Business Ethics

As a leader of the world diamond industry, ALROSA applies high ethical standards of transparent and fair business conduct to maintain the company's business reputation at a proper level, improve corporate culture and follow the best practices of corporate governance. ALROSA was the first company in the diamond sector to become a public company of such size, and we believe that openness and transparency are the key tools for achieving these goals, and that an impeccable reputation is not only a competitive advantage, but also an essential condition for the development of the diamond business.

Since the early 2000s, the global diamond industry has seen an escalation of ethical issues that are closely linked with political processes. Taking into account global trends, both in industry and business processes, we intend to maintain our ethical principles and develop these relations in two ways: on the Russian and international business arena and within the company.

Participation in international and Russian business ethics and integrity initiatives

Organization

Documents

ALROSA actively cooperates with the World Federation of Diamond Bourses (WFDB).  

The company operates with strict observance of the WFDB resolutions and recommendations that regulate the behaviour of participants in the world diamond market. 

Support of the goals and objectives of the Kimberley Process as an intergovernmental initiative to fight conflict diamonds, and participation of the Russian Federation in the Kimberley Process.  

The company complies with the standards of certification, principles and decisions that are put down in the administrative decisions of the Kimberley Process. 

ALROSA is a founding member of the Diamond Chamber of Russia. 

The Internal Regulations of the Diamond Chamber of Russia has a provision on ethical principles of business conduct, which ALROSA strictly abides by in its operations. 

ALROSA has been a member of the Russian PR Association (RASO) since 1991.

The company fully supports the Russian Code of Professional and Ethical Principles established by RASO.

The declaration and ethical principles of ALROSA’s business conduct are inscribed in the effective Regulations on the Procedures and Terms of Sales of Natural Rough Diamond by OJSC ALROSA. 

The Kimberley Process

The world diamond sector was one of the first to face the problem of illegal, uncontrolled use of revenues from illicit mining of natural diamonds to finance, inter alia, internal armed conflicts in a number of African countries. In order to break the link between the illegal mining of diamonds and armed conflicts and terrorist activities, the government of a number of countries, the diamond industry, and representatives of civil society announced in 2001 the creation of the Kimberley Process, which, on the one hand, is a unique mechanism for international cooperation, and a manifestation of the increased civic self-consciousness of business, on the other. Today, 80 countries are participating in and fully comply with the principles of the Kimberley Process. 

To solve the tasks outlined by the Kimberley Process, it was decided to set up an intergovernmental accounting system that would keep, accumulate and publish statistical data on the volume of rough diamond production and international export and import transactions. Any export transaction involving rough diamonds is accompanied by a special Kimberley Process certificate that the member counties of the process issue to confirm the origin of the diamonds.  

The accessibility and openness of the Kimberley Process also contributes to better transparency in the diamond market and helps improve customer trust in our products.

ALROSA actively supports Russian government bodies in their efforts to achieve the goals and implement the requirements of the Kimberley Process by various means, including taking a strong and principled position to not supply rough diamonds to legal entities and individual business people if they: 

  • come from a country that is not an official member of the Kimberley Process;
  • do not comply with the international Kimberley Process Diamond Certification Scheme (KPCS);
  • violate the procedure for separate sales of natural, synthetic and treated natural diamonds and their end products established in the global practice;
  • violate the requirements of tax, customs and other legislation;
  • are in the process of restructuring, liquidation or insolvency;
  • have provided inaccurate information about themselves.

 

INTERNAL REGULATIONS OF THE DIAMOND CHAMBER OF RUSSIA

Ethical Principles of Business Conduct

We base our work on trust and honesty, and therefore all participants in transactions are obliged to hold negotiations in an honest and fair way and keep their word.

The application and observance of generally accepted ethical principles of business conduct shall be a prerequisite for assuring mutual understanding and development of business. To this end, the members and visitors of the Diamond Chamber shall:

  • Prove their professional knowledge and skills;
  • Treat their colleagues with respect;
  • Describe diamonds and other gemstones fairly and accurately;
  • Undertake all necessary measures – prescribed and voluntary – to avoid trading in conflict diamonds, notably to observe the requirements of the diamond industry within the framework of the Kimberley Process, including:  
    • all contracts (agreements) on sales of natural diamonds, polished diamonds and diamond jewellery shall contain the following confirmation: “Natural diamonds (polished diamonds, diamond jewellery), which are mentioned in this contract (agreement) were acquired from legitimate sources (in accordance with the relevant UN resolutions). The seller hereby warrants and guarantees that these diamonds (polished diamonds, diamond jewellery) are not conflict diamonds according to written warranties submitted by the supplier”;  
    • not to buy any natural diamonds from firms whose contracts (agreements) do not have such a confirmation;
    • not to purchase natural diamonds from suspicious or unknown sources and/or sources from those countries that have not introduced the Kimberley Process Certification Scheme;
    • not to purchase  natural diamonds from any source that after completing a corresponding legally binding procedure was found guilty of violating existing regulations that restrict the trade in diamonds from conflict areas;  
    • not to purchase natural diamonds in or from a region wherefrom, according to information from a state body, conflict diamonds originate or if they are sold in said region, unless such diamonds were not exported from that region in accordance with the requirements of the Kimberley Process;
    • Consciously refrain from buying or selling or assisting others in buying or selling natural diamonds from conflict areas;
  • Not to treat rough diamonds with the aim of improving natural diamond characteristics or consciously participate in the trade in such rough diamonds and not to conceal information related to enhancing the qualitative characteristics of diamonds and other gemstones;
  • Not to conceal the synthetic origin of a diamond or any other gemstone;
  • Provide safe and non-hazardous labour conditions for its employees; 
  • Observe human rights and conform to social accepted moral principles;  
  • To refrain from being involved, directly or indirectly, in activity that may be harmful to society. 

Corporate Ethics

Observance of business ethics becomes one of the key indicators in assessing the professionalism of an individual employee and the organization in general.  Compliance by employees with business ethics becomes a hallmark of the organization and, in many cases, determines the success of relationships with contractors and within the team.

ALROSA’s management understands the need for developing and implementing an internal corporate legal instrument (a code) that would regulate corporate relations, including ethics.

One of the most important elements of a corporate ethics system today is ALROSA’s anti-corruption policy.

Anti-Corruption Activity  

The same as in most large companies, we must acknowledge that corruption has increasingly become one of the most significant impediments to sustainable development in any area, since it is now found not only within government or administrative structures, but also in the business world. This problem requires prompt resolution and development of policies, principles and countermeasures for each individual company.

ALROSA, in turn, actively supports the efforts of the international community in the fight against corruption and aims to minimize the risk for the company’s management and employees, regardless of their position, of being involved in corrupt practices.

Our company’s anti-corruption regulatory framework is based on the standards of international and Russian anti-corruption legislation, and includes a series of provisions, methodological guidelines and administrative documents.

In accordance with the Regulation On the Procedures and Terms of Sales of Natural Rough Diamonds by OJSC ALROSA, the company has the right to stop selling natural diamonds to a buyer if there is an established fact of a violation of law involving corruption on the part of said buyer (or its employees), said offence being confirmed by an authorized state body1.

We give special consideration to laws and regulations governing purchasing activity as an area of increased risk for engaging affiliated companies. The company applies an approved List of Attributes (Criteria) for Contractors Participating in the Company’s Purchasing Procedures, and if a contractor meets certain criteria it may be categorized as a “fly-by-night” company.

Starting from December 2011, our company has applied an internal Order On Carrying out Anti-Corruption Inspections (Order No. А01 / 0286‑P of December 20, 2011).

In general, within the reporting period, the company’s internal security departments carried out 230 procedures related to detecting instances of corruption among the company’s employees and 4,064, among business partners, when concluding purchasing contracts. Twelve structural units, or 40% of all ALROSA divisions, and four subsidiaries, or 10.5% of all ALROSA subsidiaries, were reviewed with regard to corruption risks and, following the inspections, a series of administrative sanctions were imposed on offenders.

The Economic Safety and Regime Department is in charge of the company’s anti-corruption management system.

In 2012, four of our employees took an anti-corruption policy training course. A larger number of people took the anti-corruption course in 2011.This training course is being conducted in 2013 as well.

 



In accordance with Paragraph 1, Article 1 of Federal Law No. 273-FZ of December 25, 2008 “On Anti-Corruption Measures”, corruption shall mean abuse of official position, bribery, abuse of authority,  commercial graft or any other unlawful use by an individual of his or her official position contrary to the legitimate interests of society and the state for the purpose of gaining benefits in the form of money, valuables or other property or services of a material nature, or other property rights for oneself or third persons, or the unlawful provision of such benefits to said person by other individuals, as well as the committal of the aforementioned deeds on behalf of or in the interests of a legal entity.