development diamonds - martin rapaport

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TBLI CONFERENCE

Development Diamonds

Martin RapaportNovember 8, 2012 – Zurich

Martin @ Diamonds. Netwww . Diamonds. Net

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Fair Markets

Jobs and “Fair Market Value”

Gov’t and NGO’s can’t deliver.– Sustainable Economic Development

18% of children die before the Age of 5– No Rule of Law, Laws Become Evil

The Role of Government is Problematic– Governments kill their own people

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Regulation

The Kimberley Process– Government, NGO and Trade Cooperation– Sierra Leone, Zimbabwe– Fig-Leafing, Green-Washing, An African Story

Limits of International Law vs. National Laws

Dodd Frank Act Legislation- OFAC– Regulating Conflict Minerals– U.S. OFAC Regulations

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Responsibility

Money is power.

Money is not neutral. It can be used for good or evil.

Money is a powerful force for change

You are responsible for what you do with money

You are responsible for how we invest money

You are responsible for what you buy and sell

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Differentiation

Market & Product Differentiation– Ethical, Legal, Economic Forces– The slippery slope of legitimacy– Monetization of externalities

Are Some Products Evil?

Product Certification = Product Differentiation– Source, Production, Chain of Custody (CoC)– RJC, Partial Certification, The Whole Truth– Changing distribution systems

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Certification

Rating Ethical Sourcing

Score

9 Fair Trade Grassroot Beneficiation

7 Ethical Legitimate Sourcing

8 Unknown Unidentified Sourcing

9 Problematic No Human Rights Violations

10 Evil Severe Human Rights Violations

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Market Dynamics

Maximizing Sustainable Profits – Altruism Is Not Sustainable– Price Competition Limits Profits– Value Addition Increases Profits … Branding

Ethics (ESG) As A Value Added Proposition– Can we make more money by being ethical– Will consumers pay more for ethical products– Will we lose money if we are unethical– Can we hide under unknown sourcing

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Summary

Fair Markets – Competition Regulation – National Laws Responsibility – Money Is Power Differentiation – Create

Products Certification – Adding Value Market Dynamics – Supply / Demand

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Conclusion

Market forces determine reality.

It’s up to us to improve the added value proposition of ethical products.

We must create free, fair, efficient, transparent and competitive markets for ethical (ESG) products.

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Conclusions

In the end, after all is said and done ...

Society gets the level on ethics that it is willing to pay for. No more, no less.

Our challenge is to increase

the value of our values.

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END

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