Here is some background on the KP’s agreement with Zimbabwe, which was negotiated during the World Diamond Council meeting in St. Petersburg (where I am now):   (UPDATE: I just posted the agreement here.)

The “sides” boiled down to the U.S., the NGOs and Canada (and to some extent Australia) against Zimbabwe. The industry was somewhere in the middle trying to strike a deal. But the disagreements narrowed as talks went on.  Zimbabwe hoped to begin exporting diamonds from Marange immediately. The NGO alliance wanted to send a review mission first, and hoped to maintain “leverage,” to insure things really had changed.  After initial talks, the NGOs agreed that they would let some goods go. Even so, snags developed.

The negotiations began on Wednesday, before the World Diamond Council meeting. But the day ended without a deal, and a much smaller group reconvened on Thursday during the WDC meeting. And, as the day went on, it was clear we were at a crucial juncture for the Kimberley Process.  African nations were angry about what they considered unfair treatment for Zimbabwe; Namibia’s diamond commissioner, Kennedy Hamutenya, even threatened that his country, and others like it, would pull out of the KP if Zimbabwe were not re-admitted. It is hard to know how serious a threat that was, but if they followed through that really would have been the end.

Zimbabwe’s attorney general also appeared at the meeting and said that, while his country follows the rule of law and has an independent judiciary etc etc,  it just so happens he has the power to drop charges. Which seemed to be a pretty serious indication that he plans to get rid of the case against arrested NGO activist  Farai Maguwu, who was freed on bailed two days before the meeting began. (Hey, what’s one court case when weighed against potential billions in diamond revenue?)

All of which seemed to promise success for the KP negotiations held in private on the floor above the WDC meeting. Global Witness’ Elly Harrowell even said: “It’s clear: We want Zimbabwe to stay in the Kimberley Process.”

But as Thursday dragged on, and the negotiations kept going, it looked like that might not happen.  Emotions ran high. As I mentioned the other day, most of the industry felt the NGOs were pushing things too far, and one industry representative even suggested that, if there is no final deal, the industry should “side with Zimbabwe.” Frankly, that is insane — why would the industry want to publicly side with one of the least popular countries in the world, one which has been credibly accused of human rights abuses? WDC president Eli Izhakoff brushed that suggestion aside, saying he fully expected a deal.

At around 5 PM, Izhakoff called a break, saying he expected good news soon. Right afterwards, one negotiator sent out a text saying a “deal’s dead.” And then, just as everyone was ready to call it a night, discussions restarted in the hallways. And, to everyone’s surprise, at about 6, a deal was reached.

The arrangement calls for Zimbabwe to begin exports, but for a review mission to visit the country at least twice before it can sell its significant diamond stockpile (accumulated while exports where barred by Kimberley.)  You can read a summation of it in this press release.

It’s hard to get across how euphoric the mood was among WDC attendees when the deal was finally announced, after two torturous days of negotiations. Champagne was even served.  And yet the NGOs considered the deal a significant “compromise” and a “gamble,” and were uncomfortable when people kept congratulating them. They said that allowing exports was a “good will gesture,” but they were nervous that profits from the sales would just end up in the pockets of government cronies.

I do think there are good things about this deal, and this process. Zimbabwe was suspended for eight months from selling from a possibly world-class diamond deposit (and yes, the talk that Marange might comprise up to 25% of world production is true.) This is the only time the international community has been able to lay a serious sanction against the country. And, in a way, the debate about whether the KP is a human rights group has been settled. A country has just been subject to serious penalties because it violated the human rights of diamond diggers.

As for the bad side — well, the KP is now selling diamonds from a pretty suspect regime. Many consumers and commenters won’t like that. But the facts are: Zimbabwe is now a significant diamond producer. They have expended significant effort to comply with the KP. Since the industry can’t overthrow the government, it has to deal with those facts. This was a situation without a lot of good options.

In the end, I agree a lot remains to be seen. The Zimbabwe delegation, which was also overflowing with happiness, bent over backwards to show how grateful they were, with the mining minister praising NGOs and promising to make everyone “proud.”

Industry representatives — including the JVC’s Cecilia Gardner, De Beers’ Andy Bone, and Izhakoff — deserve a lot of credit for their hard work in getting all this done.  Because of their efforts, the Kimberley Process lives another day. Until the next crisis.

If you want more color, read my tweets as it happened.

 

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