De Beers Denies Conflict of Interest

March 23, 2001

De Beers Denies Conflict of Interest

De Beers today denied there's a conflict of interest created by the presence of some of its major buyers on the South African Diamond Board committee that decides if the company must pay an export tax. According to Reuters, De Beers Spokeswoman Tracey Peterson says, "We don't believe it's a conflict of interest...We are definitely not buying influence on the committee."

The Diamond Board is scheduled to meet next week to discuss legislation relating to export taxes within the context of the government's new draft minerals bill, Reuters reports. However, Diamond Board head Abe Chikane says there's no conflict of interest with having sightholders on the board. It has happened in the past. Six of the 22 members of the Diamond Board and three of the 11 members of its Section 59 committee are sightholders.

Currently, De Beers pays no export tax on its sales because more than half of its diamonds in value are brought back to South Africa to local cutters and polishers. The Diamond Board and its Section 59 committee are supposed to decide if De Beers should pay a 15% export tax, which would cost the company millions each year. Conflicts between the Diamond Board and De Beers over export taxes have delayed De Beers shipments in the past.

- by Julia M. Duncan