This report is about our responsibilities in society. As a global player in the diamond industry, we account for approximately 40% of world production and 45% of world distribution. We report on our economic, ethics, employee, community and environmental performance from January 2005 until December 2006. Systematic data coverage is for 2005. In our report, we address issues that are relevant and material to our stakeholders who include governments, intergovernmental organisations, non-governmental organisations (NGOs), communities, employees, contractors, suppliers, consumers and shareholders.
	Our stakeholders have concerns about issues as diverse as free and fair competition, anti-corruption, conflict diamonds, HIV/AIDS, human rights, small-scale informal diamond digging, indigenous communities, planning for closure, and energy and climate change. The last 18 months have marked a period of change for De Beers. This includes senior management changes. It includes the sale of 26% equity in De Beers Consolidated Mines (DBCM), our South African mining arm, to Ponahalo. The latter is a broad based Black Economic Empowerment (BEE) company, partly owned by our employees and pensioners. Agreements were signed with the government of Botswana for the renewal of mining licences, the continued sale of diamond production to the Diamond Trading Company (DTC) and to undertake beneficiation and job creation initiatives. De Beers also obtained approvals for two expansion projects in South Africa and negotiated exploration partnerships with Angola and the Democratic Republic of Congo (DRC). Our two Canadian projects, Snap Lake and Victor, remain on track for commissioning in 2007 and 2008. Together, these projects drive employment, investment and enhanced returns to stakeholders, including our African government partners. The year 2005 saw a 4% increase in diamond production. Pre-tax profits were up 3% from 2004. De Beers invested more than US$4.9 billion of its US$7.96 billion total income in Africa. This was through capital investment and payments to stakeholders including governments, employees and suppliers (for diamonds and services). It includes profits shared with governments and BEE partners. In addition, nearly 1.3% (US$13.5 million) of pre-tax profit was donated to local communities. Over 90% of this (US$12.2 million) was disbursed in Africa to address education, health and HIV/AIDS. This investment is worth nearly US$37 million in Africa, when adjusted for purchasing power. Important work was also undertaken to develop our new Purpose, Vision, Values and Principles. Our Principles define the way we do business, inform our understanding of what is right and wrong, and describe what is important to us. They provide a comprehensive framework for measuring our contribution to sustainable development. The Principles will be implemented progressively over 2007/8.They are rooted in best practice standards and extensive consultation with our stakeholders. A rigorous Assurance Programme ensures continuous improvement. Three performance focal points for 2005/6 are safety, HIV/AIDS and climate change: With sadness and regret we report the accidental deaths of Clement Mooki (January 2005), Benjamin Maide (October 2005), Baagi Medupe (February 2006) and Michael Masindi (September 2006). In 2005, we recorded improvements of more than 35% in both our lost time injury severity rates and shifts-lost indicators. Seven mine operations obtained certification to the OHSAS 18001 standard in 2005/6. We will implement OHSAS 18001 and behaviour-based safety programmes at all our operations by end 2007. At the time of reporting, more than 80% of the DBCM workforce, 70% of Namdeb employees and 80% of Debswana employees had participated in our workplace voluntary counselling and testing (VCT) programmes. The provision of antiretroviral treatment (ART) is 100% funded and available to all employees and a spouse or life partner where it can be provided in a responsible and sustainable manner. Currently, 1 245 employees and 294 spouses are registered on treatment programmes. Improving treatment adherence is a target for 2007. The reporting period saw the development of our Energy and Climate Change Policy. All DBCM operations have set an aggressive energy reduction target of 15% by 2015. Our energy strategy aims to increase energy efficiency through best practice, a more diversified energy portfolio and the use of market-based mechanisms for emissions reductions. All mining operations are ISO 14001 certified except Williamson Diamonds Limited in Tanzania, which is on track for certification in 2007. This report has been prepared in accordance with the new Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines. It also applies the GRI Mining and Metals Sector Supplement and Reporting Guidance on HIV/AIDS. We are a signatory to the UN Global Compact. Our Communication on Progress and evidence of our contributions to the UN Millennium Development Goals are available online. We have sought to be objective and qualify every statement with evidence. Where possible we have presented stakeholder viewpoints and the assurance of specialist external providers. This report is not just about us telling you what we have done. We also invite you to tell us whether we are “living up to diamonds”. Gareth Penny