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A Girl's Best Friend? Conflict Diamonds and Corporate Social Responsibility

By Negar Rachel Treister | August 23, 2006

CREDIT: © Stephen Codrington.

Forty-seventh Street in Manhattan is a global port in its own right. Home to New York City’s diamond district, more than 90 percent of the diamonds that enter the United States first pass this bustling thoroughfare near Times Square before heading to their final destinations in wedding rings and necklaces throughout the country. By the time the stones reach the New York City shops, most have made an arduous journey from large dirt pits in Africa, passing through the hands of local miners, international corporations, politicians, and even rebel groups on occasion—a multifaceted clash over the economics and politics of resource extraction, technology transfer and sustainable development. This convoluted voyage has made diamonds a focal point of the larger debate over ethical standards in international trade.

Diamond mines are found on every major landmass except Europe and Antarctica, but with nearly 65 percent of the global supply coming from Africa the diamond trade on that continent has landed at the forefront of resource-extraction issues. The impact of corporate social responsibility on the miners and countries involved in the diamond industry is complex: Corporations are called on to help the countries in which they are mining by providing safe working conditions, protecting the local environment, and increasing local access to new technologies, while simultaneously ensuring that profits don’t end up in the hands of rebel groups who have fueled the region’s civil wars.

Critics are quick to point out that a major flaw of corporate social responsibility in Africa is the lack of standardized, international guidelines for corporations to follow. Because the codes of conduct are usually voluntary, critics argue, corporations will tend to make profit the only bottom line. Crossover comparisons between mining and oil extraction in this regard are common, with scholars often citing technology transfer and a fair division of profits as key to creating sustainable development. In fact, many oil-producing countries in the Middle East now require a process for technology transfer in their joint-venture agreements with international oil companies. In contrast, southern African countries with mining industries generally do not have as much political clout as the oil-producing countries.

Conflict Diamonds are an important battleground for corporate social responsibility, one that has started to permeate the popular imagination. Warlords successfully used diamonds as a high-value and easily portable currency to finance civil wars, most famously in the 1990s in Sierra Leone and the Democratic Republic of the Congo. In an attempt to call attention to the plight of Sierra Leone, the country where diamonds fueled civil war but left 82 percent of the population in poverty, rapper Kanye West editorialized on conflict diamonds in his 2005 video “Diamonds from Sierra Leone.” The video weaves together depictions of child labor and conflict in Africa with images of high-end jewelers and Western women wearing diamonds.

After the bloodbaths of the nineties, government officials and the diamond industry undertook a series of talks, which evolved into the Kimberley Process, to ensure that rough diamonds entering the trade have not supported violence or human-rights abuses. Some critics say the Kimberley Process, which calls on companies to self-regulate themselves, results in a lack of transparency, whereas supporters say the trade in conflict diamonds has fallen dramatically—from a reported high of 15 percent of the total trade to a reported less than 1 percent of the total trade now. In spite of these changes, for many poor miners it can seem that the problems in the diamond industry, like the diamonds themselves, last forever.

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Read More: Business, Environment, Human Rights, Mining, Trade, Sierra Leone, Americas, Africa

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