Due Diligence in artisanal diamonds: Focusing on What Matters, Where it Matters

Marie d’HuartMY FAIR DIAMOND – CAP CONSEIL

About us

CAP CONSEIL

2003 – consultancy in sustainability and social responsibility (CSR)

CAP SOURCE - MY FAIR DIAMOND

2016 – responsible sourcing and ethicaldiamond jewellery

Serge De Backer Marie d’Huart

Due diligence in practice:

what is at stake?

• Knowing : the chain and its true risks

• Learning: skilled staff on good standards

• Verifying : internal & external sources

• Managing: investing, adapting costs

• Equipment: software, blockchain, IOT …

• Reporting: on real situation & improvements

• Partnering : eyes & ears on the field!– Diplomacy, NGOs,

The classical value chain

© CAP source

TODAY

Expectation gaps

Mix & sort

Industrial & small-scale

Dubious practices

Discrete sector

Traceability until origin

Chain of custody

Ethics & integrity

Full transparency

Business as usual

New trends

?

Mix &

Sort

1,5 $ / day

Our starting point

GO FOR MAXIMUM POSITIVE IMPACT

Means:

Going where change is most needed

Beyond Due Diligence

« Responsibly sourced »: 12 criteria

reflecting the risks and opportunities to monitor

1. Respect for Human Rights

2. Communitydevelopment

3. Conflict-free

4. No child labour 5. No forced labour6. Fair wages: living

wage, beyondminimum wage

7. Safety, healthand hygiene

8. Proper workingtime

9. Non-discrimination

10. Integrity and traceability

11. No bribery and money laundering

12. Respect for the environment

The Kimberley Process

certification does not address

human rights abuses,

environmental degradation and

other developmental

challenges.

SDG-mapping

of our business model

-5

0

5

10

15

20

25

30

35

40

45

sourcing from small-scale mining cut & polish manufacturing

partnerships &promotion retail

Positive contribution to the SDG’s all along the value chain

MY FAIR DIAMONDSphere of influence

Sphere of influence

Going there& partnering

Reporting & promoting

Positive contribution per SDG

End poverty in all its forms everywhere

End hunger, achieve food security and improved nutrition

and promote sustainable agriculture

Ensure healthy lives and promote well-being for all at all

ages

Ensure inclusive and equitable quality education and

promote lifelong learning opportunities for all

Achieve gender equality and empower all women and

girls

Ensure availability and sustainable management of water

and sanitation for all

Ensure access to affordable, reliable, sustainable and

modern energy for all

Promote sustained, inclusive and sustainable economic

growth, full and productive employment and decent work

for all

Build resilient infrastructure, promote inclusive and

sustainable industrialization and foster innovation

Reduce inequality within and among countries

Make cities and human settlements inclusive, safe, resilient

and sustainable

Ensure sustainable consumption and production patterns

Take urgent action to combat climate change and its

impacts*

Conserve and sustainably use the oceans, seas and marine

resources for sustainable development

Contribution

per SDG

Take urgent action to combat climate change and its

impacts*

Conserve and sustainably use the oceans, seas and marine

resources for sustainable development

Protect, restore and promote sustainable use of terrestrial

ecosystems, sustainably manage forests, combat

desertification, and halt and reverse land degradation and

halt biodiversity loss

Promote peaceful and inclusive societies for sustainable

development, provide access to justice for all and build

effective, accountable and inclusive institutions at all levels

Strengthen the means of implementation and revitalize the

global partnership for sustainable development

Due diligence: tracing & managing

can mean reinventing / shortening the chain

Others’ approach

very

fragmented

opaque

sequence

of owners

Our approach

we keep

full track

We

own

A->Z

Technical challenge: small scale

means partners and adaptation

• Artisanal = not easy – KISS principle!

➢ Weak literacy

➢ No infrastructure & low equipment

➢ small budget, small priority

• Partnerships: bring new actors in the

radar!

• Guaranteeing good practices =

ethical audits on the spot, following

sector-specific tools

➢ RJC Chain of Custody is an opportunity

Economical challenge:

Due diligence means additional time,

efforts and costs

• Investigating the chain = traveling

• Paying decent wages = premium

• Buying certified products = premium

• Paying extra-assurance = 3d-party audits

• Relocating some activities = higher wages

Limit risks, be modest and honnest

S T A R T F I N I S H

BANANKOROMARKETPLACE RESPONSIBLE

CERTIFICATION

ANTWERPMARKETPLACE

Business Partnership Facility: Enterprises for SDGsOpening a new trade of responsibly sourced

diamonds

Traceability & due diligence:

an ethical challenge for gems and money

2 standards = Double complianceCertification along the chain

1 Set up of management

systemsa. Policy in function of supply

chainb. Management protocolsc. Collect datad. Engage with supplierse. Management of complaints

2 risk identification &

evaluationRed flag activitiesMapping of risksEvaluation of risks

4 Due diligence

reportThird party audit

5 annual report

Annual reporting

3 risk management

Report on conclusions & analysisConsultation & controlsImplementation and follow-up on risk management

RED FLAG

No red flag

Controls & evaluation

for continuous improvement

Certification on the field: human rights risks

Sample Text Here

legality

Consent & community

engagement

Human & workers

rights

Health & safety on

site

Environmental management

Interaction with large-

scale mining

Site closure

Measurable requirements

Performance criteria

Acceptable audit

++

BOP blockchain?

Call for ideas

• Operational in a developing country

• Linked to IOT, I.A. and payment system

• Licensee free

• Supporting 2-ways flow: money & stones

We are looking for a partner with an ambition to co-design and provide technology and solutions

THANK YOU!

MARIE

d’HUART