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Petra Diamonds Limited Sustainability Report 201243COMMUNITYCommunityEnhancing our communities continuedLocal procurementIn line with our commitment to supporting local economic development, our operations aim to use local suppliers for goods and services where possible.In FY 2012, Petra's South African operations spent US$172 million (ZAR1.4 billion) on goods and services, of which 37% was spent with companies owned or operated by HDSAs. We help local HDSA/BEE businesses to develop their commercial offerings so that they can be added to the Company's future preferred suppliers list. The nature of our operations means that we need to ensure that all services and products are of a high standard, comply with the necessary health and safety requirements and are available with minimal lead times to avoid disruptions to production. Petra's target for FY 2013 HDSA procurement spending is 30% capital, 60% services and 40% consumables.In FY 2012, Williamson spent US$28.9 million on goods and services, of which 65% was spent with local and regional suppliers.In FY 2012, Petra Diamonds Botswana spent US$3.1 million (BWP22.3 million) on goods and services, of which 74% was spent with local and regional suppliers.Additionally, Petra has established its core marketing operation in Johannesburg. This supports the South African Government's aim to stimulate its local diamond industry, to create sustainable employment, attract international industry participants to the country and increase the value and commensurate taxes on diamond exports.Indigenous peopleWe come into contact with indigenous people at our exploration projects in Botswana. We respect their culture and rights and have maintained regular, proactive contact with them as appropriate, as well as local authorities, individuals and NGOs, since we began our exploration programme in 2005. Although Petra is not currently engaged in mining activities in Botswana, we are committed to further engaging with the indigenous Basarwa people in advance of any decision to develop commercial operations. Petra reported no violations involving rights of indigenous people during FY 2012.Human rights Petra is fully committed to upholding the human rights of all of its stakeholders, including its employees, contractors and partners, and as such has a policy of fair dealing and integrity in place in terms of the conduct of its business. This commitment is based on the belief that business should be conducted honestly, fairly and legally. We expect all employees to share our commitment to high moral, ethical and legal standards.The Company complies with and supports the UN Universal Declaration of Human Rights as well as all legislation pertaining to human rights in the countries where it operates. However, as all our operations are based in constitutional democracies, where human rights are formally recognised under such constitutions, there is not the same level of risk with regards to human rights as can be found in certain other emerging markets.The Company is in the process of revising its Group Code of Ethical Conduct and will formally state its commitment to human rights within this. This Code will be made public on the Company's website at www.petradiamonds.com once finalised.The Company's Employment Equity policy and its Disciplinary Code and Procedures forbid any kind of discrimination. There were no cases of discrimination involving the Company or its employees reported during FY 2012.Human rights issues are covered by Petra's operational policies and procedures. Any human rights grievances are either managed through the operational grievance procedures, or where they are seen as substantive in nature, by the collective bargaining processes that are in place with recognised labour unions.In South Africa we organise training in human rights for union representatives through the Commission for Conciliation, Mediation and Arbitration ("CCMA") and they, in turn, disseminate their knowledge to all employees.Petra has aligned its principles with the International Labour Organisation Declaration on fundamental Principles and Rights at Work. This means we have zero tolerance for child labour, forced labour, or discrimination, and we respect the right of our workers to form unions. We are pleased to report that there is no risk of child labour or forced labour taking place at any of Petra's operations.A public grievance procedure (i.e. for external stakeholders) is being developed as part of an integrated stakeholder management approach and will be included in the revised Group Code of Ethical Conduct.SecurityPetra places significant importance on the safety and security of its workforce.Within South Africa, Petra undertakes and regularly updates risk assessments relating to security at all our operations. In South Africa our security personnel only operate within our mandate and the borders of Company properties. Should any security operation impact on the local community, it is communicated with them. Petra provides no assistance or materials to public security forces in South Africa.In Tanzania, Williamson has developed a security and human rights policy in line with the Voluntary Principles on Security and Human Rights following a risk analysis. All employees of our private security service provider and over 90%, to date, of Petra's in-house security managers have been trained on the Voluntary Principles. Williamson's security and human rights policy has been communicated to stakeholders of the mine, including the local police force.Williamson has undertaken a full risk assessment and frequently conducts security meetings with the Regional Police Chief and Regional Crime Officer. The Company, as part of our Community Support Programme, assists the local police by offering fuel and maintenance to enhance community policing.At the Williamson mine in Tanzania, we have identified significant trespassing and illegal mining on the Special Mining Lease ("SML") as a potential, but unlikely, risk. Petra manages this through frequent consultation, patrols and relationship management. Williamson's SML is viewed as a diamond protection area but small scale, artisanal mining occasionally takes place. Control measures, early warnings and a well-established information system provide the mine with pre-emptive action plans should such instances occur.

Petra Diamonds Limited Sustainability Report 201244COMMUNITYCommunityCase study: The Vukuzenzele Agricultural ProjectVukuzenzele Agricultural ProjectThe Vukuzenzela Agricultural Project in Refilwe, near the Cullinan mine, fulfils all our local community project objectives, in that it assists with job creation; poverty alleviation; skills transfer; and enterprise development.One of the priority CSI projects at the Cullinan mine is the Vukuzenzele Agricultural Project in Refilwe. Refilwe (Region 5, in the City of Tshwane Municipality) is an area with a high unemployment rate and the key objectives of the project are therefore to reduce poverty and unemployment in the area.The Vukuzenzele Agricultural Project was founded in 1997 by a local women's group, who saw an opportunity to use land for agricultural purposes. Whilst the project has faced numerous challenges, during recent years it has gathered momentum. The project remains a predominantly female co-operative, consisting of 15 women and two men. Petra has partnered with the Tshwane University of Technology, Sombhulula (a local NGO) and the Department of Agriculture to help provide training, mentorship and advice to the project members. So far, training has focused on core business skills, such as computer skills, business management and product marketing. Currently the project sells its vegetables to the Tshwane Fresh Produce market and the local community. A key focus has been to generate more income streams to sustain the business and, as part of this objective, initiatives including a seedling nursery, chicken farming and flower production have been successfully developed, and plans are well underway for the development of a restaurant and craft centre for visitors.Plans for the future development of the project include the potential for the municipality to donate the land to the project and the development of a packing house, to be donated by the Department of Agriculture. The construction of a packing house could enable the project to supply the Pretoria Market and other supermarkets, generating further revenues for the local community. In addition, there is the potential for an on-site chicken broiler and for seedlings to be sold to other co-operatives involved in vegetable farming.Rachel Kgomo, Director of the Vukuzenzele project, commented, "The Vukuzenzele project plays an important role in the community and all our lives. I joined the project in 1998, after I was retrenched from my previous job. I wanted to do something that could help put food on the table for my family, as well as contributing to my community. The fresh vegetables and produce help feed families who now no longer need to travel all the way to Cullinan in order to buy vegetables. The project members, their families and the local community are thankful to Petra Diamonds because they have played a very significant role in insuring this project is a success. They have supported the project financially and also through the mentoring scheme. If it wasn't for Petra, the project wouldn't be where it is today."Cabbages ready for sale at the Tshwane Market