BUILDING FOREVER REPORT TO SOCIETY 2015 - De Beers Group

 
BUILDING FOREVER REPORT TO SOCIETY 2015 - De Beers Group
BUILDING
FOREVER
REPORT TO
SOCIETY
2015
BUILDING FOREVER REPORT TO SOCIETY 2015 - De Beers Group
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.
BUILDING FOREVER REPORT TO SOCIETY 2015 - De Beers Group
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
BUILDING FOREVER REPORT TO SOCIETY 2015 - De Beers Group
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.
BUILDING FOREVER REPORT TO SOCIETY 2015 - De Beers Group
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
BUILDING FOREVER REPORT TO SOCIETY 2015 - De Beers Group
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
BUILDING FOREVER REPORT TO SOCIETY 2015 - De Beers Group
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.
BUILDING FOREVER REPORT TO SOCIETY 2015 - De Beers Group
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.
BUILDING FOREVER REPORT TO SOCIETY 2015 - De Beers Group
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.
BUILDING FOREVER REPORT TO SOCIETY 2015 - De Beers Group
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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