Did Zimbabwe Violate the KP?

Last week, Jewelers of America published a letter
(PDF) it sent to the KP administrator. An accompanying media release said:

Jewelers of America has … learned of apparent violations to the Kimberley
Process Joint Work Plan (JWP), which was instituted with Zimbabwe’s consent, at
the November 2009 KP Plenary in Swakopmund, Namibia … It included the
suspension of all diamond exports from Marange until a KP Monitor could certify
that shipments from the region were KP compliant.

However, the KP Working Group on Monitoring (WGM) has recently confirmed
reports that multiple shipments of rough diamonds, in apparent violation of the
JWP, moved from Zimbabwe
to the United Arab Emirates (UAE) between December 2009 and April 2010.

Yesterday, the State Dept. all but confirmed this, posting on its
web site
(PDF):

[R]eports continue to appear concerning smuggling of rough diamonds from,
and violence in, the Marange area. … Rough diamonds from Marange will only be
acceptable for Kimberley Process purposes with official approval from the
Kimberley Process Monitor … to date, no rough diamonds have been certified by
the Monitor.

The KP has recently been informed that some exports of Marange diamonds
have, in fact, occurred, despite this prohibition.

The note
includes a primer (on its last two pages) on how to identify Marange rough.
Everyone in the trade should read it and be on the lookout for those diamonds.

Clearly, the standoff between Zimbabwe and the KP is escalating. Zimbabwe, for
its part, protests that the shipments in question did not violate the “work
plan,” as they were mined before the Plenary. But the Working Group on
Monitoring does not seem to be buying this. There is apparently a real split in
the Zimbabwe
government, with some taking the KP more seriously than others. 
Obviously, the country needs money, and Marange diamonds have basically been
banned from the international market for the last six months.

In any case, when you add it all up – the shipments, the threats
and inflammatory statements
from government officials, and, most
importantly, the atrocities
that occurred a year and a half ago and the violence that continues – we see a
pretty troubling pattern of behavior from Zimbabwe.  (These reports are
also not great publicity for Dubai,
though in fairness authorities there do deserve credit for helping to bring
this to light.)

As I’ve written before, there are pros and cons to suspending Zimbabwe from
the KP.   The “pros” would be, first and foremost, it would show that
the system has teeth.  The main “con” is that no one wants to have
millions of carats outside the KP.  My sources think, barring something
extraordinary happening, firm action (meaning suspension) will not likely be
taken until the next Plenary. A lot depends on what the KP monitor, Abbey
Chikane, uncovers when he visits the country next week. Zimbabwe, of course, always has the option to
walk out by itself, as Venezuela
did, but that is not something that would suit anyone at this point.

It is all a big, ugly, mess – and we hope that the
government of Zimbabwe
decides to act reasonably and responsibly before it gets any messier.

JCK News Director