DeBeers has been in existence for many decades and prior to advertisements and promotions not many people knew about the company. The Diamond is forever slogan that the company uses coupled with celebrity endorsements has helped to put it out there.
An arm of the De Beers Group, The Diamond Trading Company sells nearly 40% of the world’s unpolished diamond by value. The corporation accounts to 80% of the world’s industrial diamonds and has over the years with its legendary slogan “A Diamond is forever” emerged extremely successful in augmenting the demand for diamonds among consumers. Advertising Age magazine has in 2000 dubbed the slogan the preeminent of the 20th century.
Having had it easy for years in the industry, when change came it proved atrocious and merciless. Insights that De Beers was involved in some ethical issues some of which discussed below, even if mislaid created a backlash. Diamond sales dropped. (Rob, 2001)
ETHICAL ISSUES AND CONTOVERSIES
As of 2001 and beyond a number of claims were brought forward against the De Beers Corporation in the United States of America (USA) federal and state courts. The corporation was suspected of illicitly monopolizing or rather cornering the market for the supply of diamonds and plotting to move up, control and fix the prices of gem diamonds. De Beers refused the entire assertions that it contravened the bylaw, nevertheless in November 2005, the corporation proclaimed that it had reached an agreement to resolve civil action suits brought against it in the US. It substantiated in April 2008 that the New Jersey Federal District Court judge Chelser had entered a court order endorsing the reimbursement amounting $295 million. De Beers did not own up liability. Any person who between the start of January 1994 and March 31, 2006 bought gem diamonds was as part of the defrayal entitled for a probable refund.
In regard to its Industrial diamonds, De Beers in 2004 pleaded guilty to the 1994 allegations of yet again conspiring with General Electric Corporation to fix the rate of industrial diamonds. As penalty the corporation was ordered to pay a fine of $10 million to the US Department of Justice.
The issue of whose duty is it to ascertain whether or not a diamond regularly examined for Clarity, Colour and Cut ought to be checked up for a further “c” for Conflict came to play subsequent to the release of a motion picture dubbed “Blood Diamonds”. The film starring one of the world’s renowned actors, Leonardo Dicaprio is a fictionalized version of the acts of violence as well as the enforced child labour that essentially occurred throughout the 1990s in Sierra Leone, a small country in Africa. De Beers Corporation preceding the action taken in 2000 by the United Nations Security Council (UNSC) was trading in conflict or blood diamonds. The diamonds were purchased from guerilla pressure groups in war torn African states including Angola and Liberia, in that way backing regional clashes. The proceeds obtained from these valued stones were used to sponsor armed forces conflicts, one of the reasons why the Angolan civil war extended even unto 1998 amid the sanctions the country was facing is in fact because Jonas Savimbi’s movement was actively selling uncut diamonds to De Beers and using the money obtained to purchase ammunition and other weapons. Revolts, raped, thrashed and mutilated fellow Africans as well as minors and compelled them to dig up for the stones in riverbeds.
De Beers Corporation in 1999 under demands from the UN (United Nations) came to a decision to discontinue all the external purchasing of diamonds as a way of ensuring the firmly conflict free condition of its diamonds, preliminary to 26 March 2000 the Kimberley Process Certification Scheme came to existence in November 2002 resulting from talks between countries, the civil society organization and the international diamond industry. The scheme has since helped out De Beers re-establish its reputation and now the company claims that an incredible 100% of its diamonds are conflict free.
DeBeers has in the past treated its workforce in a really bad manner especially the poor blacks of South Africa working in the mines. In his article Duncan Innes gives details on how Rhodes and others came up with ways to exploit the poor blacks in order to get a lot of cheap labour that was needed by the mining operations. In other words they contrived cheap labour and had some significant influence in the setting up of several taxes, including a poll levy in order for the majority unemployed black population to get work so that they could earn an income or cash to pay the mandated taxes. A large majority of blacks resided in villages and in order to earn cash to pay taxes were forced to seek employment in the DeBeers mines where they could expectantly earn money quickly and go back to their rural communities. Many of these "migrant workers" became subjected to very appalling living conditions and in the DeBeers Company stores for many years were all the time thought of thieving diamonds, and for a meal they were fed with a little bread and cold tea during working hours.
THE VIGOROUS REMOVAL OF BASARWA FROM THEIR NATIVE LAND;
“I cannot be told by anyone how to live. If I said to the minister, move from your home he would think I was mad.”(survivalinternational.org). These are the words of a bushman from Botswana on the Bushmen’s relocation from The Central Kalahari Game Reserve also known as CKGR. De Beers through a joint venture with the government of Botswana controls the country’s diamond mining. Botswana government holds 50% of the company (Debswana)’s shares with the remaining 50% owned by the De Beers Corporation. A lengthy heated debate has subsisted involving De Beer’s mining interest, Debswana and the relocation of the country’s Bushmen from their inhabitant land in order to make the most of the diamond sources. Ever since as early as the 1980’s when the diamond sources were ascertained, the Bushmen are reported to have been fronted with threats from the Botswana government policies. As a way of trying to get them to evacuate, the Bushmen have been fined for practicing their ‘superseded’ hunting and gathering way of life, they have been agonized and beaten and their water supply brought to a halt. In order to counteract and bring to an end to what it calls genocide of an African clan, Survival International along with Iman and other numerous international supermodels that were in the past engaged in the company’s diamonds advertising are fighting hard against the move. Iman has profoundly criticized and cut ties with the De Beers Corporation over a difference of ethics. She was quoted in one interview as saying; ‘it was clear that the Bushmen were being destroyed - you take people from their element and you end up with Aids, drugs and alcohol in the guise of advancement.' (buzzle.com)
DE BEERS CORPORATION’S I NFLUENCE AND CONTROL OVER GORVENMENTS;
De Beers Corporation has for many decades been an important component of an old organizational set-up, put into place by the British and also fronting for various US actions and interests with the objective of exerting control over global governments and populace for the gain and in favor of some powerful corporations, particularly banks. There is also an American edition of such a global organization called the Council of Foreign Relations (CFR). CFR enlists members of the political profession, the media, academia, and the very powerful foundations since they all have significant influence on politics. To most members of its organization, the function of the organization is unknown which is to make sure that its members protect the interests of their financial sponsors by following a party line. As a means of shielding the reputation of its alliance, DeBeers sponsors CFR and its American version. By supporting CFR, DeBeers is able to override the political proceedings of a number of nation states, including powerful nations like the United States of America. In the case of Botswana and several African countries, DeBeers has meddled in the politics of these countries through sponsoring election campaigns for political parties representing the company’s interests to win and it has also influenced the government’s choice of government negotiators when negotiating contractual agreements between it and those countries. In order to protect its interests, the corporation has also gone to the extent of bribing head of states with millions and/or billions of dollars whilst the rest of the population or country had to request for monetary aid in the form of long term loans accruing interests from the United Nations, International Monetary Fund (IMF) and the World Bank for survival.
In a recent edition of one of Botswana’s newspapers, The Sunday Standard, one of the headline stories was about the former president of Botswana Sir Q.K.J Masire and his dealings with Debswana Company which is a company co- owned by DeBeers and the Botswana government in which DeBeers by then owned the majority company shares of 85% and the government shares only accounted to 15% of the total shares. The article provided a detailed insight of how the company organized a financial retirement package for the former president .The package that was arranged by the company included the settlement of the former president’s bank debts which amounted to millions of dollars in a bid to encourage him to retire and pave way for the company’s much more preferred individual to replace him as president, who can better protect its interests in the country. Following his retirement in 1999 the company cleared his debts and also provided him with additional financial assistance worth millions to run his farm. While the former president received millions worth of dollars from Debswana Company, Botswana had huge debts with the African National Development Bank and IMF, there was increasing unemployment rate and the country was being ravaged by the HIV/AIDS epidemic.
UNETHICAL BEHAVIOUR; WHY IT HAPPENS
Before going further into explaining why unethical behavior takes places in organizations, a definition of the term ‘unethical behavior’ is perhaps necessary. According to Mercado (2007), unethical behaviors are deduced when the acts of employees and organizations do not conform to professional or social standards and there are quite a number of reasons why companies find themselves caught in immoral/unethical acts some of which are explained below.
The Behavior is in the Best Interest of The Company or Individual;
Well Renowned for its monopolistic ways all through the 20th century, whereby the corporation utilized its overriding power to control the global market for diamonds, in its conspiracies to fix, push up and control the price of diamonds, De Beers Corporation was plainly protecting its interest.
Wrong Decisions Rationalized Away;
An excellent example of this in regard to the De Beer’s Corporation is the promotion of terror campaigns and civil warfare in African nations just for the sake of making money. The decision to buy diamonds from Angola, Sierra Leone and Liberia was rationalized by the company’s need to sell and make profits. Except for the nonprofit making organizations the main motive behind every line of business is to generate as much profit as can and companies may in this quest get lost and engage in unethical acts. Some companies of course do this with their eyes wide open. De Beers Corporation took more of an egoistic view in this situation and tended to pay no attention to the actual effect of their purchasing ‘Blood diamonds’.
Marketing Managers Sometimes Have Little Direct Authority And Have to Rely On The Company;
This on the whole has to do with centralization and decentralization of powers. In a case where there is centralization of power, a lot of the decisions come from the company’s headquarters and the bunch just have to without questioning follow them through. In the case of De Beers the power is centralized, the others are just the corporation’s representatives.
DE BEERS’ APPROACHES TO MARKETING ETHICS
There are essentially two approaches applicable to marketing ethics. These approaches are founded on the Teleogical and Deontological theories. A Teleogical approach or theory on the one hand puts emphasis on professed effects and not behaviors when making a judgment. Teleogical theory is further sub-divided into Ethical egoism and Utilitarianism. In Ethical egoism a company or an individual’s interest is put first, the company or individual thinks only about its own selfish needs whereas in a Utilitarianism manner an action produces the greatest good for the greatest number of people. Deontological approach on the other hand has its focus put on the behaviors of an individual and the principles used to come to an ethical decision. The approach is greatly influenced by principles learnt from a religious group, family, politics and so forth.
De Beers in reaching all its decisions seem to have integrated a blend of the Ethical egoism and Utilitarianism approaches. When meddling with the political affairs of Botswana, a country branded the “ideal model of democracy in Africa” De Beers Corporation was egoistically and selfishly thinking about its own gain and not the interest of the citizens and not only that, its fixing and controlling of prices ignored the interest of other stakeholders (consumers) and other players in the diamond industry. The issue of the relocation of Basarwa (Bushmen) as bad as it looks was a utiliranianistic approach. Basarwa clan make up only about 1 to 1.5% of the country’s population, they are the minority and for the reason that perhaps not exclusively, De Beers Corporation and the government of Botswana were willing to sacrifice their land for the gain on the majority. The government of Botswana as a matter of fact depends largely on diamonds to fund the country’s expenditure.
THE PART CONSUMERS CAN PLAY IN COMBATING UNETHICAL BEHAVIOURS OF COMPANIES
Subsequent to the release of ‘Blood Diamond’ the movie, advantageously, two tremendously powerful end user groupings of hip-hop insiders and Hollywood actors and actresses are stepping up to the plate to scrutinize what the notorious U.S is doing about the issue and the suffering African men, women and children. There has been songs written and documentary produced in order to raise awareness of Blood diamonds. Celebrities Lupe Fiasco and Kanye West took a stand in a hip hop industry where covetousness is typical and wrote morally influential lyrics about blood diamonds. Iman also in pulling out from De Beers took a bold move no ordinary person would have taken especially in this greed ridden era where money and all the other worldly materials matter.
Apart from all of the above consumers can come together and call for a boycott of products of and protests against the irresponsible and unethical companies.
TRUTH OR JUST MERE ALLEGATIONS?
Like the saying goes, where there is smoke there is fire; this a suggestion that all the tittle-tattles and allegations are often validated by fact. Given a number of the ethical issues discussed at the beginning of this paper, De Beers is by far one of the most unethical corporations one has ever come upon. While there is some element of decency in its practices, like for example, addressing the issues of sustainability and it being shaped by the societal essentials of the countries in which it operates as mentioned in its website, the bad just seem to supersede the good. The corporation has failed to balance its interest with those of consumers. In her book, Business Ethics: the new bottom line, Carmichael writes that doing the right doesn’t need any excuses or justification. She further explicates how acting ethical can feed through the bottom line and help corporations improve customer relations, employee relations, supplier relations etc. Of course every Jack and Jill knows that businesses need to make profits in order to survive, if nonetheless those profits and survival are realized through delinquency the benefits are short lived. But of course, regrettably, society today is fuelled by voracity, money and power. People and businesses have grown to be egotistical and selfish and will carry on sucking up everything and whatever thing around them until there is just nothing remaining. In conclusion, by its character, the issue of ethics is divisive an there is no particular approach that is universally recognized for dealing with ethical issues (Ferell, Fraedrich) however acting in an ethical manner saves corporations a lot of billions in lawsuit settlements etc (Weiss, pp 11).
Carmichael, S., 1995. Business ethics: the new bottom line. Demos.
, O. C. & , J., 2006. Business Ethics: Ethical Decision Making and Cases.7th ed. Cengage Learning.
Guardian News & Media. 2004. Iman Cuts De Beers Links in Ethics Row. Available at: http:// [Accessed 10 May 2010].
., 2008. Business Ethics: A Stakeholder and Issues Management Approach. Cengage Learning.
Kaplan, B., n.d. Forever diamonds: A powerful company, a catchy slogan, and how they forever changed the way we value diamonds.
[Accessed 9 May 2010]
Mokone, O., 2010. De Beers takes Botswana for a ride. Sundaystandard online [internet] 7 March .Available at: http://www.sundaystandard.info/article.php?NewsID=7169&GroupID=4 [Accessed 14 March 2010]
Survival international. 2005. De Beers wrong about Bushman evictions.
Available at: http:// [Accessed 10 April 2010].
Rob, B., 2001. De Beers sales drop by 25%.