To help maintain the integrity of our supply chain, Tiffany & Co. established Laurelton Diamonds in 2002, a wholly owned subsidiary that procures rough diamonds and manages our worldwide supply chain that sources, cuts, polishes and supplies finished stones to Tiffany & Co.
Tiffany & Co. recognizes that diamond-producing countries are entitled to benefit from their diamond resources; we support producer country beneficiation. We believe that diamond activities should be used to further develop and sustain economies, to create employment opportunities and to support the broader social goals of communities and nations.
Our first investment in a producer country was in Yellowknife, Canada in 2002. Since then we have invested in cutting and polishing operations in the following diamond-producing countries: Botswana, Namibia and South Africa. In Calendar Year 2012, we provided over $90 million* in beneficiation to the local economies, including payments to local suppliers, payroll, donations and taxes. This figure rose from $63 million in 2011 due to an increase in purchases of rough diamonds from these three countries.
In order to further invest in these communities, we hire local employees to work in, and ultimately manage, our facilities. Laurelton Diamonds provides on-the-job training for employees, to provide a lasting impact on the development of the country. Our facilities have custom-designed, state-of-the-art equipment and our employee development and training programs are designed to equip the local workforce to meet Tiffany & Co.’s exacting quality standards. Local employees make up 90%* of the workforce in Laurelton’s facilities in Botswana, Namibia and South Africa. Additionally, the Tiffany & Co. Social Accountability Program includes Laurelton Diamonds facilities to ensure that employees are offered a safe and respectful working environment.
Tiffany has worked with outside contractors and academics to ensure that we provide our skilled workforce fair wages for its work. In 2009, we began to conduct living wage studies at each Laurelton Diamonds location to ensure that trainees are paid above minimum wage in the area and that skilled workers receive salaries at and above the living wage. Tiffany defines a living wage as the rate, which is required to support an employee, meet financial obligations of the employee’s dependents and provide some discretionary income. The living wage reflects the expectations of the particular society at the time the calculation is made. In 2013, Laurelton management will conduct an in-depth analysis of our living wage program to ensure that it is meeting its intended goal to provide workers with fair and equitable compensation.
*Metric included in the Report of Independent Accountants