Dec '10/Jan '11

Kimberly process needs refining

Certification scheme a work in progress

By Heather Ednie

DeBeers Diamond 

The Kimberley Process Certification Scheme prevents conflict diamonds from entering the legitimate diamond supply chain | Photo courtesy of De Beers Canada

The certification scheme to regulate the trade in rough diamonds is flawed. This is the conclusion that author Ian Smillie, one of the main architects behind the initiative to rid the world of rough diamonds, makes in his new book Blood on the Stone: Greed, Corruption and War in the Global Diamond Trade.

The Kimberley Process Certification Scheme (KPCS) is designed to prevent rough diamonds from being used to finance armed conflicts and rebel movements. All diamonds from a given country must go out with that government’s certificate — creating an auditable trail of where the diamonds come from. “For example, if Guinea says they exported 1,000 carats worth $1 million to Israel, it should show on Israel’s report too,” Smillie said. “The whole process was negotiated by governments, with industry and NGOs participating, and is strengthened by the national regulations created to support it,” he explained. But the KPCS is not working because governments will not get tough with each other.

Smillie, development consultant and chair of the board of the Diamond Development Initiative, first became active in the movement to address the conflict diamond issue over a decade ago as part of a team for Partnership Africa Canada, which launched a report, “The Heart of the Matter,” detailing proof that smuggling, crime and terror was infecting the diamond trade.

To address the situation, a public campaign was launched to grab the media’s attention — and to make the diamond industry respond. “De Beers was the one that began to realize they couldn’t keep denying the situation, and when the UN Security Council took interest in 2000, the idea of a certification system for rough diamonds took form, and only three years later the KPCS was launched,” Smillie recalled.

Seven years later, the weaknesses of the scheme are clear to Smillie. “It’s based on consensus, so 100 per cent agreement is required to suspend a country,” he explained. In the UN Security Council, only five countries have veto power; in the Kimberly Process, all 75 do.

Chantal Lavoie, acting CEO and COO, De Beers Canada, defended the KPCS and argued that it has evolved into an effective mechanism for stemming the trade in conflict diamonds, and is recognized as a unique conflict-prevention instrument to promote peace and security. “That has been the KPCS’s most remarkable contribution to the restoration of peace in Central and West Africa,” he said.

Lavoie, however, acknowledged that the KPCS has its limits. “The KPCS has come under increasing criticism from sections of the international community following revelations of alleged human rights abuses in the artisanal diamond fields of Zimbabwe,” he added. “De Beers does not operate in Zimbabwe but, as a responsible industry leader and founding member of the World Diamond Council (WDC), we are working with all stakeholders towards a constructive and sustainable solution to the issue.”

De Beers has been a leading advocate for a working group on KP reform. As a member of the WDC, De Beers calls upon governments to review and renew their commitment to the KPCS by providing it with the support and resources it needs, and by establishing coherent and strategic engagement between those responsible for KPCS compliance and other branches of government, including security forces, customs and border control authorities, and the judiciary.

“What is clear is that the KPCS has proven that it does have teeth,” said Lavoie. “It is the only international organization that has been able to call the Zimbabwean government to account and effect positive change in the way it manages its diamond sector.”

If these reforms and improvements to the system don’t happen, Smillie said they may need to look at a real, tough consumer campaign. “The time may come soon to start telling people that diamonds can’t be trusted,” he said. “My druthers are to not go after industry — they’ve been pretty good, and are pushing for human rights inclusion. We have to go after the governments. However, industry would likely be the first unfortunate victim of such a campaign.”

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