Root Diamonds

The Challenge

How might we develop and improve the equitable earning power for landowners of minerals in Sierra Leone?

The Insight

Sierra Leone is a diamond-rich country that exports over $250 million worth of uncut diamonds each year ($6 billion in retail value), yet 70% of its people live below the $1.25-a-day poverty line.

The Solution

Developed a profit-sharing model for a sustainable diamond company that aims to liberate over 100 million miners and landowners in the artisanal mining communities. This will protect the miners against exploitative and oppressive systems by using local resources of diamonds to sustain, heal, empower communities, and return profits to those communities.

Date

December 2018 - February 2019

Role : Lead Design Reseacher & Strategist

  • Ethnographer
  • Strategic Design
  • Business Dev
  • Framework Design
  • Design Research

Root

Diamonds

Artisanal

Mining

Research Overview

My ethnographic research study was done in the Kono district in Sierra Leone. There, we met and interviewed landowners, miners, and leaders in the communities to find leverage points that bridge gaps in the artisanal mining sector. We chose this district for ethnographic research because it is one of the world’s most fought-over regions due to its abundance of natural resources.

Objective

To understand artisanal mining practices -- in particular, the poor working conditions, and lack of profit sharing and attitudes of affected populations, to identify interventions for small changes at the individual, community or system level to improve the social, economic, and environmental well being of diamond miners and their communities.

Methodology

  • Understand the system by conducting primary and secondary research through community sources
  • Semi-structured interviews to identify and understand the pain points of landowners and miners in communities
  • Identify the lever point within the system through participatory co-design with stakeholders and advocacy groups

Stakeholders

We conducted 120 interviews with landowners, miners, local business owners, Paramount Chiefs, Town Chiefs, community members, mines managers, artisanal mining license holders, and farmers.

Location

We conducted these interviews in the Kono District, primarily around the largest diamond-mining town in the District: Koidu Town. Kono District is where diamonds were first discovered in Sierra Leone. As the primary diamond-mining region in the country, it continues to be the least-developed.

Limitations of In-Person Interviews

Those I could access in the community were limited to accessibility issues. Many people in the Kono District do not have means to be reached. The rainy season created accessibility and observation challenges. Heavy rain made people’s homes and some mining sites inaccessible and in many cases prevented us from filming. . .

Given my inability to speak the tribal Kono language, I worked with translators whenever meeting an interviewee who does not speak English or the national Creole language (which I do speak).

Hypothesis

Landowners, diamond miners and mining communities feel overwhelmingly negative impacts from mining companies through unfair profit sharing, environmental degradation, and inhumane working conditions; yet communities lack resources to pursue solutions. Our research question started as: How might we generate models that will help liberate landowners and miners from exploitative systems? Furthermore, how might we use local resources from the communities to sustain and empower each other?

Commitments

  1. To understand challenging systems behind the diamond industry Why do landowners receive such small profit from participating in such a profitable industry? What do local communities see as the biggest obstacles to escaping poverty? How does strip mining negatively impact the environment?
  2. We will be infinite learners The problems we work to solve are complex and ever-changing; we must remain open and fluid.
  3. We are part of an ecosystem We are part of global ecosystems and our ability to find solutions will create a system in place where everyone benefits.

System
Investigation

The Mining Ecosystem in Sierra leone

We analyzed and researched the current mining ecosystem in Kono, Sierra Leone to understand who wins and who loses from before the diamonds are dug up until they are moved out of the country.

Winners in the current ecosystem

  1. The Supporter The supporter is usually a local business owner who sponsors the mining process to provide money for equipment and workers. They usually negotiate a strong cut of the profit.
  2. Diamond Dealer Diamond dealers are usually foreigners in Sierra Leone. They buy the diamonds at low prices and sell them to exporters, often exploiting the landowner and the supporter.
  3. Exporter The exporter is a big winner. These are usually large international corporations that move the diamonds to the international market, making the largest profit.

Losers in the current ecosystem:

  1. Landowner The landowner often gets very little profit, and sometimes nothing.
  2. Mine Manager Mine managers ensure mining operations move smoothly and effectively. However, the job does not pay highly and Mine Managers can not expect to benefit from the sale of the diamonds.
  3. Mine workers Mine workers are usually drawn from the local area and are often low-skilled laborers. Their wages are very low, and conditions are poor, but for many, other options are not available.

Root Causes for Exploitation in the Diamond Industry

Ecosystem Map

Culture & Social Fabric, Geography & Infrastructure

Sierra Leone, West Africa. A population of 7 million recovering from a civil war, diamond-rich soil, Kinships, patriarchal, ethic divisions.

Resource Providers

Financial
venture funds, Grants, Medic Ventures

Human
Kimberly Certificate, NGOs, Chiefs, Landowners,
Knowledge

Knowledge
RAPnet marketplace, Kono Miners Association

Networking
Diamond Developmental Initiatives DDI, Guinea project, DeBeers

Technological
Blockchain technology, Tracr

Political & Administrative

Democracy, heavily corruption, social welfare, NGO's

Competitors

Debeers, Russia, Canada, Botswana, Rio Tinto, Alorrasa

Your Big Idea

Offer beautiful and affordable diamonds, ethically mined so that landowners are protected, mining communities are strengthened, and entrepreneurship is fostered in one of the poorest places on earth.

Key Partner

Complementary Organization/ Allies

My fair Diamond, Government of Sierra Leone, Ministry of Mines, NPOs, NGO, Ministry of Land, Minister of Commerce, Minister of infrastructure , DDO

Economics & Markets

80/20, Foreign Direct investments, Capitalistic, Corruption

Wider System Influence

Department of Mines, Debeers

Beneficiaries

Landowners and miners living below $1 a day

Barriers

Synthetic diamond led initiatives, Debeers, Corrupt Governments

A diamond project with entirely ethical and traceable diamonds that connects buyers and landowners that aims at improving the standard of living for landowners across all continents

Impact

Drawing systems and influencing change

Archetypes

Landowner

Landowners theoretically control the land, but most lack the resources to be able to profit from it. They have little leverage over profit distribution.

Supporter

Supporters sponsor landowners with resources to extract diamonds from the land, also taking a percentage of profit.

Miner

Miners do not own land and want to find any employment that will help them support themselves and their families.

Diamond Dealer

Diamond dealers act as middlemen, buying diamonds at the lowest prices possible and selling them to Exporters.

Exporter or Retailer

Exporters take diamonds outside the ecosystem, further monetizing them on the international market.

Layers of Change

  1. Property rights/land rights Much of the mining in Sierra Leone is done illegally; if mining is regulated, landowners can be protected and receive higher returns on the resources extracted.
  2. Conditions Currently, miners and the environment are exploited and damaged by the mining process. Miners must receive fair wages, and safety regulations must be implemented and observed to protect their health and their environment.
  3. Access to the international market With more direct access to the international market, landowners will receive fairer prices for their diamonds and cut exploitative middlemen.

Reflective Activities

Choice Activities

We want to create a cohesive system in which all stakeholders benefit from the extraction and sale of Sierra Leonean diamonds.

Reflective Activities

How all stakeholders will work together for a better system. This showcases a perfect system

What becomes evident is that everyone in the old system suppresses the person below them. Landowners and miners are the greatest losers in this system and this community.

How might we develop and improve equitable earning power for landowners of diamonds in African nations?

Research Design Work Plan

Kono

Sierra Leone

My Visit to Sierra Leone

With general research concluded, now I wondered: “How did the community in Kono, Sierra Leone understand the issues affecting them through the diamond mining industry? How could we address those problems alongside them?”

I traveled to Sierra Leone with a small team to consult village elders, landowners, and mining professionals in the Kono District. This area is one of the most fought-over pieces of land on earth due to its diamonds.

Many expressed frustrations about the current, mostly foreign-run mining industry, especially poor working conditions and lack of profit-sharing for landowners and mine workers.

Questions In the Field

  • What educational programs exist? What are the greatest challenges to those programs’ success?
  • What potential businesses could those in the community start with their existing resources and/or sponsorship?
  • What standards would improve and protect miners’ working conditions?
  • How does the current mining process produce pollution, and what sustainable alternatives exist?
  • What do landowners and mine workers need to circumvent exploitative partnerships/how can landowners and mine workers approach the international market themselves?
  • Where sponsorship and aid currently exists, where is it successful? What prevents their success?
  • What problems cause the greatest pain and concern to those in the community?

Findings

  • The mining system lacks accountability. Standards and practices are not enforced and corruption is rampant.
  • Most landowners lack agency: they lack capital and therefore have to turn to outsiders for help. They see little or no profit.
  • Many young children work in the mines helping their families; one income is not enough under unfair pay.
  • A lack of regard for the environment increases problems such as a lack of clean water for the community.
  • There is an existing desire for autonomy through entrepreneurship. Many workers and landowners feel a self-owned business is the only way out of poverty and are searching for large enough diamonds to fund new business ventures.
  • Labor is un-mechanized and intense, causing wear on bodies and minds. It is greatly affected by seasonal rains.
  • Work is constant, but incomes are inconsistent.
  • Illegal and informal mining is widespread

Current Problems

  • Lack of capital
  • Lack of governmental support
  • The cycle of poverty: multiple generations of impoverished mine workers
  • Unsustainable approach to labor and environment

Key Takeaway

Fair price and access to international markets When workers receive fair wages and landowners can sell their diamonds on the international stage without outside capital, profit will return to the community, changing outcomes for generations.

Protect the environment/ transform inhumane working conditions Our efforts must be sustainable if they are going to positively affect future generations.

Create entrepreneurship and business pathways We want the surrounding community to gain autonomy. Most people want to build ways to sustain themselves and their families and thrive. Many efforts to help communities end up competing with local efforts (for example, aid in the form of shoes prevents local shoemakers from thriving). In contrast, our model needs to lift everyone in the community, increasing their opportunities to create and sell.

Conclusion

The trip revealed the enormous and troubling scope of problems facing exploited diamond mining communities, but also helped us to develop solutions within our business model. Each problem has multiple roots. For example, illiteracy is affected by poor wages as children skip studies and become mine workers for their families’ survival, and few teachers can work for the low wages the community can offer. At the same time, many in the community are eager to create businesses, and an entrepreneurial instinct already exists.

By consulting with mine workers and community elders, we discovered the challenges they most wanted us to address: the lack of capital returning to the community as value is stripped by outside investors, poor working conditions, and the toll on the environment.

Ultimately, we responded with the 4-4-2 Business Model. 40% of earnings are invested in the organization, 40% return to the stakeholders (including mine workers and landowners) through equitable distribution, and 20% are reinvested into the community through new infrastructure and investments in local entrepreneurship

Stakeholder problem framing

Persona 1

James Sessay

Artisan Miner
Married, 35 years old
Kono, Sierra Leone

Goal

"I want to provide for my family and send my kids to school. I never went, but if I can provide for them, they can become important people someday.”

“I have no capital to mine the land, so I work for large companies and have no control over what foreign investors take from my lands. When they find diamonds, they give me what they feel like giving. They have money and power."

Kono

Sierra Leone

Frustrations / Pain Points

Like most miners, James Sessay is forced to work in unsafe conditions for grueling, long hours, yet he receives very little pay. Though he has avoided bringing his children to mine with him so far, child labor is a deep problem. Education opportunities are limited; James was unable to attend school because his own family lacked resources. Like other workers, he lacks tools and training on the job and lacks necessities at home.

If James will be able to reap the benefits of participating in such a lucrative trade, he needs training and tools, and he needs an opportunity to take control of his land.

James Sessay

Stakeholder Activity Mapping

The Intervention

Diamond Journey Map

What opportunities exist to intervene and impact the diamond supply chain industry?

Our Business Model: 4-4-2 Sustainability

4

40 % to platform

4

40 % to Landowners

2

40 % to Landowners

60% Re-invested in Community

Escrow Float 40%

To guard against creating new social issues, and to protect miners, 40% of Root's profits will be placed in an escrow account and distributed monthly, as residual income, until depleted.

Fund Lending 10%

Of the 20% that remains in the Co-Op, 10% will be used to provide loans to entrepreneurs looking to expand their businesses.

Fund Investing 10%

The other 10% will be invested in infrastructure, with an initial focus on building roads across the Kono district. This will be key to commercial expansion and improved quality-of-life.

Inputs

Access to lands

Capital to support mining/ purchase

Startup capital

Business model

Team

Local Company

Activities

Kono Coop Established

Supply chain & manufacturing chain validated

Traceability & blockchain technology initiated

Escrow Float

Government Partnerships

Outputs

Profit-sharing 4-4-2 model initiated

Ecommerce retail and wholesale platform

Perpetual fund (infrastructure fund+ Escrow fund +microloan fund)

Theory of Change
Sierra Leonean communities are not equipped to ensure their own prosperity or benefit from their own resources; ideally, in the long run, Sierra Leonean communities become able to use their own resources to meet their own needs and prosper.

Outcomes / Impact

Empower communities to a sustainable profit of their natural resources

Access for African landowners to international markets

Develop a community of in-country diamond cutters and jewelry designers for the production of a finished product

Connect families around the globe via diamonds with precious memories that last forever

Raise the daily earnings for landowners/ miners in diamonds producing countries

Raise the number of small business entrepreneurs in diamonds producing countries that stimulate economic growth

Theory of Change
Sierra Leonean communities are not equipped to ensure their own prosperity or benefit from their own resources; ideally, in the long run, Sierra Leonean communities become able to use their own resources to meet their own needs and prosper.

Precedent Analysis

How might landowners improve their standard of living through the sale of their diamonds mined?
How might landowners improve their standard of living through the sale of their diamonds mined?

Why Now

87% of Americans will pay more for diamond jewelry if they know that the diamonds are ethically sourced.

Millennials are demanding ethical diamonds. Diamonds sales fell by 25% in early 2019.

1

One Year of Survey & Research

Survey responses from our target market revealed that consumers don’t just want to know the region from which their diamond comes. They want to know each diamond’s story — the mining source community, and/or individuals behind it.

2

Funds Distributed Responsibly

American millennials, in particular, are passionate about changing the world, not buying it. They want to be certain that the money they spend on diamonds is distributed equitably and responsibly.

3

New Type of Conflict Era

Americans have reduced their diamond purchases because of the new types conflicts era in diamond mining that are gender and profit inequities, youth labor, and slave-like working conditions. They fear that they might unknowingly be supporting conflict diamonds.

Customer Study

Customer Target: Millenials

Who

  • Choose a wide variety of relationship types
  • Often remain single
  • Interested in end-point of money
  • “Do-good-feel-good”
  • Consumer advocates

Motivation

  • Want to feel their purchases are ethical
  • Many still traditional diamond buyers (engagement, marriage)
  • Many buying diamonds for themselves/partners
  • Want to buy online or from home
  • Participate in a product’s story
  • Engage with content online
  • Engage with the global community

Purchase Environment

Physical store

Via online

Young Working Millenials

Millennials in Orange County, Ca

Goal

  • Define themselves and their relationships, borrowing from tradition but not tied to it
  • Unique, individualized products or recognized brands
  • Making ethical purchases (no blood diamonds)
  • Supporting causes through consumer advocacy

“Where is the nearest shop to me?”
“What shop can I trust online?”

Young, upwardly mobile professionals who see diamonds as investments and may purchase them for the same purposes as previous generations.

Alex Wright

Independent, Internet savvy, Socially conscious

Age: 29

Occupation: Influencer/ health authority

Family: Domestic partnership

Location: Orange County, CA

"When my fiance Madi and I met, I was already reviewing sports and nutrition products full time, both for magazines and my blog. Now we run our business together through our website and a shared IG handle, nine hours a day, five days a week.”

Bio

Alex moved to California after completing a degree in sports science and retiring from a career as a professional cyclist. Interested in writing, and skilled at using social media platforms, he launched his own business reviewing nutritional products and gear for athletes and fitness buffs. He participates in global activism: he remembers large campaigns like KONY 2012. Like many of his generation, he sources clothes and coffee from ethical sources whenever possible. Now he hopes to marry his live-in partner and business co-owner, Madi, after dating for several years.

Scenario

Alex and Madi share property and have a joint checking account, having lived together in a committed relationship for six years. However, they have discussed having a minimalist wedding ceremony. Alex hopes to find a unique engagement ring. He is vaguely aware of the ethical implications of buying diamonds sourced from conflict areas and will perform research before making any purchases. He may also consider other precious stones or alternatives to traditional diamond bands, though he imagines a diamond engagement ring before anything else.

Goals / Interest

  • Create a highly personalized proposal
  • Choose gifts — including an engagement and wedding band — that both are modern and nod to tradition
  • Make ethical investments he will continue to be proud of (leave other graphics, etc)

Alex Wright

"When my fiance Madi and I met, I was already reviewing sports and nutrition products full time, both for magazines and my blog. Now we run our business together through our website and a shared IG handle, nine hours a day, five days a week.”

Independent, Internet savvy, Socially conscious

Age: 29

Occupation: Influencer/ health authority

Family: Domestic partnership

Location: Orange County, CA

Bio

Alex moved to California after completing a degree in sports science and retiring from a career as a professional cyclist. Interested in writing, and skilled at using social media platforms, he launched his own business reviewing nutritional products and gear for athletes and fitness buffs. He participates in global activism: he remembers large campaigns like KONY 2012. Like many of his generation, he sources clothes and coffee from ethical sources whenever possible. Now he hopes to marry his live-in partner and business co-owner, Madi, after dating for several years.

Goals / Interest

  • Create a highly personalized proposal
  • Choose gifts — including an engagement and wedding band — that both are modern and nod to tradition
  • Make ethical investments he will continue to be proud of (leave other graphics, etc)

Scenario

Alex and Madi share property and have a joint checking account, having lived together in a committed relationship for six years. However, they have discussed having a minimalist wedding ceremony. Alex hopes to find a unique engagement ring. He is vaguely aware of the ethical implications of buying diamonds sourced from conflict areas and will perform research before making any purchases. He may also consider other precious stones or alternatives to traditional diamond bands, though he imagines a diamond engagement ring before anything else.

Jobs, Pains and Gains

Possible Customer/ User Segments

The Future Grooms

Young Working Womenn

The Suburban Husbands

Stakeholder’s Descriptive Value Web

Stakeholders interact, receiving and offering value throughout the system.

Root Diamonds The Strategy

Radical Transparency

  • The 4-4-2 Model and Pricing 
our unique model re-invests 60% of profits back into the community around the diamond mines, with 40% distributed to all stakeholders and 20% invested in local entrepreneurship and infrastructure. Our diamond pricing model offers consumers unique freedom to decide what they want to pay, guaranteeing their right to know what each dollar pays for.
  • Radical Transparency Behind every transaction: Price Points and Buying 
Every diamond can be purchased at three prices:
    Even-price-point
: This price point covers the cost of extracting the diamond and adding its value, ensuring everyone is paid; it does not add profit to the Root Diamonds Platform
    Future care price-point
: Pays ahead two months of stakeholder distribution, helping miners and landowners to grow financially
    Perfect clarity price-point: 
On top of two months of stakeholder distribution, part of the price returns to Root Diamonds for the growth of the company
  • A constant, open conversation 
retailers receive monthly backends showing clearly how all funds are being distributed through the stakeholder ecosystem
  • A personal connection 
retailers and consumers can learn about the individual stories of stakeholders in Sierra Leone, connecting to a larger story and understanding their impact
  • A heuristic education 
consumers easily learn diamond grading and specifications for a convenient yet deep understanding of the product

Standard Diamond Specifications

Shape

Round

Cut

Brilliant

Colour Grade

D to F

Clarity Grade

VVS2 or better

Cut Grade

Excellent

Polish

Excellent

Symmetry

Excellent

Fluorescence

None

Certification

None

Provenance

Kimberley Process

Shape

Round

Cut

Brilliant

Colour Grade

D

Clarity Grade

Internally flawless or better

Cut Grade

Excellent

Polish

Excellent

Symmetry

Excellent

Fluorescence

None

Certification

None

Provenance

Kimberley Process & blockchain from mines

Key Resources
Facilities/programs
Physical resources
Brand
Kono Coop
Online platform & development
Key Partners
Kiva
Government of Sierra Leone
Diamond cutter
Jewelry manufacturer

Key Activities
Supply chain
Manufacturing
Distribution
Platform marketing
Providing loans
Managing Coop platform
Infrastructure Development
Intervention/ Value preposition
Transparency in supply chain
Sustainable profit sharing model
Channels
rootdiamonds.com
behind4cs.org
rootdiamonds.org
Social media
Segments / Beneficiaries
Landowners & Family
Miners & Family
Entrepreneurs & Family
Impact Measures
# of sales on platform
# of residual income for landowners & Miners
$ loaned & $ repaid
Customer Segments
Millenials who are socially conscious
Borrowers from Co-op
Suburban Husbands
Future Partners
Young Working Women
Cost Structure
  • Staff
  • Grease money
  • Online platform & development
  • Loan repayment risk
  • Manufacturing & distribution
  • Marketing & Advertising
Revenue Streams
Selling diamond jewelries retail
Selling loose and polish diamonds at wholesale
Selling industrial diamonds