programme now has 211 participating mine sites in Sierra Leone and continues to expand in line with our 2030 Building Forever goal to deliver scalable solutions to improve the livelihoods of artisanal miners.

When it comes to the Kimberley Process, we support the WDC (as industry’s representative on the KP and of which De Beers is a proud member) and its long-held position that the best way for the KP to evolve is to expand the conflict diamond definition. And we share the frustration of many at the pace of progress in this regard. But we must also remember why the KP was established and all that it has achieved in delivering on its mandate. It is undeniable that the KP has been a force for good and a catalyst for ending the devastating civil conflicts that were underway in parts of West Africa in the early 2000s. And it remains an important mechanism for ongoing peace keeping in these regions. Moreover, the KP’s requirements for the import and export of rough diamonds over international borders means it provides an additional layer of protection against risks relating to money laundering — risks which persist in other sectors without such a mechanism. Abandoning the KP is not the answer. But we must develop new solutions for what the KP is not structured to address.

As an industry, we must be intentional about maintaining the foundational frameworks that have enabled diamonds to be a force for positive development in the world, while empowering participants across the value chain with new tools to address new challenges. We have made significant progress over the past two decades and, we believe as the industry continues to address emerging challenges while maximising the development potential of diamonds, we will see more consumers wearing diamonds not in spite of their reputation, but because of it.

Stephen Lussier
Executive Vice-President, Consumer Markets; Chairman, De Beers Jewellers and Chairman, De Beers Forevermark


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