Diamonds

To help ensure the integrity of our supply chain, Tiffany created Laurelton Diamonds, a wholly owned subsidiary that procures rough diamonds and manages our worldwide supply chain that sources, cuts, polishes and supplies finished stones to Tiffany.

Laurelton Diamonds sources diamonds from known sources across the globe, primarily in Africa, Canada and Russia.

In creating Laurelton Diamonds, Tiffany recognized early on that diamond-producing countries want, and indeed deserve, to benefit from their diamond resources. We wholeheartedly support this process of producer country "beneficiation." We believe that diamond activities should be used to further develop and sustain economies, to create employment opportunities and to support the broader social goals of communities and nations. It is our responsibility to contribute to this effort.

Our first investment in a producer country was in Yellowknife, Canada in 2002. Since then we have invested in diamond sourcing and polishing operations in South Africa, Botswana and Namibia. Our approach to investing is based on long-term sustainability. Our facilities are equipped with custom-designed, state-of-the-art equipment and our employee development and training programs are designed to equip the local workforce to meet Tiffany's exacting quality standards.

Tiffany & Co. purchases diamonds only in those countries that are full participants in the Kimberley Process Certification Scheme (KPCS). This is an international cooperative monitoring system created to eliminate the flow of "conflict diamonds"—diamonds that are smuggled out of war-torn regions by those seeking to finance violence. The Kimberley Process requires the participating countries to tightly control the import and export of rough diamonds. Also, the KPCS requires establishing control systems over private sectors that trade in rough diamonds. To comply with this process, rough diamonds may only move among participating countries in sealed containers with accompanying documentation evidencing that the diamonds are conflict-free.

We applaud the creation of the KPCS thanks to the cooperative efforts of governments, the diamond industry and nongovernmental organizations such as Global Witness and Partnership Africa Canada. We are encouraged by the progress that has been made since the system was put in place in 2003.

The KPCS is not yet perfect and much work remains to be done. Tiffany supports a strengthening of the Kimberley Process, including the development of minimum control standards to be implemented in every participating country, more rigorous compliance monitoring of rough diamond imports and exports and the implementation of auditable systems to allow more objective assessment of industry compliance with the Kimberley Process. Tiffany also supports more transparent reporting of diamond production and trade statistics and the establishment of permanent funding mechanisms to assure that financial resources are available to support Kimberley Process Certification Scheme activities.