De Beers

a diamond is forever

Friday 30 September 2011, by Masbernat, Wang, Yang

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Discussion

A, Main facts about the activities of the company

DeBeers is a family of company that dominates the diamond, diamond mining, diamond trading, and industrial diamond manufacturing sectors. The DeBeers employs about 20,000 people around the world on five continents.

1, The Diamond Trading Company (DTC) is mainly engaged in rough diamond sales and distribution. The DTC also develops diamond technology and operates a research and development facility based in the United States.
2, The DeBeers Diamond Jewelers entered into a retained joint venture with French luxury goods company Louis Vuitton Moet Hennessy (LVMH) to establish an independently managed DeBeers diamond jewelry company in 2001.There are now DeBeers retail stores in England, France, Ukraine, Russia, Japan, Taipei, Hong Kong, Macau, Dubai and the United states

Over the last century, DeBeers has been highly successful in increasing the customer for diamonds. One of the most effective marketing strategies has been the marketing of diamonds as a symbol of love and commitment.

B, The ethical challenges this company is addressing.

The ethical challenges this company that DeBeers is addressing is mainly comes from the unethical behaviors in the history of this company, which is given as follows,

1, Child labor: The mines had ever created job opportunities to the kids.

2, Low salary: Employees were paid less than 1$ per day under the African sun. Moreover, they work the whole day and sleep in the mines.

3, Environmental pollution: Extraction of diamonds provokes an environment?s degradation and water?s pollution.

4, The resources is being doubted: De Beers swear that its diamonds come from clean regions of the world but the problem is that serious organizations recognize that it?s impossible to check origins of diamonds. Even if 69 countries have signed the Kimberley process, effects are far from expectations.
5, Monopoly: The DeBeers had ever been a leader of a cartel, it set up with other producers in order to control international prices of the diamond.

C, What makes you believe this company is really ethical and why you trust it

In recent years, De Beers has changed their behaviour into a more ethical method, and benefit both the society and the public for the following actions:

1、 Partnering Against Corruption Initiative
De Beers sees the role of civil society as an essential element in overcoming bribery and corruption and has worked closely with Transparency International through membership of and association with PACI （Partnering Against Corruption Initiative）and EITI.

2、Anti-money laundering
De Beers developed a separate policy on Anti-Money Laundering and Combating the Financing of Terrorism. It obliges the Family of Companies to only transact with approved financial institutions and forms part of the Sightholder selection process on the basis of stringent background checks.

3、Child labour
Employee Human Rights Policy of De Beers prohibits any child under the age of 16 from being employed. It also requires that ?no persons under the age of 18 will be employed in roles that may be hazardous to their health, wellbeing or safety, including any night work, underground work and work involving machinery.?

4、Impact on the environment
Using the measures include conservation projects, research on biodiversity, energy and climate care programmes and water management technologies to minimise the negative impact on the environment.

What De Beers has done above made us trust it.

D, The possible challenges facing in the future and how you think this company may improve

1. As the incomes of the employees and the cost of operation are increasing , the company may dismiss the staff to reduce the cost.
2. Though the company has used diversity of methods to solve the environment pollution, there are still some negative impact on it.

How to improve

1. Enlarge the scale of the product capacity, which not only can reduce the cost of operation but also can give more positions to employees.
2. Paying more attention and make more budget on the technology that can reduce the pollution.

Bibliography

http://www.debeersgroup.com/
http://www.ewtn.com/library/business/antdebrs.htm
http://www.diamonds.net/news/NewsItem.aspx?ArticleID=34526
http://money.cnn.com/magazines/fortune/fortune_archive/2001/02/19/296863/index.htm
http://priceofdiamonds.org/wp-index.php?p=117

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2 Discussions / 3 Messages

# De Beers - Missing evidence 8 June 2012 at 11:57 , by JonasHeller

The three students of the Renmin University wrote that the four policies or implementation mentioned above made them trust in the company. They continued with several future challenges (increasing costs of operation, still pollution etc.) with which I agree, they made some short suggestions who to improve and added some company information in the end. In the end I could not really believe that people could be convinced that easily by some company policies stated on a sheet of paper or on a website so I checked the sources of the sources of the article. Next to the company webpage there were four sources of which only one stated that “[…] DE BEER WANTS TO POLISH ITS IMAGE...AND DOMINATE AS NEVER BEFORE” (Headline of an article from CNN.com). The other two sources either simply mentioned company related figures or numbers. The last remaining used the headline “SOUTH AFRICA’S DE BEERS: THE MOST UNETHICAL CORPORATION IN THE WORLD” (Ewtn.com). After referring to those resources, several thoughts were confirmed and new doubts about the company rose.

After doing some additional, short research one factor was mentioned in different sources: The diamond industry is untransparent. So is the cartel around the De Beers company. Barely information about how the working conditions have been officially changed exists. While trying to open the document of the company website which should prove that 100% of the De Beers diamonds are conflict free, the hyperlink was unavailable. In the employee report of 2010, no policy against child labor was mentioned, nearly 50% of the death of employees was “undefined” and in an company conducted research it was found out that people did not see development opportunities, future career option and people management was rated badly by own employees. In this research, the Debswana Company, a giant mining company half-owned by De Beers did not even participate. Debswana was criticized by social right organizations for not respecting the rights of the Bushmen living in the mining areas. There are also critiques concerning the working conditions in Africa, also if it has to be said that many diamonds by De Beers are mined in Botswana which is one of the most stable countries of the African continent.

Not only the way of how handling the workforce, the society or the environment in the country where De Beers works are under critique. Due to the monopoly De Beers is having, the company is able to control supply and demand of their product, which leads to enormous profits for the company they would not have if the monopoly would not exist. Those profits are not invested in any ethical projects and also the way of controlling prices already can be seen as unethical concerning the customers of De Beers.

In addition to that, the only way De Beers is selling diamonds is in London through a single channel system which you can only enter if you have the money and/or reputation. Even if you, as a potential customer on the market, have managed to get into this circle, you are only allowed to reject 5% of the boxes of diamonds you get and always have to pay in cash. Those factors lead to higher prices than on the free market, but due to the monopoly at some time the customers need to start buying at De Beers.

I can not understand why the authors of this profile, who at least needed to have some business background and some knowledge in how writing an article or company profile (including doing the necessary research) used biased resources and why did they believe in those while ignoring others they even cited.

And my last concern, why does the website www.wedreambusiness.org allow the publication of the company profile without checking the quality of the profile and therefore helping to produce a wrong image of a company. It is given that the website is not for promotional reasons and that everyone can publish a profile of any company online. But isn’t the fact that educated people apparently already started to believe in, or at least not questioning the public relation strategies of companies important if we imagine that many people may read those profiles to look for inspiring companies they can learn from or may want to invest in? The intention of the project wedreambusiness.org is undoubted and honest, but is the publication of all those profiles below an inspiring video ethical if it may helps to build up a good and blurry believe of people in those companies?

The factors mentioned above were thoughts who rose in my head while thinking about a inspiring example by former students, also if this essay may not help to find another, in a good way, inspiring company, it is written to improve the, from my side strongly supported, idea of We Dream Business.

Jonas

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- # De Beers - Missing evidence 14 June 2012 at 16:20 , by Marc Le Menestrel
  
  As of today, we have not censored the projects uploaded by the students. I am not sure this policy is the most appropriate one and I find the questions raised by Jonas relevant. One solution would be to have a special tag like "greenwashing" in order to allow the students to express their opinion about the "unispiring" power of the projects uploaded. Another solution is to promote discussion like the one that takes place here. I propose that we keep this subject open and gather opinions about how to move forward.
  
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# De Beers: is it a really inspiring company? 5 October 2012 at 17:09 , by Filippo Cirulli

I just want to express my simple point of view, so my comment will be clear and simple as well.
Peronally, when I think to companies that "inspire me and make me dream" and that I appreciate for their ethic and their moral values I immediately think about these companies whose main goal is not to maximize profit. A lot of companies think their priority is to maximize the wellness of shareholder, employees and the community.
Some of them even decide to reinvest their profits in humanitarian projects in order to offer equal opportunities to less fortunate people.
I was reading some projects, but when I saw The Beers I was really interested to understand what reasons could make you think this company should be considered a "company that inspires students and make them dream that another business is possible".
I read the project, I liked it, but I think that the ethical challenges of the company are not so "inspiring".
It’s a company that is against the child labour, unfair salaries and diamonds that are used to finance civil wars.
Well, I think that these are NECESSARY STANDARDS, it’s not a plus that De Beers is doing in order to create a better world.
It just acts according to human rights, but I think it’s not enough.
De Beers isn’t promoting any activity to help 3rd world people, but it just ensures the minimum rights that can keep the company doing its business and, in this way, it can avoid scandals.
In addition, I read in the project that it’s not sure that all the diamonds come from pacific countries, and that we just have to trust what the company says. And if it so, how can we be so sure that these are not blood diamonds?
I’m not blaming the company, but the question is obvious. How can we say that a company that potentially could help insurgents parties to buy weapons to kill their people is "inspiring"?
How can we consider "ethical" a cartel that steals the only resource that these countries have?
And then, how a company that collects most of the diamond of the world in its caveau just to keep the price as high as they can coul be considered an example of high morality?
I think that there are a lot of companies that could be examples of good business, but I really can’t understand how De Beers could be one of them.

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