De Beers Releases Report to Society 2009

De Beers has long been an exponent of the positive role of business in driving Africa’s development.

The Report charts the company’s recent sustainability performance and represents the collective input of hundreds of dedicated individuals both internal and external to the Family of Companies.

At a time at which the attention of shareholders, partners, employees and communities are focused on the recovery and prosperity of the business, the report offers a clear and honest examination of the role played by the Family of Companies and associated partners in promoting sustainable development.

Hillary Clinton, US Secretary of State made the following comments when speaking at a forum with Nigerian Foreign Minister Ojo Maduekwe in Abuja, Nigeria in August:

“So for example, when you buy a diamond from De Beers, part of that money still today goes to help build and maintain roads and clean water systems in Botswana. You can drive anywhere in that country and you can see services that have been paid for by a legal framework, strong regulations, and a national consensus that the money from the earth and its riches should be spent on the people of Botswana.”

The report includes important DTC Sightholder case studies including one from “Trau Bros”, one of 11 NDTC Sightholders who work in partnership with UNAIDS and the Namibia Coalition on Aids. Also featured are the extensive corporate social investment programmes of “Bhavani Gems” and “Laxmi Diamond” in relation to their work in the provision of water resources and education respectively.

In his introduction, Nicky Oppenheimer, Chairman of De Beers, says “the restructuring exercise we undertook in 2009 has provided us with the opportunity to hardwire sustainability into our “new normal” and exploit the clear synergies that exist between running a sustainable and responsible business, and a profitable one”.

Highlights of the Report include:
• The Family of Companies achieved zero fatalities for the first time in 80 years, reflecting the implementation of numerous targeted safety measures; Our Lost Time Injury Severity Rate improved from 106.89 per 200,000 hours in 2008 to 6.52 in 2009;
• Despite a 49% reduction in diamond production, the Family of Companies was still able to pay US$3.4 billion (2008: US$6.2 billion) to stakeholders around the world;
• More than US$580 million in rough diamonds was supplied to Sightholders for manufacture in southern Africa (2008: US$1.1 billion);
• The Family of Companies disbursed a total of US$29.3 million in community social investment, including contractually mandated initiatives and in-kind contributions. This amounts to 9.2% of pre-tax profits of US$318 million and is significantly in excess of the international benchmark of 1%;
• Social Impact Assessments were carried out in Botswana for the major Cut-8 expansion project at Jwaneng mine, as well as the expansion of the Morupule coal mine;
• The Family of Companies continued to provide Anti–Retroviral Treatment to a total of 1,820 employees and their partners in Botswana, Namibia and South Africa;
• In 2009, we used 21.1 million cubic metres of new (potable and non-potable) water at our mining operations (2008: 37.2 million cubic metres) equating to at 41% reduction. Our use of reused and recycled water increased to 57% of our total water footprint.

In his introduction, Gareth Penny, CEO of De Beers, says “the last year was an exceptionally difficult one for the diamond industry. That we were able to take the steps we did to ensure the health of the business during 2009, without undermining our shared commitment to sustainability, should be a source of pride for everyone in the Family of Companies. As we look forward to capitalising on the opportunities of economic recovery we will continue to focus on finding synergies between operating sustainably, meeting the expectations of our stakeholders, and meeting our commercial goals. In doing so, we intend to exemplify our commitment to ‘live up to diamonds’.”

Notably the report articulates key challenges faced by the Kimberley Process in 2009 in dealing with alleged human rights violations associated with informal diamond mining in Zimbabwe. The Report notes, among other areas, key recommendations made by De Beers in support of a permanent Kimberley Process “secretariat”, the establishment of majority rather than consensus voting within the Kimberley Process and the inclusion of human rights language within the Kimberley Process framework.