...Discussion Case: The Challenges of Globalization Issue A symbol of prestige and love around the world has caused horrific violence across the diamond-rich nations of Africa. Diamonds, the hardest and most powerful substance known to man, are mined or stolen to fund armed conflict by rebel groups seeking to overthrow West African governments. During the 1990s diamonds obtained by rebel groups, conflict diamonds, made up twenty percent of the diamond market. After a decade long battle, the diamond industry, national governments and civil organizations collaborated to combat the illicit trade of conflict diamonds with the Kimberley Process. Sector Interest In this case, the diamond industry; countries with legitimate diamond businesses and retail operations; and nongovernment organizations collaborated as major sectors to end trade of conflict diamonds. The diamond industry’s main interest in the Kimberley Process was to develop a certification scheme that guaranteed customers that diamonds were conflict-free. Countries with legitimate diamond businesses and retail operations were concerned that economies would be affected and retail sales would decline. Nongovernment organizations called for an end to the violence and civil war. Collaborative Partnership for Problem Solving The major sectors in this case concerned with...
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...Conflict Diamonds and the Kimberly Process What this case is about was that ion the 2000’s, a common concern emerged among members of the diamond industry, the United Nations, several governments and Human Rights campaigners who all wished to end the trade in Conflict Diamonds which were gemstones that were being mined or stolen by rebels fighting internationally recognized governments. To end this, they embarked an unusual collaboration called the Kimberly Process. The Kimberly Process was a scheme for tracking diamonds all the way from the mine to the jewelry shop, so that consumers could be assured that the gems they were buying were conflict free. 1. Conflict Diamonds are diamonds that are illegally traded to fund conflicts. In recent times, conflicts in some of the poorest parts of Africa have often focused on rebels controlling their country’s natural resources and assets, for example, oil, wood, minerals and also diamonds. They are diamonds that had originated from areas controlled by forces or factions opposed to legitimate and internationally recognized governments, and are used to fund military action in opposition to those governments. Conflict diamonds came to the attention of the world media during the extremely brutal conflict in Sierra Leone in the 1990s. The groups that were benefited from the trade in conflict diamonds were the combatants, including the Revolutionary United Front. Diamonds played a key role in obtaining funds to provide these...
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...leads and dominates the diamond industry in diamond mining, diamond trading, and industrial diamond manufacturing. In 1871 a South African man named Cecil Rhodes created De Beers. Rhodes rented water pumps to miners then invested his profits by buying up small mining operations. In 2011 the De Beers Group sold their remaining stake to Anglo American for $5.1 billion in cash. (DeMarco, 2011). Before the sale the diamond company was owned by the Oppenheimer family. Now Anglo American own 85 percent of De Beers making them the primary stockholder while the Republic of Botswana owns the remaining 15 percent of the company. Mining diamonds involves a lot of factors that can effect a company’s external environment. In order for De Beers to operate it has to account for things such as: local and foreign governments, globalization and trade, the ethics of business and labor, the effect on the environment, the perception of society, and the importance of new technology. In the case of the De Beers Diamond Company the two most important factors to the organization’s external environment are globalization and trade, and the perception of society. Salient Stakeholders When producing a product as fragile such as diamonds, a company needs many factors to come in place. In actuality a diamond is just a shiny rock found in the earth. A lot of people play a major role in insuring the value of the diamond. Three groups that have important stakes in De Beer Diamond Company are the stockholders...
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...1. What are conflict diamonds? What groups benefited from the trade in conflict diamonds? What groups were hurt by it? As defined in the case study, conflict diamonds are gemstones that are mined or stolen by rebels fighting internationally recognized governments. Any of the anti-government/rebel forces/guerrilla troops/or other nonconformist groups within the areas of question or which could fall into this category or situation. The case study points out two groups who benefited the most under this circumstance; the Revolutionary United Front (RUF) (specific to the Sierra Leone region in West Africa) and the UNITA rebels (specific to the Angola region). These rebels inflicted physical pain on the villages which they took over in order to harvest and sell the diamonds. In their efforts to strong-arm villages, they terrorized men, women, and children by amputating their bodies. The mutilation count in the Sierra Leone region was estimated to be somewhere in the 20,000 count. Not only was immediate physical pain inflicted by these rebel organizations, but the money from diamond sales in these regions went to funding their anti-government and civil wars. This produced a continuous circle of effects. 2. What three sectors were concerned with the problem of conflict diamonds? What was the interest of each, and in what way did their interests converge? The (1-Business Sector) diamond industry, (2-Government Sector) the United Nations, several governments (no doubt those producing...
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...May 4, 2010 How do conflict diamonds fuel the conflict in regions they come from? From my impression of the films Blood Diamond and Lord of War, the illegal act of trading arms for diamonds seems like business as usual. It’s not until you look at, where the diamonds come from, how they are mined and who controls/owns the gems, that you begin to understand why these precious stones are called “Blood Diamonds”. Most diamonds on the market come from expensive mining operations run by large corporations, who drill into large bodies of volcanic rock containing diamond deposits, known as kimberlites. Sources like these are not easily accessible to anyone and in the case of Africa, “conflict diamonds come primarily from places where rivers have washed over kimberlites and spread their wealth down river in thick deposits of mud and gravel”. (stemming the flow) In west Africa, there are many well known regions which contain some of the world’s largest diamond deposits. INTRODUCTION The link between diamonds and armed conflict in Sierra Leone is obvious, and has been exposed, investigated, and deplored by humanitarians, journalists, politicians, and diamond industry leaders. Less obvious are the complex, entrenched relationships between exploitative systems of financial intermediation and resource management, poverty, and the spectacular, mysterious wealth of the diamond trade. Diamonds have facilitated, not caused, and armed conflict. Pre-war economic and social injustice...
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...helps to validate the “resource curse.” Blood Diamonds When thinking about diamonds, many people automatically think of love and happiness due to engagement rings and wedding bands and the commercials that continuously play on television. This is certainly not the case, and many people are missing this fact from this 81.4 billion dollar industry (Baker). Diamonds, especially in the Congo or Sierra Leone, are a symbol of conflict and war, and unhappiness. The United Nations defines conflict diamonds as diamonds that originate from areas controlled by forces or factions opposed to legitimate and international recognized governments, and used to fund military action in opposition to the governments (Armstrong). Conflict diamonds are more commonly known as blood diamonds...
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...this situation has on the relationship between countries. There is an increasing need for world order in the global community due to growing conflict both within and between nations and regions. The increased trade between countries has stimulated the growth of many world order issues such as the access to resources, the inequality in a nation’s distribution of income, crimes against humanity and the growing awareness of human rights globally have also led to an increased need for world order. The importance of world order in promoting peace and harmony can be seen in the dramatic growth and development of international law over the past 60 years. The international responses currently in place include are mainly enforced by the United Nations (UN) and are aimed at the maintenance of world order in the international community. There is an increasing need for World Order in contemporary society than ever before as a high level of interdependence between countries has resulted from the push for globalisation and free trade. This interaction between countries has instigated greater conflict in the world in the form of terrorism, civil unrest and conflict for access to the world’s shrinking resources. Access to resources has been a major source of conflict due to the world’s increasing consumption. An example of such as conflict is the chaos occurring in the Persian Gulf from 1980 over the access to oil reserves. Iraq has the world’s third largest oil reserves after...
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...adverse effect of diamonds on the people of Africa. It also addresses the real price of diamonds which it believes to be the lives of millions of Africans. Additionally, it examines the response from the United Nations and question if enough is being done to crack done on the sale of blood diamonds. The famous phrase “Diamonds are Forever” is known to most people all over the world. What most people do not know is where most of these diamonds are coming from and how they came to become perfect gestures of love and romance. Looking at a clear cut diamond ring, it is hard to imagine the possibility of thousands of innocent people being murdered, tortured, and forced to mine for these stones; unfortunately that is the case in Africa. Diamonds in West Africa have been used for the last 30 years to fund rebel groups and their desire to take control of their nations by violence and intimidation. In such conflicted regions of the world, diamonds lose their connotation of beauty and elegance and are stained with blood. In this paper, I will discuss the many ways in which “conflict diamond” has brought nothing but poverty, suffering and war to the West African people. I will further explain what world organizations such as the United Nation have done in order to counteract the adverse effects of the conflict diamond on the African community, and the extent to which such efforts have been successful. Conflict diamonds are diamonds illegally traded to fund conflict in war-torn...
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...Clarity on Blood Diamonds Diamonds are mined for a number of reasons. Some reasons may be for paying off certain debts, glamorous jewelry, or for trade. Blood diamonds, also classified as conflict diamonds, are diamonds mined in a war zone and sold for the funding of a rebellion or uprising. Conflict diamonds are also sold to fund civil wars or for the rise of a warlord. Conditions in diamond mining are not always honorable and they are completely horrific. Almost all of the diamond miner in Africa live in poverty, earning and average pay of less than a dollar a day. Also, child labor is overly common and their working conditions are very frequently hazardous. The connection of violence...
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...A selection of rough diamonds from Voorspoed Mine ACTION ETHICS Protecting THE INTEGRITY OF DIAMONDS 33 ETHICS OUR COMMITMENT TO MEETING THE highest ethical standards IS FOUNDED ON OUR aspiration TO LIVE UP TO THE unique qualities OF DIAMONDS. THE BEHAVIOUR OF OUR EMPLOYEES, THE ROBUSTNESS OF OUR COMPLIANCE SYSTEMS and our commitment to transparency maintain stakeholder confidence in our business and play a key role in upholding ‘diamond equity’. De Beers aims to meet or exceed all applicable statutory requirements, as well as international standards on ethical issues ranging from conflict diamonds to anti-corruption. We also work with our business partners to embed ethical standards throughout the diamond value chain. 34 Report to Society 2010 Ethics The ethical provenance of diamonds is an important element of both their financial and emotional value – what we call ‘diamond equity’. To ensure that the journey from mine to finger meets the highest ethical standards, we have a mandatory, third party assured, code of ethical business conduct – the Best Practice Principles Assurance Programme (BPPs) – that applies not only to our own operations, but also to our Sightholders, contractors and suppliers. HIGHLIGHTS • All diamonds sold by De Beers are 100% conflict free. Compliance with the Kimberley Process and System of Warranties for 2010 was verified by Société Générale de Surveillance (p38) To support ethical standards more broadly we work with sectoral initiatives...
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...became acculturated and lost their identity, land and traditional way of life. Sometimes the world needs things like this to happen, however the way the Europeans went about doing it was not right or fair at all, the benefits of imperialist policies in my opinion, did not out way the drawbacks. Residential schools resulted from imperialism, a form of historical globalization. European people wanted other people of the world to accept their culture, they created residential schools to assimilate the first nations into the European culture. The first nations were forbidden to speak their native languages and honor their traditional beliefs, if they did in most cases they were beaten or abused. In many of these schools children were sexually and emotionally abused. However some children benefitted from these schools in some cases the children actually had a good life and got a good education. Many years after the residential schools the government apologized and gave them a sum of money, this has not really solved the problem, we are still facing the issue today I think it will still be thought of and faced for many years to come. Imperialism did not have a good effect on the first nations peoples it created a tension between them and the European peoples that is still seen today Imperialism did not benefit the...
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...Antitrust September 17, 2009 Tonight’s Agenda Role Call Review of Last Week, Current Events Antitrust Case Study: DeBeers Wrap Up Review of Last Week “People of the same trade seldom meet together, even for merriment and division, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” -- Adam Smith “Perfectly Competitive Market” Consumers well-served. Receive goods at lowest price possible. Society able to choose among competing good with maximum efficiency. Firms that do not produce what consumers want at a fair price are quickly eliminated. Highly restrictive model applying stringent standards. Antitrust Perfect competition model is essentially static. Real world markets are extremely dynamic. Perfect competition model is unsuitable as a benchmark. Antitrust Laws Promote a competitive economy by prohibiting actions that restrain, or are likely to restrain, competition and by restricting the forms of market structure that are allowable. Limit the activities of firms that have legally obtained monopoly power. Intended to provide a general statutory framework to give the Justice Department, the FTC, and the courts wide discretion in interpreting and applying them. The Development of Antitrust Laws Trust was a device for pyramiding control over several operating companies. The Sherman Antitrust Act (1890)...
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...ACCT 4400 Case Set 1 Case Set 1 covers Ethics and Professionalism in Auditing, and consists of the following cases: Case 1-1: Accounting Scandal Case 1-2: Audit Dilemma Case 1-3: Independence Case 1-1: Accounting Scandal This case focuses on the Diamond Foods accounting scandal. To complete this assignment, you should first conduct research using the Internet to better understand Diamond Foods and its fraud. Second, answer the following questions. Questions: 1. What was the motivation for the Diamond Foods scandal? Be specific, simply stating “greed” is insufficient. 2. (a) In general, what is a conflict of interest? (b) What role did the board of directors at Diamond Foods play in creating conflicts of interest at the company? (c) How should an auditor have responded to the conflicts of interest at Diamond Foods? 3. (a) What are momentum payments? (b) What was the role of momentum payments in the Diamond Foods scandal? 4. How did Diamond Foods fund its aggressive growth strategy of multiple acquisitions during a short period of time? Case 1-2: Audit Dilemma Assume that you have just started as a staff auditor at a large accounting firm. For your first audit, you are assigned to E&K books, a public company. Your firm has been auditing this client for several years, and has always given E&K clean opinions. A senior, Ella, will lead fieldwork on the E&K audit. You are glad to be working with Ella because...
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...Report on Argyle Diamonds and the Diamond Industry 1 INTRODUCTION India was the only known source of diamonds before the eighteenth century when diamonds were discovered in Brazil. The modern diamond industry was born in 1867 when diamonds were discovered in the Kimberley region of South Africa. The De Beers mining company was formed and they controlled 80-90 per cent of the rough diamonds entering the diamond market. The De Beers share of the diamond market fell in the 1990’s when the Soviet Union moved to a free market economy as Russian diamond mining companies were selling their diamonds on the open market. The Central selling Organisation (CSO) controlled by De Beers is responsible for regulating the price of diamonds on the market and marketing a large percentage of the world’s diamonds. The CSO protected the dominance of the diamond cartel but this monopoly was challenged by Argyle Diamonds when they refused to renew their marketing contract with De Beers. Argyle has been characterised by low value coloured diamonds, however their highly sought after pink diamonds has successfully differentiated their products from other diamonds the in the market (Vinciullo, Annear and Disbury, Not dated). 1.1 AIM OF THE ASSIGNMENT The aim of the assignment is to research and analyse the diamond industry and to evaluate Argyle Diamonds’ strategic position in the diamond industry. 1.2 OBJECTIVES OF THE ASIGNMENT • To research and evaluate competition in the precious...
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...Case study De Beers- An Ethical Idealism “At De Beers there has always been a clear recognition that, while our primary purpose as a business shapes what it is that we do, it is how we work that defines who we are.” -Nicky Oppenheimer Executive Chairman, De Beers Introduction For generations, diamonds have been marketed as tokens of power and love. For some however, diamonds have a more utilitarian appeal. Easily concealed, immensely valuable and largely untraceable, stones from rebel-held mines have raised billions of dollars on world markets to finance revolution in Angola, Sierra Leone and the Democratic Republic of Congo (DRC). For years these "conflict diamonds" have encourage rebel leaders to arm and equip their armies in violation of UN weapons and financial sanctions. Diamond monopoly De Beers is notable for its monopolistic practices throughout the 20th century, whereby it used its dominant position to control the international diamond market. The company used several techniques to exercise this manipulation over the market: Firstly, it persuade independent producers to join its single channel monopoly, it flooded the market with diamonds similar to those of producers who refused to join the cartel, and lastly, it purchased and stockpiled diamonds produced by other manufacturers in order to price control through supply. In 2000, the De Beers forced to change the model, due to certain unavoidable factors such as the decision by producers in Russia,...
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