How Will the New State Department Handle Conflict Diamonds?

The United States has long been a strong advocate on conflict diamond issues. Will that continue?

Yesterday, Ashley Orbach, the U.S. Department of State’s special advisor for conflict diamonds for the last three years, announced she will be leaving her post and the agency. Here is an excerpt of her email to industry contacts:

Working alongside you has been a real pleasure and has opened my eyes to the ingenuity, integrity, and artistry of the jewelry sector. So many of you are the leaders in transparent and responsible sourcing on the world stage and in the global market and I have been proud to work alongside you to help support those efforts.

Thanks, in particular, to my U.S. industry colleagues for your generosity of spirit and time, for always playing host to us in New York, and teaching me about your industry. I never thought I’d get a front row seat to the diamond district in the greatest city in the world and it was a blast!

With new leadership coming to the State Department, it remains to be seen whether the United States will continue its strong advocacy regarding the Kimberley Process and related issues. New secretary of state Rex Tillerson, the former head of Exxon Mobil, will likely have different opinions on the regulation of mining than his predecessors (if he gets that granular). In addition, the president has expressed hostility to international agreements, though the Clean Diamond Trade Act, which codifies the Kimberley Process, is currently law.

That said, if, as reported, the State Department does refocus on fighting terrorism, it might look more at terrorist financing, and getting better control of diamonds does fall into that. According to people involved in the early days of Kimberley Process, the Bush administration became a lot more interested in the KP after Sept. 11. But the United States will likely be less outspoken on human rights and development issues than it has been in the past.

“I think it is safe to say that the new administration will not have the same backing for human rights in business that the prior administration had,” said a former U.S. government official. “But it’s impossible to tell.”

Cecilia Gardner, president and CEO of the Jewelers Vigilance Committee, says the topic was on everyone’s mind at the Jewelry Industry Summit in Tucson, Ariz.

“At this point, we don’t know what the government will do,” she says. “But talking with these professionals in the government, they all say the same thing: The ship has sailed. The idea of responsible sourcing, or protecting the environment, of caring for the local community, is now embedded in the ethos of these mining companies. It’s in their own self-interest, and they get that.”

NGOs involved in these issues are meeting this week in New York City to plot their way forward. At this point, many seem to believe, as do many in the industry, that there is a need to go beyond the KP and encourage new initiatives.

Also this week, Chaim Even-Zohar published a story in Diamond Intelligence Briefing claiming that the United States Kimberley Process Authority (USKPA), which issues certificates for rough diamond imports and exports, does not legally exist. That is being rectified, says Gardner, a director of USKPA and its general counsel. Still, Even-Zohar writes: “This is the same government that is devoting enormous financial resources to telling other countries how to run the Kimberley Process while neglecting to keep its own house in order.” At this point, it is not clear if the new State Department leadership will have much interest in either.