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The Kimberley Process: Winners and Losers From the Two Year Zim-broglio

By Rob Bates, Senior Editor

Posted on November 3, 2011

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The fallout from the Kimberley Process deal with Zimbabwe will likely reverberate for years to come. So, bowing to evergreen journalistic convention, here is my winners and losers list from all that’s transpired: 

WINNERS 

The Zimbabwe government—It’s not easy playing chicken with a regime that, when you get down to it, just doesn’t care. At one point, sources tell me, minister of mines Obert Mpofu warned the NGOs that the continued export stoppage would “destroy the Kimberley Process.” Well, this didn’t kill the KP. But it came close.

Sure, Zimbabwe suffered the ignominy of not being able to sell its own resources for two years. That cost it much revenue. But by the end, Mugabe and friends basically outsmarted their opponents, whose political skills were often lacking, and turned their country’s diamond business into a cause célèbre for other African states. Now, they’re crowing, giving new meaning to the phrase “getting away with murder.”

The African Diamond Producers Association—The industry first encountered the African Diamond Council when the group—comprised of African diamond producing nations—released a commercial that could have been produced by an NGO, with barely coherent reasoning behind it. It was a group searching for a cause.

It found one, but, ironically, the crusade of its branch organization, the African Diamond Producers Association—having Zimbabwe re-admitted into the KP—turned it into the NGOs’ nemesis. Even so, the the group has become a real power player. Remember, this isn’t like the old days, when the industry could prod African countries to join the Kimberley Process and they would grudgingly agree. The balance of power has shifted; look at De Beers and Botswana.

Non-KP efforts to monitor supply chains—This episode makes clear: If you (or your customers) have ethical concerns about where your diamonds come from, the Kimberley Process isn’t enough

But more importantly, read my interview with the State Dept.’s special advisor on the conflict diamonds. He’s saying, because of U.S. sanctions, Marange diamonds are illegal in America. Buying them from a third party is also proscribed. And, depending on how vigilant the government chooses to be, this could turn into a serious problem.

Now, in the short-term, there isn’t that much jewelers can do about either of these things. In the long-term, this will likely spur more interest in “chain of custody” schemes like the Responsible Jewelry Council’s, the ForevermarkRapaport’s “ethical certs” initiative, etc. 

(Parts of) the industry—NGOs often complained that the industry just wanted “the goods” from Marange, but that wasn’t exactly right: Many stakeholders in the World Diamond Council have no direct interest in those gems. The industry’s interest was two-fold: First, dragging this out threatened the scheme’s very existence, and most believe the industry is better off, from a PR and legal compliance standpoint, with the Kimberley Process than without it. Second, some feared that if Zimbabwe sold its massive production outside the KP, the government would “dump” the goods, and cause chaos in the market. Basically, businesses want stability. So the trade comes out ahead, except for …

LOSERS

American jewelers and diamond dealers—There was a reason JA and DMIA sent out a statement calling for KP reforms: They represent the American industry, which is most at risk here, both from a consumer perception and legal standpoint.

The trade can talk all it wants about how many countries backed this agreement, how its passage received a standing ovation, and how the two mines in question have been repeatedly judged compliant and blood-free. The NGOs have the media in their pocket, and stories won’t be spun that way. Here, for example, is The Wall Street JournalIndia Set to Import Zimbabwe ‘Blood Diamonds.’ That’s not really true, but expect more of that to come.

The NGOs—This episode represents the NGO’s first major defeat in the Kimberley Process, and the Civil Society Coalition knew it was coming, which is one reason it boycotted the meeting. The agreement does away with their treasured “local focal point,” although it does give local activists unlimited access to the Marange fields, and some argue this is a stronger provision that could even work in their favor. But that depends on the government keeping its word, and the track record there is not great.

NGO allies in the KP (Canada, the European Union, Australia, the U.S.)—These governments kept the pressure on Zimbabwe for nearly two years, but finally gave up. At the meeting, Canada and Australia did a stunning about-face, speaking out in favor of the agreement, leaving the still-skeptical U.S. basically on its own. 

UNDECIDED 

The Zimbabwe people—The citizens of Zimbabwe are stakeholders here, too, and allowing Marange exports would seem to help them: it will bring more employment, and money, to that beleaguered nation. But will the proceeds benefit the people of the country, or just prop up the existing government? My gut tells me that the Zimbabwe people will end up in the “losers” column—although it remains possible, though not probable, things could break the other way.  

The Kimberley Process—On the one hand, the last few years have been an unmitigated disaster for the KP: It’s suffered a major blow in public esteem, continually teetered on the brink of dissolution, and, when South Africa broke ranks and began importing Marange diamonds on its own, that set an ugly precedent. Moreover, this deal ends the Zimbabwe saga in a way many consumers aren’t going to like.

Clearly, this agreement appears troubling. It’s a victory for people who don’t deserve one. It shows that defying the KP can work. And the NGOs are right that the enforcement and monitoring provisions are weak.    

Yet the Kimberley Process needed to get past the Marange issue, which had tied it in knots for two years. No one could stomach another year of arguments on this issue. Things weren’t progressing, positions were hardening, and little else was getting accomplished. In the coming weeks, people will sound off on whether this agreement is a “good thing” or a “bad thing.” But in the end, most participants I spoke to saw it as a “necessary” thing—something that had to be done, even if some held their nose doing it. That’s what the U.S. concluded. Still, while there may have been wild applause in Kinshasa, I don’t see much to celebrate.

Could things have been handled better? Perhaps, some say, Zimbabwe should have received a full suspension in November 2009. But that might have increased the pressure to let the country back in the KP. In the end, the problem may have been that Zimbabwe’s antagonists were too tough when the country was willing to engage, and then too conciliatory when it was willing to walk away. So the wrong behavior ended up reinforced. 

There is some hope on the horizon: The reform-minded United States has been chosen as next year’s KP chair. If the world agrees to much-needed KP improvements, that could lure back the NGOs and, possibly, maybe, pave the way to a more robust, effective KP

And really, at this point, there’s no choice. Some NGOs are already on the verge of withdrawing support. The industry is no longer convinced the KP is helpful to its image. Consumers either don’t care or are skeptical. And of course, a lot of diamond-producing countries never wanted a certification scheme in the first place. If the Kimberley Process doesn’t get its act together soon, it may soon find itself without any supporters at all.

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