Supply Chain Challenges -- Tackling the Devil in the Detail

Supply Chain Challenges -- Tackling the Devil in the Detail

In the middle of August the Diamond Development Initiative announced its mission statement and objectives. Formed at the beginning of 2005, the initiative's founders represent a cross section of industry, non-governmental organizations and the donor community. They include de Beers, Partnership Action Canada, Global Witness, and the World Bank's communities and small-scale mining program.

Obviously, it is too early to pass comment on the effectiveness of the DDI. However, in principle it seems to demonstrate an interesting development in corporate responsibility in the mining industry. As the DDI founders observe, the Kimberley Process, although far from perfect, has been effective in creating a system for managing and certifying internal and international trade in rough diamonds. It has been credited, however, with huge increases in official diamond exports from Sierra Leone and the Democratic Republic of Congo, and with the ending of all official diamond trade with many countries accused of involvement in conflict diamonds.

What is interesting about the DDI is that it stems from a recognition that, no matter how important the issue of "blood diamonds," there are other corporate responsibility concerns over the diamond industry. In particular, the DDI recognizes that the Kimberley Process does not address issues associated with Africa's alluvial diamond operations and the estimated one million miners involved. Alluvial diamonds are those that have been deposited in river sediment, rather than as part of rock formations.

Informal Sector

The alluvial diamond industry is typified not by massive mining corporations but by a diffuse informal sector. DDI aims to address the problems of these workers. These include, according to a background paper written by Ian Smillie of Partnership Africa Canada poverty, underemployment and overcrowded living conditions. These in turn contribute to the spread of disease, prostitution, illegal weapons trade and drug trafficking. These conditions also allow terrorists and other unlawful forces to operate in countries where alluvial miners operate, such as Sierra Leone, the DRC and Angola.

The DDI wants to bring together interested parties to pool their resources, experience and knowledge, and to integrate various initiatives working on issues of alluvial diamond mining.

The initiative states its mission as being to address "the political, social and economic challenges facing the artisanal diamond mining sector" so as to ensure benefits for "miners, their communities and their governments." Specific areas of activity will include consideration of government regulation and mining regulation and looking for legitimate and transparent distribution and marketing channels.

The DDI takes to a further level of detail the questions surrounding corporate responsibility in the diamond industry. Many initiatives are criticized for being too thin on detail, or for paying scant attention the realities of emerging markets.

This initiative also recognizes that different sectors can achieve more by working together on issues that they admit are complex and for which there will be no easy solutions. Whether or not DDI works, it demonstrates the maturing of the corporate responsibility debate.

Peter Davis is politics editor at Ethical Corporation.

This column has been reprinted courtesy of
Ethical Corporation. It was first published on Sept. 30, 2005.