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Long before corporate social responsibility became a capitalized, boiler-plate section in the annual report of every international firm, Rio Tinto was instrumental in developing the diamond industry of India into its current global leader status, enriching the lives of countless men, women, and children. Last year, Rio Tinto Diamonds launched its Select Diamantaire program—a giant step in the branding transparency of the supply chain, with all diamonds separated and tracked to the originating mine. We talked to Rio's general manager of marketing, Jean-Marc Lieberherr, on the Select Diamantaire program and Rio Tinto's continuing work in driving social and environmental sustainability as ever more important consumer values.
Modern Jeweler: Rio Tinto Diamonds, in collaboration with the IADC, has been huge in helping the Indian diamond industry reach the forefront, producing wages in the billions and evolving labor practices from third world to first in a decade's time. What do you see as the primary challenges to the "second decade" of India's diamond miracle, and how is RTD helping its client base to face them?
Jean-Marc Lieberherr: Rio Tinto Diamonds and the Indian diamond industry go back a long way and our links go far beyond business. Argyle first, then Rio Tinto Diamonds, have played an important role in putting India on the diamond map, just as Indian companies have played a great role in our business. We are committed to supporting our Indian customers, as we are to all our customers. We are now entering a new phase in which we need to have a more targeted approach reflecting both the higher level of sophistication of Indian players, and the evolving requirements of the market.
We see the diversity of our Select Diamantaires as a strength for the future. It is clear to us that no one business model is intrinsically superior to another, but must reflect the customer's own business objectives, their unique capabilities, the profile of their products, and the needs of the markets they serve. We wish to help our Select Diamantaires play their own game the best they can, and give them some of the tools to excel at it. We also aim to promote them as a community of distinctive professionals in the market.
As far as market requirements are concerned, we believe that the demand for greater transparency and integrity is only going to intensify in years to come. We must support our Select Diamantaires to live up to the expectations of increasingly demanding customers, consumers, and industry observers. We see our Business Excellence Model as an excellent tool to do this. It is an uncompromising, site-by-site, third party certification program covering many questions, ranging from health and safety to employment conditions and operations.
MJ: As a global miner, Rio Tinto is routinely graded in the top percentiles for social and corporate responsibility, be it environmental impact, labor relations, or product safety. How has the company changed over the past few years to become more responsible? How crucial were such issues in the selection last year of the first Select Diamantaire?
JML: Rio Tinto has made a strategic commitment to ensuring our businesses, operations, and products contribute to sustainable development. The last couple of years have seen an increasing emphasis by Rio Tinto on the need to better understand the impacts and benefits of our products across their entire life cycles. This has resulted in a set of key product stewardships principles. We intend to differentiate ourselves from our competitors, enhance our reputation in the marketplace, and become a "brand of choice" for minerals and metals products.
In the case of the diamond product group, the direct control starts at exploration and ends when the rough product is sold in Antwerp by Rio Tinto Diamonds. Throughout the process from mining to sales, each mine's production is kept separate, maintaining the national identity of each mine. This enables Rio Tinto Diamonds to specify country and mine of origin when selling to customers.
Rio Tinto continues to exercise limited control over the downstream diamond pipeline and where possible seeks to influence and support the standard of operation of its customers and its customers' customers. To this end Rio Tinto Diamonds launched its new trademark for diamonds earlier this year. The Select Diamantaire program is a customer recognition program that celebrates the distinctive skills of Rio Tinto Diamonds' main customers. However, the program is not only about providing access to production. It is also about the reassurance that they are buying goods which have been mined by an internationally renowned mining company applying the most stringent health, safety, environment, and social standards.
MJ: Do you feel you have the correct number of Select Diamantaire for now? What percentage of total output is reserved for these clients?
JML: We do believe that it is essential to have a balanced customer base, especially given the wide diversity of our production and Rio Tinto's growing position in the diamond industry. Our Select Diamantaires are the specialists in their field, recognized for their specific experience and expertise in trading, cutting, and polishing diamonds, and in some cases, manufacturing diamond jewelry. To date we have 25 Select Diamantaires, many of whom we have been working with for the past ten years. A large proportion of our production is today reserved for our Select Diamantaires.
MJ: RTD lists the exact provenance of its goods clients receive, be it from Argyle, Diavik, Murowa, or all of the above. How important is transparency in the pipeline?
JML: We believe that the market's demand for transparency, be it about business practices or origin of goods, is only going to grow. More important than being able to identify precisely the mine of origin, which is what we do today, a mining company must be able to guarantee the integrity of its pipeline. It is an essential part of the benefit of buying from a primary, responsible source. Within Rio Tinto, we have built transparency into the way we work. We have decided to list the exact provenance of the mine, so there is no question about the conditions under which a specific diamond has been mined.
MJ: Murowa is unique in Rio Tinto Diamond's catalog, given the severe political and health issues of its host country. Can you address the difficulties of applying and maintaining international standards in a country as fraught as Zimbabwe?
JML: Rio Tinto is committed to being a long term participant in the diamond industry. We have three very different mines operating in three very different countries. All three of Rio Tinto's diamond operations, Argyle, Murowa, and Diavik are committed to providing a legacy of stronger, healthier, and environmentally secure communities. In the case of the Murowa mine in Zimbabwe there have been challenges operating in a region of political instability. These challenges have not deterred us from seeking to measure improvement in the social, economic, and physical well-being of the communities. In the long run, Rio Tinto Diamonds will judge the sustainability of the mine on whether or not this goal has been achieved. An ongoing five year plan has been agreed with the community and is the basis for focusing both the community's and Murowa's activities and funding to build a sustainable future.
MJ: Can you speak of RTD's involvement in the Kimberley Process?
JML: The Kimberley Process is a joint government, international diamond industry, and civil society initiative to stem the flow of conflict diamonds. In the last three years, it has been the biggest influence in improving the detection and control of illicit diamond transportation and sales. In 2002, Rio Tinto Diamonds was one of the first diamond companies to embrace the principles of the Kimberley Process. Rio Tinto's visible and consistent support of the initiative has served as a model for other diamond companies and has helped to ensure its continued development in the fight against conflict diamonds. We actively support the World Diamond Council and are very encouraged by the outcome of the last plenary meeting which illustrated the commitment of all parties to further improving the process.
MJ: Do you think that origin brands and provenance will be more important to the diamond industry in the future? Would you consider a Rio Tinto mark on diamonds, such as the Forevermark or the CanadaMark?
JML: The industry and consumers in particular will become increasingly inquisitive about the conditions under which their diamonds have been produced. Other industries are facing similar challenges. Consumers are increasingly aligning their consumption behaviors to their core values, and social and environmental sustainability certainly are growing consumer values. As an organization and a responsible industry participant, we welcome this.
Origin and branding play a role, but it is not the whole story. There are many ways to convene a similar level of reassurance. Reassurance can come from the retailer, from the manufacturer, from the mining company. We support the approach and the work of the Council for Responsible Jewelry Practices, which aims to cover the whole supply chain, from mine to retail. As for a Rio Tinto mark on our diamonds, it is not on the agenda in the short term.
MJ: Rio's minerals are as diverse as borax and pink diamonds, putting you in a position to speak on a unique aspect of this commodity. So much of its value lies in its symbolism. What is Rio doing to promote consumer confidence in the diamond's ongoing emotional value?
JML: Rio Tinto Diamonds, as the sales and marketing arm for all of Rio Tinto's diamond productions, has taken the lead in introducing best practice principles to ensure that consumers buying a Rio Tinto diamond are able to rely with confidence on the ethical standards and technical skills of the company. Examples include the Business Excellence Model and our support for the Kimberley Process and the Council for Responsible Jewelry Practices. We recognize that diamonds are a unique product about which the consumer has limited expertise and is reliant on industry information and professionalism. We value the trust that is placed in the integrity of our diamond marketing programs and will continue to work hard to ensure that trust is not misplaced.
Further upstream at the Argyle, Diavik, and Murowa mines there is an enormous amount of work that has been done, demonstrating to consumers that Rio Tinto diamonds have been mined with integrity. Let me provide you with just a few examples.
The establishment of the Diavik mine in Lac de Gras, 220 kilometers from the Arctic Circle in the Northwest Territories, is an epic saga of success on a grand scale in the most forbidding of places. One of the key environmental issues related to water management. In spite of its apparent abundance in this region, water is considered a precious resource, especially by the aboriginal peoples as it has provided habitat for much of the wildlife that is critical to their lifestyles. Comprehensive data was collected on fish and water, wildlife, vegetation and terrain, air quality, heritage resources, and socio-economic conditions, and this was supplemented by traditional knowledge contributed by community residents.
Open cut mining at Diavik could only proceed if there was a guarantee that nothing would blemish the pristine waters of Lac de Gras. International searches were mounted to determine the best way to achieve this and eventually new engineering technologies were developed to construct a rockfill dike that would hold the waters at Lac de Gras at bay for the construction of the mine. Work was done to develop a water management system that would ensure that once the mine was operational, no pollutants would ever enter Lac de Gras. As a result, 12 on-land engineered dams were developed that were locked to the permafrost, lined with geosynthetic material, and successfully heat welded under the coldest temperatures ever attempted.
On the other side of the world in the remote East Kimberley region of Western Australia, the Argyle diamond mine operates in a region of significant economic and social disadvantage. Argyle gives a high priority to building partnerships with local organizations, communities, and businesses to develop health and education programs that will improve social outcomes in areas of need. Argyle, through its landmark 2005 participation agreement, is supporting local indigenous people to become the drivers of economic and community development, so that the growth and improvement will continue for aboriginal communities long after Argyle has left the region.
Finally, in Zimbabwe when the Murowa mine was discovered in 1997, the impact on the local community was recognized and proactive consultation at many levels of the community has been a critical part of the development of this mine. The need to resettle 142 families living in the mine area was a critical test of Rio Tinto's respect and understanding and evidence of being able to make a real difference to the lives of this community. These are just three examples of the hundreds of projects undertaken by Rio Tinto Diamonds to ensure social, environmental, and economic development in the communities in which we operate.
author: BY IVAN SOLOTAROFF, SENIOR EDITOR - Modern Jeweler