JCK Las Vegas: Kimberley Process Needs to Unite, Improve

Members of the Kimberley Process need to “come together” and
improve communication if the certification system is to maintain consumer
confidence, participants on a “Diamond Dialogue” panel at the JCK Show in Las Vegas
on June 2 agreed.

“The KP has had a tumultuous year,” admitted World Diamond
Council chairman Eli Izhakoff. “Of course, we have had many challenges over the
years. But this past year had something extra in it. There is plenty of blame
to go around: The governments have made mistakes, the NGOs have made mistakes.”

Izhakoff said that there is currently “no consensus” toward
re-allowing exports from the Marange region of Zimbabwe.

“But there are many countries doing some soul-searching and
trying to remedy the situation,” he said. “With good will on all sides, we will
be able to have an agreement. And we need that attitude, because the other
option is not acceptable.”

Izhakoff later added that the KP needs to be reformed with
“more transparency” and a change in the voting system from requriing absolute consensus to possibly moving to a super-majority vote.

Cecilia Gardner, general counsel of the World Diamond
Council as well as president and CEO of the Jewelers Vigilance Committee, noted
that Zimbabwe has made tremendous progress but has still fallen short of what
is expected.

“Zimbabwe knows what the KPCS seeks from them,” he said.
“It’s not a mystery. They know what needs to be done. It is not unprecedented,
it is not onerous, it is not unusual.”

Brad Brooks-Rubin, special advisor on conflict diamonds for
the U.S. State Dept., argued that despite the KP’s shortcomings, the world still needs a diamond certification scheme.

“There is a need for a system to stop conflict diamonds, as
we saw in the nineties,” he said. “If the KP has anything to be truly ashamed
about, it’s the diamonds from the Côte d’Ivoire, which we have tried in any
number of ways to prevent from coming into the system but they still do.”

He said the lack of a “structural middle” has let issues
like Zimbabwe dominate.

“There is no communication,” he said. “There is no phone
number for the Kimberley Process.”

He agreed that “a lot of lessons have been learned” from the
Zimbabwe stalemate.

“When the Marange violence broke out, everyone assumed that
is the Kimberley Process’ job,” he said. “But if there is a problem with the
diamond sector, the Kimberley Process can’t necessarily deal with it.”

He said that, to address some of the problems, it’s possible
that the “conflict mineral” provision of the Dodd-Frank Wall Street Reform Act might
be broadened to include diamonds.

“Will more need to be done by the government?” he said. “I
think that is up to the people here.”

Nadim Kara, campaign director, natural resources, with
Partnership Africa Canada, said “there is no doubt that the KP is struggling.”

“The good will has been built up over the last seven years
is at threat,” he said. “The politicization of the KP, where governments now
make decisions based on political loyalties rather than evidence, is the kind
of thing that has hurt many international bodies.”

He said that what all sides “need to focus on now is the
rebuilding of relationships,” and ideas to improve the KP, such as a full-time
Secretariat.

Kara also argued that the industry’s System of Warranties is
obsolete and “shockingly weak.”

“It doesn’t have to be rebuilt from scratch,” he said.
“There has been some incredible work done by the Responsible Jewellery Council.
This is an opportunity for the industry to step forward, and say: We have some
solutions.”

Matthew A. Runci, chairman of Jewelers of America, said
“many retailers have serious doubts” about the Kimberley Process.

“The politicization of the KP has elevated the rhetoric to a
level no one can ignore,” he said.

He noted that his members want the Kimberley Process to
continue, but view the Kimberley Process as a foundation, but “not as a panacea
for all the problems of the supply chain.” He advised retailers to use their
market power with their suppliers to affect change.

“We have fallen into the trap of watching KP like it’s a
tennis match,” he said. “And we forget that the power of influencing business
relationships rests in the hands of all the people in this building.”

Borsheims CEO Susan Jacques said that it is crucial to
maintain consumer confidence in diamonds, adding “we feel it is vitally
important that we choose partners upstream with the same ethical and moral
values as us.”

Jacques noted that she has told her suppliers she will not accept goods from
the Marange region—and that, in response, many suppliers told her she “didn’t
understand” how the diamond business works.

“My response was: If that is how it is currently being done,
change it,” she said. “I want to communicate to my retail clients that I truly
believe in the System of Warranties and it’s not just a rubber-stamp I put on
everything.”

Dr. Benjamin Chavis, civil rights leader and executive
director of the Diamond Empowerment Fund, added that “the issues is not whether
we need the Kimberley Process, but how it can be strengthened.”

He quoted former South African president Nelson Mandela as
saying the Kimberley Process is all about “improving the lives of people in the
places where the diamonds come from.”

“The strongest economies in Africa are the ones that produce
diamonds,” he said. “When consumers buy diamonds, they should also know that
they are buying diamonds that help empower African nations. Sometimes we focus
so much on conflict, we don’t see the good.”