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ANNUAL REPORT 2011/2012 1
The Chairperson’s Statement 4
An Overview from the CEO 8
Corporate Governance 10
Board members 12
Mission Statement and Objectives 18
Performance Information
Compliance (Licensing) 20
Diamond Inspectorate 24
Precious Metals and Bene ciation 27
Diamond Exchange and Export Centre 32
Government Diamond Valuator 38
Kimberley Process Certi cation Scheme and Communication 46
Legal Services 53
Security Risk Management 54
Human Resources Management 55
Information Communication Technology 65
Finance 66
Internal Audit 67
Financial Contents
Accounting Authority’s Responsibility and Approval 70
Report of the Audit Committee 71
Report of the Auditor General 73
Annual Financial Statements 76
TABLE OF CONTENTS
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR4
Almost ve years have already passed since our Board took over at the helm of the South African Diamond and Precious Metals Regulator (Regulator). I am pleased to present the last annual report of our term to the shareholders and stakeholders, for the nancial year ended 31 March 2012.
It has been a hectic and eventful ve-year term for the Board. We started immediately after the promulgation of the Diamond Amendment Act, 2005 and the Precious Metals Act, 2005. The Regulator was almost a year old when these laws presented the industry with great challenges, resulting in the hosting of the Diamond and Precious Metals Indaba in Johannesburg in 2008. The indaba aimed to re ect on the status of the industry and to address contentious issues raised by the stakeholders. During the past ve years the Regulator also had its fair
share of challenges relating speci cally to the interpretation and constitutionality of the Diamond Act, as amended The Regulator was consequently hauled to courts of law regarding certain amendments to the Diamond Act, 1986 as amended. It is worth noting that our interpretations were in line with the judgments handed down in most cases and we are grati ed that the Regulator has maintained its integrity and respect in the diamond industry and precious metals industry at large. However, much needs to be done to ne-tune these laws in order to close the identi ed gaps.
Despite these challenges, the implementation of the new legislation was very successful. We experienced an increase in diamond and precious metals licences issued to the previously disadvantaged individuals entering into these industries. However, the Board was not happy with progress made on access to raw materials, training and jobs created and had to assign to Transformation Committee the speci c duty to look into these areas. The outcome of this strategy, we hope, will be realized soon.
Globally the diamond industry experienced periods during which prices of rough diamonds were increasing, underpinned by market speculation but later followed by a dramatic slow-down as the credit crunch and the uncertainty in the international banking system began to impact negatively on the diamond industry. In response to the economic crisis of 2008, major diamond miners cut their output due to a drop in demand. However, the recovery came faster than expected, straining the market and pushing prices up. As a result, excessive pressure was being applied to the rough diamond market because supply problems with polished stones have led cutters and polishers to buy.
The people of India and China have been responsible for this demand, as these two countries have seen market growth of about 25% while they contributed 20% of the global demand over the past year. Both polished and rough diamonds were moving well in these countries.
THE CHAIRPERSON’S STATEMENT
ANNUAL REPORT 2011/2012 5
Last year we were disturbed to hear the sad news that the Oppenheimer family is exiting the diamond industry. They have been in this industry for a long time and it is unimaginable how it will move on without them. However, we were also comforted that their long-time partners, Anglo American’s, commitment to the company. We hope they will take De Beers to even greater heights. We wish the Oppenheimers well in their new endeavours; they have made our country proud in the global diamond industry.
On the precious metals front, it was a tale of two very different metals; one a store of wealth (gold) and the other a predominantly industrial metal (platinum). Gold set a new record high of over US$1 900 per ounce in August 2011. High prices were driven by currency concerns, in ation pressures, economic worries and the concomitant growth in investor demand. Interestingly, for most of the second half of 2011, the gold price was higher than the platinum price. The last time the gold price was consistently higher than the platinum price was a decade ago in the 1991/92 period. The platinum-gold ratio was at times as low as 0.9 in 2011, in contrasting with it often trading at more than twice the price of gold in the 1998 – 2008 period.
Platinum suffered when the nancial crisis struck in late 2008, while demand in 2011 was affected mainly by the Eurozone crisis. The many disruptions in supply were mainly due to safety-related stoppages and labour problems in South Africa. One would have expected the platinum price to spike, if it were not for the market surplus. This is a situation that is expected to continue in 2012. Gold, on the other hand, bene tted from the worries and anxieties of the economic problems and currency concerns in Europe, and often rallied on talks of further quantitative easing. It may be a while yet before it loses its current status as the “more precious” metal. These dynamics have affected the downstream industry in South Africa as well. Most notable were trends such as increasing scrap recycling, higher investment product fabrication (coins and minted bars) and lower jewelry fabrication.
New Board members Mr. P Arendse and Ms. N Mokoena joined as representatives of the South African Police Services.
I thank the Minister, Susan Shabangu, as well as the Deputy Minister, Godfrey Oliphant for providing us an opportunity to serve at their pleasure on the Board. It has been a wonderful and rewarding experience for us. I also wish to express my gratitude to the Board, management and staff members for their cheerful and untiring efforts in servicing the industry and our stakeholders.
S. Phiri
Chairman
THE CHAIRPERSON’S STATEMENT
S. Phihhhh ri
C
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR8
In the year under review, the SADPMR has been very aggressive in ensuring compliance with diamond and precious metals legislation. Compliance inspections targets, particularly with the diamond licensees, have been exceeded. This was due to the the Regulator having to assess the compliance status of existing licensees. A series of workshops were held throughout the country to inform and educate the industry about the role that the diamond and precious metal industry can play in job creation.
Pursuant to its objectives to promote bene ciation, the SADPMR moved to new premises at the end of last year. These premises are spacious, modern and have adequate security for business. In the new premises, space allocated to the Diamond Exchange and Export Centre (DEEC) has been doubled to accommodate more clients and to render ef cient services to the industry.
During this year the Government Diamond Valuator has been very ef cient and effective in assisting the State Diamond Trader to purchase 10% of goods offered by diamond producers. No disputes were experienced during the veri cation stages and this has improved access and availably of diamonds to bene ciators.
On the international front, the Kimberley Process (KP) nominated South Africa to serve as deputy chair for 2012. This means that South Africa will chair the KP in 2013. In 2013 the KP Certi cation Scheme (KPCS) will observe its tenth anniversary, making South Africa the rst country to chair the KP for the second time.
In its forthcoming plan the Regulator will focus in forstering and promoting additional supply of rough diamonds from various sources. We shall further facilitate the supply of raw materials, skills and entrepreneurial development, as well as access to markets for small players. This intervention will promote growth in bene ciation, create new jobs and sustain existing jobs in the diamond and precious metals industries.
GL Rapoo
Chief Executive Of cer
AN OVERVIEW FROM THE CEO
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR10
CHIEF
EXEC
UTIVE
OF
FICER
INTE
RNAL
AUD
IT
LEGA
L AND
CO
MPLIA
NCE
LEGA
LSE
RVIC
ESLIC
ENSIN
GDI
AMON
DS
GOVE
RNME
NTDI
AMON
DVA
LUAT
ION
PREC
IOUS
META
LS &
BENE
FICIAT
ION
REGI
ONAL
OFF
ICES
FINAN
CIAL
MANA
GEME
NTMA
NAGE
MENT
MANA
GEME
NTOP
ERAT
IONS
MANA
GEME
NTHU
MAN
RESO
URCE
MANA
GEME
NT
INFO
RMAT
ION
&CO
MMUN
ICAT
ION
DIAM
ONDS
AND
PREC
IOUS
META
LSFIN
ANCE
SERV
ICES
MANA
GEME
NTCO
RPOR
ATE
SERV
ICES
CERT
IFICA
TION
SCHE
ME/C
OMMU
NICA
TIONS
DIAM
OND
EXCH
ANGE
&EX
PORT
CEN
TRE
CORPORATE STRUCTURE OF THE SADPMR
ANNUAL REPORT 2011/2012 13
COMPOSITION
1 Messrs S PhiriChairperson 2 RA Manoko
Deputy Chairperson 3 GL RapooCEO 4 P Bersiks
Member
5 R Baxter* Member 6 L Delport
Member 7 L GroblerMember 8 A Luhlabo
Member
9 E Blom Member 10 K Rana
Member 11 Dr F PetersonMember 12 T Nell
Member
13 R PaolaMember 14 Ms N Zikalala
Member 15 Ms N Mokoena**Member
* * Appointed w.e.f 06 May 2011
* Resigned w.e.f. 01 October 2011
Mr E Majadibodu and Mr P Arendse were absent
12 13 14 15
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR14
BOARD MEETING
Name 01/04/11 04/05/11 27/05/11 10/06/11 27/07/11 27/09/11 25/10/11 31/01/12 24/02/12# 20/03/12
S Phiri Yes Yes Yes Yes Yes Yes No Yes No Yes
RA Manoko Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
GL Rapoo Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
P Bersiks Yes Yes Yes Yes Yes No Yes Yes Yes Yes
L Delport Yes Yes Yes Yes Yes No Yes Yes Yes No
E Majadibodu Yes Yes No No Yes Yes Yes Yes No No
L Grobler Yes Yes Yes No Yes Yes Yes Yes No Yes
A Luhlabo Yes Yes Yes Yes Yes No Yes Yes Yes Yes
E Blom No Yes Yes Yes Yes No Yes Yes No Yes
K Rana Yes Yes Yes Yes Yes Yes Yes Yes No Yes
T Nell Yes Yes No No Yes No No Yes Yes Yes
R Paola Yes Yes Yes Yes Yes Yes Yes Yes No Yes
N Zikalala Yes Yes Yes No Yes No Yes Yes No No
F Peterson No No Yes No Yes No No Yes No Yes
P Arendse** No No No No No Yes Yes No Yes No
N Mokoena** No No No No No Yes Yes No No Yes
R Baxter* Yes No No Yes Yes No No No No No
* * Appointed with effect from 06 May 2011
* Resigned with effect from 01/10/2011
# Director Development: Workshop on Public Finance Management Act
## On the 28 and 29th February 2012, the following members of the Board ( Merss RA Manoko, P Bersiks and Delport) briefed the Parliamentary Portfolio Committee on the Annual Report of 2010/2011 nancial year.
MEETINGS AND ATTENDANCE
ANNUAL REPORT 2011/2012 15
MEETING ATTENDANCE
The Executive Committee: chaired by Mr. S PhiriMembers: Messrs. RA Manoko, GL Rapoo, R Baxter, P Bersiks and L Delport
Names 27/05/2011 25/10/11 31/01/12
S Phiri Yes No Yes
RA Manoko Yes Yes Yes
GL Rapoo Yes Yes Yes
R Baxter Yes No No
P Bersiks Yes Yes No
L Delport Yes No Yes
N Zikalala Yes No Yes
E Blom* No No Yes
*Appointed Chairperson of the Technical committee with effect from 01 October 2011
Audit and Risk Committee: chaired by Mr. P BersiksMembers: Messrs. E Blom, K Rana, GL Rapoo, M Ntumba*
Names 20/05/11 29/07/11 20/10/11 15/03/12
P Bersiks Yes Yes Yes Yes
E Blom No Yes No Yes
K Rana Yes No Yes Yes
GL Rapoo No Yes Yes Yes
M Ntumba* Yes No Yes Yes
R Paola Yes No Yes Yes
*Independent Auditor
BOARD COMMITTEES
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR16
Finance Committee: chaired by Mr. L DelportMembers: A Luhlabo, P Bersiks, E Majadibodu, R Paola, GL Rapoo
Names 19/04/11 20/05/11 21/07/11 19/10/11 26/10/11 18/01/12L Delport Yes Yes Yes Yes Yes YesA Luhlabo Yes Yes Yes Yes No YesP Bersiks Yes Yes Yes Yes Yes YesE Majadibodu No No No Yes No YesR Paola No Yes Yes No No YesGL Rapoo Yes Yes Yes Yes Yes Yes
Licensing Committee: chaired by Mr. RA ManokoMembers: Ms N Zikalala, A Luhlabo, K Rana, L Delport and GL Rapoo
Name 08/04/11 20/07/11 26/07/11 13/10/11 13/01/12 14/03/12RA Manoko Yes Yes Yes Yes Yes YesN Zikalala Yes Yes No No Yes No A Luhlabo Yes Yes Yes Yes Yes No K Rana No Yes Yes Yes No YesL Delport No Yes No No No No GL Rapoo Yes Yes No Yes Yes No
Technical Committee: chaired by Mr. R BaxterMembers: Dr F Peterson, Messrs E Blom, L Grobler and GL Rapoo
Names 07/04/11 15/07/11 12/10/11 17/01/12R Baxter Yes Yes No NoF Peterson No Yes No YesE Blom Yes Yes Yes YesL Grobler Yes Yes Yes YesL Rapoo Yes Yes Yes Yes
Ethics Committee chaired By: Mr. S PhiriMembers: R Manoko, K Rana and GL Rapoo
Names 21/07/11 18/01/12S Phiri Yes YesRA Manoko Yes YesK Rana Yes YesL Rapoo Yes Yes
BOARD COMMITTEES
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR18
VISION
Regulating for business excellence
MISSION
We render regulatory services by ensuring:
• compliance with legislation• skills transfer• business development support• equitable access to resources • local bene ciation
VALUES
• Integrity • Respect • Time management • Accuracy• Consistency
MANDATE
The South African Diamond and Precious Metals Regulator (SADPMR) was established by the Diamonds Act, 1986 as amended to administer the following legislation:
• Diamonds Act, 1986 (as amended) • Precious Metals Act, 2005 • Diamond Export Levy Act, 2007 in collaboration with South African Revenue Services (SARS)
KEY STRATEGIC OBJECTIVES
• To ensure competitiveness, sustainable development and job creation in the diamond and precious metals industry
• To ensure effective transformation of the diamond and precious metals sectors• To ensure equitable access to resources for local bene ciation• To ensure compliance with the legislative requirements• To improve organisational capacity for maximum execution brilliance
MISSION STATEMENT & OBJECTIVES
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR20
The
follo
win
g st
rate
gic
obje
ctiv
es a
re k
ey to
the
licen
sing
pro
cess
of t
he R
egul
ator
, viz
to e
nsur
e:
• co
mpe
titiv
enes
s, s
usta
inab
le g
row
th a
nd jo
b cr
eatio
n in
the
diam
ond
and
prec
ious
met
als
indu
strie
s;•
effe
ctiv
e tra
nsfo
rmat
ion
of th
e di
amon
d an
d pr
ecio
us m
etal
s se
ctor
s;•
com
plia
nce
with
legi
slat
ive
requ
irem
ents
.
The
divi
sion
is re
spon
sibl
e fo
r rec
eivi
ng a
nd p
roce
ssin
g al
l lice
nce
appl
icat
ions
for t
rade
in u
npol
ishe
d di
amon
ds, r
esea
rch
and
the
bene
cia
tion
of u
npol
ishe
d di
amon
ds, a
nd fo
r pre
ciou
s m
etal
s be
ne c
iatio
n lic
ence
s an
d pe
rmits
(gol
d an
d pl
atin
um g
roup
met
als)
, re
nin
g, re
sear
ch a
nd
jew
eler
y-m
akin
g, a
nd p
reci
ous
met
als
impo
rt pe
rmits
and
exp
ort a
utho
risat
ion.
The
divi
sion
furth
er c
ondu
cts
com
plia
nce
audi
ts o
n lic
ense
es to
mon
itor
whe
ther
they
are
com
plyi
ng w
ith th
e un
derta
king
s m
ade
in th
eir
busi
ness
pla
ns.
A nu
mbe
r of
wor
ksho
ps a
re c
ondu
cted
dur
ing
the
cour
se o
f a r
epor
ting
perio
d to
sha
re in
form
atio
n w
ith b
oth
the
exis
ting
clie
nt b
ase
and
pote
ntia
l new
ent
rant
s in
ord
er to
ens
ure
that
gov
ernm
ent’s
key
prio
ritie
s ar
e ac
hiev
ed in
term
s of
BE
E, j
ob c
reat
ion
and
skill
s de
velo
pmen
t.
PER
FOR
MA
NC
E IN
FOR
MAT
ION
: CO
MPL
IAN
CE
(LIC
ENSI
NG
)
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Ensu
re
comp
etitiv
enes
s, su
staina
ble gr
owth
and j
ob cr
eatio
n in t
he
diamo
nd an
d pre
cious
me
tals i
ndus
tries
Facil
itate
and i
ssue
be
ne ci
ation
licen
ces
Numb
er of
licen
ces
issue
d20
bene
ciati
on
licen
ces i
ssue
dAc
hieve
d. 17
9 be
ne ci
ation
lic
ence
s iss
ued o
f whic
h 14 w
ere f
or
diamo
nd be
ne ci
ation
and 1
0 wer
e for
prec
ious m
etals
bene
ciati
on
Ensu
re ef
fectiv
e tra
nsfor
matio
n of th
e dia
mond
and p
recio
us
metal
s sec
tors
Proc
ess a
nd is
sue
licen
ces i
n line
with
the
BBSE
E Mi
ning C
harte
r
Numb
er of
appli
catio
ns
gran
ted30
HDS
A’s lic
ense
dAc
hieve
d. 18
4 lice
nces
issu
ed to
10
0% bl
ack-o
wned
comp
anies
/ap
plica
nts
Ensu
re co
mplia
nce w
ith
legisl
ative
requ
ireme
ntsCo
nduc
t com
plian
ce
inspe
ction
/audit
s on
licen
sees
Numb
er of
audit
ins
pecti
ons c
ondu
cted
100
Achie
ved.
217 A
udits
cond
ucted
COMPLIANCE (LICENSING)
ANNUAL REPORT 2011/2012 21
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Cond
uct w
orks
hops
to
infor
m an
d edu
cate
the
indus
try
Numb
er of
wor
ksho
ps
cond
ucted
5Ac
hieve
d. 6 W
orks
hops
cond
ucted
We c
ondu
cted o
ne ad
dition
al wo
rksho
p for
stud
ents
grad
uatin
g fro
m dia
mond
train
ing sc
hools
in th
e Je
wel C
ity pr
ecinc
t.
A fur
ther t
hree
wor
ksho
ps w
ere
cond
ucted
in M
arch
2012
with
our
diamo
nd se
ctor li
cens
ees o
n billi
ng
issue
s and
licen
ce re
newa
ls
DIA
MO
ND
LIC
ENSI
NG
Sin
ce th
e D
iam
onds
Am
endm
ent A
ct c
ame
into
ope
ratio
n on
1 J
uly
2007
, a to
tal o
f 2 8
14 li
cenc
e ap
plic
atio
ns w
ere
rece
ived
and
pro
cess
ed,
resu
lting
in 2
438
lice
nces
issu
ed to
dat
e.
Dia
mon
d lic
ensi
ng s
tatis
tics
for t
he p
erio
d un
der r
evie
w.
Lice
nce T
ype
Appl
icatio
ns R
eceiv
edLi
cenc
es Is
sued
Diam
ond D
ealer
112
174
Diam
ond B
ene
ciatio
n7
14
Diam
ond T
radin
g Hou
se1
1
Diam
ond R
esea
rch1
3
Temp
orar
y Buy
er P
ermi
t0
0
Certi
cate
to po
sses
s unp
olish
ed di
amon
ds2
1
Autho
rised
Rep
Cer
ti ca
te13
112
1
Expo
rt Pe
rmit t
o Ben
e cia
tors
3134
TOTA
L28
534
8
Lice
nces
issu
ed a
re ro
lled
over
from
the
prev
ious
repo
rting
per
iod.
COMPLIANCE (LICENSING)
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR22
Chart 1. Diamond Licensing 2011/2012
During the period under review, a total of 348 diamond applications were nalised and licences issued. The majority of applications received and issued were for diamond dealers’ licences, followed by Authorised Rep certi cates.
PRECIOUS METALS LICENSING
Since the implementation of the Precious Metals Act on 1 July 2007, a total number of 1 603 applications were received and processed, with 1 177 licences issued to date.
Precious Metals (PM) licensing statistics for the period under review
Licence Type Applications Received Licences Issued
Re ning Licence 6 24
Jewelers Permit 89 131
Precious Metals Bene ciation 10 10
Export Approval 9 3
PM Import Permit 10 8
PM Certi cate 4 1
PM Special Permit 5 8
TOTAL 133 185
COMPLIANCE (LICENSING)
ANNUAL REPORT 2011/2012 23
Chart 2. Precious Metals 2011/2012
Licences issued are rolled over from the previous reporting period
The above precious metals application chart indicates that the Regulator continues to receive applications for jewelery permits at a steady pace, mainly from new entrants. Applications rolled over from the previous reporting period were nalised and a total of 131 jewellers permits were issued in this reporting period.
HIGHLIGHTS
The twenty-four (24) Diamond and Precious Metals Bene ciation licences issued during this period created 146 jobs.
The conducting of workshops is leading to increased awareness and interest by HDSA’s to enter these industry sectors. All ve ( 5) regional workshops were well attended.
Three (3) additional workshops were conducted to address J-register billing and issues relating to licence renewals which will commence during 2012
A further workshop, focusing on students graduating from training institutions in the Jewel City precinct, was conducted to provide them – as prospective new entrants – with information on licence application requirements.
COMPLIANCE (LICENSING)
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR24
INSPECTIONS
Section 80(1) of the Diamonds Act 56 of 1986 as emended provides for the appointment of Diamond Inspectors. Various inspections are conducted by Diamond Inspectors for the following reasons:
1. when a new application is lodged and after the permit/licence is issued;
2. to approve the suitability of the business premises for the type of permit/licence applied for and to verify the address where the activities will take place;
3. to check if the activities are still in accordance to the terms and conditions of the permit/licence.
The following checks are done during inspection:
• verify the name of the company and the address;• check if the premises are shared with another licensee/permit holder;• check if the premises have a safe storage;• check if premises are controlled and monitored for entry and exit; • check if machines and equipment for the type of licence applied for are suitable;• con rm if transaction registers are kept and submitted to the Regulator for speci ed periods;• check if there are diamonds on the premises. A new applicant must not be in possession of
diamonds before a permit/licence is issued.
DIAMOND REGISTERS
In terms of Section 57 of the Diamond Act 1986 as emended every producer, manufacturer of synthetic diamonds, dealer, cutter or toolmaker shall keep or cause to be kept the prescribed register, in which shall be entered the prescribed particulars in respect of unpolished diamonds.
Regulation 13(iii) of the regulations promulgated in terms of the Diamonds Act further requires that licensees, including those which are inactive, keep Form J registers and forward to the Regulator a true copy of such register within seven days after the end of every month.
DIAMOND INSPECTORATE
ANNUAL REPORT 2011/2012 25
These registers detail their production, buying and selling of diamond stocks.
i. Form J(i) : Diamond Producers
ii. Form J(ii) : Diamond Dealers Licence
iii. Form J(iii) : Diamond Bene ciation Licence
iv. Form J(iv) : Diamond Trading House
v. Form J(v) : Diamond Research
The submissions of J-Registers as per the relevant legislative requirements are imperative for statistical purposes, to enable the Regulator to collate data on the country’s production, trade and bene ciation levels. Most importantly, the information on the J-Registers provide for the audit-trail of unpolished diamonds, a requirement of the Kimberley Process Certi cation Scheme.
Penalties for non-submission of registers
Any person who fails to comply with or produce the register or proper books of accounts required to be kept by him or her in terms of the Diamonds Act is guilty of an offence and liable on conviction to a ne. The registers are available for purchase at the SADPMR of ces.
A BREAKDOWN OF THE INSPECTIONS DONE BY LICENCE TYPE
Licence Type Number of Inspections
Dealing (New) 199
Bene ciation (New) 26
Trading Houses (New) 2
Research (New) 2
Dealing (Follow-up) 219
Bene ciation (Follow-up) 137
Trading Houses (Follow up) 59
Research (Follow-up) 7
Total 651
The table above shows that most of the inspections were conducted on the follow-up of existing licences. These inspections included hand delivering statements of account for J-Register penalties. Positive results were realised in terms of revenue collection. During the period December 2011 to March 2012, the Regulator managed to collect R88 500 in register penalties alone.
DIAMOND INSPECTORATE
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR26
PER
FOR
MA
NC
E IN
FOR
MAT
ION
: DIA
MO
ND
INSP
ECTO
RAT
E
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Ensu
re co
mplia
nce w
ith
legisl
ative
requ
ireme
ntsCo
nduc
t insp
ectio
ns
on al
l diam
ond t
radin
g ho
uses
Numb
er of
insp
ectio
ns
cond
ucted
50Ac
hieve
d. 59
insp
ectio
ns co
nduc
ted
Cond
uct in
spec
tions
on
new
appli
cants
and
exist
ing lic
ence
holde
rs
Numb
er of
insp
ectio
ns
cond
ucted
100%
new
appli
cants
100 e
xistin
g lice
nce
holde
rs
Achie
ved.
100%
= 23
0 ins
pecti
ons
on ne
w ap
plica
tions
cond
ucted
Achie
ved.
356 f
ollow
up in
spec
tions
co
nduc
ted
Regis
ter al
l diam
ond
prod
ucer
sNu
mber
of pr
oduc
ers
regis
tered
100%
(122
mini
ng rig
hts
issue
d)
Achie
ved.
125 r
egist
ratio
ns
Monit
or th
e sub
miss
ion
of J-R
egist
ers
Timeo
us su
bmiss
ion of
re
gister
s10
0%Ac
hieve
d. 10
0% J
-regis
ter
subm
ission
mon
itore
d -14
160
Cond
uct w
orks
hops
to
infor
m an
d edu
cate
the
indus
try
Numb
er of
wor
ksho
p co
nduc
ted5
Achie
ved.
8 wor
ksho
ps co
nduc
ted
Cond
uct in
spec
tion o
n im
port
and e
xpor
ts of
diamo
nds (
airpo
rts)
Numb
er of
insp
ectio
ns
cond
ucted
100 %
of al
l impo
rts
and e
xpor
ts of
diamo
nds
Achie
ved.
100%
of in
spec
tion
requ
ests
were
cond
ucted
=7
DIAMOND INSPECTORATE
ANNUAL REPORT 2011/2012 27
The Precious Metals & Bene ciation Division is composed of two sub-divisions:
1. Precious Metals Inspectorate: This sub-division ensures compliance with the Precious Metals Act, and has two main functions: (i) conducting inspections relating to precious metals licences and applications for such licences, and (ii) monitoring trade transactions through prescribed registers and information submission forms;
2. Bene ciation: The main function of this sub-division is to implement government policies and legislation relating to bene ciation of precious metals and diamonds.
PRECIOUS METALS INSPECTIONS
A total of 473 inspections were conducted during the period April 2011 to March 2012. These comprise of 159 new business premises inspections and 314 follow-up inspections. A new premises inspection is conducted to approve the suitability of the business premises for the type of permit/licence applied for and to verify the address where the activities will take place, whereas a follow-up inspection is conducted to check if the activities are still in accordance with the terms and conditions of the permit/licence issued to the holder.
The aim of inspecting premises is to monitor compliance by the permit/licence holders, as stated in the Precious Metals Act and Regulations.
FIGURE 1.1: The number of inspections conducted on precious metals licence/permit holders and applicants
Month
PRECIOUS METALS AND BENEFICATION
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR28
TABLE 1.1: A breakdown of the inspections done by licence/permit type
Licence/Permit Type Number of Inspections for 2011/12 Number of Inspections for 2010/11
Re ning 16 27
Bene ciation 6 49
Jewelers 132 357
Special Permit 5 9
Certi cate 0 0
Bene ciation (Follow-up) 32 24
Jewelers (Follow-up) 271 252
Re ning (Follow-up) 11 7
Total 473 725
Table 1.1 represents a breakdown of the inspections conducted by licence/permit type and shows that most of the inspections were conducted on the follow-up premises inspections (especially Jeweler’s permit holders), as they comprise the majority of permit holders. Less new inspections were conducted most of which these were of Jewelers changing premises and a few new applicants.
Fewer inspections were conducted in this nancial year compared to the previous year, due to the decline in new applications.
REGISTER OF TRANSACTIONS
Every holder of a licence who deposits for safe-keeping, receives, dispatches or otherwise disposes of unwrought or semi-fabricated precious metal must keep a true and correct register in the prescribed format and for the prescribed period of all such precious metal deposited, received, dispatched or otherwise disposed of by him or her. A prescribed format of register needs to be submitted on a speci ed period (quarterly, bi-annually or annually) to the Regulator.
Register submissions remain a challenge because of the different submission periods for licence holders. Non-submission of registers is currently being followed-up and warning letters were sent to the defaulters.
PRECIOUS METALS AND BENEFICATION
ANNUAL REPORT 2011/2012 29
PER
FOR
MA
NC
E IN
FOR
MAT
ION
: PR
ECIO
US
MET
ALS
INSP
ECTO
RAT
E
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Ensu
re co
mplia
nce w
ith
legisl
ative
requ
ireme
ntsCo
nduc
t insp
ectio
ns
on ne
w an
d exis
ting
busin
ess p
remi
ses
Numb
er of
insp
ectio
n co
nduc
ted10
0% ne
w ap
plica
nts
300 e
xistin
g
Not A
chiev
ed, 1
59 (9
2%)in
spec
tions
co
nduc
ted
Achie
ved,
314 i
nspe
ction
s co
nduc
ted
Some
appli
cants
wer
e not
avail
able
for in
spec
tions
. Ava
ilabil
ity of
ap
plica
nts w
ill be
con
rmed
befor
e ins
pecti
ons a
re co
nduc
ted
Cond
uct in
spec
tion o
n im
ports
and e
xpor
ts of
prec
ious m
etals
(airp
orts)
Numb
er of
insp
ectio
ns
cond
ucted
100 %
of al
l impo
rt an
d ex
ports
of pr
eciou
s me
tals
Not A
chiev
edAc
cess
to th
e airp
ort fa
cilitie
s was
pr
ohibi
ted be
caus
e of h
igh se
curity
an
d high
insu
ranc
e pre
mium
s. Ins
pecti
ons w
ill be
cond
ucted
on th
e pr
emise
s of th
e clie
ntsMo
nitor
the s
ubmi
ssion
of
PM R
egist
ers
Numb
er of
subm
ission
pe
r ann
um10
0%No
t Ach
ieved
, 638
/1 82
1 (35
%)
subm
ission
of P
M re
gister
sTh
e diffe
rent
nanc
ial ye
ars f
or th
e jew
elers
was a
cons
traint
. Lice
ncee
s wi
ll be c
ompe
lled t
o sub
mit b
efore
the
end o
f the
nanc
ial ye
ar
Regis
ter al
l pre
cious
me
tals p
rodu
cers
Numb
er of
prod
ucer
s re
gister
ed10
0%No
t Ach
ieved
, 61/8
8 = 69
%
prod
ucer
s reg
ister
edCo
mplex
owne
rship
struc
ture o
f co
mpan
ies an
d mine
s tha
t are
do
rman
t or u
nder
liquid
ation
could
no
t be r
egist
ered
. Com
panie
s tha
t ha
ve no
t reg
ister
ed w
ith S
ADPM
R wi
ll be f
ollow
ed up
in 20
12
Facil
itate
subm
ission
of
prec
ious m
etals
samp
les to
the S
APS
Fore
nsic
Lab
Numb
er of
prod
ucer
s su
bmitte
d to t
he
Fore
nsic
Lab
40%
(num
ber o
f pr
oduc
ers)
Ach
ieved
, 32/6
1 = 52
% p
rodu
cers
subm
itted s
ample
s to t
he F
oren
sic
Lab
Cond
uct w
orks
hops
to
infor
m an
d ed
ucate
the
indu
stry
Numb
er of
wor
ksho
ps
cond
ucted
5Ac
hieve
d, 5
works
hops
cond
ucted
PRECIOUS METALS AND BENEFICATION
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR30
BENEFICIATION
During the period under review, diamond bene ciators purchased a conservatively-estimated 230 000 carats of rough diamonds (3.2% of South Africa’s mine production) of which an estimated 200 000 carats (90%) were subjected to cutting and polishing.
SADPMR estimates South Africa’s total gold fabrication (bene ciation) in 2011 at some 20 tons, moderately down from the 22 tons fabricated in 2010.
Platinum-group metal (PGM) fabrication (bene ciation) is dominated by the fabrication of catalytic converters. SADPMR estimates PGM fabrication at some 32 tons in 2011.
PRECIOUS METALS AND BENEFICATION
ANNUAL REPORT 2011/2012 31
PER
FOR
MA
NC
E IN
FOR
MAT
ION
: BEN
EFIC
IATI
ON
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Co
nstra
ints
and
prop
osed
re
med
ies
Ensu
re
comp
etitiv
enes
s, su
staina
ble
deve
lopme
nt an
d job
cre
ation
in th
e diam
ond
and p
recio
us m
etals
indus
tries
Facil
itate
busin
ess
deve
lopme
nt in
diamo
nd an
d pre
cious
me
tals b
ene
ciatio
n
Numb
er of
Ente
rpris
es
create
d5
Not A
chiev
ed.
No E
nterp
rises
crea
ted
The m
ajor c
onstr
aint is
acce
ss
to fun
ding,
and i
n the
case
of
diamo
nds,
the in
abilit
y to s
ecur
e a
roug
h diam
ond s
upply
. Reg
ulator
to
facilit
ate so
urce
s of fu
nding
and
supp
ly of
diamo
nds f
rom
prod
ucer
s
Impr
ove o
rgan
isatio
nal
capa
city f
or m
axim
um
exec
ution
brilli
ance
Comp
ile a
prec
ious
metal
supp
lier
datab
ase f
or
bene
ciato
rs
Comp
ile pr
eciou
s me
tals t
rade
hand
book
Prec
ious M
etal s
uppli
er
datab
ase
Trad
e Han
dboo
k
1 1
Achie
ved
1 Pre
cious
Meta
l sup
plier
datab
ase
create
d
Achie
ved
1 Pre
cious
Meta
l trad
e han
dboo
k co
mplet
ed
Prov
ide te
chnic
al ins
ight, a
dvice
and
rese
arch
on di
amon
ds
and p
recio
us m
etals
Repo
rts on
tech
nical
issue
s ide
nti ed
Quar
terly
repo
rts
Achie
ved
1. F
our q
uarte
rly re
ports
to th
e Te
chnic
al Co
mmitte
e com
pleted
in
the pe
riod.
2. A
dvise
d on m
inted
bar, i
mpor
t pe
rmit a
nd ex
port
appr
oval
appli
catio
ns3.
Thr
ee pr
esen
tation
s give
n at
confe
renc
es an
d wor
ksho
ps.
Supp
ort M
INTE
K Di
amon
d Pro
vena
nce
Lab w
ith te
chnic
al ex
pertis
e.
Quar
terly
repo
rtQu
arter
ly re
ports
Achie
ved,
Four
quar
terly
repo
rts
comp
leted
in th
e yea
r and
tech
nical
expe
rtise p
rovid
ed to
MIN
TEK
as
and w
hen r
eque
sted.
PRECIOUS METALS AND BENEFICATION
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR32
The
Dia
mon
d E
xcha
nge
and
Exp
ort C
entre
(DE
EC
) was
est
ablis
hed
in te
rms
of s
ectio
n 59
(b) o
f the
Dia
mon
d A
ct a
nd h
as b
een
in o
pera
tion
sinc
e 14
Jan
uary
200
8. It
s co
re fu
nctio
ns a
re to
faci
litat
e th
e bu
ying
, sel
ling,
exp
ortin
g an
d im
porti
ng o
f dia
mon
ds.
The
DE
EC
is a
sec
ure
and
cont
rolle
d en
viro
nmen
t whe
re d
iam
onds
are
offe
red
on te
nder
to th
e di
amon
d lic
ence
-hol
ders
. It p
lays
a v
ital r
ole
in e
nsur
ing
that
unp
olis
hed
diam
ond
tend
ers
are
faci
litat
ed fa
irly
to th
e lo
cal m
arke
t.
PER
FOR
MA
NC
E IN
FOR
MAT
ION
: DIA
MO
ND
EXC
HA
NG
E A
ND
EXP
OR
T C
ENTR
E (D
EEC
)
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Ensu
re eq
uitab
le ac
cess
to re
sour
ces
for lo
cal b
ene
ciatio
n
Emba
rk on
a ma
rketin
g stra
tegy t
o inc
reas
e clie
nt ba
se
Numb
er of
clien
ts1 0
00No
t Ach
ieved
Th
e obje
ctive
was
linke
d to t
he
facilit
ation
of te
nder
s for
polis
hed
diamo
nds.
To be
addr
esse
d in t
he ne
w na
ncial
year
Facil
itate
the
marke
ting o
f poli
shed
dia
mond
s
Numb
er of
polis
hed
trade
tran
sacti
ons
20No
t Ach
ieved
La
ck of
a we
b-ba
sed s
ystem
, to be
ad
dres
sed i
n the
new
nanc
ial ye
ar.
Trad
ing o
or to
be es
tablis
hed i
n the
ne
w na
ncial
year
to ad
dres
s this
ob
jectiv
e
Facil
itate
the bu
ying
and s
elling
of
diamo
nds
Numb
er of
parce
ls re
ceive
d for
tend
er80
0Ac
hieve
d 4
631
Incre
ase i
n num
ber o
f view
ing
room
s
Incre
ased
prod
uctio
n fro
m on
e pr
oduc
er
Incre
ase i
n num
ber o
f par
ticipa
nts.
The e
xpan
sion o
f the n
ew D
EEC
mana
ged t
o cate
r for
mor
e clie
nts an
d the
incre
ased
prod
uctio
n fro
m on
e pr
oduc
er al
so co
ntribu
ted to
the o
ver
achie
veme
nt of
targe
t.
DIAMOND EXCHANGE AND EXPORT CENTRE (DEEC)
ANNUAL REPORT 2011/2012 33
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Ensu
re co
mplia
nce
with
legisl
ative
re
quire
ments
Regis
tratio
n of
expo
rt an
d imp
ort o
f dia
mond
s
Numb
er of
regis
tered
ex
ports
and i
mpor
ts1 2
00Ac
hieve
d 4 0
74
Incre
ase i
n num
ber o
f reg
ister
ed
shipm
ents.
Incre
ased
prod
uctio
n fro
m on
e pr
oduc
er
The e
xpan
sion o
f the n
ew D
EEC
man-
aged
to ca
ter fo
r mor
e clie
nts an
d the
inc
reas
ed pr
oduc
tion f
rom
one p
rodu
cer
also c
ontrib
uted t
o the
over
achie
ve-
ment
of tar
get.
Numb
er of
Kim
berle
y pr
oces
s cer
ti ca
tes
issue
d
800
Achie
ved
1 152
Incre
ase i
n num
ber o
f reg
ister
ed
shipm
ents.
Incre
ased
prod
uctio
n fro
m on
e pr
oduc
er
The e
xpan
sion o
f the n
ew D
EEC
man-
aged
to ca
ter fo
r mor
e clie
nts an
d the
inc
reas
ed pr
oduc
tion f
rom
one p
rodu
cer
also c
ontrib
uted t
o the
over
achie
ve-
ment
of tar
get.
Dia
mon
d te
nder
s fa
cilit
ated
at t
he D
EEC
dur
ing
the
perio
d A
pril
2011
to M
arch
201
2
The
DE
EC
man
aged
to fa
cilit
ate
the
tend
ers
belo
w a
nd th
e fo
llow
ing
wer
e ac
hiev
ed:
• Th
e nu
mbe
rs o
f vie
win
g ro
oms
wer
e in
crea
sed
from
10
to 3
0, w
hich
pos
itive
ly im
pact
ed th
e nu
mbe
r of v
iew
ers
parti
cipa
ting
at th
e D
EE
C.
• A
n in
crea
se o
f 19.
82%
occ
urre
d in
term
s of
wei
ght o
f dia
mon
ds (i
n ca
rats
) sub
mitt
ed b
y th
e in
dust
ry. T
he n
umbe
r of d
iam
ond
parc
els
that
qua
li e
d to
be
expo
rted
in th
e 20
11/2
012
incr
ease
d by
50.
52%
in c
ompa
rison
to th
e pr
evio
us y
ear.
This
was
due
to a
n in
crea
se
in th
e n
umbe
r of p
arce
ls p
lace
d on
tend
er a
nd th
e nu
mbe
r of v
iew
ers.
DIAMOND EXCHANGE AND EXPORT CENTRE (DEEC)
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR34
Diamond offered for local sale by Diamond Dealers and Bene ciators
QuartersQ1 Q2 Q3 Q4
Apr – Jun 2011 Jul – Sept 2011 Oct – Dec 2011 Jan – Mar 2012 Totals
Total carats received
Total US$ received
372 100.17
150 140 644.64
377 955.70
127 529 558.97
787 131.78
129 983 114.85
516 046.29
119 204 596.90
2 053 233.94
526 857 915.36
Total carats of sold parcels
Total US$ value of sold parcels
697.94
95 342.00
1 294.90
2 495 459.00
1 865.21
43 590.68
1 432.86
42 412.00
5290.91
2 676 803.68
Total carats exported by highest bidders
Total US$ value exported by highest bidders
362 064.26
144 743 706.69
373 358.09
120 414 300.30
743 541.11
128 896 524.17
492 294.33
118 275 747.60
1 971 257.79
512 330 278.76
Total carats withdrawn
Total US$ withdrawn
9 275.63
2 843 962.60
0.00
0.00
326.46
1 043 000.00
22 319.10
410 349.35
31 921.19
4 297 311.95
Diamond Dealers and Bene ciators submitted a total of 2,053,233.94 carats valued at US$ 526,857,951.36 to be placed for export at the DEEC for a minimum of four workings days. A total of 5,290.91 carats (0.25%) valued at US$2,676,803.68 was sold locally and the balance was exported as there were no offers for these parcels.
Diamonds offered for local sale by Diamond Producers
QuartersQ1 Q2 Q3 Q4
Apr – Jun 2011 Jul – Sept 2011 Oct – Dec 2011 Jan – Mar 2012 Totals
Total carats received
Total US$ received.
296 444.31
80 873 475.50
169 331.75
24 661 132.87
498 849.33
90 712 502.11
603 840.99
120 884 293.62
1 568 466.38
317 131 404.10
Total carats of sold parcels.
Total US$ value of sold parcels
284 060.58
74 945 806.17
10 539.09
22 984 719.44
411 052.32
66 018 748.26
574 771.31
94 678 465.45
1 280 423.30
258 627 739.32
Total carats exported by highest bidders
Total US$ value exported by highest bidders
279 223.88
72 384 303.45
160 527.90
20 003 398.55
486 730.66
84 409 010.76
594 407.04
119 975 383.43
1 520 889.48
296 772 096.19
Diamond Producers offered a total of 1,568,466.38 carats valued at US$317,131,404.10 for local sale at the DEEC. A total of 1,520,889.48 carats (96.96%) valued at US$296,772,096.19 carats was sold on tender.
DIAMOND EXCHANGE AND EXPORT CENTRE (DEEC)
ANNUAL REPORT 2011/2012 35
Polished Diamond Exports
POLISHED EXPORTS (APRIL 2011 TO MARCH 2012)
MONTH CARATS DOLLAR VALUE (US$) RAND VALUE (ZAR)
Apr-11 16 130.60 $65 430 914.40 R 479 297 789.27
May-11 16 903.07 $108 310 561.05 R 741 700 445.81
Jun-11 13 739.24 $81 040 060.10 R 536 878 421.00
Jul-11 16 201.90 $103 828 997.97 R 705 452 491.00
Aug-11 16 292.50 $97 420 320.45 R 701 840 399.82
Sep-11 13 838.49 $76 878 513.10 R 603 674 457.61
Oct-11 13 429.64 $86 788 023.66 R 694 247 206.79
Nov-11 15 204.07 $90 222 289.97 R 714 967 706.89
Dec-11 8 663.53 $53 606 648.29 R 415 492 326.00
Jan-12 10 380.64 $549 510 290.09 R 326 703 680.00
Feb-12 13 851.06 $73 685 988.60 R 656 109 684.01
Mar-12 12 847.44 $1 349 458 143.00 R 1 044 549 953.00
TOTAL 167 482.18 $2 736 180 750.68 R 7 620 914 561.20
DIAMOND EXCHANGE AND EXPORT CENTRE (DEEC)
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR36
South Africa exported a total of 167,482.18 carats valued at US$2,736,180,750.68 during the period April 2011 to March 2012. The polished exports registered during this nancial year have increased by 3.72 % compared to the previous nancial year.
Polished Diamond Imports
POLISHED IMPORTS (APRIL 2011 TO MARCH 2012)
MONTH CARATS DOLLAR VALUE (US$) RAND VALUE (ZAR)
Apr-11 9 912.02 $39 696 231.24 R 177 175 586.96
May-11 14 568.33 $40 155 934.65 R 281 731 146.05
Jun-11 20 884.61 $42 454 045.44 R 246 410 484.50
Jul-11 13 079.56 $37 966 549.26 R 264 913 000.15
Aug-11 12 460.72 $31 716 272.72 R 221 334 061.79
Sep-11 15 014.98 $49 827 038.87 R 341 218 848.38
Oct-11 7 015.08 $22 187 794.57 R 167 396 114.19
Nov-11 13 291.58 $34 742 509.96 R 264 803 973.00
Dec-11 5 615.27 $15 124 630.54 R 112 152 192.60
Jan-12 12 803.51 $27 610 316.35 R 193 272 214.45
Feb-12 8 239.97 $14 824 684.00 R 103 772 788.00
Mar-12 8 297.13 $23 385 774.00 R 181 102 069.30
TOTAL 141 182.76 $379 691 781.60 R 2 555 282 479.37
DIAMOND EXCHANGE AND EXPORT CENTRE (DEEC)
ANNUAL REPORT 2011/2012 37
South Africa’s total imports of polished diamonds for the period April 2011 to March 2012 totalled 141,182.76 carats, valued at about US$379,691,781.60. We have seen an increase in the number of shipments that were registered and declared with the Regulator. The polished imports increased by 22.27 % compared with the previous year. These imports included diamonds that were imported into South Africa for commission work and for consultation.
DIAMOND EXCHANGE AND EXPORT CENTRE (DEEC)
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR38
The Government Diamond Valuator (GDV) was appointed by the Regulator in July 2008 in term of Section 5(1) (c) of the Diamonds Act, which provides for the Regulator to appoint a person who has expertise in diamond market prices as a government diamond valuator.
The GDV functions are:
• Rough exports – value all unpolished diamonds (at the Diamond Exchange and Export Centre) declared for export to ensure fair market value;
• Polished exports – examine and value all polished diamonds to be exported to ensure that all polished diamond are exported at fair market value;
• Temporary exports (Deferments) – examine and value all unpolished diamonds that are temporarily exported for expert opinion or marking;
• Rough imports – examine and value all imported unpolished diamonds to ensure fair market value. All rough imports of unpolished diamonds are meticulously sorted and valued by the GDV to ensure that the goods being imported are of fair market value. Since importers receive credits on their import, it is important for the GDV to ensure an accurate valuation;
• State Diamond Trader (SDT) – examine and value the 10% of production presented to the SDT by all diamond producers, upon invitation from the SDT. The GDV conducts a valuation on the 10% presented from the producer and collates as much data of the remaining 90% as possible to ensure a representative sample. The value produced by GDV is communicated to both parties and is regarded as fair market value;
• South African Police Services (SAPS) – provide diamond valuation services on all con scated objects. Testify in court as and when required. Appointments are made as and when required by the SAPS requesting a valuation on all objects con scated by them. Af davits are produced in each case as a reference in the event that a subpoena is issued. The particular GDV member who conducted the valuation will give testimony in court and provide evidence surrounding the valuation of the exhibit/s;
• Provide technical advice regarding the value of diamonds to all stakeholders particularly SARS and the Department of Minerals Resources.
GOVERNMENT DIAMOND VALUATOR
ANNUAL REPORT 2011/2012 39
PER
FOR
MA
NC
E IN
FOR
MAT
ION
: GO
VER
NM
ENT
DIA
MO
ND
VA
LUAT
OR
Stra
tegi
c obj
ectiv
esAc
tiviti
esMe
asur
esAn
nual
targ
etAc
tual
perfo
rman
ceCo
nstra
ints
& p
ropo
sed
rem
edies
Ensu
re co
mpl
iance
wi
th le
gisla
tive
requ
irem
ents
verify
value
of a
ll dia
mond
s offe
red
to SD
T by
prod
ucer
s
Numb
er of
valua
tions
co
nduc
ted
100 %
of di
amon
ds
offer
ed11
7 SDT
valua
tions
cond
ucted
Achie
ved
Verify
ing th
e valu
e of a
ll un
polis
hed d
iamon
ds
impo
rts.
Numb
er of
impo
rts
veri
ed10
0% of
impo
rts33
3 par
cels
of im
ports
veri
ed
Achie
ved
Identi
fy, de
scrib
e an
d valu
e exh
ibits
con
scate
d by S
APS
and c
omple
te co
urt
af da
vits
Numb
er of
exhib
its
valua
ted10
0% of
exhib
its15
0 exh
ibits
exam
ined a
nd va
luated
Achie
ved
Impr
ove
orga
nisa
tiona
l ca
pacit
y for
max
imum
ex
ecut
ion
brilli
ance
Monit
or an
d ana
lyse
price
s to a
djust
the
GDV
diamo
nd p
rice
book
month
ly up
dated
price
bo
okMo
nthly
1212
price
book
s upd
ated
Achie
ved
HIG
HLI
GH
TS
The
2011
/201
2 n
anci
al y
ear s
tarte
d of
f with
stro
ng d
eman
d fo
r rou
gh d
iam
onds
, alth
ough
slig
htly
bel
ow th
e le
vels
see
n in
pre
viou
s m
onth
s.
Rou
gh d
iam
ond
pric
es c
ontin
ued
to ri
se in
Apr
il as
obs
erve
d in
tend
ers
held
by
prod
ucer
s w
ho u
se th
e te
nder
sys
tem
s. T
he a
vera
ge in
crea
se
real
ised
by
prod
ucer
s w
as b
etw
een
2 an
d 3
perc
ent.
This
mea
nt th
at th
e G
DV
nee
ded
to a
djus
t the
ir pr
ice
book
to a
lign
with
mar
ket p
rices
.
By
June
201
1, th
ere
was
con
cern
abo
ut th
e ov
erhe
atin
g ro
ugh
diam
ond
mar
ket,
even
thou
gh d
eman
d re
mai
ned
stea
dy. W
e al
so w
itnes
sed
the
pers
iste
nt h
igh
prem
ium
s on
Dia
mon
d Tr
adin
g C
ompa
ny (D
TC) s
ight
box
es, f
ollo
wed
by
pric
e hi
kes
by B
HP
Bill
iton.
We
estim
ated
a 3
5%
incr
ease
in ro
ugh
diam
onds
bet
wee
n th
e be
ginn
ing
of J
anua
ry a
nd J
une
2011
. Dur
ing
Aug
ust t
here
was
sud
denl
y a
sign
i ca
nt d
ecre
ase
in
tradi
ng in
the
deal
er m
arke
t afte
r a b
oom
ing
perio
d. W
e w
ere
also
info
rmed
that
man
ufac
ture
rs in
Indi
a w
ere
burd
ened
with
low
liqu
idity
, and
ba
nks
tight
ened
thei
r len
ding
to th
e in
dust
ry.
GOVERNMENT DIAMOND VALUATOR
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR40
The GDV was faced with a challenge when they reacted to market conditions and reduced prices to synchronise them with prevailing conditions, only to have a major producer decide to maintain its high prices and not react to the market. The GDV had to make a decision as to whether they should declare a dispute on prices or not. After long negotiations with the producer concerned, and presenting the situation to the Regulator for further deliberations and advice, it was concluded that the producer should be allowed to market their production at those prices and to wait and see if the market would accept the prices or not. The producer managed to sell all their diamonds at those prices and the fair market value of those diamonds was subsequently accepted.
Despite the above challenges the Regulator is proud that during the 2010/2011 nancial year no fair market value disputes were declared while the GDV performed its function of verifying prices.
Section 59B(5) of the Diamond Act states: “The government diamond valuator shall verify the prices speci ed in terms of subsection (2).” Veri cation was performed by the GDV team to determine the fair market value (FMV) of all diamonds offered by the diamond producer to the State Diamond Trader.
Table 1 below demonstrates the legislative requirements of Section 59B of the Diamonds Second Amendment Act of 2005 which provides for diamond producers to offer unpolished diamonds to the SDT. A comparative analysis between the 2010/2011 and 2011/2012 nancial years is illustrated in Graph 1.1
The table shows us what diamond producers produced and subsequently offered to the SDT, which resulted in the SDT purchasing or declining. This process was performed under the watchful eye of the Regulator through the GDV.
Table 1: Producer Summary (Carats) of Unpolished Diamonds Offered to the SDT
100% CARATS SELECTED CARATS PURCHASED
2010/2011 2011/2012 2010/2011 2011/2012 2010/2011 2011/2012
1st QUARTER 2 562 081.45 1 252 547.48 255 018.05 125 267.67 228 752.22 135 869.88
2nd QUARTER 2 812 850.61 2 251 603.83 280 550.25 236 101.25 82 046.45 83 332.96
3rd QUARTER 2 137 782.35 1 639 925.65 214 468.85 163 800.59 351 276.84 1 743.33
4th QUARTER 1 990 664.67 1 349 255.16 198 778.80 134 313.65 198 268.97 71 945.36
Total 9 503 379.08 6 493 332.12 948 815.95 659 483.16 860 344.48 292 891.53
The above table is a comparison of the activities of the 2010/2011 and 2011/2012 nancial years that concern the SDT and diamond producers as per the legislative requirements. We can clearly see the huge difference between the production of 2010/2011 compared to 2011/2012. Production in 2011/2012 was 32% less than in 2010/2011. This can be attributed to the strategy adopted by some producers to focus on maintenance and waste mining during the period of market softness.
GOVERNMENT DIAMOND VALUATOR
ANNUAL REPORT 2011/2012 41
GRAPH 1.1 PRODUCTION (CARATS) BY PRODUCERS 2010/11 VS 2011/12
Graph 1.1 demonstrates that there was a 32% decrease in carats produced in the 2011/2012 compared to 2010/2011. This decrease may be attributed in part to some producers performing routine maintenance on mines to achieve some improvement on safety results.
Graph 1.2 PRODUCTION SELECTED BY STATE DIAMOND TRADER 2010/11 VS 2011/12
Graph 1.2 demonstrates that there was a 30% decrease in the 10% of carats of unpolished diamonds offered to the SDT for 2011/2012 compared to the previous nancial year.
GOVERNMENT DIAMOND VALUATOR
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR42
GRAPH 1.3 2010/11 VS 2011/12 PURCHASES BY THE STATE DIAMOND TRADER
Graph 1.3 above demonstrates that although the SDT managed to purchase 10% of the unpolished diamonds that were offered during the previous nancial year, the results for the 2011/2012 nancial year were different as they only managed to purchase 4% of what was offered to them by the producers.
Table 2: Producer Summary (VALUE US$) of Unpolished Diamonds offered to the SDT
100% VALUE (US$) SELECTED VALUE (US$) PURCHASED
2010/2011 2011/2012 2010/2011 2011/2012 2010/2011 2011/2012
1st QUARTER 306 122 181.30 256 337 268.20 29 213 725.17 24 247 011.79 29 012 902.52 26 090 969.63
2nd QUARTER 333 926 701.85 483 299 894.98 32 396 394.76 47 914 091.43 9 487 851.50 19 615 301.02
3rd QUARTER 286 135 037.87 322 399 870.24 27 945 791.43 30 812 912.03 40 846 528.97 798 242.73
4th QUARTER 308 049 547.10 231 279 952.55 29 812 311.82 21 854 636.92 29 820 578.27 11 952 411.84
Total 1 234 233 468.12 1 293 316 985.97 119 368 223.18 124 828 652.17 109 167 861.26 58 456 925.22
Table 2 demonstrates the value (in US$) that the GDV had to verify to determine the fairness thereof before the SDT could decide whether they could purchase or decline. It also compares the US$ value of the 2010/2011 nancial year with the current nancial year.
GOVERNMENT DIAMOND VALUATOR
ANNUAL REPORT 2011/2012 43
GRAPH 2.1 PRODUCTION 2010/11 VS 2011/12 US$
Graph 2.1 clearly demonstrates that the rough diamond market was strong in the 2nd quarter of 2011/2012 compared to the same period of the previous nancial year which witnessed a considerable price decrease from July 2011. This decrease is attributed to the turmoil in the market and the Eurozone crisis. The decrease in prices continued to December 2011.
GRAPH 2.2 PRODUCTION VALUE (US$) SELECTED BY SDT 2010/11 VS 2011/12
Although we witnessed a decrease in volumes offered between the two nancial years, there was an increase in value terms. The values of diamonds veri ed by the GDV were indeed better than the previous nancial year.
GOVERNMENT DIAMOND VALUATOR
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR44
GRAPH 2.3 2010/11 VS 2011/12 (US$ VALUE) PURCHASES BY SDT
This graph demonstrates that in the 2011/2012 the SDT spend 46% less in value (US$) than in 2010/2011.
Table 3: State Diamond Trader Purchases in Caratage 2011/2012
2010/2011 2011/2012
CARATS OFFERED
SDT PURCHASES
% PURCHASED
CARATS OFFERED
SDT PURCHASES
% PURCHASED
1ST QUARTER 2 562 081.45 228 752.22 8.93% 1 357 110.11 135 869.88 10.01%
2ND QUARTER 2 812 850.61 82 046.45 2.92% 2 363 147.59 83 332.96 3.53%
3RD QUARTER 2 137 782.35 351 276.84 16.43% 1 869 919.15 1 743.33 0.09%
4TH QUARTER 1 990 664.67 198 268.97 9.96% 1 348 978.07 71 945.36 5.33%
TOTAL 9 503 379.08 860 344.48 9.05% 6 939 154.92 292 891.53 4.22%
This table clearly demonstrates the decrease in percentage terms of unpolished diamonds available to the SDT during 2011/2012, when compared to 2010/2011. The SDT only managed to purchase 4% of unpolished diamonds offered to them by the diamond producers.
GOVERNMENT DIAMOND VALUATOR
ANNUAL REPORT 2011/2012 45
TAB
LE 4
: OB
JEC
TS A
ND
DIA
MO
ND
S C
ON
FISC
ATED
BY
THE
SAPS
201
0/11
VS
2011
/12
ACTI
VITY
2010
/2011
ACTI
VITY
2011
/2012
NAME
OF
PROV
INCE
2010
/2011
OB
JECT
S
EXHI
BITS
TOTA
LS20
11/20
12
OBJE
CTS
EXHI
BITS
TOTA
LS
DIAM
ONDS
NON
DIAM
ONDS
CARA
TSR
VALU
EDI
AMON
DSNO
N DI
AMON
DSCA
RATS
R VA
LUE
GAUT
ENG
651
408
243
41.49
292 2
94.08
418
356
6229
9.84
363 4
58.75
LIMP
OPO
649
064
90
02
02
00
FREE
STA
TE85
5827
49.87
110 7
95.25
662
9556
755
.7219
756.7
8
NORT
HERN
CAP
E28
313
115
236
.0274
516.0
058
241
40
171.4
762
6 793
.00
EAST
ERN
CAPE
4423
2122
.7736
099.0
00
00
00.0
0
NORT
H W
EST
136
1911
72.5
94 6
87.24
372
211
161
57.33
12 97
5.18
MPUM
ALAN
GA0
00
00
00
00
0
KWAZ
ULU
NATA
L4
40
2.19
984
112
92.7
889
4.74
WES
TERN
CAP
E12
141
8061
.171 3
20 37
4.30
455
270
175
2.32
12 60
6.00
TOTA
L19
7368
412
891 1
00.17
21 67
4 603
.3322
5011
9597
658
9.46
1 036
484.4
5
The
Reg
ulat
or a
lso
prov
ides
val
uatio
n se
rvic
es fo
r di
amon
ds to
oth
er s
tate
ent
ities
thro
ugh
the
GD
V. A
n ex
ampl
e of
suc
h a
serv
ice
is th
e ev
alua
tion
of S
AP
S e
xhib
its fo
r cou
rt pu
rpos
es w
hich
is d
emon
stra
ted
by th
e Ta
ble
5 ab
ove.
Tabl
e 4
also
illu
stra
te a
12%
incr
ease
of t
he a
mou
nt o
f con
sca
ted
obje
cts
com
pare
d to
the
2010
/201
1 n
anci
al y
ear a
nd a
lso
indi
cate
that
of
the
obje
cts
pres
ente
d to
the
GD
V, th
ere
was
an
incr
ease
in d
iam
onds
com
pare
d to
the
prev
ious
na
ncia
l yea
r.
GOVERNMENT DIAMOND VALUATOR
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR46
Dur
ing
the
year
und
er r
evie
w, t
he in
tern
al a
nd e
xter
nal c
omm
unic
atio
n po
licy
was
dev
elop
ed a
nd a
ppro
ved.
A n
umbe
r of
initi
ativ
es to
ok
plac
e, s
uch
as th
e in
trodu
ctio
n of
the
orga
nisa
tion’
s ne
wsl
ette
r and
fac
ilita
ting
wor
ksho
ps fo
r the
Reg
ulat
or to
eng
age
with
pot
entia
l ent
rant
s to
the
diam
ond
and
prec
ious
met
als
indu
strie
s.
PER
FOR
MA
NC
E IN
FOR
MAT
ION
: KIM
BER
LEY
PRO
CES
S C
ERTI
FIC
ATIO
N S
CH
EME
(KPC
S) A
ND
C
OM
MU
NIC
ATIO
NS
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Impr
ove o
rgan
isatio
nal
capa
city f
or m
axim
um
exec
ution
brilli
ance
Deve
lop in
terna
l an
d exte
rnal
co
mmun
icatio
n str
ategy
/plan
and p
olicy
Appr
oved
co
mmun
icatio
ns
strate
gy an
d poli
cy
Imple
menta
tion
Achie
ved.
Com
munic
ation
s str
ategy
/plan
appr
oved
Reva
mp/re
-des
ign
logo
Appr
oved
new
or
reva
mped
logo
De
sign a
nd de
velop
Not a
chiev
edPr
oject
in pr
ogre
ss, to
be n
alise
d in
the ne
w na
ncial
year
Facil
itate
works
hops
an
d eve
ntsNu
mber
of w
orks
hops
an
d eve
nts fa
cilita
ted
5 wor
ksho
ps
6 loc
al ex
hibitio
ns
2 inte
rnati
onal
exhib
itions
2 pub
licati
ons
Achie
ved.
9 wo
rksho
ps In
terna
l: Se
curity
leav
e, Pa
rking
polic
y co
nduc
ted
Achie
ved,
6 loc
al ex
hibitio
ns he
ld (M
ining
Inda
ba, B
udge
t Vote
, MQA
- C
ape T
own,
MQA
- Joh
anne
sbur
g, Ro
seba
nk C
olleg
e, Ma
ngau
ng
Care
er W
eek)
Not A
chiev
ed
Achie
ved.
SADP
MR fe
ature
d in 2
pu
blica
tions
(New
swee
k and
Mini
ng
Decis
ions m
agaz
ines)
Trips
could
not
t in th
e Bud
get
alloc
ation
. Will
be re
viewe
d dur
ing
plann
ing in
a ca
se of
insu
f cien
t bu
dget
Ensu
re co
mplia
nce
with
legisl
ative
re
quire
ments
Prep
are f
or th
e KPC
S Re
view
visit
Comp
leted
comp
lianc
e ch
eckli
st10
0% co
mplia
nce w
ith
KPCS
Achie
ved,
comp
lianc
e che
cklis
t co
mplet
ed
KIMBERLEY PROCESS CERTIFICATION SCHEME (KPCS) AND COMMUNICATIONS
ANNUAL REPORT 2011/2012 47
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Partic
ipate
in re
view
visits
/miss
ion an
d sp
ecial
envo
ys
Numb
er of
mee
tings
, re
view
visits
/miss
ion
and s
pecia
l env
oys
partic
ipated
in
4 rev
iew vi
sits
2 inte
rnati
onal
meeti
ngs
8 tele
phon
e co
nfere
nces
Not a
chiev
ed
Achie
ved.
2 int
erna
tiona
l and
ple
nary
meeti
ngs p
artic
ipated
in
Achie
ved.
15 te
lecon
feren
ces h
eld
No re
ques
ts we
re fo
rwar
ded t
o RSA
an
d a nu
mber
of re
view
visits
wer
e po
stpon
ed.
Facil
itate
techn
ical
assis
tance
(mult
ilater
al)Nu
mber
of pa
rticipa
nts
assis
ted
Zimba
bwe a
nd D
RCAc
hieve
d. 3 p
artic
ipants
assis
ted
(DRC
/Zim
/Leso
tho)
Subm
it qua
rterly
sta
tistic
al re
port
to KP
CS (
WGM
)
Comp
leted
quar
terly
statis
tical
repo
rt4
Achie
ved.
4 qua
rterly
stati
stica
l re
ports
comp
leted
and s
ubmi
tted
Kim
berle
y P
roce
ss C
erti
cat
ion
Sch
eme
(KP
CS
) is
an in
ter-
gove
rnm
enta
l sys
tem
use
d to
cer
tify
roug
h di
amon
ds a
re fr
om le
gitim
ate
sour
ces
and
that
thei
r pro
ceed
s ar
e no
t use
d to
fund
war
s ag
ains
t leg
itim
ate
gove
rnm
ents
.
By
the
end
of th
e ye
ar 2
011,
Kim
berle
y P
roce
ss h
ad 5
0 pa
rtici
pant
s (in
clud
ing
the
Eur
opea
n U
nion
, whi
ch re
pres
ents
its
27 M
embe
r Sta
tes)
; th
e K
PC
S m
embe
rshi
p co
mpr
ised
of 5
0 m
embe
r cou
ntrie
s, a
coa
litio
n of
non
-gov
ernm
enta
l org
anis
atio
ns (N
GO
’s) a
nd th
e di
amon
d in
dust
ry.
2011
was
arg
uabl
y th
e m
ost e
vent
ful y
ear i
n th
e hi
stor
y of
the
KP
CS
as
it sa
w th
e im
pass
e on
Zim
babw
e di
amon
ds
nally
bei
ng re
solv
ed,
and
Glo
bal W
itnes
s, a
mem
ber o
f the
Civ
il S
ocie
ty C
oalit
ion
with
draw
ing
its p
artic
ipat
ion
from
the
Kim
berle
y P
roce
ss.
Dur
ing
its te
nure
as
the
Kim
berle
y P
roce
ss c
hair,
the
Dem
ocra
tic R
epub
lic o
f Con
go a
ssum
ed it
s du
ties
with
the
seat
of t
he d
eput
y ch
air
bein
g va
cant
. Thi
s ca
me
afte
r the
201
0 pl
enar
y m
eetin
g w
as n
ot a
ble
to e
ndor
se th
e 20
11 v
ice
chai
r. It
beca
me
the
rst y
ear e
ver f
or th
e K
P to
not
hav
e an
app
oint
ed d
eput
y ch
air.
The
Uni
ted
Sta
tes
of A
mer
ica
then
bec
ame
the
rst c
ount
ry to
ser
ve a
s th
e K
imbe
rley
Pro
cess
dep
uty
chai
r for
a p
erio
d of
less
than
a y
ear,
as th
is re
spon
sibi
lity
was
onl
y en
dors
ed a
t the
201
1 pl
enar
y m
eetin
g. T
he U
nite
d S
tate
s of
Am
eric
a w
as
also
end
orse
d as
the
2012
Kim
berle
y P
roce
ss (K
PC
S) c
hair.
Sou
th A
frica
bec
ame
the
rst a
nd o
nly
coun
try th
us fa
r to
be s
elec
ted
to s
erve
as
the
KP
chai
r for
the
seco
nd ti
me.
Thi
s pe
riod
will
coi
ncid
e w
ith th
e 10
th a
nniv
ersa
ry o
f the
Kim
berle
y P
roce
ss.
KIMBERLEY PROCESS CERTIFICATION SCHEME (KPCS) AND COMMUNICATIONS
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR48
HIGHLIGHTS
i. The United States of America SA was endorsed as the 2012 KP chair and South Africa as its deputy chair.
ii. Swaziland became the 50th member of the KPCS.
iii. Review visits to Botswana and Lesotho where conducted.
iv. Zimbabwe was allowed to freely import and export its diamonds as per the agreement reached at the plenary.
v. An administrative decision on the review of the KP core document by the Ad hoc Committee of KP Reform was adopted.
vi. The Working Group of Diamond Experts’ scienti c sub-group on origin characterisation, led by South Africa, engaged the UN Group of Experts and the UN Sanctions Committee on Côte d’Ivoire to start exporting diamonds from Côte d’Ivoire under the export exemption programme for state-of-the art scienti c origin determination research.
vii. Ghana and Namibia joined the Working Group of Diamond Experts. Ghana also joined the Working Group on Monitoring
KIMBERLEY PROCESS CERTIFICATION SCHEME (KPCS) AND COMMUNICATIONS
ANNUAL REPORT 2011/2012 49
Rou
gh D
iam
ond
Impo
rts
ROUG
H DI
AMON
DS IM
PORT
S - J
ANUA
RY T
O DE
CEMB
ER 20
11
1 Qua
rter
2 Qua
rter
3 Qua
rter
4 Qua
rter
2011
Parti
cipan
tsVo
lume,
ctsVa
lue, U
S$Vo
lume,
ctsVa
lue, U
S$Vo
lume,
ctsVa
lue, U
S$Vo
lume,
ctsVa
lue, U
S$Vo
lume,
ctsVa
lue, U
S$
Ango
la0.0
00.0
00.0
00.0
013
6.60
10 22
4.08
0.00
0.00
136.6
010
224.0
8
Austr
alia
0.00
0.00
0.00
0.00
0.00
0.00
3.09
3 093
.003.0
93 0
99.18
Botsw
ana
0.00
0.00
2 469
.0014
8 712
.001 0
61.49
4 024
970.2
085
1.71
587 6
46.46
4 382
.204 7
61 32
8.66
Cana
da0.0
00.0
00.0
00.0
01 0
13.34
118 5
97.80
0.00
0.00
1 013
.3411
8 597
.80
China
, Peo
ple’s
Repu
blic o
f20
5.26
2 592
342.0
026
387.1
56 2
23 19
4.14
8 259
.456 7
25 03
5.18
0.00
0.00
34 85
1.86
15 54
0 571
.32
Cong
o, De
mocra
tic R
epub
lic of
17 44
7.31
2 551
660.5
140
191.4
05 2
95 72
1.62
1 280
.4623
2 367
.391 1
52.53
225 1
00.55
60 07
1.70
8 304
850.0
7
Euro
pean
Com
munit
y16
3 118
.3196
250 5
85.50
105 2
51.39
99 81
2 231
.8013
7 305
.7012
2 610
203.6
759
647.6
539
872 1
79.20
465 3
23.05
358 5
45 20
0.17
India
2 259
.8031
5 483
.1869
296.9
94 0
20 75
7.29
30 47
5.61
2 990
575.3
324
457.9
550
8 030
.0712
6 490
.357 8
34 84
5.87
Israe
l6 7
91.25
12 06
3 744
.0416
567.8
412
244 5
07.10
3 791
.644 8
69 60
1.26
5 025
.377 7
70 05
5.90
32 17
6.10
36 94
7 908
.30
Leso
tho5 4
09.97
1 750
000.0
05 1
10.12
1 400
000.0
00.0
00.0
00.0
00.0
010
520.0
93 1
50 00
0.00
Liber
ia0.0
00.0
00.0
00.0
045
7.23
102 1
86.80
0.00
0.00
457.2
310
2 186
.80
Nami
bia38
1.70
1 216
484.4
347
9.50
618 5
76.00
8.36
2 015
.2436
5.24
785 5
05.93
1 234
.802 6
22 58
1.60
Sier
ra Le
one
16.10
30 27
6.85
62.57
74 66
9.00
15.40
1 909
.6017
.3860
767.0
411
1.45
167 6
22.49
Switz
erlan
d0.0
00.0
020
195.7
011
400 4
99.80
90.28
2 000
000.0
00.0
00.0
020
285.9
813
400 4
99.80
Tanz
ania
0.00
0.00
0.00
0.00
14.00
13 01
9.00
65.97
23 77
3.23
79.97
36 79
2.23
Unite
d Ara
b Emi
rates
12 72
8.96
9 210
415.7
03 3
46.29
4 537
044.5
05 5
20.19
12 42
1 032
.6925
546.6
512
316 4
99.07
47 14
2.09
38 48
4 991
.96
Unite
d Stat
es of
Ame
rica
61.59
496 8
90.00
123.4
35 6
15 20
0.00
523.3
812
855 6
12.00
363.4
63 9
60 92
7.38
1 071
.8622
928 6
29.38
Zimba
bwe
0.00
0.00
3 636
.161 0
98 12
0.32
312 5
13.60
22 09
7 723
.0033
5 371
.765 7
31 51
6.06
651 5
21.52
28 92
7 359
.38
Tota
l20
8 420
.2512
6 477
882.2
129
3 117
.5415
2 489
233.5
750
2 466
.7319
1 075
073.2
445
2 868
.7671
845 0
93.89
1 456
873.2
854
1 887
289.0
9
KIMBERLEY PROCESS CERTIFICATION SCHEME (KPCS) AND COMMUNICATIONS
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR50
The total imports (carats) increased from 560 023.33 carats in 2010 to 1.45 million carats in 2011. This increase is attributable in part to Zimbabwean diamonds entering the markets.
South Africa imported 651 521.52 carats (45%) from Zimbabwe in the year 2011, the largest number of carats in comparison to other countries. Zimbabwe managed to overtake imports from the European Community (32%) which has been in the lead for many years.
In 2011, Zimbabwe became the top-ranking supplier of rough diamonds to South Africa in terms of volume, while imports from that country climbed to 651 521.52 carats. The European Community however remained the top-ranking supplier in terms of value (US$358 million) in 2011.
The European community was followed by Israel and the United Arab Emirates at 7% each.
Other: Angola, Australia, Botswana, Canada, China, Israel, Lesotho, Liberia, Namibia, Sierra Leone, Switzerland, Tanzania and the United States of America
Other: Angola, Australia, Botswana, Canada, Democratic Republic of Congo, India, Lesotho, Liberia, Namibia, Sierra Leone, and Tanzania
KIMBERLEY PROCESS CERTIFICATION SCHEME (KPCS) AND COMMUNICATIONS
ANNUAL REPORT 2011/2012 51
Rou
gh D
iam
ond
Expo
rts
ROUG
H DI
AMON
DS E
XPOR
TS -
JANU
ARY
2011
TO
DECE
MBER
2011
1 Qua
rter
2 Qua
rter
3 Qua
rter
4 Qua
rter
Tota
l
Parti
cipan
tsVo
lume,
ctsVa
lue, U
S$Vo
lume,
ctsVa
lue, U
S$Vo
lume,
ctsVa
lue, U
S$Vo
lume,
ctsVa
lue, U
S$Vo
lume,
ctsVa
lue, U
S$
Austr
alia
0.00
0.00
-0.0
03.0
93 0
93.00
985.3
393
597.8
098
8.42
96 69
0.80
Botsw
ana
21.44
148 7
12.00
796.9
011
0 676
.500.0
00.0
030
.461 8
88 52
0.00
848.8
02 1
47 90
8.50
Cana
da28
.1025
000.0
015
.242 3
79.76
84.94
18 59
9.00
0.00
0.00
128.2
845
978.7
6
China
, Peo
ple’s
Repu
blic o
f18
713.2
35 2
59 37
7.41
4 788
.3872
7 726
.0013
639.5
51 7
20 15
4.00
130 5
76.06
938 4
73.90
167 7
17.22
8 645
731.
31
Euro
pean
Com
munit
y1 2
54 80
6.38
188 1
87 83
0.81
1 806
039.6
827
6 059
530.2
01 3
09 38
6.91
244 6
06 37
6.03
1 613
826.5
428
1 878
734.0
05 9
84 05
9.51
990 7
32 47
1.04
India
9 785
.443 1
04 74
7.48
21 64
8.52
5 390
543.8
853
949.1
95 4
63 96
5.62
31 40
6.05
9 653
650.3
311
6 789
.2023
612 9
07.31
Israe
l18
9 972
.4984
839 4
48.42
72 23
1.55
38 20
5 410
.7227
993.9
522
209 2
59.79
41 03
2.41
35 05
1 032
.8033
1 230
.4018
0 305
151.7
3
Leso
tho52
.1413
8 688
.00-
0.00
0.00
0.00
0.00
0.00
52.14
138 6
88.00
Nami
bia35
2.29
557 5
00.00
415.0
010
4 000
.000.0
00.0
045
0.37
18 00
0.00
1 217
.6667
9 500
.00
Switz
erlan
d28
998.5
316
661 9
15.00
38 04
5.91
33 02
2 772
.5120
1 919
.2528
258 2
68.00
102 1
28.10
15 43
5 187
.0037
1 091
.7993
378 1
42.51
Thail
and
306.8
112
6 688
.002 1
68.47
883 5
53.00
1 015
.5846
3 445
.004 3
38.30
1 318
140.0
07 8
29.16
2 791
826.0
0
Unite
d Ara
b Emi
rates
92 24
6.60
23 31
7 379
.4116
5 680
.4835
691 5
20.41
115 6
89.80
33 65
0 871
.4947
4 673
.6543
926 4
97.04
848 2
90.53
135 5
86 26
8.35
Unite
d Stat
es of
Ame
rica
1 709
.4995
4 120
.601 9
34.53
407 8
68.00
6 797
.536 8
20 73
4.90
1 228
.567 9
39 56
6.00
11 67
0.11
16 12
2 289
.50
Vietn
am15
5.10
148 0
55.00
-0.0
018
0.48
314 9
92.00
588.9
943
7 000
.0092
4.57
900 0
47.00
Tota
l1 5
97 14
8.04
323 4
69 46
2.13
2 113
764.6
639
0 605
980.9
81 7
30 66
0.27
343 5
29 75
8.83
2 401
264.8
239
8 578
398.8
77 8
42 83
7.79
1 455
183 6
00.81
KIMBERLEY PROCESS CERTIFICATION SCHEME (KPCS) AND COMMUNICATIONS
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR52
KIMBERLEY PROCESS CERTIFICATION SCHEME (KPCS) AND COMMUNICATIONS
South Africa exported more than 5.9 million carats of rough diamonds to the European Community, which amounts to 76% of total rough diamond exports (carat). The European Community was followed by the United Arab Emirates with more than 848 000 carats exported (11%).
Rough diamond exports to the European community amounted to more than $990.7 million ( 68%) followed by Israel at more $180.3 million (12%) and the United Arab Emirates at more than $136.6 million (9%).
Other: Australia, Botswana, Canada, India, Lesotho, Namibia, Tanzania, United States of America and Vietnam
Other: Australia, Botswana, Canada, China, Lesotho, Namibia, Thailand, United States of America and Vietnam
ANNUAL REPORT 2011/2012 53
The
Lega
l Ser
vice
s D
ivis
ion
prov
ides
ove
rall
lega
l sup
port
to th
e R
egul
ator
. Thi
s en
tails
pro
vidi
ng le
gal o
pini
ons,
lega
l res
earc
h, a
ssis
ting
in
all l
itiga
tion
the
Reg
ulat
or is
invo
lved
in, c
onsu
lting
with
the
Dep
artm
ent o
f Min
eral
Res
ourc
es re
gard
ing
any
amen
dmen
ts to
the
legi
slat
ion
havi
ng a
dire
ct im
pact
on
the
Reg
ulat
or, a
nd a
dvis
ing
appl
ican
ts o
n co
mpl
ianc
e w
ith le
gisl
atio
n.
In 2
008
the
Reg
ulat
or h
ad a
few
cou
rt ap
plic
atio
ns b
roug
ht a
gain
st it
, mai
nly
chal
leng
ing
the
cons
titut
iona
lity
of th
e am
endm
ents
to th
e D
iam
onds
Act
198
6 (A
ct N
o 56
of 1
986)
as
amen
ded
and
the
esta
blis
hmen
t of t
he D
iam
ond
Exc
hang
e an
d E
xpor
t Cen
tre (
DE
EC
). T
he
Reg
ulat
or h
as s
ucce
ssfu
lly d
efen
ded
mos
t cas
es b
roug
ht a
gain
st it
. The
re is
cur
rent
ly o
ne c
ase
pend
ing
rega
rdin
g th
e co
nstit
utio
nalit
y of
th
e am
endm
ents
.
PER
FOR
MA
NC
E IN
FOR
MAT
ION
: LEG
AL
SER
VIC
ES
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Ensu
re co
mplia
nce
with
legisl
ative
re
quire
ments
Prov
ide le
gal a
dvice
on
the s
tatute
s to t
he
Regu
lator
Numb
er of
case
s ad
vised
on10
0% of
all c
ases
re
ferre
dAc
hieve
d. 13
5 (10
0%) o
f cas
es
advis
ed on
Facil
itatio
n of le
gal
opini
on fo
r the
Re
gulat
or
Numb
er of
lega
l op
inion
s obta
ined
100%
of al
l cas
es
refer
red
Ach
ieved
. 4 (1
00%
) lega
l opin
ions
obtai
ned
Partic
ipate
in the
dr
afting
of le
gislat
ion
and a
mend
ments
for
the R
egula
tor
Numb
er of
revie
w me
eting
s atte
nded
10
0% of
all in
vites
re
ceive
d Ac
hieve
d. 4 (
100%
) rev
iew
meeti
ngs
atten
ded.
Partic
ipated
in
Depa
rtmen
t of J
ustic
e-or
ganis
ed
revie
w of
all le
gislat
ion th
at se
eks
to co
mbat
illega
l mini
ng an
d illic
it mi
ning i
n pre
cious
meta
ls
Facil
itatio
n of le
gal
repr
esen
tation
for t
he
Regu
lator
by ex
terna
l leg
al co
unse
l
Numb
er of
brie
ngs
cond
ucted
100%
of al
l cas
es
refer
red
Achie
ved.
5 (10
0%) o
f all c
ases
re
ferre
d. Se
cure
d leg
al co
unse
l on
beha
lf of th
e Reg
ulator
, for la
bour
-re
lated
issu
es
LEGAL SERVICES
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR54
The
func
tion
of S
ecur
ity R
isk
Man
agem
ent i
s to
pro
vide
a m
anag
emen
t sup
port
serv
ice
agai
nst a
ll ki
nd o
f sec
urity
risk
, vul
nera
bilit
ies
and
thre
ats.
Hig
hlig
hts
The
SA
DP
MR
has
fully
impl
emen
ted
a na
tiona
l vet
ting
stra
tegy
by
ensu
ring
that
all
of c
ials
und
ergo
per
sonn
el s
uita
bilit
y ch
ecks
bef
ore
appo
intm
ent.
This
incl
udes
che
ckin
g cr
imin
al re
cord
s, c
itize
nshi
p an
d cr
edit
reco
rds
whi
le H
R v
eri
es q
uali
cat
ions
and
pre
viou
s em
ploy
men
t. N
o em
ploy
ee(s
) with
an
illic
it-re
late
d ac
tivity
reco
rd h
as b
een
appo
inte
d. In
the
year
und
er re
view
sev
ente
en (1
7) o
f ci
als
obta
ined
pos
itive
se
curit
y cl
eara
nces
, pro
mot
ing
trust
and
redu
cing
vul
nera
bilit
y of
the
orga
nisa
tion.
PER
FOR
MA
NC
E IN
FOR
MAT
ION
: SEC
UR
ITY
RIS
K M
AN
AG
EMEN
T
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Imple
menta
tion o
f na
tiona
l vett
ing st
rateg
yIde
ntify
critic
al po
sts fo
r ve
tting
Certi
cate
issue
d20
Not A
chiev
ed. 1
7 cer
ti ca
tes is
sued
Fo
ur (4
) app
licati
ons f
or se
curity
cle
aran
ce fo
rms a
re in
proc
ess.
Conti
nued
follo
w-up
s will
be
cond
ucted
with
Stat
e Sec
urity
Ag
ency
Ensu
re co
mplia
nce w
ith
Minim
um In
forma
tion
Secu
rity S
tanda
rds
(MIS
S)
Imple
ment
secu
rity
polic
yDe
velop
secu
rity
proc
edur
es2
Achie
ved.
2 sec
urity
proc
edur
es
deve
loped
and a
ppro
ved
Imple
menta
tion o
f Mi
nimum
Phy
sical
Secu
rity S
tanda
rds
(MPS
S)
Imple
ment
phys
ical
secu
rity m
easu
res
Deve
lop co
mplia
nce
stand
ard
Monit
oring
of C
CTV
came
ra
Appr
oved
stan
dard
s
2 1
Achie
ved.
CCTV
came
ras
conti
nuou
sly m
onito
red.
Achie
ved.
Appr
oved
stan
dard
s in
place
SECURITY RISK MANAGEMENT
ANNUAL REPORT 2011/2012 55
Purp
ose:
To
enab
le th
e or
gani
satio
n to
del
iver
on
its m
anda
te b
y pr
ovid
ing
stra
tegi
c hu
man
reso
urce
s m
anag
emen
t and
adm
inis
tratio
n to
th
e R
egul
ator
.
Hum
an R
esou
rces
Man
agem
ent p
rovi
des
serv
ices
rela
ting
to o
rgan
isat
iona
l dev
elop
men
t, re
crui
tmen
t and
sel
ectio
n, fa
cilit
atin
g pe
rform
ance
ev
alua
tions
of e
mpl
oyee
s th
roug
h a
perfo
rman
ce m
anag
emen
t and
dev
elop
men
t sys
tem
(PM
DS
), m
anag
ing
serv
ice
bene
ts, a
n em
ploy
ee
wel
lnes
s pr
ogra
mm
e (E
WP
), la
bour
rel
atio
ns m
anag
emen
t, an
d bu
ildin
g hu
man
res
ourc
es c
apac
ity t
hrou
gh t
rain
ing
and
deve
lopm
ent
inte
rven
tions
. W
e re
mai
n co
mm
itted
to e
nsur
ing
that
the
SA
DP
MR
has
peo
ple
who
mak
e a
diffe
renc
e fo
r all
thro
ugh
effe
ctiv
e, e
f ci
ent a
nd
prof
essi
onal
hum
an re
sour
ces
serv
ices
.
A hi
ghlig
ht d
urin
g th
e pe
riod
unde
r rev
iew
is th
e ap
prov
al o
f the
inte
grat
ed h
uman
reso
urce
s pl
an (H
RP
) by
the
Boa
rd.
PER
FOR
MA
NC
E IN
FOR
MAT
ION
FO
R H
UM
AN
RES
OU
RC
ES M
AN
AG
EMEN
T
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Impr
ove o
rgan
isatio
nal
capa
city f
or m
axim
um
exec
ution
brilli
ance
Deve
lop an
d imp
lemen
t hu
man r
esou
rces p
lan
(HRP
)
• Ap
prov
ed H
R Pl
an im
pleme
nted
• Re
vised
or
ganis
ation
al str
uctur
e im
pleme
nted
Deve
lopme
nt an
d im
pleme
ntatio
nAc
hieve
d. Hu
man r
esou
rces p
lan
appr
oved
and i
mplem
ented
.
Achie
ved.
Org
anisa
tiona
l stru
cture
re
vised
and i
mplem
ented
Imple
ment
HRD
polic
y/str
ategy
Numb
er of
perso
nnel
deve
loped
50%
im
pleme
ntatio
nAc
hieve
d. 49
perso
nnel
deve
loped
in
vario
us sk
ills ar
eas
Impr
ove t
he
imple
menta
tion o
f the
perfo
rman
ce
mana
geme
nt an
d de
velop
ment
syste
m (P
MDS)
Impr
oved
PMD
S im
pleme
nted
Imple
ment-
ation
of th
e PM
DS po
licy
Achie
ved.
PMD
S im
pleme
nted,
all
perfo
rman
ce ag
reem
ents
in pla
ce
and e
mploy
ees i
ncen
tivise
d in t
erms
of
the im
prov
ed P
MDS
syste
m
Deve
lop an
d Imp
lemen
t the
talen
t man
agem
ent
strate
gy (T
MS)
Appr
oved
TMS
De
velop
ment
and
imple
menta
tion o
f the
TMS
Not A
chiev
edFo
cus w
as on
the
nalis
ation
of th
e HR
plan
. The
draft
TMS
has b
een
nalis
ed an
d app
rova
l will
be so
ught
durin
g the
2012
/2013
HUMAN RESOURCES MANAGEMENT
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR56
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Ensu
re co
mplia
nce w
ith
legisl
ative
requ
ireme
ntsDe
velop
and i
mplem
ent
HR po
licies
, pro
cess
es
and p
roce
dure
s
Appr
oved
polic
ies an
d gu
idelin
es
Deve
lopme
nt an
d im
pleme
ntatio
nAc
hieve
d. Si
x (6)
polic
ies ap
prov
ed
and i
mplem
ented
Prom
ote so
und
emplo
yer/e
mploy
ee
relat
ions
Perce
ntage
of re
solve
d re
porte
d cas
es10
0%No
t Ach
ieved
. 95
% of
case
s wer
e res
olved
and
one c
ase w
as su
bmitte
d dur
ing
March
2012
. To b
e na
lised
durin
g 20
12/20
13
Dur
ing
the
year
und
er re
view
a c
onsi
dera
ble
effo
rt w
as m
ade
to a
ttrac
t and
recr
uit e
mpl
oyee
s w
ith c
ritic
al s
kills
to d
eliv
er o
n th
e m
anda
te o
f th
e or
gani
satio
n. A
t 31
Mar
ch 2
012
empl
oym
ent e
quity
sta
f ng
ratio
s st
ood
at 9
4.3%
Bla
cks
to 5
.7%
Whi
tes;
60%
fem
ales
to 4
0% m
ales
; an
d 5
3.3%
cor
e fu
nctio
n to
46.
7% s
uppo
rt fu
nctio
n st
aff.
HUMAN RESOURCES MANAGEMENT
ANNUAL REPORT 2011/2012 57
WORKFORCE PROFILE AND CORE & SUPPORT FUNCTIONS
The Regulator headcount currently stands at 105 employees, as indicated in the table below.
Occupational LevelsMale Female Foreign
Nationals TotalA C I W A C I W Male Female
Top management 4 0 0 0 0 0 0 0 0 0 4
Senior management 3 0 1 0 3 0 0 1 0 0 8
Professionally quali ed and experienced specialists and mid-management 12 0 1 1 12 1 0 1 0 0 28
Skilled technical and academically quali ed workers, junior management, supervisors, foremen, and superintendents 11 0 0 1 25 2 2 1 0 0 42
Semi-skilled and discretionary decision making 6 0 0 0 9 1 0 0 0 0 16
Unskilled and de ned decision making 1 0 0 1 5 0 0 0 0 0 7
TOTAL PERMANENT 37 0 2 3 54 4 2 3 0 0 105
Temporary employees 0 0 0 0 0 0 0 0 0 0 0
GRAND TOTAL 37 0 2 3 54 4 2 3 0 0 105
Chart 1: Workforce pro le/Employment Equity
HUMAN RESOURCES MANAGEMENT
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR58
RECRUITMENT AND SELECTION
The table below indicates the total number of employees recruited during the twelve-month period.
Occupational LevelsMale Female Foreign
Nationals TotalA C I W A C I W Male Female
Top management 0 0 0 0 0 0 0 0 0 0 0
Senior management 0 0 0 0 0 0 0 0 0 0 0
Professionally quali ed and experienced specialists and mid-management 2 0 0 0 0 0 0 0 0 0 2
Skilled technical and academically quali ed workers, junior management, supervisors, foremen, and superintendents 1 0 0 0 2 0 0 0 0 0 3
Semi-skilled and discretionary decision-making 5 0 0 0 3 0 0 0 0 0 8
Unskilled and de ned decision-making 0 0 0 0 0 0 0 0 0 0 0
TOTAL PERMANENT 8 0 0 0 5 0 0 0 0 0 13
Temporary employees
GRAND TOTAL 8 0 0 0 5 0 0 0 0 0 13
Chart 2: Recruitment rate 2010/11 and 2011/2012
HUMAN RESOURCES MANAGEMENT
ANNUAL REPORT 2011/2012 59
PROMOTIONS
The table below indicates the total number of employees promoted during the twelve months period.
Occupational LevelsMale Female Foreign
Nationals TotalA C I W A C I W Male Female
Top management 0 0 0 0 0 0 0 0 0 0 0
Senior management 0 0 0 0 0 0 0 0 0 0 0
Professionally quali ed and experienced specialists and mid-management 0 0 0 0 0 0 0 0 0 0 0
Skilled technical and academically quali ed workers, junior management, supervisors, foremen, and superintendents
1 0 0 0 0 0 0 0 0 0 1
Semi-skilled and discretionary decision-making 0 0 0 0 0 0 0 0 0 0 0
Unskilled and de ned decision-making 0 0 0 0 0 0 0 0 0 0 0
TOTAL PERMANENT 1 0 0 0 0 0 0 0 0 0 1
Temporary employees 0 0 0 0 0 0 0 0 0 0 0
GRAND TOTAL 1 0 0 0 0 0 0 0 0 0 1
EMPLOYEE SERVICE TERMINATION
The table below indicates the total number of terminated employees during the twelve months period.
Occupational LevelsMale Female Foreign
Nationals TotalA C I W A C I W Male Female
Top management 1 0 0 0 0 0 0 0 0 0 1
Senior management 0 0 0 0 0 0 0 0 0 0
Professionally quali ed and experienced specialists and mid-management 0 1 0 0 0 0 0 0 0 0 1
Skilled technical and academically quali ed workers, junior management, supervisors, foremen, and superintendents
0 0 0 0 0 0 0 0 0 0 0
Semi-skilled and discretionary decision-making 0 0 0 0 0 0 0 0 0 0 0
Unskilled and de ned decision-making 0 0 0 0 0 0 0 0 0 0 0
TOTAL PERMANENT 1 1 0 0 0 0 0 0 0 0 2
Temporary employees 2 0 0 0 1 0 0 0 0 0 3
GRAND TOTAL 3 1 0 0 1 0 0 0 0 0 5
HUMAN RESOURCES MANAGEMENT
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR60
Chart 3: Employee Service Termination per month
HUMAN RESOURCES MANAGEMENT
ANNUAL REPORT 2011/2012 61
The table below indicates the Skills Development within SADPMR
Occupational LevelsMale Female Foreign
Nationals TotalA C I W A C I W Male Female
Top management 3 0 0 0 0 0 0 0 0 0 3
Senior management 2 0 0 0 2 0 0 0 0 0 4
Professionally quali ed and experienced specialists and mid-management 4 0 0 0 5 0 0 1 0 0 10
Skilled technical and academically quali ed workers, junior management, supervisors, foremen, and superintendents
4 0 0 0 11 1 0 0 0 0 16
Semi-skilled and discretionary decision-making 4 0 0 0 4 0 0 0 0 0 8
Unskilled and de ned decision-making 0 0 0 0 0 0 0 0 0 0 0
TOTAL PERMANENT 17 0 0 0 22 1 0 1 0 0 41
Temporary employees 0 0 0 0 0 0 0 0 0 0
GRAND TOTAL 17 0 0 0 22 1 0 1 0 0 41
Chart 4: Skills Development Data in terms of Gender and Racial Groups
HUMAN RESOURCES MANAGEMENT
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR62
BURSARIES OFFERED IN 2011/2012 FINANCIAL YEAR
The table below indicates bursaries offered to employees
Field of StudyMale Female Foreign
Nationals TotalA C I W A C I W Male Female
PhD Engineering 0 0 1 0 0 0 0 0 0 0 1
Masters in Business Administration 1 0 0 0 0 0 0 0 0 0 1
Masters of Management in Business 0 0 0 0 1 0 0 0 0 0 1
LLM Corporate Law 0 0 0 0 1 0 0 0 0 0 1
BCom International Politics, 0 0 0 0 0 0 1 0 0 0 1
BCom General 0 0 0 0 2 0 0 0 0 0 2
BCom Accounting 1 0 0 0 0 0 0 0 0 0 1
BA Public Administration, & Communication Science 0 0 0 0 0 2 0 0 0 0 2
BTech: Human Resources Management 0 0 0 0 1 0 0 0 0 0 1
BTech: Public Management 0 0 0 0 1 0 0 0 0 0 1
LLB 1 0 0 0 0 0 0 0 0 0 1
ND: Human Resource Management, 0 0 0 0 2 0 0 0 0 0 2
ND: Administration 0 0 0 0 2 0 0 0 0 0 2
ND: Security Risk Management 1 0 0 0 0 0 0 0 0 0 1
ND: Public Administration 0 0 0 0 1 0 0 0 0 0 1
ND: Public Management 0 0 0 0 0 1 0 0 0 0 1
GRAND TOTAL 4 0 1 0 11 3 1 0 0 0 20
INTERNSHIP PROGRAMME
The table below indicates the total number of Interns during the twelve months period.
Occupational LevelsMale Female Foreign
Nationals TotalA C I W A C I W Male Female
Internship Programme 4 0 0 0 7 0 0 0 0 0 11
HUMAN RESOURCES MANAGEMENT
ANNUAL REPORT 2011/2012 63
PERFORMANCE MANAGEMENT
Performance appraisals for the period 1 April 2011 to 31 March 2012 were completed and the employees appraised accordingly in terms of the requirements of the PMDS policy.
LABOUR RELATIONS MANAGEMENT
The table below indicates the total number of disciplinary actions:
Occupational LevelsMale Female Foreign
Nationals TotalA C I W A C I W Male Female
Disciplinary Action 4 1 1 0 3 0 0 0 0 0 9
List of misconducts addressed in 2011/2012
Misconducts Verdict
Unacceptable behaviour Dismissal
Breach of trust Dismissal
3 x Insolent behaviour 6 Months written warning
2 x Insubordination and insolence 6 Months written warning
Abusing the resources of the Regulator 3 Months written warning
Unacceptable conduct 3 Months written warning
Disloyalty 3 Months written warning
List of grievances lodged in 2011/2012 nancial year
Grievance Status
Improper and unethical conduct Resolved
Unacceptable behaviour/ conduct In Progress
Total sanctions issued in 2011/2012 nancial year
Type of sanction Number % of Total
Dismissal 2 20%
6 Months written warning 5 50%
3 Months written warning 3 30%
Total 10 100%
HUMAN RESOURCES MANAGEMENT
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR64
Withdrawal and addressed cases at CCMA
Cases Number % of Total
Addressed in the CCMA 1 33.3%
Withdrawn from CCMA 2 66.7%
Total 3 100%
Chart 5: Grievances and Misconducts 2009/10, 2010/11 and 2011/12
WORKSHOPS CONDUCTED DURING 2011/2012
• Government Employee Pension Fund workshop for Management Committee• Liberty Life workshop for all staff members • Leave policy workshop for all staff members • Induction programme for all new employees • Employee wellness programme workshop for managers
HUMAN RESOURCES MANAGEMENT
ANNUAL REPORT 2011/2012 65
PER
FOR
MA
NC
E IN
FOR
MAT
ION
: O
VER
VIEW
OF
INFO
RM
ATIO
N A
ND
CO
MM
UN
ICAT
ION
TEC
HN
OLO
GY
At t
he b
egin
ning
of t
he
nanc
ial y
ear w
e pr
ocur
ed a
nd d
eplo
yed
ICT
infra
stru
ctur
e eq
uipm
ent t
hat r
equi
red
an u
pgra
de. T
his
incl
uded
aud
iting
of
the
serv
er, d
eskt
op e
nviro
nmen
t and
est
ablis
hing
ser
vice
leve
l agr
eem
ents
(S
LA�
s) w
ith v
ario
us s
ervi
ce p
rovi
ders
for
the
supp
ly a
nd
mai
nten
ance
of o
ur in
tern
et s
ervi
ce a
nd e
nd-u
ser e
quip
men
t. In
tern
et s
ervi
ce p
rovi
sion
was
suc
cess
fully
mig
rate
d to
the
Sta
te In
form
atio
n Te
chno
logy
Age
ncy
(SIT
A).
The
Kim
berle
y of
ce
was
suc
cess
fully
link
ed to
the
SA
DP
MR
hea
d of
ce
virtu
al p
rivat
e ne
twor
k (V
PN
).
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
indi
cato
r/ m
easu
reAn
nual
targ
etAc
tual
perfo
rman
ceCo
nstra
ints
& p
ropo
sed
rem
edies
Impr
ove o
rgan
isatio
nal
capa
city f
or m
axim
um
exec
ution
brilli
ance
Deve
lop an
d imp
lemen
t an
infor
matio
n ma
nage
ment
syste
m
Imple
mente
d web
-bas
ed ad
min
syste
m:
- Lic
ensin
g mod
ule-
DEEC
tend
er m
odule
- Di
amon
d & pr
eciou
s me
tals –
regis
ter m
odule
- GD
V mo
dule
- Fin
ance
– Lic
ence
tra
nsac
tions
& re
gister
bil
ling
April
2011
Not A
chiev
edTe
nder
re-a
dver
tised
, cou
ld no
t get
supp
lier d
ue to
lack
of re
spon
se to
the
rst
adve
rt. S
ervic
e pro
vider
to
be ap
point
ed in
the 2
012/2
013
nanc
ial ye
ar.
Train
ing en
d-us
ers o
n the
new
web-
base
d ad
min s
ystem
Perce
ntage
of en
d-us
ers
traine
d10
0%Ac
hieve
d
Upgr
ade I
CT
infra
struc
ture
Upgr
ade I
CT in
frastr
uctur
eIm
pleme
ntatio
n
Appr
oved
polic
ies
Appr
oved
pro
cedu
res
Appr
oved
DRP
Not A
chiev
ed
Delay
s in t
he po
wer in
stalla
tion f
or
the ne
w se
rvers
to be
insta
lled.
To be
addr
esse
d in t
he 20
12/20
13
nanc
ial ye
ar
Link s
atellit
e of c
esCo
nnec
tivity
to sa
tellite
of ce
s3 s
atellit
e of c
esAc
hieve
d
Link s
trateg
ic sta
keho
lders
Conn
ectiv
ity to
stak
ehold
ers
1 stra
tegic
stake
holde
r
Feas
ibility
stud
y
Not a
chiev
edRe
levan
t stak
ehold
er ap
proa
ched
. Aw
aiting
resp
onse
. Foll
ow-u
ps to
be
cond
ucted
durin
g the
2012
/2013
Up
grad
e of e
xistin
g de
sktop
comp
uters
& oth
er pe
riphe
rals
Numb
er of
desk
tops a
nd
perip
hera
ls up
grad
ed50
Achie
ved
En
sure
comp
lianc
e with
leg
islati
ve re
quire
ments
Deve
lop IC
T go
vern
ance
plan
Appr
oved
ICT
gove
rnan
ce pl
anIm
pleme
ntatio
nAc
hieve
d
INFORMATION COMMUNICATION TECHNOLOGY
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR66
PER
FOR
MA
NC
E IN
FOR
MAT
ION
: FIN
AN
CE
Stra
tegi
c obj
ectiv
esAc
tiviti
esPe
rform
ance
in
dica
tor/
mea
sure
Annu
al ta
rget
Actu
al pe
rform
ance
Cons
train
ts &
pro
pose
d re
med
ies
Ensu
re co
mplia
nce w
ith
legisl
ative
requ
ireme
ntsMa
nage
reve
nue,
expe
nditu
re, a
ssets
an
d liab
ilities
effec
tively
an
d ef c
iently
Comp
leted
comp
lianc
e tem
plate
Month
lyAc
hieve
d. Tw
elve (
12) c
ompli
ance
tem
plates
comp
leted
.
Revie
w an
d upd
ate al
l na
ncial
polic
ies an
d pr
oced
ures
Numb
er of
polic
ies
revie
wed a
nd ap
prov
ed5
Not A
chiev
ed.
Focu
s was
on th
e imp
lemen
tation
of
supp
ly ch
ain pr
oces
ses a
nd in
terna
l co
ntrols
stipu
lated
on th
e PFM
A an
d Tr
easu
ry Re
gulat
ion co
mplia
nce
chec
klist.
As a
resu
lt the
revie
w an
d ap
prov
al of
deve
loped
polic
ies w
as
delay
ed. T
he fo
ur (4
) poli
cies w
ill be
su
bmitte
d for
appr
oval
durin
g the
20
12/20
13 n
ancia
l yea
r
Impr
ove o
rgan
isatio
nal
capa
city f
or m
axim
um
exec
ution
brilli
ance
Align
budg
et to
appr
oved
stra
tegic
plan
Appr
oved
budg
et30
Sep
t 201
1Ac
hieve
d. Bu
dget
was a
ppro
ved
and s
ubmi
tted t
o the
shar
ehold
er.
Hig
hlig
hts
The
Reg
ulat
or h
as in
tens
i ed
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FINANCE
ANNUAL REPORT 2011/2012 67
Strategic objectives Activities
Performance indicator/ measure
Annual target Actual performance
Constraints & proposed
remedies
Ensure compliance with legislative requirements
Review the internal audit charter
Annually reviewed and approved Audit Charter
1 Achieved. Audit charter reviewed and approved
Prepare an annual audit plan
Approved plan 1 Achieved. Annual audit plan prepared approved by Audit Committee
Assess the risks as identi ed in the risk register
Updated risks register
10 Achieved. All planned audits were conducted during the nancial year and the risk register updated accordingly
Respond to the Auditor General (AG)’s management letter
Response to the Auditor General’s ndings
1 Auditor General’s recommendations implemented
INTERNAL AUDIT
ANNUAL REPORT 2011/2012 71
REPORT OF THE AUDIT COMMITTEE Report of the Audit Committee required by Treasury Regulations 27.1.7 and 27.1.10 (b) and (c) in terms of the Public Finance Management Act 1 of 1999, as amended.
1. Overview
We are pleased to present our report for the nancial year ended 31 March 2012.
1.1 Audit Committee members and attendance
The Audit Committee consists of the members listed hereunder. As per its terms of reference, the committee is required to meet at least 2 times a year. During the year under review, 4 meetings were held.
Member Period Meetings Attended
P. Bersiks 1 April 2011 - 31 March 2012 4
E. Blom 1 April 2011 - 31 March 2012 2
R. Paola 1 April 2011 - 31 March 2012 3
K. Rana 1 April 2011 - 31 March 2012 3
M. Ntumba 1 April 2011 - 31 March 2012 3
1.2 Audit Committee’s Responsibility
The Audit Committee is a committee of the Board and has discharged its responsibilities accordingly in terms of section 51 (1) a (ii) of the PFMA and 27.1.8 of the Treasury Regulations. The Audit Committee adopted a formal terms of reference, its audit committee charter, and has regulated its affairs in compliance with the charter and has discharged its responsibilities contained therein.
1.2.1 Effectiveness of internal control
During the year various reports of the Internal Auditors as well as the Audit Report on the Annual Financial Statements and Management Letter of the Auditor General indicated that the system of internal control has shortcomings. The Audit Committee has noted these and based on the outcome of such reviews and the information provided by Management, the Audit Committee is of the opinion that the internal controls of the Regulator operated effectively throughout the year under review.
The Audit Committee is also of the view that progress has been made with respect to the control environment, especially in view of the fact that the Regulator has achieved its second successive unquali ed audit report.
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR72
1.2.2 Risk management and governance
A risk management framework and policy has been adopted and approved by the Board.
A process of enterprise wide risk management was implemented by the Regulator wherein risk assessments are conducted and updated on an annual basis by the Internal Audit function at both senior management and Board level.
During the year the Regulator adopted and approved various policies and procedures to strengthen the control environment.
1.2.3 Monthly and quarterly performance information
The Audit Committee is satis ed with the content and quality of monthly and quarterly reports prepared and issued by the Regulator during the year under review.
1.2.4 Internal audit
The Audit Committee reviewed the activities of the internal audit function and has concluded the following:
• the function is effective and that there were no unjusti ed restrictions or limitations;• the internal audit reports were reviewed at audit committee meetings, including its annual work
programme, co-ordination with the external auditors, the reports of signi cant investigations and the responses of management to issues raised therein.
2. Evaluation of Annual Financial Statements
The Audit Committee has:
• reviewed and discussed with the Auditor-General and the Accounting Authority the audited annual nancial statements to be included in the Annual Report;
• reviewed the Auditor-General’s audit report, the management letter and management responses thereto; and
• reviewed the signi cant adjustments resulting from the audit.
The Audit Committee concurs and accepts the conclusions of the Auditor-General on the annual nancial statements and is of the opinion that the audited nancial statements be accepted and read together with the report of the Auditor-General and the Accounting Authorities Report. The Audit Committee agrees that the adoption of the going concern premise is appropriate in preparing the annual nancial statements.
On behalf of the audit committee
Peter Bersiks
Chairman Audit Committee
On behalf of the audit
Petettttt r Bersiks
ANNUAL REPORT 2011/2012 73
REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR
REPORT ON THE FINANCIAL STATEMENT S
Introduction
1. I have audited the nancial statements of the South African Diamond and Precious Metals Regulator set out on pages 76 to 108, which comprise the statement of nancial position as at 31 March 2012, the statement of nancial performance, statement of changes in net assets and the cash ow statement for the year then ended, and the notes, comprising a summary of signi cant accounting policies and other explanatory information
Accounting authority’s responsibility for the nancial statements
2. The accounting authority is responsible for the preparation and fair presentation of these nancial statements in accordance with South African Statements of Generally Recognised Accounting Practice (SA Statements of GRAP) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA), and for such internal control as the accounting authority determines is necessary to enable the preparation of nancial statements that are free from material misstatement, whether due to fraud or error.
Auditor-General’s responsibility
3. My responsibility is to express an opinion on these nancial statements based on my audit. I conducted my audit in accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2001) (PAA), the General Notice issued in Government Gazette 33872 of 15 December 2010 and International Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the nancial statements.
5. I believe that the audit evidence I have obtained is suf cient and appropriate to provide a basis for my audit opinion.
SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR74
Opinion
6. In my opinion, the nancial statements present fairly, in all material respects, the nancial position of the South African Diamond and Precious Metals Regulator as at 31 March 2012 and its nancial performance and cash ows for the year then ended in accordance with South African Statements of Generally Recognised Accounting Practice (SA Statements of GRAP) and the requirements of the PFMA .
Emphasis of matters
7. I draw attention to the matters below. My opinion is not modi ed in respect of these matters
Restatement of corresponding gures
8. As disclosed in note 24 of the nancial statements, the corresponding gures for 31 March 2011 have been restated as a result of errors discovered during 31 March 2012 in the nancial statements of the South African Diamond and Precious Metals Regulator at, and for the year ended, 31 March 2011.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMEN TS
9. In accordance with the PAA and the General Notice 1111 of 2010 issued in Government Gazette 33872 of 15 December 2010, I report the following ndings relevant to performance against predetermined objectives, compliance with laws and regulations and internal control, but not for the purpose of expressing an opinion.
Predetermined objectives
10. I performed procedures to obtain evidence about the usefulness and reliability of the information in the annual performance report as set out on pages 20 to 67 of the annual report.
11. The reported performance against predetermined objectives was evaluated against the overall criteria of usefulness and reliability. The usefulness of information in the annual performance report relates to whether it is presented in accordance with the National Treasury annual reporting principles and whether the reported performance is consistent with the planned objectives. The usefulness of information further relates to whether indicators and targets are measurable (i.e. well de ned, veri able, speci c, measurable and time bound) and relevant as required by the National Treasury Framework for managing programme performance information.
12. The reliability of the information in respect of the selected objectives is assessed to determine whether it adequately re ects the facts (i.e. whether it is valid, accurate and complete).
13. There were no material ndings on the annual performance report concerning the usefulness and reliability of the information.
ANNUAL REPORT 2011/2012 75
Additional matter
14. Although no material ndings concerning the usefulness and reliability of the performance information were identi ed in the performance information report, we draw attention to the following matter below. This matter does not have an impact on the predetermined objectives audit ndings reported above
Achievement of planned targets
15. Of the total number of planned targets, only 78% were achieved during the year under review. This represents 22 % of total planned targets that were not achieved during the year under review. This was mainly due to the fact that indicators and targets were not suitably developed during the strategic planning process.
Compliance with laws and regulations
16. I performed procedures to obtain evidence that the entity has complied with applicable laws and regulations regarding nancial matters, nancial management and other related matters. I did not identify any instances of material non-compliance with speci c matters in key applicable laws and regulations as set out in the General Notice issued in terms of the PAA.
Internal control
17. I considered internal control relevant to my audit of the nancial statements, annual performance report and compliance with laws and regulations. I did not identify any de ciencies in internal control which we considered suf ciently signi cant for inclusion in this report.
Pretoria
31 July 2012
Head Office
Jewel City, 251 Fox Street, Johannesburg, 2001Tel: 011 223 7000 Fax: 011 334 8898
Kimberley Office
15-17 Chapel Street, 2nd floor Chapwood Chambers, Kimberley, 8301Tel: 053 831 3121 Fax: 053 831 3101
KwaZulu-Natal Office
3rd Floor, Durban Bay House, 333 Anton Lembede Street, Durban, 4000Tel: 031 335 9677 Fax: 031 301 6950
Cape Town Office
10th Floor, Atterbury House, 9 Riebeek Street, Cape Town, 8000Tel: 021 427 1070 Fax: 021 0866 124 907
www.sadpmr.co.za
ISBN 978-0-621-40793-8 • RP 107/2012
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