Corporate Social Responsibility Statement

Since its founding in 1903, Lazare Kaplan International Inc. (LKI) has become an acknowledged leader among the world’s diamond cutting and polishing companies.  Every Lazare Diamond® is cut to produce the optimal balance of brilliance, scintillation, and fire. Likewise, LKI has consistently set and adhered to the highest ethical and professional standards in the industry.  This tradition of excellence gives every LKI stakeholder the confidence that they share in one of the richest and most honorable diamond traditions anywhere.   LKI has, in addition, taken a leading role in developing self-regulatory industry protocols and procedures to promote ethical conduct.   LKI has been a committed partner of the people in those countries on five continents where it does business, pursuing policies and projects that yield tangible local benefits.  The consistency of the company’s commitment to local communities reflects LKI’s operating philosophy of long-term dedication to its partners, within and without the industry.   LKI is proud of its record of leadership in promoting ethical, social, and environmental accountability in today’s global diamond market place. 


GOOD CORPORATE GOVERNANCE 

Fair Trade and Practice Laws – An increasing body of U.S. legislation regulates the conduct of American corporations vis-à-vis other stakeholders such as employees, consumers and local communities.   LKI fully supports, complies with, and routinely exceeds the standards set by legislation in all these areas.   

Ethical Standards in All Commercial Relationships – A number of multinationals have faced intense public scrutiny in recent years because of sub-par standards in some of their offshore operations. By contrast, LKI’s close involvement with its own operations outside America ensures that the highest ethical standards are maintained in all its commercial relationships, irrespective of where located. 

Code of Ethics – LKI’s Board has adopted and enforced a Code of Ethics for senior company officers, mandating adherence to a rigorous set of substantive and procedural safeguards. 

Compliance With Laws - As a concerned leader of the global diamond industry, LKI has helped develop and fully supports policies which prohibit corruption and bribery, outlaw the trade in conflict diamonds, prevent money laundering, combat the financing of terrorism, and promote transparency, fair dealing and disclosure throughout the diamond pipeline.  It is LKI’s strict policy to clearly identify its prospective suppliers and its customers before entering into any business transaction.  

Zero Tolerance for Corruption - LKI shall conduct its affairs in accordance with all applicable laws and in adherence to the highest ethical business standards.   

USA PATRIOT Act -- Under Financial Crimes Enforcement Network (FinCEN) of the United States Treasury Department rules, diamond dealers are required to establish Anti-Money Laundering (AML) programs under the USA PATRIOT Act. The regulations ensure that relevant provisions of the Bank Secrecy Act are applied appropriately to the diamond industry.  LKI is defined as a dealer under these rules and has implemented all relevant USA PATRIOT Act provisions as required under the law.   

Zero Tolerance for Zimbabwe Diamonds – Until further notice, LKI rough diamond traders are specifically precluded from trading rough diamonds known to have originated in Zimbabwe or polished diamonds known to have been cut from Zimbabwe rough diamonds.    

Zero Tolerance For Conflict Diamonds -- LKI rough diamond traders are trained to recognize conflict diamonds as defined by UN Resolution 55/56 of 2001. The LKI system of controls was instituted even before the existence of this UN Resolution, and received special commendation from the UN for its contribution to stemming the flow of conflict diamonds.   All of LKI’s rough diamond buyers are required to sign and abide by a written code of ethical diamond trading conduct as a condition of continued employment.   

Kimberley Process Certification Scheme (KPCS) - LKI actively participated in the inaugural meeting of diamond industry stakeholders in Kimberley, South Africa in May 2000 and participated in all subsequent deliberations that led to the January 2003 adoption of the KPCS and its system of controls over rough diamond trading. With over 81 participating countries, the KPCS has proved to be a significant tool for combating the trade in conflict diamonds, contributing to peace and security, and protecting the legitimate diamond industry.  LKI will not import or export rough diamonds without an accompanying Kimberley Process Certificate of origin.   

The Clean Diamond Trade Act of April 2003 – The Act enabled the United States to implement Kimberley Process regulations to eliminate the international trade in “conflict diamonds”.   

World Diamond Council (WDC) Industry Self-Regulation – Established in conjunction with the KPCS, the WDC has established a system of buyer-seller warranties to extend the reach and effectiveness of the KPCS throughout the entire diamond pipeline. LKI trades only with companies that provide such warranty statements, guaranteeing the conflict-free origin of all diamonds on their invoices.  All sales and consignments of LKI diamonds are themselves accompanied by LKI’s own warranty statement.  This flow of warranties in and warranties out is audited and reconciled on an annual basis by LKI’s financial auditors. 

Leadership in Disclosure – Just as LKI has been an industry leader in technological breakthroughs relating to diamond enhancement; it has been the first to insist on full disclosure of all such treatments.   

Zero Tolerance for Undisclosed Synthetic Diamonds – As the pioneer of full disclosure best practice, Lazare Kaplan International Inc. has always taken matters of disclosure and supply chain integrity very seriously.   Unless acquired from the Company’s own manufacturing affiliate, all polished diamonds are acquired with a certificate from a reputable gemological institute attesting to the natural nature of the diamond and/or sample tested to prove the natural nature of the diamond. Our commitment continues in support of World Federation of Diamond Bourses (WFDB) efforts, and the WFDB’s synthetic warranty language requirement is applied to all invoices and memos for polished diamonds to customers of all LKI Group Companies.  Furthermore, the warranty statement is required of all vendors on invoices and memos for rough and polished diamonds.  No invoice or memo lacking the proper synthetics warranty statement will be accepted or processed for settlement.   

WFDB Charter on the Disclosure of Synthetic, Treated Natural and Natural Diamonds, May 2, 2014 – The issue of undisclosed synthetic diamonds entering the natural diamond supply chain is an issue of growing concern to the international diamond community.   These concerns have been addressed by the promulgation of new and evolving rules.  Prominent among these is the WFDB’s May 2, 2014 Charter on the Disclosure of Synthetic, Treated Natural and Natural Diamonds under which “each and every member of any accredited Member Bourse is obliged to act…in the first instance, (by) providing a proper description and declaration on every issued invoice attesting to the nature of the diamonds sold, and reporting immediately through the appropriate Bourse, any activity that may be in contravention thereof.”

Corporate Compliance Officer - LKI has appointed a senior executive with full-time oversight responsibility in the areas of corporate social responsibility and KPCS/WDC/AML compliance.  Under this executive’s oversight, each of the company’s employees engaged in buying, selling and/or accounting for diamonds and precious minerals has been trained, among other things, to recognize, prevent and report any attempt by prospective business partners to use LKI to further or engage in criminal activity, including illicit diamond trading.    


PROMOTION OF DIAMOND INDUSTRY BEST PRACTICE   

Trade Association Membership – LKI and its officers are members of a wide variety of diamond and jewelry industry associations including, but not limited to, the American Gem Society, the Gemological Institute of America, the Jewelers Vigilance Committee, the Jewelers Board of Trade, the Diamond Manufacturers and Importers Association, the Jewelers Credit Interchange Group, the Jewelers Security Alliance, the New York Diamond Dealers Club, and the Council for Responsible Jewelry Practices, and the World Diamond Council. 

Best Practice Principles Assurance Program - LKI fully subscribes to and is compliant with the DTC’s BPP Assurance Program developed to demonstrate to supply chain partners, consumers and other interested stakeholders that the exploration, extraction, sorting, cutting and polishing of diamonds, and the manufacture and sale of diamond jewelry is undertaken in a professionally, ethically, socially and environmentally friendly and accountable way.   

Responsible Jewelry Council Membership - LKI is a Certified member of the Responsible Jewelry Council (RJC), a standards-setting organization established to reinforce consumer confidence in the jewelry industry by promoting responsible ethical, human rights, social and environmental practices throughout the jewelry supply chain. The RJC has developed a platform of standards for verifying responsible business practices through third party auditing. We commit to operating our business according to the RJC Principles and Code of Practices.  


GOOD CORPORATE CITIZENSHIP

LKI is committed to embracing, supporting and implementing, within the scope of its influence, a set of core values in the areas of human rights, development, labor standards and environmental sustainability.   

The UN Global Compact - In 1999, UN Secretary-General Kofi Annan challenged business leaders to join an international initiative – the Global Compact – that would bring companies together with UN agencies, labor and civil society to support universal ethical, social, human rights and environmental principles.  In 2001, LKI became a founding member of the Global Compact, which by 2014 had grown to more than 12,500 participants, including over 8,000 businesses in 145 countries.  LKI is proud to report its annual Communication on Progress at the “advanced” level. http://www.unglobalcompact.org/COPs/detail/66721   

Leadership on Africa – LKI pioneered diamond beneficiation outside of apartheid South Africa, and apart from investing heavily in the continent the company and its principal shareholders have over the past half-century played a leading role in launching and sustaining numerous organizations and initiatives that have built bridges between Africa and the US, to Africa’s developmental benefit. Prominent examples include   

  • The Corporate Council on Africa, on which LKI’s Chairman served two terms as Chairman and member of the Executive Committee of this leading organization dedicated to enhancing United States investment in Africa;

  • The Business Council for International Understanding (BCIU) , which LKI’s longstanding support (LKI’s Chairman has served on BCIU’s board since the 1960s) has helped become a principal forum for public-private partnership initiatives, particularly focused on Africa; 

  • The Africa-America Institute (AAI), which over the years has promoted and financed higher education programs for more than 20,000 African students and of which LKI was a leading supporter, as symbolized by the five decades that LKI’s Chairman served on AAI’s Board of Trustees;

  • The National Democratic Institute (NDI), which works to strengthen and expand democracy around the globe and has acquired a special legitimacy in Africa due to its effective investments in peace and stability on the continent, with LKI’s Chairman having served as Chair of NDI’s Africa Subcommittee for over 20 years;

  • The Harvard AIDS Institute, of which LKI’s Chairman was a founder and is Chairman of the International Advisory Council of the Harvard AIDS Initiative (HAI).  

  • In Botswana, the Company was instrumental in attracting HAI to establish a state-of-the-art medical research facility, the Botswana-Harvard AIDS Institute HIV Reference Laboratory, in Gaborone. The facility is of a caliber and scale unmatched on the continent. For example, Harvard scientists discovered that one in four people infected with the virulent strain of the AIDS virus found in Southern Africa (HIV-1C) are hyper-infectious, super carriers. The scientists launched a new front in the battle against AIDS with clinical trials to test and treat hundreds of HIV-positive people believed to be at the highest risk of transmitting the virus. The aim of the project is to identify these hyper transmitters as soon as they become infected so that they can be treated with a powerful cocktail of antiretroviral drugs to limit their ability to transmit HIV and to study how the virus mutates as it travels through the community.  In 2003, the Botswana-Harvard Partnership launched the Botswana Combination Prevention Project (BCPP) to evaluate whether a combination of proven HIV-prevention measures introduced into a community can significantly reduce the incidence of new HIV infections.  US Ambassador Michelle Gavin said, “If this combination prevention strategy is shown to be effective and affordable, Botswana will be a global leader in providing scientific evidence needed to turn the tide on this epidemic.”

  • Namibia – Lazare Ongoma Initiative -- In Namibia, where LKI is a Joint-Venture partner with the Government in NamGem, the country s flagship diamond cutting and polishing factory, LKI launched The Lazare Ongoma Initiative (LOI).  The Lazare Ongama Initiative was formed to raise awareness of the educational challenges in Namibia and to establish a cultural connection to this community.  While aiming to increase resources available resources available to the Five Rand Primary School in Okahandja, where the NamGem factory is located, LOI seeks to increase global consumer and retailer awareness, not only of the Namibian source of the polished diamonds, but also of the community where NamGem is located and its citizens who beneficiate the jewels. LOI works hand-in hand in the United States with The Lazare Diamond Incentive Program which rewards Lazare Diamond retailers and their sales associates who sell and register Lazare Diamonds. Under LOI, LKI makes matching contributions to The Five Rand Primary School in the name of each sales associate for every Lazare Diamond that they register. Through this initiative, Lazare Diamond retailers in the U.S. help spread awareness of the importance of diamonds to the economic wellbeing of Namibia and her people while supporting the Five Rand Primary School. Furthermore, LKI employees may also participate through direct donations as part of this initiative.  In November, 2014, LKI made its latest contribution of N 100,000 to the Five Rand Primary School for general support of the school s operations. In 2015, the proceeds of these contributions were used to build a new gathering place for the school. 

Japan -- In May of 2011 Lazare Kaplan Japan launched a project to donate 8 percent of the sales proceeds from specially designed diamond jewelry, named Brightness of Hope and Harvest Pin, to the Japan Red Cross Society s Fund for Victims of the Great East Japan Earthquake. The Company donated over 4,000 Dollars over the last year. In May of 2012, Lazare Kaplan Japan announced a second project to assist victims in the area affected by the earthquake.  LKI s new Wings of Hope pendant was designed in the image of wings - a symbol of reconstruction. For each pendant sold, Lazare Kaplan Japan also donates 8 percent of the sales proceeds to the Japan Red Cross Society. In addition the Company supported the following CSR activities in Japan over the last year; March:  * Held a workshop for the career college students to gain a workplace experience. May:  * Conducted the 2nd Mt. Fuji Cleaning June:  * Conducted the Marble Beach cleaning in Rinku Park, Osaka July:  * Conducted the Sosei River cleaning in Hokkaido August:  * Provided the 5th job-training program for orphans in Tokyo * Provided the 1st job-training program for orphans in Nagoya * Gave a donation for the gas explosion in Taiwan October:  * Carried out the Pink Ribbon Campaign * Held the job training for the junior-high-school students in Miyagi. November:   * Held the job training for the junior-high-school students in Chiba. * Held the job training for the junior-high-school students in Hokkaido. December: * Joined the volunteer activities for the reconstruction assistance of the Great East Japan Earthquake * Conducted the Christmas Event in Miyagi.