We embrace the challenge of raising standards in the supply chain. It is an ongoing process and collaboration is vital to our programme's success. While assessing conformance is essential, our goal is long-lasting change.
Mr. Rihen Mehta - Group Associate

We are committed to making sure that all Rosy Blue products can be sourced, manufactured and sold in an environmentally and socially responsible manner.

Our business does not exist in isolation. We have an impact on our people, suppliers, contractors, customers and the local community where we operate. We believe CSR is about understanding our business impact on the wider world. It means taking a responsible attitude, going beyond the minimum legal requirements and following straightforward principles wherever we operate.

Our main priorities are the majority contractors and in a second phase of our implementation process the minority contractors.

Rosy Blue has 5 majority contractors and 100 minority contractors.

Majority contractor: one that generates 75% or more of the revenues from one Sightholder entity

Minority contractor: one that generates less than 75% of the revenues from one Sightholder entity

CONTRACTOR ACTIVITIES

The company's contractors guiding principles are organised around five pillars:

HUMAN RIGHTS

• No abuse of human rights
• No involvement of child labour (below 15 years of age) or forced labour
• No trade in conflict diamonds

LABOUR AND HEALTH & SAFETY

• Payment of minimum wages
• No willful or negligent acts or omissions resulting in serious injuries or death

PRODUCT INTEGRITY

• Disclosure of all information on diamonds (e.g. synthetics, treated, stimulants)

ANTI-BRIBERY AND CORRUPTION

• No involvement in corruption or bribery activities
• No involvement in money laundering or the financing of terrorism

ENVIRONMENT

• No actions causing a significant adverse effect to the environment
• No actions bringing the diamond industry's supply chain from mining to retail into disrepute.

Since we joined the BPP Programme of De Beers in 2005, we have also participated in the BPP Contractors Programme initiated in 2008: a special programme focused on continual improvement in contractors' facilities.

A distinction is made between minority and majority contractors.

Based on the impact of the contractor on our operations, we work with the contractors following a four-phase process:

• In phase one, Rosy Blue's majority contractors conduct a self assessment by filling in a contractors workbook that help them to understand, prioritize and address specific risks.
• The second phase is a desk top review of these self assessment contractors' workbooks by SGS.
• The third phase is validation and improvement through onsite audits.
• In the fourth phase, we address needs for contractor's capability building (including the minority contractors) and education and implement programmes designed for continual improvement.

PROMOTING TRANSPARENCY IN THE SUPPLY CHAIN

We believe that transparency gains trust, which improves the effectiveness of our supply chain work.

In 2009 Rosy Blue has engaged all the majority contractors in this desk top review process and conducted two on site audits in Israel and India.

Rosy Blue has sent the Guiding Principles to all the minority contractors in 2009 and requested a formal undertaking.

FORMAL UNDERTAKING MINORITY CONTRACTORS

GOING FORWARD

WORKING FOR ROSY BLUE WIDE IMPROVEMENTS

The next step will be to include the supply chain management principles in the contractors' agreements and to evaluate the minority contractors. When a minority contractor is not in compliance, we will take appropriate action on a case-by-case basis, and work with them to correct deficiencies, conduct follow-up audits, and, if appropriate, terminate relationships.

WORKING FOR INDUSTRY WIDE IMPROVEMENTS

We believe that the most effective way to bring about lasting social and environmental improvements in the supply chain is to collaborate with other companies in our industry to create common standards and audit procedures. As such, we have worked as an active member of RJC since 2005 at Board and Committee level. Rosy Blue is working with over 225 companies throughout the supply chain to drive this industry mechanism. Our application for RJC certification clearly reflects this commitment.

ADRESSING NEW CHALLENGES IN MATERIALS SOURCING

We continue to face new challenges in our supply chain and are committed to addressing them. We will develop a sustainable procurement policy and establish a framework on all non diamond purchasing across the Group. A special taskforce will be appointed.

Engaging with all business partners for long-term success

INTERVIEW WITH PAUL HOTZ & ALLAN LEIBLER

In 2009 you had your first Contractors Audit? How did you manage this process?

We have found it important to go beyond assessment and actively support our contractor in developing their labor, health and safety, environmental, and ethics management capabilities.

Communication and on site regular visits were essential to clearly explain why we want to ensure compliance and how we want to help them implement best practices.

We went through all the contractors workbook questions and discussed the different areas of focus. We adjusted the contractors toolkit to a simplified document taking into consideration the local needs.

We also provided appropriate training for each employee, with a special focus on health and safety.

What impact did this audit had on your relationship with your contractor?

At first they thought we were interfering with their business. Over time they clearly saw the advantage of implementing policies and procedures. Now I can say it has strengthened our relationship. We are in this together with one goal: to deliver sustainable products.

For example we improved the structured reporting of the HR reports; we implemented a health & safety plan with one of their very dedicated polishers who is trained in health & safety. We organised training on different compliance topics in Hebrew by one of our own compliance managers.

How will you go forward?

We will continue to monitor and implement similar programmes where they are needed. The good thing is that they understand now why we are requesting certain data and evaluating on a quarterly basis.

Our Contractor has responded positively as well satisfied, by the positive impact on health, workplace satisfaction, and generated by the programme without disrupting production.

The result of the SGS audit was positive and no breaches were found. This was a true recognition to our contractor.