Why We Still Need a Kimberley Process

It can be a little lonely being a supporter of the Kimberley Process.

It has been criticized inside the industry  — with influential commentators Chaim Even-Zohar and Martin Rapaport both suggesting pulling the plug. One industry veteran recently wrote an editorial in the Wall Street Journal suggesting the whole thing is a De Beers plot. (I can assure you: it isn’t.) 

And outsiders have always viewed it suspiciously, with some seemingly against it simply because the trade is for it.

But the fact is that 1) no one has really come up with any better ideas, and 2) the KP has had a positive impact. At the beginning of this decade three brutal African wars were fueled by diamonds, and conflict diamonds were at least four percent of the overall production. Now they are close to gone. That is a real achievement – and if you are not sure why that is important, read this recent article about what “blood diamonds” led to in the Daily Mail.  

That doesn’t mean that the KP doesn’t have flaws, or challenges ahead, or it is a guarantee your diamonds are 100% ethical. But it does have considerable value, and it needs the support of both the industry and outside world. And I would caution critics – when commenters like Greg Campbell claim that the KP is “ a joke,” opponents of any mineral certification scheme look at that and take note. See here, for example. 

But don’t take my word for all this. I asked informed people from the three “prongs” of Kimberley — the NGOs, government, and industry — to talk about “why we still need the Kimberley Process.” They don’t all likely completely agree with what I wrote above, or each other — note that the last two comments are somewhat contradictory.  But I received a lot of long thoughtful replies, which inevitably touch upon current events. They are excerpted here:

Ian Smillie, formerly of Partnership Africa Canada, author of the forthcoming “Blood on the Stone”   

It’s obvious that criminals are waiting in the wings to take advantage of a KP collapse. Many are already taking advantage of the KP’s obvious weaknesses. I don’t know what the level of smuggling is today, but if you take into account Venezuela and what’s happening on the Zim-Mozambique border alone, it is not insignificant.
 
Maybe the industry and the governments that created the KP think that’s OK, because we’ve “solved” the problem of conflict diamonds. On the contrary – we’ve really only proven how difficult it is to get some governments and some parts of the industry on the same page and to take tough action when it’s needed.
 
Many forget – or maybe never knew – that the demand for gem diamonds is pretty elastic, and could become a lot more so as the reputation of diamonds takes a continued beating. Maybe they think it’s still the 1950s and the gravy train can continue, with young couples buying diamond rings as symbols of love even as we get more and more bad news about places like Zimbabwe and Guinea and the DRC.
 
My own view is that a collapse of the KP – very near in a real sense, even if it limps along in pretend-mode for another five years – would be catastrophic for the industry and for the poor countries that depend on diamonds for a portion of their economies. A return to where we were in the 1990s, with diamonds being used for guns and drugs and money laundering, is almost inconceivable after all we’ve learned, after all we’ve created, and after all we’ve done …
 
If there was no KP, it would soon have to be reinvented. The cost while we wait for that to happen would be enormous.

Brad Brooks-Rubin, special advisor, conflict diamonds, U.S. State Dept.

As a preventative measure, the Kimberley Process is key.  If there was another war funded by diamonds, the world would be crying for a Kimberley Process. The KP didn’t end the wars in Liberia, Sierra Leone or Angola, but it sure helped. If another war were to break out, a lot of people would breathe a sigh of relief that the KP was there. Even if it doesn’t stop every single stone used by a rebel movement, it will stop many of them. It’s the best preventative system to insure that a rebel movement doesn’t use diamonds like the RUF did. This is why in the Congo context, people are saying: Why don’t we have a KP-like process?
 
I often have industry people complain to me: Why do I have all this hassle with my shipment from the U.S. to Canada? But in order for the system to work, you need to monitor every single shipment. Smuggling has not gone away, there is still plenty of illicit trade. But it has been driven further underground.
 
A lot of countries, including the U.S., have problems with the idea that they need to develop an internal control system that they are accountable for. That is a pretty revolutionary idea. And it is something that leads to an impressive level of good governance and transparency. The most common statistic you hear is that, in 2000, Sierra Leone exported zero dollars in diamonds legally. In 2007, it exported $125 million.
 
And when we do see something that isn’t right, we usually find it because we have a lot more information at our disposal thanks to the KP. The Guinea-Lebanon thing Chaim uncovered is because we were able to see what happened and target what was happening.
 
The KP does need to evolve, but it’s achieved a fair amount in a short period of time. Most of the criticisms of its failings are things that I would agree with. But on balance this is a system that we need to continue to support and that other trades will continue to look to. It is too important to lose.

Elly Harrowell, campaigner, Global Witness

The fact that we have a KP is a good thing. It took a lot of work to bring it about. A lot of people said this wasn’t an industry that could be regulated. It’s made a lot of progress. The KP we have today is stronger than it was ten years ago. It’s been a good forum for bringing together governments, the industry and civil society. There are places like Sierra Leone, where it’s helped to bring diamond revenues into the formal sector. That shows how important it is to have something like the KP.
 
However, we are not resting on our laurels. A lot of people seem too happy to let the KP stagnate. Our message is that the KP is facing great difficulties and it needs to be reformed. Without reform and change, I don’t think it will be of great relevance and use in coming years. It can’t just be focused on the problems of ten years ago. We need to evolve and reform to meet the challenges of today.
 
We can make the KP better and more effective. For instance, there really needs to be a renewal of the KP’s commitment to human rights. The arguments we saw over Zimbabwe, when some said it was only government soldiers that are murdering people, were really perverse. Human rights are mentioned in the KP preamble. Then there are the structural issues. People laugh when I tell them there is this big certification scheme that doesn’t receive one penny in funding. A technical secretariat would do a huge amount in increasing continuity. The decision making process needs to be reviewed. It may turn out that the [100%] consenus model is the best model out there. But we need to review all the options.  Without these kind of reforms, it becomes more difficult to argue the case for the KP.
 
If we don’t move towards implementing those reforms, the KP will just go from crisis to crisis. A scheme that is constantly in crisis is not a scheme that is working. The industry has generally supported these reforms, but it needs to put its full weight behind them, and not just be reactive.

Matt Runci, president and CEO, Jewelers of America

My view is there is, at present, no functional equivalent that can address the issues of confidence that arise in the supply chain. Even the people who have been most outspoken in their public criticism of the KP have not come up with credible alternatives.  
 
The Kimberley Process is basically second party verification. You have governments verifying the origin of the diamonds. If you do away with that, you are back to first party verification, where jewelers say to the customer, “You can trust me, I’m honest.” I think we all know that, in today’s world the first party model is considered unsatisfactory.
 
The Kimberley Process is flawed in ways that are generally recognized. It must be improved or otherwise it will increasingly be seen as a liability rather than an asset. It can’t rest on its past laurels and just rely on a particular definition of conflict. It has to be expanded. The human rights language needs to be included. There needs to be more transparency.   
 
But the industry can’t just sit back and say, we’ll let the Kimberley Process do it all. The ultimate responsibility lies with individual businesses. At the end of the day, the best counsel we can give people is to look carefully as to what is going on with the KP, particularly with regards to Zimbabwe, and decide for yourself whether it can be the complete answer to your consumer confidence challenges. Some have decided that their standards need to be higher.
 
The industry needs to be prepared to really push governments to make improvements in KP.  We made a good start with the workshop in Tel Aviv but it’s just a good start.  A lot of work needs to be done between now and the Plenary in November.

Nadim Kara, director, Diamonds and Human Security Program, Partnership Africa Canada

To me, the KPCS is one very important tool through which to improve one small dimension of the industry’s overall performance.  What [the KPCS] needs, however, is a complete psychological makeover.  Everyone in the KPCS needs to step back and ask themselves: in an ideal world, what does the perfect diamond industry supply chain look like, at every stage?  Then it needs to ask itself: what needs to be in place, from a governance perspective, to strive towards bringing this ideal supply chain into being?  The third question, then, is what role could the KP play in contributing to achieving the vision laid out in the first place?
 
I think the KP has a lot to be proud of – but all that it has to be proud of is at risk.  For starters, the KP actually does have teeth.  For the last six months, industry and government have been telling NGOs that Zimbabwe is going to walk away, and that this would be a disaster for the KP, and that the KP needs Zimbabwe.  By contrast, what the last few months have shown is that Zimbabwe needs the KP!  They sent around 20 people to Tel Aviv, and another dozen to Russia. Despite their frustrations, they accepted a Joint Work Plan and they accepted a Review Mission. They jumped through all the hoops that the KPCS set out (however [un]credibly and unwillingly). Why did they do this? Why didn’t they walk away? Because at the end of the day, unlike other global governance initiatives, the KPCS has some power over the ability of governments to make money.  The Zimbabwean government did not want to lose 30-50% of the value of its diamonds by relying on smuggling. It wanted full value, and that meant it wanted KP validation  …

Zim has also illuminated the dark side of the technocratic, risk-averse culture of the KP.  By denying that the KP has any role in promoting respect for human rights, KP members have demonstrated a deplorable lack of creativity, of vision, and of leadership.  Even if this is technically true, why is not every government in the KP participating in a massive lobbying campaign with other KP members to change the formal definition of conflict diamonds and ensure that no diamond associated with human rights abuses gets a KP stamp of approval?  The lack of effort by governments and industry on this front is the most disappointing.  

But the KP Reform Agenda that was officially born in Tel Aviv is hoping to put in place structural reforms that will hopefully help change the culture of the KP. These reforms include:  1) Making all KP documents public, by default, instead of confidential by default (and requiring consensus to not make something public). 2) Putting in a KP Secretariat that can address a wide number of flaws impeding the effective operation of the KP, and also impeding social learning activities that address how KP members “see themselves” and understand the role of the KP in the world. 3) Making human rights language explicit in the KP document, so that the KP plays a progressive role in promoting respect for human rights, at least in the diamond supply chain. We’ll see how far we get.

Boaz Hirsch, current chairman, the Kimberley Process, originally from the Israel Ministry of Industry, Trade and Labor

As a newcomer to the process, from a relatively fresh point of view, I am surprised by the strength and the vitality and importance of the Process.
 
It is unique process that protects a unique product.  If you look at other minerals, there is no equivalent to it. The KP has managed to eradicate the problems that were connected to diamonds in the beginning of the last decade. Except for Cote d’Ivore, we cannot identify any diamonds being used by rebel movements that lead to bloodshed and violence.  If the KP is eliminated, the end consumer will lose the guarantee their diamonds are free of bloodshed, and you create an incentive to duplicate the acts that led to its creation in 2003.
 
But it is not only the issue of having the Process, but how the process is implemented. The KP checks itself regularly. There are peer review missions comprised of members of the KP that examine the way countries implement the regulations.
 
Because the KP has been so successful in eradicating the problems that were the impetus behind its creation, as time goes on, memory of those problems fades away. And because it’s so successful, people would like it to serve as a solution to all kind of issues.  I get all kinds of queries trying to connect the KP to environmental issues and labor rights issues. The KP is not the magic catch-all solution to everything that relates to diamonds. It was meant to deal with a very specific issue and it does so very successfully.

 

JCK News Director