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RESPONSIBLE BUSINESS

A LUXURY INDUSTRY PAYS FORWARD

 

“Pay It Forward,” an American romantic move released in 2000, tells the story of child who conceives of a plan to build a better world, by which the recipient of a favor does in turn do a favor for three others, rather than paying the original favor back. It is a concept that is being translated into reality in the luxury product industries, which over the years have acquired much of their raw materials from developing countries, where few people would be able to purchase the products they sell. The idea is that they initiate capacity building projects in projects that not only provide direct revenues, but also build capacity so that sustainable economic opportunities are created.

The vast majority of the world’s diamond production comes from industrialized mining operations, with the seven largest companies delivering $16 billion worth of net benefits to the countries in which they operate, according to a recent study by the Diamond Producers Association (DPA)

However, while the seven DPA members collectively represent around 75 percent of global diamond production, and employ about 77,000 workers and contractors, between 1 million and 1.5 million individuals are involved in artisanal diamond mining. They account for around 15 percent of all rough diamonds produced each year by volume, but they only receive 5 percent of the revenue in terms of value.

The challenges faced by artisanal miners are daunting. Using basic equipment in remote areas of the world, they also a frequently are uninformed about the real market value of the goods they have recovered, meaning that they particularly vulnerable to exploitation. It is difficult for them accessing the legitimate diamond pipeline and to obtain Kimberley Process certification.

SERVING ARTISANAL MINERS AT VERIFIED ALLUVIAL MINING SITES

Speaking during a Special Forum at the 2019 Kimberley Process Intersessional Meeting in Mumbai, India, in June, Feriel Zerouki, a World Diamond Council Board member and Senior Vice President of International Relations and Ethical Initiatives at De Beers Group, provided an overview of a pilot project initiated in Sierra Leone, which uses a digital solution to provide artisanal and small-scale miners with a secure route to market for ethically-sourced diamonds, while at the time helping them to receive fair market value.

Called GemFair, the project was launched in 2018 in the Kono region of the country, and immediately started to provide services to registered artisanal miners at 14 carefully demarcated sites. Each had  been certified as compliant with the Maendeleo Diamond Standards, which is an innovative certification system that enables ethical production of diamonds by artisanal and small-scale mining operations, through the adoption of eight specific principles covering legality, consent and community engagement, human and worker’s rights, health and safety, violence-free operations, environmental management, interactions with large-scale mining and site closure. 

The GemFair team posing outside the De Beers buying office in Sierra Leone’s Kono region, on the day that project registered its first rough diamond purchase. (Photo courtesy of the WDC Newsletter)

Since its launch, GemFair has increased the number of member mine sites it works with from 14 to 72.

 

ENABLING ARTISANAL MINERS ACCESS THE LEGITIMITE DIAMOND TRADE

As part of the program, GemFair supplies certified miners with a dedicated tool kit free of charge. It contains basic gemological equipment, including a loupe and scale, QR-coded sealable bags and a weatherproofed tablet computer, which is a designed to operate in the often-unforgiving conditions at the artisanal mining sites and comes equipped with a solar charger.

 

GemFair staff training artisanal miners in the mining area. (Photo courtesy of the WDC Newsletter)

An artisanal miner in Sierra Leone’s Kono region weighing a diamond, using the electronic scale that is supplied as part of the GemFair toolkit. (Photo courtesy of the WDC Newsletter)

When artisanal miners recover a diamond, they use an application on the tablet computer to register the stone, providing basic gemological information, and uploading photographs both of the rough diamond and the miner holding it. The first set of photographs are intended to assist the GemFair staff with the traceability assurance function of the digital solution, and the second set is to verify the identity of the miner. 

Using GPS location technology, activated by the tablet computer that the miners have been provided with, GemFair is able to ascertain that the stone has been recovered in a certified artisanal mining site.

The miner delivers the diamond in a QR-coded bag to the GemFair buying office where it is valued by GemFair’s experienced diamond buyers, then an offer is made.  If the miner accepts the offer, payment is prompt. Miners in the program are not obliged to sell their merchandise to GemFair. But, even if they do not, they have been provided valuable information about the market value of diamonds in their possession.

Rough diamonds purchased by GemFair and exported from Sierra Leone are KP-certified, and eligible to be traded legally in the major markets, and are provided with Kimberley Process certificates. 

In fact, because of the technology that has been developed, GemFair diamonds can be traced individually to the artisanal mine sites at which they were recovered. De Beers Group plans on integrating them into its Tracr blockchain, which will provide a full chain of custody all the way through to the final buyer.