BUILDING FOREVER REPORT TO SOCIETY 2015 - De Beers Group
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OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 INTRODUCTION We are humbled to play a role in connecting Front cover image: Sunset at Orapa Game Park, millions of people around the world to the near the Orapa Mine, Botswana, a conservation diamond dream. Our operations and leadership area set up by Debswana and its business partners. position across the diamond pipeline enable Photo: Annie Griffiths us to create development opportunities in the communities where we live and work, and ensure that people can be proud to wear a diamond from The De Beers Group of Companies. We call this Building Forever – our commitment to create a lasting positive legacy, and to grow and protect the special place diamonds hold in the lives of consumers. Partnership is at the heart of this approach. We are proud to play a part in the development of partner countries and communities, working together to maximise enduring value from their finite natural resource. And our collaborations across industry and beyond set ever higher ethical standards, providing confidence to generations of consumers. This is our 10th annual Report to Society and it charts our sustainability performance in 2015. Despite significant market challenges throughout the year, our Report to Society reflects the unwavering commitment of our people to continue Building Forever. The report is accompanied by a shorter, summary Review, and further information can be found online. About this report For the purposes of our data reporting, we provide Disclaimer This report presents performance data for figures to one decimal place, except where it is This publication has been prepared for general those businesses that De Beers either owns or necessary to use two decimal places for more guidance on matters of interest only, and does has a significant shareholding in, and that have accurate reporting. Any inconsistencies between not constitute professional advice. Readers should economic, social and environmental impacts. the data, charts or percentage changes reported not act upon the information contained in this De Beers Diamond Jewellers, an independently are due to this rounding. publication without obtaining specific professional managed joint venture company, is not included in advice. No representation or warranty (express or the scope of this report. Use of ‘De Beers’, ‘our’ or All performance data for joint ventures included in implied) is given as to the accuracy or completeness ‘we’ in this report relates to The De Beers Group this publication is reported on a 100 per cent basis of the information contained in this report, and, of Companies, a collective term used for both unless otherwise stated. to the extent permitted by law, the authors and wholly-owned and joint venture business entities distributors do not accept or assume any liability, that De Beers has a significant shareholding in, Corporate Citizenship was commissioned by responsibility or duty of care for any consequences with the exception of De Beers Diamond Jewellers. De Beers to conduct an independent assurance of the reader or anyone else may incur from acting, the 2015 Report to Society. In addition, it has carried or refraining from acting, in reliance on the The 2015 Report to Society has been prepared out a full evaluation of the GRI Application Level information contained in this publication or for in accordance with the core option of the Global against GRI G4. In its full assurance statement any decision based on it. © De Beers UK Limited Reporting Initiative fourth generation Guidelines (see page 81), Corporate Citizenship states that our 2016. All rights reserved. De Beers™, Forevermark™, (GRI G4). A GRI Index is included at the end reporting is in accordance with ‘Core’ level of the A Diamond is Forever™ and The One™ are trade of this document. GRI G4 reporting Guidelines. marks of The De Beers Group of Companies.
OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 1 CONTENTS OVERVIEW 2 Who we are 12 4 Chairman’s and Chief Executive Officer’s statements 5 Our year in review ECONOMICS We work to build a positive 6 Executive summary legacy from diamonds in the 18 8 Our approach communities in which we live and work. ISSUE AREAS 12 Economics 20 28 Ethics Employees 20 38 48 Communities Environment 28 MORE INFORMATION 56 Performance summary 60 Global Reporting Initiative Index 81 Assurance statement 83 Best Practice Principles assurance statement 85 Contacts ETHICS 87 Further information We strive to raise ethical standards across our industry to ensure that diamonds continue to be a symbol of love, commitment and achievement for people around the world. 38 EMPLOYEES COMMUNITIES Our people are our business and With operations spanning we invest in them to help them decades, we look beyond the meet their full potential. life of our mines with a view to building strong and resilient communities that thrive into the future. 48 ENVIRONMENT We are committed to minimising environmental impacts at every stage of the mine lifecycle and championing the protection of biodiversity. For more information, go online www.debeersgroup.com/buildingforever
2 OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 WHO WE ARE OUR BUSINESS AT A GLANCE De Beers was established in 1888 and is a member of the Anglo American plc group. We are the world’s leading diamond company, with unrivalled expertise in the exploration, mining, sorting, valuing, selling and marketing of diamonds. We believe that diamonds are a catalyst for creating value and delivering socio-economic benefit in the countries and communities where we operate. FIGURE 1: A COMPANY BUILT ON PARTNERSHIP Partnership sits at the heart of our business, through a number of 50/50 joint ventures with the Governments of Botswana and Namibia, and our 74/26 Black Economic Empowerment Partnership with Ponahalo Holdings in South Africa. ANGLO AMERICAN PLC 85% GOVERNMENT OF THE REPUBLIC OF BOTSWANA 15% THE DE BEERS GROUP OF COMPANIES EXPLORATION PRODUCTION ROUGH DIAMOND SALES BRANDS/RETAIL MINING SUPER- MATERIALS GLOBAL CANADA DE BEERS DEBSWANA NAMDEB ELEMENT SIX: GLOBAL AUCTION FOREVERMARK DE BEERS EXPLORATION1 (100%) CONSOLIDATED (50%) HOLDINGS TECHNOLOGIES SIGHTHOLDER SALES (100%) DIAMOND MINES (74%) (50%) (100%) SALES (100%) JEWELLERS (100%) (50%) ABRASIVES (60%) NAMDEB SIGHTHOLDER DIAMOND SALES SOUTH CORPORATION AFRICA (LAND-BASED) (74%) DTC BOTSWANA DEBMARINE (50%) NAMIBIA (MARINE-BASED) NAMIBIA DTC (50%) Numbers indicate percentage of De Beers’ ownership 1E xploration is undertaken through a number of wholly-owned and joint venture entities.
OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 3 WHO WE ARE A GLOBAL VALUE CHAIN EXPLORATION PRODUCTION ROUGH DIAMOND SALES CUTTING, POLISHING BRANDS/RETAIL AND MANUFACTURING De Beers’ exploration De Beers has both De Beers sells its rough The cutting and polishing De Beers markets activities are currently underground and diamond production via of diamonds and the polished diamonds to focused in Canada, open-pit mines in contract sales to customers, manufacture of diamond consumers through Botswana, South Africa Botswana, Canada known as Sightholders and jewellery are concentrated Forevermark, which and Namibia, where we and South Africa. Accredited Buyers, and via in Belgium, Botswana, promises a consumer use highly sophisticated rough diamond auctions. China, India, Israel, that their diamond is technologies to find and We also commercially Namibia, South Africa mine alluvial diamonds As part of our long-term beautiful, rare and determine the economic and the United States. responsibly sourced; and viability of deposits. in Namibia using onshore contract sales, the majority extraction techniques of De Beers’ diamonds We aim to support retails diamond jewellery and, in the sea, are aggregated and sold downstream activities through De Beers specialised ships. at 10 Sights (or selling such as cutting and Diamond Jewellers, our events) each year, with the polishing in our countries independently managed Through Element Six, remainder being sold via of production through 50/50 joint venture our synthetic industrial online auction. our beneficiation strategy with Moët Hennessy diamond supermaterials (see Economics chapter). Louis Vuitton. business, we supply De Beers has sales tool and application operations in Belgium, manufacturers across Hong Kong, Israel, a diverse range of Singapore and the global markets. United Arab Emirates. WHERE WE OPERATE CANADA 1,887,000 carats recovered, 2015 1,354 employees REST OF WORLD • 1,824 employees NAMIBIA SOUTH AFRICA BOTSWANA • Corporate centres in Luxembourg, South Africa and the United Kingdom • Additional sales operations 1,764,000 4,673,000 20,368,000 in Belgium, Hong Kong, Israel, Singapore, and the carats recovered, 2015 carats recovered, 2015 carats recovered, 2015 United Arab Emirates 2,646 4,188 6,812 • Forevermark available employees employees employees in 35 markets
4 OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 CHAIRMAN’S AND CHIEF EXECUTIVE OFFICER’S STATEMENTS SUSTAINABLE LEADERSHIP MARK CUTIFANI PHILIPPE MELLIER “INVESTING FOR Chairman Chief Executive Officer THE LONG TERM, In challenging economic times, we must often 2015 was undoubtedly a challenging year for DRIVING CHANGE make difficult decisions. Some may assume that De Beers. However, diamond mining is, by its very AND WORKING IN sustainability priorities – the value returned to nature, long term. That means that everything PARTNERSHIP stakeholders, investment in socio-economic benefit, we do has to be done with the future in mind – WILL REMAIN and improvements in management approaches – irrespective of what the shorter-term challenges would take a back seat at these critical points. may be. FOREVER AT OUR CORE – WHATEVER This is not, and cannot be, the approach taken by If we don’t invest in production, our partnerships CHALLENGES WE De Beers, as our actions demonstrated during 2015. will have no diamond mines in the future. If we don’t MAY FACE ALONG invest in training our people, they will not have the THE WAY.” Our business is built on partnerships. Our skills to meet the challenges of tomorrow. And if we partnerships with the governments of Botswana don’t invest in local communities, we cannot create Philippe Mellier and Namibia, and the Black Economic Empowerment CEO a positive, lasting legacy. trust Ponahalo in South Africa, contribute 98 per cent of our rough diamond production, while the route So I was greatly encouraged with the progress we to market for De Beers’ diamonds is dependent on made last year: US$697 million invested to increase long-term relationships with our Sightholders. production; US$24 million in development training for our workforce; and US$28 million in social Our business and wider societal activities generate projects, benefiting almost 50,000 people. significant value for our partners. A recent study of our almost 50-year partnership with the Government of And we continued to deliver against our sustainability Botswana, found that it contributed 27 per cent of improvement plan, with another fatality-free Botswana’s GDP in 2014. year and a 15 per cent reduction in our total recordable case frequency rate, along with savings With our fortunes so closely intertwined, we share the of US$6.8 million from lower energy consumption aspirations of our partners to maximise the value of and carbon emissions over 2013-2015. their finite resource for long-term socio-economic development, both through harnessing our core At the same time, we stimulated the market so business for maximum socio-economic benefit in diamond revenues can continue to drive development producer countries, and through protecting and in our partner countries and communities, and growing consumer confidence in diamonds. worked to ensure consumer confidence in diamonds. That is why our commitment to operating sustainably As we look ahead, we are better prepared than ever – what we call Building Forever – was unwavering to continue to deliver on our commitments and meet through the market and economic turbulence future challenges. of 2015. Mark Cutifani Philippe Mellier
OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 5 OUR YEAR IN REVIEW 2015 IN NUMBERS LOST TIME INJURY FREQUENCY RATE PREFERENTIAL PROCUREMENT AS PAYMENTS TO STAKEHOLDERS (LTIFR) A PROPORTION OF TOTAL SPEND US$3.9bn 0.15 (2014: 0.17) 56% (2014: 62%) Including partners, joint ventures, governments, suppliers, employees, shareholders and other finance providers (2014: US$5.7bn) 0 LOSS OF LIFE INCIDENTS DIRECT EMPLOYEES BASED IN AFRICA PEOPLE COVERED BY 81% DE BEERS’ BEST PRACTICE PRINCIPLES (BPPs) 320,000 (2014: 81%) Asia Europe and Americas Africa Middle East (primarily (2014: 0) Canada) (2014: 370,000) PERCENTAGE OF DE BEERS’ WORKFORCE REPORTED INDIVIDUAL BENEFICIARIES OF TOTAL SOCIAL THAT IS FEMALE SOCIO-ECONOMIC DEVELOPMENT PROGRAMMES INVESTMENT SPEND 24% (2014: 24%) 47,800 (2014: not reported) US$28.2m (2014: US$27.6m1) FRESH WATER CONSUMPTION ENERGY CONSUMPTION LAND SET ASIDE FOR CONSERVATION (DIRECT AND INDIRECT) 37.9m m 17.2m GJ 170,785 ha 3 For every hectare of land disturbed for mining, five are managed for conservation (2014: 38.2m m3) (2014: 16.2m GJ1) (2014: 195,128 ha) 1 Restated from previously reported figures in the 2014 Report to Society.
6 OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 EXECUTIVE SUMMARY EXECUTIVE SUMMARY Despite the economic headwinds of 2015, we were unwavering in our commitment to maximise the value of every carat for our producer governments and communities. We call this Building Forever, our commitment to leave a lasting, positive legacy. 2015 was a challenging year for De Beers, INVESTING FOR THE LONG TERM Throughout the year, we also focused with revenues declining by 34 per cent significant resources on helping our to US$4.7 billion (2014: US$7.1 billion) IN PRODUCTION, PEOPLE AND workforce (81.3 per cent of which are as demand for rough diamonds weakened. SOCIO-ECONOMIC BENEFIT based in Africa) grow their capabilities With reduced sales, the total diamond Our commitment to Building Forever saw and talents. We invested US$24.3 million revenues we returned to stakeholders us make significant investment throughout in development training, a 29 per cent fell 32 per cent, to US$3.9 billion (2014: 2015 to ensure that diamond revenues increase on 2014. This is one of the US$5.7 billion). continue to drive economic development most important ways in which we can in the countries and communities where contribute to the long-term development Among the decisive actions we took we operate far into the future. of the countries where we operate. during the year to respond to market conditions, we cut production by 12 per We invested US$697 million during We also increased our total social cent and unit costs by six per cent, putting 2015. A portion of this went towards the investment to US$28.2 million (2014: both Snap Lake Mine in Canada and construction of Gahcho Kué in Canada, US$27.6 million1) benefiting nearly Damtshaa Mine in Botswana on care the largest new diamond mine under 50,000 people, while also focusing on and maintenance. development anywhere in the world, improving the efficiency and effectiveness and to extending production at Jwaneng of our contributions. Under our ongoing Despite the economic headwinds of 2015, and Venetia Mines to ensure that beneficiation programme, we sold we were unwavering in our commitment diamonds can continue supporting US$825 million worth of rough diamonds to maximise the value of every carat development into the future. Other major to customers in producer countries to for our producer governments and investments during 2015 included nearly ensure their economies benefit from the communities. We call this Building US$26 million in Debmarine’s new value-adding steps of diamond production. Forever, our commitment to leave a deep-water diamond exploration And we spent a total of US$1.1 billion – lasting, positive legacy by maximising and sampling vessel, the SS Nujoma, and 56 per cent of our total procurement the shared value of diamonds in the US$34 million on our ongoing global budget – on goods and services from countries and communities where we exploration programme, which led to local suppliers. operate, and to protect the special role nine new kimberlite discoveries. of diamonds in the lives of millions of consumers around the world. Throughout 2015, we continued our focus on Building Forever through: • Investing for the long term in production, people and socio-economic benefit • Driving change across the industry and our business • Working in partnership for sustainable development Right: An aerial view of the Gahcho Kué project camp at Kennady Lake in Canada. 1 Restated from figure previously reported in the 2014 Report to Society.
OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 7 EXECUTIVE SUMMARY DRIVING CHANGE ACROSS THE In line with our five-year sustainability In Namibia, for example, we announced improvement plan, Good to Great (G2G), an in-principle 10-year agreement with INDUSTRY AND OUR BUSINESS we continued to drive positive change the Government for the sorting, valuing In 2015, we continued our efforts to drive across our own company, in order to and sales of Namdeb Holding’s diamonds responsible business behaviour within set best practice standards across the as well as our continued support for De Beers and across the industry, in order industry. Through G2G we continued beneficiation. In Botswana, we co-hosted to maintain confidence in the integrity work toward zero harm and our efforts a conference with the Government and of both our business and our product. underpinned another fatality-free year the international think tank, Chatham The year marked 10 years of our and a 15 per cent reduction in our House, to discuss sustainable solutions Best Practice Principles (BPPs) assurance Total Recordable Case Frequency for the country’s post-mining economy. programme, through which we set Rate (TRCFR). We also improved our And, in both countries, we worked with robust ethical, social, environmental environmental performance by focusing local people on our shared plans to and business standards. In 2015, the on water and energy conservation and transfer our two remaining ‘closed’ BPPs provided independent assurance biodiversity management. We reduced our towns (Oranjemund and Orapa) to on the working conditions and business consumption of fresh water by 0.9 per local authorities. practices of nearly 320,000 people in cent over the year, while lower energy In South Africa, we continued to 3,000 entities across the pipeline. These consumption and carbon emissions led work in several long-term scientific were updated to include the introduction to savings of US$6.8 million over the partnerships, including a shared project of additional requirements addressing last two years. with the UK’s Camborne School of Mines, human rights due diligence and a focus on human trafficking. WORKING IN PARTNERSHIP that led to the development of a new Our partnerships with producer climate model around Venetia Mine, to De Beers also co-founded the Diamond countries are vital to ensure the long- understand in more detail the risks and Producers Association (DPA) in 2015, term sustainability of our operations. opportunities that De Beers faces in a new representative body with a mandate In 2015, we deepened and extended relation to climate change. to improve ethical performance across the scope of several key partnerships And in Canada, we continued our the industry through sharing best that sit at the heart of our business. ongoing partnership with Aurora College practice in health and safety, supply and the Mine Training Society to deliver chain integrity and environmental a technical programme introducing management. students to the skills needed in a range of mining jobs. Despite the challenges presented by the market, the work completed in WE INCREASED OUR TOTAL SOCIAL INVESTMENT TO 2015 on the efficiency and effectiveness of our sustainability management US$28.2 MILLION (2014: US$27.6 MILLION ) BENEFITING NEARLY systems will stand us in good stead for the future. 50,000 PEOPLE, WHILE ALSO FOCUSING ON IMPROVING THE EFFICIENCY AND EFFECTIVENESS OF OUR CONTRIBUTIONS. Left: A diamond sorter inspects a rough diamond. Below: A shovel operator at Venetia Mine in South Africa is about to load ore on to the trucks for delivery to the plant.
8 OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 OUR APPROACH BUILDING FOREVER: OUR APPROACH At De Beers, the concept of Building Forever describes our commitment to making a positive and lasting contribution to the world, both through our own activities and by working with others to find solutions to some of the most significant sustainable development challenges we collectively face. As an organisation, our overall purpose • Working in partnership to support Building Forever is a constant for is to turn diamond dreams into lasting sustainable development De Beers – far from changing in the face reality. This purpose is what drives us to of particular challenges or opportunities, • Providing socio-economic support for achieve our vision of unlocking the value it actively shapes how we respond to them. the communities where we operate and of our leadership position across the supporting the development aspirations This was no different in 2015, despite the diamond pipeline to create a better of our partner countries challenges the year presented, and as we diamond industry for all. detail in this report, we continued to • Being accountable to the standards we To deliver this, we aim to safely and invest in improving our approach and set for ourselves and those we work with sustainably make the most of every carat delivery across the five core areas of our we mine and sell, following three guiding As such, Building Forever means working sustainability performance: Economics; principles that inform the way we together with our stakeholders to find Ethics; Employees; Communities; do business: and support long-term solutions that will and Environment. enable us to create a lasting positive legacy from diamonds. GOOD TO GREAT – MAKING PROGRESS AGAINST OUR SUSTAINABILITY IMPROVEMENT FRAMEWORK Good to Great (G2G) outlines a During 2015, our primary focus was • 110 per cent increase in the five-year improvement journey focusing on consistently embedding good practice, reporting of serious incidents on four areas of sustainability particularly through: • 15 per cent reduction in Total management and performance: Recordable Case Frequency • Engaging people and teams Strategy, Design and Governance; Rate (TRCFR) • Learning from incidents People and Behaviour; Performance • No serious environmental incidents • Risk management and control Management and Reporting; and • Re-energised HIV/AIDS campaign implementation Operational Excellence. • Energy savings target achieved • Further integrating sustainability • Significant improvement against Overall, it is designed to deliver requirements in our business the updated social performance excellence in sustainability planning process standards management by 2018, through • Improving performance management driving further improvement and • Rolling out water, energy and carbon We have based our 2016 G2G achieving more resilient performance. emissions strategies priorities on an assessment of current The improvement plan contains performance, feedback from our We also began to develop our forward- a set of actions and commitments operations, guidance from stakeholders looking sustainability strategy. designed to ensure that our efforts and the outcomes of assurance are aligned with our strategic intent, Results achieved by implementing the processes. We also took the current and ensures sustainability is a fully G2G framework include improvements economic climate into account. integrated aspect of decision-making. in performance and reporting such as:
OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 9 OUR APPROACH THREE LEVELS OF ASSURANCE GOVERNING SUSTAINABILITY In 2015 we continued to provide Accountability for sustainability assurance that we are meeting required resides with the Board of our holding standards to regulators, shareholders company, De Beers Société Anonyme and consumers, amongst others, through (De Beers sa), which is supported three main types of activity: first-party in this through the Sustainability assurance via our Internal Audit Committee, chaired by the De Beers department and Technical and Group CEO, Philippe Mellier, as well Sustainability teams; second-party as several other committees, subsidiary assurance by Anglo American; and boards and Group functions (see Figure third-party assurance including through 2). We continued to streamline and the BPPs assurance programme. strengthen our sustainability governance processes during 2015, launching the internal Social Performance Council in October. FIGURE 2: OUR SUSTAINABILITY GOVERNANCE AND MANAGEMENT FRAMEWORK DE BEERS SOCIÉTÉ ANONYME BOARD EXECUTIVE COMMITTEE SUSTAINABILITY COMMITTEE AUDIT COMMITTEE Executes strategy as set by the Board Reviews, oversees and advises on Oversight responsibility for the financial significant sustainability strategies, reporting process, the system of internal policies and activities. Ensures that control, governance, risk and De Beers’ sustainability strategy audit processes delivers shared value SOCIAL INVESTMENT BPP COMMITTEE COMMITTEE Establishes the BPPs Responsible for maximising standards to protect the benefit of social SAFETY AND SUSTAINABLE SOCIAL PERFORMANCE consumer confidence. investment across the DEVELOPMENT (S&SD) COUNCIL COUNCIL Investigates and takes Group, supporting governance and tracking Provides a platform for Provides a platform for necessary actions against of social investment sharing and engaging on sharing and engaging on allegations/reports of the delivery of S&SD the delivery of social non-compliance by any strategies, improvement performance strategies, BPP-auditable entity plans and objectives improvement plans and objectives SAFETY, HEALTH AND SOCIAL PERFORMANCE HUMAN RIGHTS ENVIRONMENTAL PEER GROUPS PEER GROUP WORKING GROUP Discipline-specific working Social working group that Cross-functional, groups that develop develops standards and sets multidisciplinary standards and set direction direction for its discipline, working group that for their discipline, and and shares best practice identifies, assesses, share best practice and learning manages and reviews and learning relevant human rights issues
10 OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 OUR APPROACH OUR APPROACH TO STAKEHOLDER ENGAGEMENT AND MATERIALITY ENGAGING STAKEHOLDERS FIGURE 3: OUR 2015 MATERIALITY PROCESS In challenging times it is more important than ever to engage with the people affected by, and core to the success of, our business. Every day and at every level of our business, we engage with groups including shareholders, producer The 20 material issues reported in the 2014 governments, local communities, Report to Society provided the input for the employees, civil society organisations and IDENTIFY 2015 materiality process. These were identified consumers. Understanding stakeholder through an in-depth review of our risk logs, media interests, and acting on them, provides coverage, and stakeholder engagement in 2014. the bedrock of our efforts to support consumer confidence, and be a good neighbour, an effective partner and a sustainable operator. We do not participate in party politics or make political donations. Specific examples of engagement in 2015 are highlighted throughout the report. The 20 issues were reviewed and prioritised REPORTING ON OUR PERFORMANCE In 2015 we continued to improve our REVIEW in interviews and a round-table discussion with key internal stakeholders. external sustainability reporting process, introducing an online data collection and assurance platform, and reviewing the format and content of the Report to Society with the aim of increasing its accessibility. We also reviewed our approach to identifying, prioritising and presenting the issues we discuss in the report. We identify and report on potential External stakeholders and sustainability experts reviewed the updated issues at our annual risks to our business and the most material LISTEN multi-stakeholder forum, in discussion with our issues for our stakeholders through a multistage engagement process, internal teams. supported by an independent third party (see Figure 3). IN CHALLENGING TIMES IT IS MORE IMPORTANT THAN It was agreed that the 20 issues identified in 2014 remained the most material for 2015, EVER TO ENGAGE WITH THE DETERMINE and would form the basis of the 2015 Report to Society, with recommendations made for the PEOPLE AFFECTED BY, AND 2016 materiality process. CORE TO THE SUCCESS OF, OUR BUSINESS.
OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 11 OUR APPROACH The process resulted in two significant developments: FIGURE 4: IDENTIFIED MATERIAL ISSUE AREAS, 2015 1) A decision to move away from presenting the material issues in a matrix, due to the difficulty of prioritising often interconnected ECONOMICS issues in relation to one another, DELIVERING VALUE SUCCESS OF DRIVING LOCAL GROWTH, GOVERNANCE and to present the discussion of these TO PRODUCERS BENEFICIATION DIVERSIFICATION AND AND REVENUE issues in an integrated narrative in the CAPACITY BUILDING TRANSPARENCY report instead of by individual risk. 2)Identification of six overarching issues that better reflect the ETHICS interdependencies of the current issues: RAISING STANDARDS ILLICIT TRADE HUMAN RIGHTS DOING BUSINESS ACROSS THE PIPELINE WITH INTEGRITY • Conservation, biodiversity and ecosystems • Governance and revenue transparency EMPLOYEES • Human rights ATTRACTING AND SAFETY AND DIVERSITY HIV/AIDS AND • Managing impacts across the mine RETAINING TALENT OCCUPATIONAL HEALTH AND INCLUSION TUBERCULOSIS lifecycle PERFORMANCE MANAGEMENT • Socio-economic benefit • Water and energy security in a changing climate COMMUNITIES This insight will be a key input in the SOCIO-ECONOMIC CLOSURE AND OPERATIONAL IMPACTS LAND OWNERSHIP review of our reporting approach BENEFIT TRANSFER OF ASSETS in 2016. The 20 issues identified through the 2015 materiality process are listed on the right. As in previous reports, any material issues ENVIRONMENT not addressed in the main report are included in the GRI table (page 60). WATER AND ENERGY CONSERVATION AND MANAGING IMPACTS WASTE AND POLLUTION SECURITY IN A CHANGING RESTORATION OF ACROSS THE MINE PREVENTION CLIMATE BIODIVERSITY AND LIFECYCLE MAINTENANCE OF ECOSYSTEM SERVICES “DE BEERS, TO MY MIND, IS ONE OF THE FIRST COMPANIES THAT HAS UNDERSTOOD THAT ISSUES THAT SEEM INDEPENDENT CAN ACTUALLY INTERPLAY VERY DIFFERENTLY IN PRACTICE. THIS HAS PLAYED A KEY ROLE NOT ONLY IN HOW DE BEERS REPORTS ON ISSUES, BUT IN HOW THE COMPANY RELATES TO THEM – IN THE WAY THEY PRACTISE THEIR OPERATIONS, BUT ALSO IN DECISION-MAKING. THESE ARE INTRINSICALLY LINKED, YOU CANNOT DECOUPLE SUSTAINABILITY ISSUES FROM THE SUCCESS OF THE COMPANY.” Pippa Howard Director of the Business & Biodiversity Programme, Fauna & Flora International
12 OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 ECONOMICS MAXIMISING THE VALUE OF DIAMONDS The success of our activities will ultimately be measured by the economic and social development that endures beyond the life of a mine. Diamond revenues play a central role in the economies of Botswana and Namibia. Even in the larger economies of South Africa and Canada, the positive impact of diamonds is keenly felt by the communities where we operate.
OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 13 ECONOMICS We share the aspirations of our producer partner countries and communities to responsibly maximise sustainable value OUR PERFORMANCE IN 2015 from their natural resource, and work in partnership with them to create MATERIAL ISSUES: opportunities that will endure long • Socio-economic benefit after our activities cease. • Closure and transfer of assets In Botswana and Namibia, our single • Operational impacts biggest contribution to development is • Land ownership through the revenues and dividends FULL PERFORMANCE DATA PAGE 56 we pay to the respective governments, with whom we have a number of 50/50 joint venture partnerships. For example, SPEND ON PROCURING GOODS AND PREFERENTIAL PROCUREMENT AS in Botswana, diamonds account for SERVICES FROM LOCAL SUPPLIERS A PROPORTION OF TOTAL SPEND US$1.1bn 56% approximately 70 per cent of all exports by value; and our partnership with the Government, including through our 50/50 joint venture in Debswana, is the largest contributor to the economy apart (2014: US$1.5bn) (2014: 62%) from the Government itself. We are proud to have played a key role in the development of Botswana, Namibia and South Africa, and we continue to invest in the future of our activities PAYMENTS TO STAKEHOLDERS PAYMENTS TO STAKEHOLDERS both there and in Canada. Despite a IN AFRICA challenging year, we invested a total of US$3.9bn US$3.2bn US$697 million in capital projects globally, including investments to extend the life of our operations in each of our producer countries. And we continued including partners, joint ventures, (2014: US$4.6bn) to support socio-economic development governments, suppliers, employees, through beneficiation, local procurement shareholders and other finance providers and infrastructure development, while investing heavily in the skills (2014: US$5.7bn) and development of our people – the ultimate resource for development. 2015 KEY ACHIEVEMENTS • Continued to invest significantly in extending diamond production, in each producer country • Invested US$34 million in exploration projects, with nine new kimberlite discoveries • Began a new supply agreement period for our beneficiation customers, introducing stricter standards to bolster third-party confidence in the Sightholder community, and reduce business sustainability risks Image on page 12: The SS Nujoma on the slipway in Norway, ultimately destined for Namibian waters.
14 OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 ECONOMICS ACTING DECISIVELY TO RESPOND TO THE MARKET RESPONDING TO THE CHALLENGES THE SALE OF KIMBERLEY MINES FIGURE 5: DE BEERS’ PAYMENTS TO STAKEHOLDERS (CONSOLIDATED OF 2015 ACCOUNTING BASIS)1 During 2015, the global market for TO EKAPA MINERALS, A BLACK diamonds was challenging. With weaker demand for rough diamonds from the ECONOMIC EMPOWERMENT midstream of the value chain, total revenue for De Beers fell by 34 per cent ENTITY, GIVES THE OPERATION to US$4.7 billion (2014: US$7.1 billion). This was mainly driven by lower rough THE BEST CHANCE TO 2015 diamond sales, which declined by 36 per cent to US$4.1 billion (2014: CONTINUE TO BENEFIT THE US$6.5 billion). Reduced sales impacted the diamond revenues we were able COMMUNITY BEYOND THE to return to stakeholders from US$5.7 billion in 2014 to US$3.9 billion in PREVIOUSLY PROJECTED 2015 (see Figure 5), which particularly affected our diamond producer partners. CLOSURE DATE OF 2018. Partners, joint ventures and suppliers US$3,054m Employees US$620m Government taxation US$240m Finance providers US$13m We acted decisively to respond to the Dividends to shareholders US$11m market during 2015. We cut production, We also continued to deliver our long- price and costs to ensure the health of standing strategy of refocusing our our business, using operational flexibility portfolio in South Africa, with the FIGURE 6: REGIONAL BREAKDOWN OF to reduce production by 12 per cent while announcement of the sale of Kimberley DE BEERS’ PAYMENTS TO STAKEHOLDERS (CONSOLIDATED ACCOUNTING BASIS)1 reducing unit costs by six per cent. Mines. Completed in January 2016, the sale of Kimberley Mines to Ekapa In response to market conditions, we Minerals, a Black Economic Empowerment also took the difficult decision to put entity, gives the operation the best chance Snap Lake Mine in Canada on care to continue benefiting the community and maintenance, and Debswana put beyond the previously projected closure Damtshaa Mine on temporary care and date of 2018. 2015 maintenance and scaled down operations 2015 at Orapa Mine’s No. 1 Plant. Ultimately, consumer demand is the only source of value for our business and, therefore, the driving force behind our operations and ability to create economic activity. During a challenging year, we continued to make substantial investments in our proprietary Africa US$3,217m Forevermark brand. We reintroduced North America US$403m Europe US$299m the iconic ‘A Diamond is Forever’ Asia US$19m marketing slogan in the US and launched a new Forevermark campaign entitled 1 I ncludes 100 per cent of subsidiaries and our ‘The One’, focusing on the brand’s proportionate share of joint ventures (this includes exacting selection standards. We also 19.2 per cent of Debswana on a pre-tax basis; committed an additional US$20 million 50 per cent of Namdeb). to support demand in the US and China with a multichannel marketing campaign encouraging diamond giving over the holiday season.
OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 15 ECONOMICS DESPITE THE MARKET CHALLENGES, DURING 2015 WE CONTINUED TO INVEST SIGNIFICANTLY IN DIAMOND PRODUCTION, DELIVERING SOCIO-ECONOMIC BENEFIT. INVESTING FOR THE FUTURE We also invested US$34 million in TOTALINVESTMENT TOTAL INVESTMENTININEXPLORATION During 2015, we continued to invest exploration projects in South Africa, EXPLORATION PROJECTS PROJECTS Canada and Botswana. These are US$34m significantly in diamond production US$34m and in the skills and development of currently focused on early-stage our people, delivering socio-economic exploration, with nine new kimberlite benefit. Reflecting our belief in the discoveries during 2015. fundamentals of the diamond industry, In Namibia, Debmarine Namibia these long-term investments will ensure launched its new US$170 million our activities continue to catalyse (approximately) deep-water diamond NUMBEROFOFNEW NUMBER NEWKIMBERLITE development long into the future. exploration and sampling vessel, DISCOVERIES DISCOVERIES KIMBERLITE 99 SS Nujoma, ahead of schedule on DIAMOND PRODUCTION 9 January 2016. The most technically We continued to plan, manage and advanced vessel of its kind in the world, deliver on our rolling investment it is equipped with a subsea sampling programme throughout 2015. Among system and treatment plant allowing it other projects, we focused on delivering to process 48 samples per day. It is now large capital projects at Botswana’s being fitted out and will undergo sea TOTALCOST TOTAL COSTOFOFDEBMARINE DEBMARINE Jwaneng Mine, Venetia Underground in trials for final delivery in H2 2016 NAMIBIA’SNEW NAMIBIA’S NEWDEEP-WATER DEEP-WATER South Africa, and the new Gahcho Kué before launch with a crew of 80. DIAMONDEXPLORATION DIAMOND EXPLORATIONVESSEL, VESSEL, Mine in Canada (see page 16). These projects will support 400 jobs in Canada, THESSSSNUJOMA THE NUJOMA US$170m US$170m 500 in South Africa, and 1,000 in Botswana during operations. (Approximately) (Approximately) Below: Jwaneng Mine in Botswana – trucks at the workshop. Top right: SS Nujoma in Kleven harbour, Norway. Bottom right: Venetia Underground Project in South Africa.
16 OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 ECONOMICS INVESTING Throughout 2015, we continued to invest in new and existing operations to extend our FOR THE FUTURE mining activities and the socio-economic benefit they help generate. GAHCHO KUÉ, CANADA 2015 2017 2019 2021 2023 2025 2027 A new mine will be constructed comprising PRODUCTION LIFE OF MINE three pits and covering 1,200 hectares, making it STARTS 2016 2028 De Beers’ largest open- pit mine in Canada. SOCIO-ECONOMIC BENEFITS ESTIMATE OF CARATS 700 400 TO BE RECOVERED 54 MILLION TONNES OF ORE 35 MILLION jobs supported during further jobs expected to be construction supported during operations JWANENG, BOTSWANA 1982 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 The eighth cut, or expansion, of Jwaneng JWANENG CUT 8 LIFE OF MINE Mine, will increase the MINE STARTED OPERATING PRODUCTION STARTS 2035 depth of the mine from 400 to 650 metres. 1982 2018 ESTIMATE OF CARATS SOCIO-ECONOMIC BENEFITS 1,000 US$31bn TO BE RECOVERED 93 MILLION TONNES OF ORE 84 MILLION jobs supported during estimated contribution extended operations to Botswana’s economy VENETIA, 1992 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 SOUTH AFRICA Venetia Mine will be MINE STARTED VENETIA UNDERGROUND LIFE OF MINE extended underground, with two vertical shafts, OPERATING 1992 PRODUCTION STARTS 2022 2046 each seven metres in diameter, sunk to a ESTIMATE OF CARATS SOCIO-ECONOMIC BENEFITS 1,500 500 depth of 1,080 metres. TO BE RECOVERED 94 MILLION TONNES OF ORE 132 MILLION jobs supported during jobs expected to be supported construction during major underground works For further information, refer to the Anglo American Ore Reserves and Mineral Resources Report 2015, www.angloamerican.com/investors/annual-reporting.
OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 17 ECONOMICS INCREASING SOCIO-ECONOMIC BENEFIT At the end of the first quarter, we began a new Supply Agreement period for our BENEFICIATION HELPS CREATE Our activities catalyse socio-economic development across the value chain, beneficiation customers in Botswana, South Africa and Canada. This introduced ADDITIONAL EMPLOYMENT enabling countries and communities to participate in more of the value-adding more rigorous financial compliance criteria for customers, designed to bolster OPPORTUNITIES, SUPPORTS steps a diamond takes on its journey from mine to consumer. third-party confidence in the Sightholder community and reduce business GOVERNMENT ECONOMIC Among our diamond-related activities is our industry-leading approach to sustainability risks relating to the ability to access finance. DEVELOPMENT PLANS beneficiation. Mining is only one link In Namibia, we are in the process of AND AIDS THE TRANSITION in the chain of processes through which value is added to a diamond. Activities finalising a new Sales Agreement with the Government. While this process TO POST-MINING ECONOMIES. like cutting and polishing are important continued in 2015, we extended the value-generating activities, which we aim supply contracts of nine existing to support and enable in our countries local Sightholders. PROPORTION OF ROUGH DIAMONDS of production. SOLD TO LOCAL SIGHTHOLDERS IN The global pressures on cutting and Our beneficiation strategy ensures polishing operations meant that we also 2015 AS A PERCENTAGE OF TOTAL that we sell a proportion of our rough saw some factory closures during the year. ROUGH DIAMOND SALES diamond production to Sightholders 20% By the end of 2015 we were supplying 20 who have set up operations for processing businesses in Botswana, nine in Namibia, diamonds in-country. Beneficiation eight in South Africa and one in Canada helps create additional employment through our beneficiation sales (2014: 21 opportunities, supports government Botswana, 13 Namibia, eight South economic development plans and aids the transition to post-mining economies. Africa, and one Canada). VALUE SOLD US$825m In total, we sold US$825 million in 2015 was a notable year for diamond rough diamonds to local Sightholders 1 beneficiation activities as it saw the in 2015 (2014: US$1.56 billion). This commencement of some new in-country was equivalent to 20 per cent of our total customer contracts. However, a range of rough diamond sales during the year pressures in the global diamond cutting (2014: 24 per cent). and polishing sector also made it a particularly challenging year for our customers in producer countries. Above: One of three cutting and polishing floors at the Diacor 1 This figure does not include rough diamonds factory, a local sold through the state-owned Okavango Diamond Sightholder in Company (Botswana). Botswana.
18 OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 ECONOMICS Tokafala is building on the success An example of a company whose AVERAGE REVENUE INCREASE of De Beers Zimele, our enterprise success is based on its services to EXPERIENCED BY PARTICIPANTS development programme in South Africa De Beers Consolidated Mines is Motse/ that has been operating for six years, Aqua Transport JV. Started in 2007 as IN TOKAFALA, 2014-2015 to date supporting 278 businesses and Motse Civils doing topsoil stripping, this 60% 2,824 jobs since launch. Plans are in HDSA-owned entity in the Free State, place to launch enterprise development South Africa later expanded its scope programmes in Namibia and Canada and activities by winning tenders for during 2016. waste mining at Voorspoed Mine. It Original target: 15-40% entered into a joint venture agreement We also support local business through with Aqua Transport in 2013 and the JOBS SUPPORTED SINCE LAUNCH our preferential procurement strategy business now has a US$2.1 million per and programmes, through which we 1,646 year contract with De Beers and employs spent US$1.1 billion on procuring 134 local employees. goods and services from suppliers in 2015 (56 per cent of total spend). Our EMPOWERING PEOPLE WITH approach varies by country of operation, in response to regulatory or other SKILLS AND CAPABILITIES Ninety-one per cent of our employees SUPPORTING LOCAL BUSINESS requirements. In South Africa, for in Africa are local citizens. Employing A strong base of locally owned and example, we give priority to suppliers local people and equipping them with managed businesses is fundamental who are owned, empowered or influenced skills and opportunities are other to a healthy local economy and to the under Historically Disadvantaged significant contributions we can make economic diversification objectives of our South African (HDSA) legislation, while that will benefit communities long partner governments. We operate local in Botswana we prioritise local and after we leave. In 2015, we spent procurement and enterprise development citizen-owned businesses. In Namibia, US$24.3 million on training and skills programmes in producer countries that preference is given to local providers; and development (see Employees chapter). aim to support a sustainable bedrock in Canada, we favour Aboriginal or First of successful local businesses. Nations suppliers (i.e. those from the Our commitment to building and indigenous population). empowering local people led us to an An example of this is Tokafala, our accelerated talent development and skills enterprise development programme Preferential procurement is higher in transfer programme in Botswana from launched in 2014 in Botswana as a South Africa where it is legislated, and 2012. As part of the current Sales partnership between the Government, in Botswana where Debswana has a Agreement with the Government of De Beers, Debswana and Anglo business mandate to purchase from local Botswana, around 80 skilled practitioners American. The programme aims suppliers. In contrast, specialised mining and their families moved from the UK to support small- to medium-sized methods are used in Namibia (alluvial to Botswana with the relocation of our enterprises through mentoring, and marine), narrowing the opportunity global sales operation to Gaborone. The capacity building and access to to purchase from Namibian companies. skills transfer programme aims to build finance. The programme is already In Canada, preferential procurement local capacity by accelerating succession demonstrating success. refers to the purchasing of goods and planning and local talent development, services from Aboriginal-owned suppliers, In 2015, an evaluation of the first which builds capacity within De Beers, and, given this is a small percentage cohort of small- and medium-sized and across Botswana. of the population, it impacts potential businesses participating in the three-year procurement opportunities. In summary programme found that Tokafala had Our continued investment in people and an almost immediate positive impact on capital projects is part of a coherent strategy revenue growth. Participating enterprises to maximise the value added to, and derived experienced an average increase in from, diamonds by local citizens. revenue of 60 per cent, ahead of the 15 to 40 per cent target set by the programme. We expect this to drive an increase in the number of jobs supported by these FIGURE 7: LOCAL PROCUREMENT AS A PROPORTION OF TOTAL enterprises, as their increased revenue enables them to grow. By the end of 2015, PROCUREMENT EXPENDITURE the programme had already supported more than 1,600 jobs since launch, 60 per cent of the target for the full three-year SOUTH AFRICA BOTSWANA NAMIBIA CANADA 70% 88% 41% 22% programme. In 2016, we will extend the programme to support more enterprises within Debswana’s supply chain. Expenditure Expenditure with Expenditure with Expenditure with with Historically local companies local companies Aboriginal businesses Disadvantaged South Africans
OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 19 ECONOMICS SECURING A But diamond revenues will not be able To gain as much participation as to drive development forever. The possible, we live-streamed the event volatility in the diamond market in 2015 and launched a dedicated hashtag: BRIGHT FUTURE provided even greater impetus to the long-term objectives of the Botswana #Botswana2015. More than 1,000 stakeholders participated in the FOR BOTSWANA Government to diversify the economy beyond diamonds. conversation, and our hashtag was seen more than 12.5 million times around the world, bringing De Beers shares in this aspiration, and Botswana’s future, and the goals Our partnership with the partnership has worked to ensure we share, into global focus. that Batswana will benefit more from Botswana is a story of diamond production over time, including prudent investment and through beneficiation and most recently shared prosperity. the relocation of the company’s THE PARTNERSHIP’S TOTAL international sales function to Gaborone. CONTRIBUTION TO BOTSWANA’S In the 50 years since independence, the Botswana De Beers partnership In November 2015, De Beers, the GDP IN 2014 Government and a leading international 27% has helped transform Botswana from affairs think-tank, Chatham House, being one of the world’s poorest co-hosted a conference on natural countries into a globally recognised resources in Botswana. The aim was development success story. to bring together leading academics, US$4.4bn This has been achieved through the policymakers and industry experts to responsible recovery of 728 million discuss Botswana’s economy and to chart JOBS IN BOTSWANA SUPPORTED a course to growth beyond diamonds. carats since 1971, when Botswana’s first BY THE PARTNERSHIP IN 2014 diamond mine went into production. 1 IN 20 And it’s been supported through De Beers’ global sales and marketing More case studies online leadership, including a more than www.debeersgroup.com/stories US$1.6 billion investment by De Beers in consumer marketing campaigns over the last 15 years alone, which have contributed to a 423 per cent increase by value in the polished diamond market since 1980. With nearly three-quarters of De Beers’ total diamond production coming from Botswana, and with Botswana holding a 15 per cent ownership interest in the company, our success is both mutual and mutually dependent. To understand more about the history of the partnership, and the value it generates for Botswana today, we commissioned a socio-economic impact study, published in 2015. The study found that the partnership made a total contribution to the Botswana economy of US$4.4 billion in 2014, or 27 per cent of gross domestic product, more than any other sector. Directly employing nearly 8,000 people, of whom 96 per cent were Botswana citizens, the partnership spent approximately US$6 million on 550,000 hours of training and skills development. And in the broader economy, its activities supported the equivalent of one in every 20 jobs in Botswana. Right: State-of-the-art diamond sorting and valuing centre, Gaborone, Botswana, a result of the 50/50 partnership between De Beers and the Government of Botswana.
20 OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 ETHICS BUILDING ON STRONG ETHICAL FOUNDATIONS For more than 125 years, De Beers has been synonymous with diamonds. As the world’s leading diamond company, with operations spanning the diamond pipeline, we are acutely aware that our business, and the diamond sector as a whole, must continue to meet increasingly rigorous ethical standards to protect consumer confidence in diamonds.
OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 21 ETHICS Our long-term success rests on a strong ethical foundation. OUR PERFORMANCE IN 2015 Diamonds symbolise precious moments in people’s lives – and our collective MATERIAL ISSUES: actions must live up to the values and emotions ascribed to them. Ensuring • Raising standards across the diamond pipeline consumer confidence in the ethical • Illicit trade and diamond security integrity of diamonds is therefore critical • Human rights to supporting demand and our ability • Doing business with integrity to maximise diamonds for development GRI INDEX TABLES PAGE 56 with our producer partners. This is why we work directly with our NUMBER OF HOURS OF TOTAL NUMBER OF PEOPLE COVERED customers and suppliers and through industry bodies to drive ever higher HUMAN RIGHTS TRAINING UNDER THE BEST PRACTICE standards across the sector. PRINCIPLES (BPPs) PROGRAMME 2,496 320,000 And it is why, even amid the demanding trading conditions of 2015, we continued to invest significant resources in our long-term programmes to enhance (2014: not reported) (2014: 370,000 people) ethical standards across De Beers and throughout the industry as a whole. And it is why every diamond sold under our proprietary Forevermark brand comes with the promise that it is not only rare NUMBER OF SITE VISITS KIMBERLEY PROCESS and beautiful, but responsibly sourced. CONDUCTED BY INDEPENDENT COMPLIANCE ASSURERS AS PART OF THE BPPs 124 (2014: 129) 100% of De Beers diamonds are certified as conflict-free 2015 KEY ACHIEVEMENTS • Marked 10 years of the De Beers BPP assurance programme • Renewed our three-year certification to the Responsible Jewellery Council (RJC) • Strengthened our management approach to address human rights-related risks • Continued to expand Forevermark programmes to further strengthen the brand’s responsible sourcing proposition Image on page 20: Diamond sorting at DTC Botswana.
22 OVERVIEW ISSUE AREAS MORE INFORMATION Report to Society | 2015 ETHICS HOLDING OURSELVES TO ACCOUNT PROTECTION THROUGH PRINCIPLES “THE BEST PRACTICE PRINCIPLES PROMOTE TRANSPARENCY During 2015, we continued to invest heavily in systems to raise standards THROUGHOUT THE DIAMOND PIPELINE AND REINFORCE across the diamond value chain, including in the Best Practice Principles (BPPs) CONSUMER CONFIDENCE BY ENSURING THAT THE END assurance programme that provides PRODUCT HAS BEEN ETHICALLY SOURCED AND the key buildings blocks of our ethical approach. MANUFACTURED. FOR OUR BUSINESS, THE ANNUAL Created in 2003 and launched in 2005, PROGRAMME HELPS US TO CONSTANTLY ASSESS THE WAY the BPPs are a set of robust requirements WE MANAGE OUR BUSINESS, SOCIAL AND ENVIRONMENTAL covering the business, social and environmental responsibilities that apply RESPONSIBILITIES AND CONTINUE TO SEEK IMPROVEMENTS to all our entities, rough diamond IN OUR SYSTEMS.” customers and substantial contractors. Ameet Shah, President, Sales and Marketing, at Jasani, The BPP programme requirements a De Beers Sightholder since 1973 are based on local and international legislation and conventions, including the Kimberley Process and the United Nations Guiding Principles on Business and Human Rights. They incorporate best We annually update the BPP standards The BPPs provide a key part of the practice management, measuring in response to emerging risks to ensure foundation for Forevermark’s responsible and reporting standards, including they provide relevant and effective sourcing brand promise. Along with the elements from the Social Accountability protection against unacceptable business, proprietary Pipeline Integrity Standard, International (SA8000) standard, the environmental and social practices. this enables Forevermark diamonds International Finance Corporation to be tracked through the value chain As well as our own operations, all our Performance Standards, and wide-ranging to provide assurance to customers Sightholders and Accredited Buyers ISO standards from environmental that their Forevermark diamonds are (and their substantial contractors) have management to nomenclature. beautiful, rare and responsibly sourced. to comply with the BPPs as a condition In 2015, we invested in our largest and of purchasing rough diamonds from most advanced diamond grading and BEST PRACTICE PRINCIPLES – us. If they subsequently fail to do so, inscription facility, to provide consumers 2015 UPDATES this constitutes a very serious breach with further confidence in Forevermark of our supply terms that could lead diamonds (see case study, page 25). Updates in 2015 included additional to the suspension of supply or to requirements to address human contract termination. rights due diligence when operating In 2015, the BPPs covered nearly in or sourcing from conflict-affected 320,000 people in almost 3,000 entities areas and human trafficking. across the industry (2014: 370,000 people PEOPLE COVERED BY THE BPPs 320,000 They also included additional risk and 3,400 entities). During the year, the assessments to address issues such majority of factories were operating at a as unsafe working conditions or lower capacity due to challenging market significant environmental impacts conditions. The reduction in coverage of when sourcing diamonds from the BPPs is a direct result of a significant artisanal and small-scale miners. decrease in production within the major manufacturing centres. As a result, consumers can have the confidence of knowing that they can rely on high professional, technical and ethical standards at every stage of the diamond value chain.
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