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ROBERT PINESPROFESSOR JUSTUS R. WEINER, ADVOCATE
BUSINESS ETHICS AND SOCIAL RESPONSIBILITY: A MIDDLE EASTERN PERSPECTIVE
BUSINESS AND ECONOMICS 48260NOVEMBER 21, 2011
Ethics within the Business Practices of the Israeli
Diamond Industry
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World Diamond Industry
Three major world diamond capitals: Antwerp, Belgium New York City, USA Ramat Gan (Tel Aviv), Israel
Two categories: Gem-grade diamonds, used for
their beauty Industrial-grade diamonds,
used for their molecular properties
Most imported from Africa; global sales worth over $72 billion
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Israeli Diamond Industry
World leader in the production of cut diamonds Polishing Center Trade Center
Diamond Exchange District, Ramat Gan World’s largest diamond
exchange World’s largest trading floor
Thousands of diamantaries, which are manufacturers of gem-quality diamonds
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Israeli Diamond Industry, Statistics
In 2000, Israel exported more polished diamonds than Belgium and India combined
In the first quarter of 2011, Israeli diamond exports reached $1.2 billion 2010 Q1 only saw $829
million 39.6 percent increase
Participation in trade shows in Mumbai, Vicenza, Hong Kong, and Basel
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Industry Process
Israeli involvement in:
• Sorting• Cutting and Polishing• Jewelry Manufacturing• Retailing
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Efforts to Eliminate Blood Diamonds
Blood diamonds, or conflict diamonds, are: Mined from areas of conflict,
often using slave labor Sold to fund insurgencies,
wars, battles, etc.
Kimberley Process Certification Scheme UN-mandated process to
eliminate blood diamonds from the market
Only the 75 countries that are members of the Kimberly Process (KP) can import or export rough diamonds
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Efforts to Eliminate Blood Diamonds
International
2003: Israel was the first country to issue a KP certificate, showing that its diamonds are conflict-free
2010: Mr. Boaz Hirsch of Israel named Chair of the KP In favor of a supranational
body to monitor and enforce the KP
Proponent of passing the chairmanship between trading and producing countries
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Efforts to Eliminate Blood Diamonds
Domestic
Establishment of a Diamond Controller within the Ministry of Industry, Trade, and Labor. Monitors imports and
exports in accordance with the KP
Represents the government in forums dealing with conflict diamonds
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Diversity and Integration in the Industry
A traditionally “Jewish” occupation in pre-WWII Europe
Establishment of Israel brought Jewish immigrants from a variety of backgrounds
Tension between the richer Ashkenazim and the poorer Sephardim influenced employment in the nascent Israeli diamond industry
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Diversity and Integration in the Industry
Ashkenazim mainly worked in management, a legacy from their positions in Europe Belgium Germany The Netherlands
Sephardim were relegated to lesser, more strenuous positions
In recent years, many foreigners have taken positions as diamantaries in Israel
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Diversity and Integration in the Industry
Mix of such diverse cultures resulted in tensions in the workplace during the early years
Today, the Israeli Diamond Industry is a standard for tolerance, diversity, and integration Every Israeli faces the
same threats; no room for discrimination
Global Jewish connections/networks have made the industry quite prosperous for all employees
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Government Influence on the Industry
During the early years of the state, the government encouraged construction of diamond plants in development areas Tried to encourage growth
away from Tel Aviv Attempted to create new
sources of employment
Dire need to populate and industrialize the Galilee and Negev
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Government Influence on the Industry
Eventual financial failures of most plants Locations deemed too
remote Inadequate amount of
working capital Irregular supply of resources
Mass buy-up through government backed company called Pituach Fears of a government
takeover Protests from foreign
governments, local manufacturing association
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Government Influence on the Industry
Growth in plants, decline in employment Underutilization of plants Frequent cessation of
operations
“Plants… embroiled in wildcat strikes and frequent strife”
Mass migration back to urban centers
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References
"Boaz Hirsch, Chair of the Kimberley Process." Israel Trade Commission. Israel Trade Commission, 26 Oct. 2011. Web. 20 Nov. 2011.
"The Diamond Industry Fact Sheet." Diamond Facts. World Diamond Council, n.d. Web. 20 Nov. 2011.
"Ethics Very Important Issue for the Diamond Industry." Diamond World. Diamond World, 30 June 2007. Web. 26 Oct. 2011.
Gradus, Yehuda, Eran Razin, and Shaul Krakover. The Industrial Geography of Israel. New York: Routledge, 1993. Print.
"Israel Diamond Industry Reports Strong Export Growth." Jewellry Outlook. Jewellry Outlook, 6 Jan. 2011. Web. 26 Oct. 2011.
The Israeli Diamond Industry. Israel Diamond Institute, n.d. Web. 26 Oct. 2011.
Siegel, Dina. The Mazzel Ritual: Culture, Customs and Crime in the Diamond Trade. New York: Springer, 2009. Print.
Szenberg, Michael. The Economics of the Israeli Diamond Industry. New York: Basic Books, 1973. Print.