How Mining Communities Are Thriving Thanks to Diamonds

December 20, 2017  |  Avi Krawitz  |  SPONSORED BY: Diamond Producers Association

From funding hospitals to keeping conflict stones out of the pipeline, the industry is investing in the future of its mining communities.

Standing in the entrance to Kiran Hospital in Surat, India, Govindbhai Dholokia beams with pride as he gestures toward the list of donors that made the facility possible. “Everyone here works with their hearts,” says Dholokia, chairman of diamond manufacturer SRK Exports and co-founder of the hospital. “This project represents the heart of the diamond industry.”

Until the hospital’s opening in April 2017, Surat offered limited options for patients in need of specialized care, explains Dr. S.P. Shrivastav, head of the hospital’s oncology unit.

Today, this facility is making treatments available to tens of thousands of people who previously didn’t have access, he says.

I don’t think the diamond industry markets its good deeds enough.

And it was Surat’s diamond manufacturing sector — which accounts for an estimated 80% to 90% of global polished production — that funded it, contributing most of the $75 million it took to build and set up the facility.

“This really is a testament to the heart of the Surat diamond community,” says one foreign executive considering a donation. “I don’t think the diamond industry markets its good deeds enough.”

Push the positive

That mandate — to highlight the positive impact the diamond industry has on its communities — is one that former South African president Nelson Mandela urged Russell Simmons to adopt just over a decade ago. Simmons, a celebrated music producer who at the time was mulling a jewelry line of his own, had embarked on a fact-finding mission to understand how diamonds could benefit the people of southern Africa.

The industry was still defending itself from negative perceptions about conflict diamonds, following the release of Blood Diamond — the 2006 film that highlighted the industry’s role in Sierra Leone’s civil war. But having visited mining and manufacturing operations in South Africa and Botswana, and having seen the schools, hospitals and infrastructure supporting those communities, Simmons recognized the opportunity that lay ahead.

He answered Mandela’s call by setting up the Diamond Empowerment Fund (DEF), with the goal of giving back to youth in the communities where the diamond industry operates.

Changing the narrative

Now in its 10th year, DEF has given out millions of dollars in student grants and to organizations that facilitate access to better education, skill-building and vocational training, the fund reports. The idea is that students should come back and contribute to the economic development of their home countries, explains DEF executive director Nancy Orem-Lyman.

The organization’s current beneficiaries include the Johannesburg-based African Leadership Academy, the Botswana Top Achievers program, and Veerayatan, a nonprofit providing educational, social and medical services in India. In the past, it also supported the Diamond Development Initiative (DDI) in setting up mobile schools for artisanal mining communities in the Democratic Republic of the Congo (DRC).

While DEF relies on donations from companies throughout the diamond pipeline, Orem-Lyman stresses that the organization is not only about financial support. “We want to change the narrative surrounding the diamond industry,” she says. “People need to know about the good that diamonds do, and that miners, manufacturers and jewelers are contributing to uplift those less fortunate.”

That extends to the work jewelers are doing in their own communities. DEF launched a “Diamonds Do Good” website, providing a platform where companies can tell their stories about the positive impact diamonds are having on their immediate surroundings.

It makes business sense

For many, these projects aren’t just about doing the right thing; they’re good for business as well, since their customers are demanding it.

“Consumers are looking for products that are made responsibly and which provide a fair livelihood for the people who are mining and producing these items,” Ernie Blom, president of the World Federation of Diamond Bourses (WFDB), said at the Dubai Diamond Conference in October. “We must continue to show that these are our aims as well.”

In fact, representatives from miner De Beers and retailer Signet Jewelers pointed to consumer interest as one of the reasons for their corporate social responsibility programs.

Such programs can include both community support and efforts to maintain the integrity of the company’s products, according to panelists at the conference.

Stéphane Fischler, acting president of the World Diamond Council (WDC), said the industry had come a long way since the 2003 establishment of the Kimberley Process Certification Scheme (KP), which verifies that a country’s rough-diamond production is conflict-free. However, he went on, many outsiders are still skeptical about the industry’s efforts to increase transparency and meet the ethical standards consumers are seeking.

System of warranties

Fischler, whose organization represents the diamond industry at the KP, acknowledges the need to update the certification scheme — which is why the KP is currently doing a review to assess whether it is fulfilling its core mission.

Part of that discussion is about broadening the scheme’s scope beyond its narrow definition of conflict diamonds, particularly to include violence related to diamond miners and their communities, Fischler explains in an interview with Rapaport Magazine. The DDI, for instance — which was established 10 years ago under the auspices of the KP — has programs in place to encourage responsible and violence-free mining in the artisanal sector (see sidebar).

At the conference, Fischler called the KP “the best story we have today” to validate the industry’s commitment to integrity, adding that a unified effort was necessary to ensure the continued implementation of the scheme.

Among other things, that means complying with the WDC’s system of warranties and self-regulation standards, which require diamond suppliers and jewelry manufacturers to pass on a warranty statement each time diamonds change hands, assuring the next buyer that the goods have gone through the KP system.

The WDC is also reviewing the system of warranties to explore ways to broaden awareness and introduce a stronger element of due diligence.

Global sustainability goals

Another organization working to bolster the integrity of the trade is the Responsible Jewellery Council (RJC), which boasts more than 1,000 member companies that have committed to its code of practices for diamonds, gold and platinum-group metals. The code addresses human rights, labor rights, environmental impact, mining practices, and product disclosure, among other issues.

Beyond the RJC, there has been an industry-wide push for companies to align with the 17 UN Sustainable Development Goals (SDGs). Special sessions at the Dubai Diamond Conference, and at the Diamond Conference that De Beers hosted in Gaborone during October, encouraged enterprises to use the SDGs as a guide for their social responsibility agendas.

The diamond industry has the potential to influence and affect all the SDGs (see graphic), given its global scale and diverse operations, De Beers explained in a report earlier this year. “The ongoing success of diamond companies will depend on accountability across the diamond value chain regarding contributions to sustainable development.”

‘Part of the industry’s DNA’

Central to De Beers’ own program are its best practice principles (BPP), which help the company determine whether its operations — and those of its clients — comply with the best ethical business standards.

But it has other projects as well. For example, a strong focus in 2017 has been gender equality, reports Katie Ferguson, the company’s head of social impact.

To that end, the company has partnered with UN Women and worked to provide opportunities for women in both its own organization and the communities where it operates. Environmental issues are also high on the agenda, with De Beers aiming to achieve carbon-free mining within five to 10 years.
The WFDB’s Blom laments that these efforts tend to go unnoticed. Part of the problem, he suggests, is that these stories are not known to the wider public. “We just need to find a way to get this information out to consumers,” he says.

DEF’s Orem-Lyman agrees, adding that the large enterprises aren’t the only ones engaged in such programs. “The industry is predominantly made up of family-run businesses, and these are families that give back,” she says. “People don’t know about it, but doing good is part of the industry’s DNA.”

Development diamonds

In the mid-2000s, the diamond industry faced a dilemma. While efforts by the Kimberley Process to monitor rough-diamond production were largely successful, there remained the challenge of recruiting the artisanal mining sector, which accounts for an estimated 15% to 20% of global production volume.

With the establishment of the Diamond Development Initiative (DDI) in 2008, the industry sought to address that challenge by formalizing the sector, explains Hany Besada, program director at DDI. It’s a daunting task, considering there are approximately 1.5 million diamond diggers with an estimated 10 million dependents — predominantly in West Africa — who remain the most vulnerable population in the diamond supply chain.

But organizing the artisanal sector to work within industry structures benefits both the diggers and the government, Besada maintains. The government gains from greater tax revenue and employment opportunities, while diggers gain a legalized framework for their work, a new set of skills, and access to diamond buyers and fair pricing.

To that end, the DDI has focused on establishing a record of active miners and registering them in its framework. Its flagship Maendeleo Diamond Standards (MDS) program certifies that their diamonds have been ethically produced through violence-free operations and environmentally friendly mining practices. The next step will be to arrange the sale of MDS-approved diamonds to international buyers. “We understand there is growing demand for ethical jewelry,” Besada says.

Main image: Mechanic at Venetia mine workshop in South Africa.


How Mining Communities Are Thriving Thanks to Diamonds

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