Diamonds Industry of South Africa Essay Example | Topics and Well Written Essays - 5000 words

Diamonds Industry of siemens Africa - Essay ExampleIt discusses the combines behavior during the apartheid era, specifically its observance of human rights and corporate responsibility under a fascist and racist regime.Chapter V discusses the agreement reached between the ANC government and the De Beers cartel on the status of diamond mines and mining industry in South Africa, and how the cartel preempt help in the countrys development program. It in like manner contains recommendations on how the agreement can help in promoting black economic empowerment, and economic and political democratisation throughout South Africa.De Beers is a monopoly and the cartel of the diamond world. Monopoly is a term that translates literally into single seller,1 which means a corporation that dominates the wareion and distribution of a particular service or product (such as diamonds). There are various forms of monopolies and a cartel is just one of them. A cartel (such as De Beers) is a forma l or informal group of corporations that have agreed to forfend and understate non-productive or destructive competition among them in order to dominate the market and maximise profits.that maximum strictly, to avoid flooding the market with products which usually results in a decrease of their prices. To guarantee their profits, members of the cartel can each agree on a common product price for their entire area of operation or set up local Diamonds of South Africa 4monopolies where they may or may not habituate a common price structure.2 The price is of course higher than what it would be if production was not modulate by the cartel, and if prices were determined, not by the cartel, but by genuine competition and the interests of the consumer. De Beers for instance set an by artificial means high price for its diamonds despite the fact that there was already a large supply of diamonds in the mines of South Africa (which were discovered as early as 1867) and other African cou ntries. The supply increased astronomically following the discovery of mines in Russia, Canada and Australia. De Beers kept prices high by cultivating the myth that diamonds are valuable and extraordinary and should be priced accordingly. The cartel has not lowered the prices of its diamonds in its entire existence.Many countries have legislated against price meliorate cartels to encourage competition, which theoretically should lower prices and improve product quality. The European Diamonds of South Africa 5Commission, in its 2005 piece on Competition Policy, proclaimed that (c)ompetition is crucial for the whole partnership for growth and jobs.3 In fact, the shinny against international price-fixing and market-sharing cartels has become a top political priority in Europe.4 B. The Birth of De BeersDe Beers can be viewed as an exceptionally innovative and long-lived cartel. On the other hand, it has been criticised and even condemned as the nearly