@techreport{71ea7de6474342559e23cb6eea4195d5,
title = "Rough and polished:: A case study of the diamond pricing and valuation system",
abstract = "This report investigates the contribution of mining, and in particular diamond mining, to the economic development of South Africa, in terms of its contribution to the fiscal resources of government. By necessity it is based on incomplete information, as while extensive efforts have been made to explore and account for the views of industry and government stakeholders, and all assistance is gratefully acknowledged, some parties remain reluctant to contribute data. Indeed, one conclusion of the paper is that more transparency is required in order to more fully make an assessment of the development value of diamond mining. However, based on the information that is available on taxes paid, import and export volumes and values there exists significant discrepancies indicative of possible transfer pricing manipulation of rough diamond values. This is due to the monopoly position of the De Beers Company and their consequent ability to designate price in various locations in the value chain and when moving diamonds across borders. Because of these discrepancies it can be plausibly suggested that the industry is not contributing the level of tax that could be reasonable expected by the citizens of South Africa.",
keywords = "Valuation, De Beers, diamond mining, trade pricing, tax justice, South Africa",
author = "S Bracking and K Sharife",
note = "The Leverhulme Centre for the Study of Value was founded in 2012 by Professor Sarah Bracking with the generous support of the Leverhulme Trust grant award RP2012-V-041. Sarah Bracking, Patrick Bond, James Igoe, Sian Sullivan and Philip Woodhouse are Co-Investigators of the programme, with Philip Woodhouse the current Director of the Centre, now joined by Research Associates, Aurora Fredriksen and Elisa Greco, and Doctoral students Jonas Amtoft Bruun, Louise Carver, Fortunate Machingura, Rachael Morgan, and Robert Watt. More information about LCSV and our working paper series can be found on our website, thestudyofvalue.orgThis report benefited from expert tax and financial consultancy and research from Len Verwey, and financial development expertise by Mark Curtis, as well as comments from Patrick Bond. Also many thanks to a number of key industry and government sources who wish to remain anonymous. This is a shortened version of a longer report whose lead author is Khadija Sharife titled Rough and Polished: The illicit role of transfer pricing, tax avoidance and other technically legal strategies used to 'profit-shift' resource revenues from SA's diamond industry, which includes sections authored by Mark Curtis, Len Verwey among other authors (Sharife and Bracking, 2014). This report includes a chapter on diamond pricing and valuation contributed by both Khadija Sharife and Sarah Bracking which is a longer version of the material covered here. This longer report was completed with the financial assistance of Oxfam South Africa using a grant housed at the University of KwaZulu-Natal, Centre for Civil Society. Sarah Bracking is the current holder of the South African Research Chair in Applied Poverty Reduction Assessment at the University of KwaZulu-Natal, while Khadija Sharife is Research Director at African Network of Centres for Investigative Reporting and Forensics Researcher at Investigative Dashboard, and the authors gratefully acknowledge assistance from these organisations.",
year = "2014",
month = may,
day = "14",
language = "English",
isbn = "9780992818937",
series = "Leverhulme Centre for the Study of Value working paper series",
publisher = "Leverhulme Centre for the Study of Value",
number = "4",
type = "WorkingPaper",
institution = "Leverhulme Centre for the Study of Value",
}