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How unethical practices in the global diamond industry affect you

Raising the bar

Transfer pricing is one method used to avoid taxes, which deprive African treasuries of revenue to fund public services.
Transfer pricing is one method used to avoid taxes, which deprive African treasuries of revenue to fund public services.

The Canadian industry is not exempt from FATF’s and Egmont’s findings or the issue of transfer pricing, and let me tell you why: for the same reason that conflict-affected diamonds from Marange tainted the integrity of the global diamond industry. Dodgy business in one jurisdiction has a knock-on effect throughout the supply chain, particularly among increasingly aware consumers brought up on a litany of ethical products from fair trade coffee to textiles. Reputational risks undermine confidence in the diamond sector and that is not in anyone’s best interests. Consumers matter, but even more so do banks, many of them who are either leaving the diamond sector altogether or imposing stricter lending requirements to placate internal concerns about risks associated with the diamond world.

The good news is that PAC, industry groups in the United States and Europe, and a growing number of governments are working to improve responsible sourcing and trading practices in the diamond sector, similar to due diligence requirements Organisation for Economic Co-operation and Development (OECD) helped to create for other conflict-affected minerals.

While Canada may be a modest player in the global manufacturing and jewellery sectors, our diamond deposits make us an acknowledged leader among miners. Industry groups should engage in this process—either on their own or through relevant associations—to support voluntary initiatives such as this one that seek to improve governance of the diamond sector. Raising the bar on acceptable standards—many of which reputable industry members already do—defends the longer-term integrity of the industry. Doing so also isolates and highlights jurisdictions that pander to criminality and the lowest common denominator.

Alan Martin is director of research for Partnership Africa Canada (PAC), a non-profit organization that undertakes investigative research, advocacy, and policy dialogue on issues relating to conflict, natural resource governance, and human rights in Africa. He can be reached at

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