How many miners would you kill to slip that diamond ring onto a finger?
Producers of the precious stone should heed the expanded definition of blood diamonds if they want to protect sales
As the diamond sector’s Kimberley Process goes into the final leg of its three-year review process, African diamond-producing states have everything to gain from expanding the mechanism’s scope. What role will SA play?
Often uncompelled by the mere moral imperatives behind human rights or environmental concerns in mining, African governments tend to defer more readily to appeals to the “bottom line” in taking bold policy steps to address such issues. However, in the mining sector, and for diamonds specifically, serious environmental, social and governance (ESG) issues and the “bottom line” have again converged. Here, in dismissing civil society and recent industry calls to address them, African governments would be — to use a mining metaphor — ignoring the sector’s canary.
SA has always been a spearhead in the diamond sector. The sector’s global attempt to collectively address the adverse peace and security impacts of diamond mining took its name from SA’s own Kimberley. The internationally renowned Kimberley Process — a certification mechanism intended to stem the flow of conflict diamonds — has now been operational since 2003. Started in a context of sectoral monopoly by De Beers, its advent marked a sea change in industry practices and has seen increased opportunities for African producers like SA and Botswana to leverage much greater benefits from the sector.
But while the diamond world has reshaped itself around the Kimberley Process, so too have the challenges it now faces. These challenges include more modern-day conceptions of blood diamonds: diamonds associated with government or private security guard violence, as well as other issues of concern to conscientious consumers, such as large-scale environmental damage or the worst forms of child labour.
These challenges increasingly leave diamond revenues once again vulnerable in the absence of visionary or at least far-sighted leadership by African producers. Why?
Three things: consumers, synthetics and investor risk aversion.
Nearly 50% of global diamond consumption comes from US retailers — that is, US consumers. A basic Google search on the new generation of diamond consumers highlights three things: they want a bargain, they have an increasing range of options in buying luxuries and they are extremely sensitive to social, environmental and governance issues.
“We are seeing a new generation equipped with more knowledge, concern and passion than ever before,” François Delage, CEO of De Beers Diamond Jewellers, told the South China Morning Post last July in an article entitled “Millennials like their diamonds ethically sourced or man-made, and jewellers are responding”.
None of this is lost on the emergent lab-grown diamond sector, a sector predominantly based in China. With advances in technology, synthetic stones are being eyed with fascination as they increasingly seek to compete with naturals on price and ethics.
Should this really matter to SA? After all, it has often been seen as a more ethical go-to producer, right?
First, where diamond mining is associated with harm, synthetics win out. Period. The first casualties here are African producers, regardless of geography. There are 54 countries on the African continent. How many do you think your average US citizen knows? For a continent generally seen as possessing so much wealth and yet staying so poor, it’s naive to think that Western consumer perceptions of African diamonds are capable of too much nuance.
A recent joke in the US satirical magazine The Onion is a case in point. Referring to the number of dead diamond miners needed to prove matrimonial commitment, it quips: “Drysdale recommended that couples earning six-figure salaries look into travelling to SA and killing a miner themselves in order to really make the occasion special.”
Africa can no longer afford to remain complacent. When diamond-related harm continues unchecked on this continent for a decade, consumer confidence eventually ebbs. The events in Zimbabwe that saw 200 artisanal miners killed by security forces in 2008 were echoed only just last year in Angola. Likewise, reports of violent abuses have continued to come from Zimbabwe and other countries. In my own native land, Lesotho, community protests regarding environment and land issues came to a head last year with two people killed during demonstrations against diamond mining operations.
All this is bad press for African diamonds. The longer these things continue, the less you can prevent them from coming to consumer attention and the more entrenched they become in the consumer psyche.
The truth of the matter is that even after so many years of the Kimberley Process, there is still often no way to know for sure whether one is buying a blood diamond. While synthetics can claim to avert such harms, however, they cannot claim to bring the blessings that diamonds likewise promise. Here, a truly fair trade system designed for consumer confidence would guarantee conscientious consumers not only harm-free stones but diamonds that can improve the working and living conditions of local communities and producer nations.
But investors too are more likely to buy into better ESG mining credentials where African countries can offer a more level playing field. In its June 2019 mine survey, major consultancy PwC said that investors are now more often ignoring improved financial performance among miners if it doesn’t come with reputational transformation: “Investors seem to be down on the brand of mining. They question whether the industry can responsibly create sustainable value for all stakeholders.”
In discussions around the scope of the Kimberley Process, SA would do well to once again grasp the reins of leadership and forge the visionary path. In doing so, encouraging innovation around how the process’s scope is applied to avoid the unnecessary imposition of harmful nationwide embargoes and seeking out smarter and more collaborative interventions to ensure clean diamond production would be a breath of fresh air.
• Lerotholi is with the Maluti Community Development Forum in Lesotho.