Site Presented By
Saturday, Jul 4, 2009
Oct 25, 2000 | Read the story
I am writing in response to an article by Susan Emerling. The article, while broad-ranging and ambitious in its scope, contains many inaccuracies and several misleading comments.
De Beers is certainly undertaking a period of profound change, a process that started well over two years ago. The central theme of the change has been for the company to shift away from its traditional role of market custodian to one of industry leadership. This process, which has generated a good deal of press coverage, has indirectly invited a degree of comment on the way De Beers might have conducted its business in the past.
The article's portrayal of De Beers as a cartel operating solely in its own interests is a misguided one. It is true that De Beers has, in the past, been responsible for marketing up to 80 percent of the world's rough diamond production. The aim of this marketing process was to provide a degree of stability in diamond prices and to avoid the potentially devastating effects of dramatic price fluctuations. This "co-operative" system operated to the benefit of producers, manufacturers and consumers alike. The majority of the diamonds purchased by De Beers come either from partnerships with producer nations, such as Botswana and Namibia, or direct contractual purchasing arrangements as is the case in Russia. De Beers owns mines only in South Africa.
Contrary to Emerling's suggestion, De Beers boxes sold at "sight" are not non-negotiable, are not purchased on an all-or-nothing basis and are prepared according to orders placed by the various sightholders. De Beers exercises no control over the diamonds once they have been sold at sight, with the manufacture and retail of diamond jewelry carried out by experts with far more specialized skills and knowledge in these areas. The idea that the company controls everything from the stones' removal from the ground to their delivery into the hands of jewelers' is fanciful at best.
In the context of conflict diamonds, De Beers has been rigorous in applying both the spirit and the letter of "Best Practice Principles." This policy aims to ensure consumer confidence in De Beers and the gem diamond industry by setting out a strict code of industry ethics and established principles of business practice. This was conceived well before the issue of conflict diamonds was receiving its current degree of coverage.
Far from being a source of "discomfort," as Emerling suggests, it is De Beers' corporate responsibility to lead the way in the campaign to banish conflict diamonds from the world market. The legitimate industry has acted with unity of purpose and conviction and has already achieved notable results in this regard through its close collaboration with the United Nations and relevant governments throughout the world.
