The world's leading diamond company, De Beers, turned to a third-party certification scheme to safeguard its reputation
De Beers' commitment to certification has helped to strengthen its standing within the industry. As a growing number of mining and jewellery companies follow De Beers' lead, the RJC Code of Practices contributes to reducing risk across the industry and thereby helping to preserve the diamond's allure, ensuring good business for De Beers well into the future.
De Beers has played an influential role in promoting good practices within the industry, contributing to the creation of the Responsible Jewellery Council (RJC) and becoming one of the first international mining companies to get all of its operations certified under the RJC Code of Practices.
Why choose certification?
De Beers is practically synonymous with diamonds. The company has been mining these precious stones since 1888, and it dominated the market for much of the twentieth century.
Though it has a prestigious, global brand, engagement with the RJC standard has helped De Beers to validate its corporate social responsibility and the good practices of its suppliers and clients.
Diamonds have been highly valued since ancient times and have grown especially popular over the past century. When the precious stone’s preeminence was threatened in the late 1990s by reports that diamonds were being sold to fund guerrilla wars in Angola and other African nations, De Beers was quick to join an international effort to halt the trade in conflict diamonds. The result was the Kimberley Process, which brought together industry, government and civil society representatives to create a diamond certification scheme that was launched in 2003.
“The Kimberley protocol has been very effective,” observed Zerouki. “We can now state with confidence that less than 1% of the world’s diamonds come from conflict areas. We can also say with confidence that 100% of De Beers’ diamonds are conflict free.”
She explained that around the time of the Kimberley Process, De Beers developed its own Best Practice Principles, which the company requires its suppliers and ‘sightholders’ (bulk diamond buyers) to comply with. Other large mining companies and retailers introduced comparable systems, which created confusion and audit fatigue among companies that had to comply with various standards.
Good comes from collaboration
In an effort to reduce such problems and raise the industry's standards, De Beers joined 13 other companies and organisations in 2005 to create an independent, not-for-profit Council for Responsible Jewellery Practices, which was subsequently renamed the Responsible Jewellery Council.
The RJC is a standardsetting and certification organisation that promotes responsible business practices for diamond, gold and platinum-group metals across supply chains - from mining to manufacturing to retail. It now has more than 600 members that commit to and are independently audited against the RJC Code of Practices, which covers human rights, labour rights, environmental impact, mining practices, product disclosure and other issues.
"The entire De Beers Group has been RJC Code of Practices certified; this includes all our mines and everything that falls under them - all our trading centres and everything that comes between that is diamond-related," said Zerouki. She explained that De Beers has harmonised its best practices program with the RJC standard, and that the company's operations now undergo a single annual audit to ensure compliance with both.
Zerouki added that De Beers also covers the cost of RJC audits for its sightholders, which are combined with audits for De Beers Best Practices, in order to provide them with a third party validation and help the RJC expand its reach. "Due to our leadership position, we decided that it was best to offer this as a value-added service," she said. "We see our clients as partners and we see the RJC as a partner. We see good in collaborating to get more people involved."
Improving an Industry
Fiona Solomon, who was the RJC's Director of Standards Development from 2007 to 2015, explained that for De Beers - and the mining, jewellery and fine watch industries in general - RJC is primarily a business-to-business programme.
While companies may mention or explain RJC certification in their annual reports or other external publications, it is rarely used for retail marketing, since few consumers are aware of the RJC and the issues it was created to address. Many retailers, on the other hand, are interested in seeing RJC certification in their supply chains, and some actively promote it.
Solomon added that while companies gain varied benefits from complying with the RJC Code of Practices, risk management is the main reason they engage with RJC. While consumer knowledge of jewellery-related standards tends to be weak, there is widespread concern that negative media coverage or an international campaign comparable to the one surrounding conflict diamonds could damage the industry and its major brands.
"The RJC standards focus on key supply-chain risks and benchmarking management of these against international practices and regulations. They provide a way of managing and organising these issues in a more coherent way within an organisation," said Solomon.
"De Beers sees this as a risk management tool for their downstream customers, but they are also concerned that risk that isn't being managed in the broader industry could undermine their own business and customers."
"Diamonds aren't really that branded, so if there is any reputational damage caused by a rogue entity concerning diamonds, the entire supply chain will feel a disproportionate impact. It is thus important to raise the industry standards, the whole pipeline: the miners, the manufacturers, the retailers, the small, large and medium sized businesses. We all have the same risks."
"De Beers is a leader, but we can only influence a limited scope of the diamond pipeline. We were able to create our own Best Practice Principles and roll them out throughout our supply chains and to our clients, however, that still represents a limited number of players in the industry.
The best reason for working with the RJC is to level the playing field and to have an independent organisation that isable to reach out to people that we can't reach." - Feriel Zerouki, Head of Government and Industry Relations at the De Beers Group.
For De Beers, expanding transparency and cooperation across the diamond and jewellery industries means an environment that is more conducive to risk management, which can help to protect diamond equity as a whole and, as a result, the company's profits.
More than 270,000 employees now work at the more than 5,900 facilities certified under the RJC Code of Practices, which has helped to raise standards across the diamond, gold and platinum-group industries. Solomon noted how much De Beers' commitment has helped. "If we didn't have De Beers and other industry leaders engaged, there wouldn't be as much interest in the RJC. They are pushing the industry forward," she said.
The RJC provides a platform for cooperation among members on the identification of emerging risks and strategies to deal with them. A recent example of this was the emergence of legislation in the United States on conflict minerals disclosures, which resulted in the addition of a provision on Provenance Claims, so that such claims must now be verified during the RJC audit process.
Zerouki summarised: "RJC provides a unique platform where we can openly engage with different stakeholders on emerging risks, and work together to better the industry as a whole."