May 03, 2019

DPA’s Study on Diamond Mining Reveals its Positive Impact; Identifies Challenges & Areas for Improvement

The first-ever independent study commissioned by the Diamond Producers Association (DPA) and conducted by Trucost ESG Analysis, part of S&P Global, found that the “world’s large-scale diamond producers infuse billions of dollars in benefits into communities, provide higher than national average wages and are working to minimise environmental impact”, the organisation said while releasing the results of the research.

The DPA, which is a global alliance of the leading diamond mining companies, represents 75% of the world’s diamond production.

The report titled ‘The Socioeconomic and Environmental Impact of Large-Scale Diamond Mining’, studied the DPA members’ impact on local communities, employees and the environment. It revealed that DPA Members generate more than US$ 16 billion in net socio-economic and environmental benefits through their diamond mining operations.

“This report marks an industry first,” commented Jean-Marc Lieberherr, Diamond Producers Association CEO. “Diamond producing companies representing three quarters of the world’s production have come together to provide a window into the impacts and benefits of their activities on the communities and environments of the countries and regions in which they operate. This independent research report breaks outdated stereotypes and misconceptions and identifies the next set of challenges that must be met to continue to evolve and improve as an industry. It also provides a baseline for industry participants and observers to track future progress.”

"This report marks the first time Trucost has seen an industry come together to measure its environmental, social and economic benefits and impacts," said Libby Bernick, Managing Director and Global Head of Trucost Corporate Business. "This data provides a baseline for future progress on issues, including environmental impact. We are very excited to work with the Diamond Producers Association and its Member companies to release this research on the total value of their benefits and impacts, promoting greater transparency on environmental and social performance to the capital markets."

The study found that “DPA Members offer high-paying jobs, excellent job training and a safe work environment. DPA Members employ people from local communities and provide high-quality employment opportunities that often become long-term careers.” 

In the words of the study, the key findings on this aspect are:

  • Salaries and wages paid by DPA Members created US$ 3.9 billion in direct and indirect benefits.
  • DPA Members employ 77,000 people in their operations worldwide. This is comparable to Fortune 500 companies such as The Coca-Cola Company, Hewlett Packard Enterprise, Alphabet, Nordstrom and Nike Inc.
  • DPA Members’ employees and contractors are highly trained; the average DPA Member employee or contractor is paid 66% more than the national average salary and receives nearly five times the living wage in his/her country.
  • All Members have made a commitment to zero harm in the workplace. The report shows that safety incidents at Member companies are a fraction of those observed in similar sectors. For example, on average there are 17x more lost time injuries in the construction industry than in DPA diamond mining.

Commenting on the impact on communities, the study said: “Beyond employment, the diamond mining industry makes a vital contribution to the socioeconomic development of diamond producing countries and communities that goes beyond employment.

“Members purchase the bulk of the goods and services needed for their operations from local businesses, creating a significant, lasting impact on local economies. Moreover, they pay a large share of their revenues to diamond mining countries in the form of taxes, royalties and dividends. Entire countries, such as Botswana, have been transformed by diamond revenues over the past 50 years.”

In this area, the key findings are:

  • 60% of the total benefits from DPA Members are infused into local communities through sourcing of goods and services, taxes and royalties, social programs and infrastructure investment.
  • DPA Members infused US$ 6.8 billion in benefits into local communities through the purchase of local goods and services.
  • Local communities receive US$ 3.9 billion in positive benefits through employment and social programs (US$ 292 million), such as health and education.
  •  DPA Members provided US$ 3 billion in tax revenue, royalties and dividends which, in turn, fund local infrastructure and other civic improvements.
  • Modern diamond mining is a long-term investment, and Members actively build long-term partnerships with the communities in which they work.

Regarding the environment, the study said: “DPA and its Members recognise that environmental stewardship is one of the main obligations of the diamond mining industry, and every DPA Member works in close collaboration with local governments and communities to control their environmental impact.”

 On this facet, the key findings as outlined by the study are:

  • The largest source of DPA Members’ environmental footprint is its CO2e emissions: 160 kg of CO2e per polished carat.
  • The estimated CO2e associated with energy use in laboratory-created diamond production is nearly three times greater than diamonds produced by DPA members in 2016.
  • DPA Members collectively protected more than 260,000 hectares (1,000 square miles) of natural land in Russia, Botswana, South Africa, Tanzania, Australia and Canada. Members protect three times the land they use for mining globally.
  • The environmental cost of producing a diamond is 37% of a single one-way airline ticket from New York City to Los Angeles.
  • DPA Members currently implement long-term biodiversity conservation programs.
  • Each DPA Member produces sustainability reports, available on DPA’s website, to measure and analyze initiatives and progress.

The DPA has put in place a plan for active collaboration and sharing of best practices amongst the Member companies around two priority areas on the environmental front: energy conservation and CO2e emissions; and employee health and safety. The organisation also plans to report on ongoing sustainability progress “to share individual and collective progress” toward these objectives and, in general, toward achieving United Nations Sustainable Development Goals.

“Building on the Trucost report, DPA is launching its Total Clarity platform, designed as a transparent and reliable source of information on the socioeconomic and environmental impact of the diamond industry,” the DPA said.