Kimberley Process Makes Progress

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Alan Eastham, Special Negotiator for Conflict Diamonds, U.S. Department of State, delivered the following speech, “Diamonds, Conflict and the Kimberley Process: Global Problem, Global Solutions,” at the Jewelers Vigilance Committee (JVC) lunch in New York on January 11.

Today, I want to elaborate on some aspects of the problem of conflict diamonds. I am the principal U.S. representative to the international negotiation known as the Kimberley Process. My role in that process has several aspects:

• I have to hold up certain principles of concern to the United States in the Kimberley Process;

• I have to make sure that it is actually possible, in terms of our domestic agencies, to do what the Kimberley Process wants to do;

• And in terms of the tripartite formula of these negotiations — industry, NGOs [nongovernmental organizations], governments — I hope to transplant some of the expertise of the industry to the NGOs and some of the passion and concern of the NGOs to the industry.

The problem is this: horrific wars, including brutality and suffering for African populations, have been financed in large part by diamonds mined in areas under the control of rebels, most notably UNITA in Angola and the Revolutionary United Front in Sierra Leone. There is little prospect of stopping conflict in these areas as long as diamonds provide the resources to keep conflict going.

Diamond fields, mainly alluvial, were being fought over, and as well provided the means to carry the fighting to new areas. They were both cause of and fuel for these conflicts.

It’s important to stress this is not about the diamonds. It’s about the money.

Money used to finance wars in which terrible things take place.

Money made portable to move offshore to finance personal lifestyles.

Money that avoids taxes and duties, and that can be used to do evil things, including terrorist attacks.

And, obviously, this money is not available to meet the needs of the people in areas where diamonds are mined.

We have a variety of traditional tools to attack the problem of diamonds, money and conflict. These include industry measures, most importantly self-policing and the essential best practices of “know your supplier” and “know your customer.”

Another tool is sanctions, including government restrictions and prohibitions on the trade, as have been applied by the UN Security Council to Sierra Leone, Liberia and Angola.

And we can take financial measures, especially in cases where diamonds are used for terrorist or criminal purposes.

But there was another good idea. About 18 months ago, the diamond industry, through the newly established World Diamond Council, called for taking action to end the conflict diamond trade by establishing a global system of certification of the international trade in rough diamonds.

This is not as easy as it seems. You in the diamond industry participate in a trading system that is complex, unique, global and not particularly transparent. Diamonds, like money, are wealth that is uniquely and exceptionally portable. They are desirable, beautiful, harm no one and form the basis for a multibillion dollar global industry that provides a livelihood for millions worldwide and hundreds of thousands in this country. People often cite to me the figure of 27,000 retail jewelry outlets in this country.

Taking this into account, we internalized two principal goals, coequal in our minds, neither more important than the other:

• To break the link between diamonds and conflict or — put another way, to deny the money from diamonds to those who want to fight, and

• To do this in a way that preserves and nurtures the ability of the industry to trade and flourish.

Industry, NGOs and governments joined together, under the chairmanship of the government of the Republic of South Africa, to design such a system. The UN General Assembly gave a mandate to the Kimberley Process, and a year of hard work in that forum culminated last month in a design for the international system, now virtually complete.

The basic principle of the Kimberley Process certification system is that each country that exports rough diamonds, whether it mines diamonds or not, will agree to set up a system designed to ensure that exports of rough diamonds do not include diamonds sold to fuel rebellions. Each country will have to certify that the diamonds in shipments being exported are subject to that system. Each country importing diamonds will require this assurance for diamonds entering its trade.

In mining countries, this will include tight controls over production and transportation to export.

In trading countries, this will depend on the industry to ensure that conflict diamonds do not enter legitimate trade. As envisaged by the World Diamond Council, this will involve warranties and audits, coupled with rigorous statistics on exports and imports and a program of verification by government agencies. We will probably need new legislation in the United States in order to participate.

It will also require international endorsement, with the next step here in New York when the UN General Assembly takes up the issue soon.

At the last meeting, in late November in Botswana, we made significant progress toward designing a system. Now we need to finish up a handful of issues and move ahead toward implementation to bring the system into being.

An essential element of an effective certification system will be the cooperation we’ve enjoyed so far — government, NGOs and the industry — together. In the past four months, I have been impressed over and over again with the sincerity and spirit of cooperation all parties have shown, and I know that will continue. This is not about regulating the diamond industry for the sake of regulating it. In fact, we do not want to regulate this industry any more than is necessary to ensure the integrity of our own trade, and I think the industry understands that there are significant benefits for the industry in the proposed certification system.

Specifically, what it will do for you is to enable you to be assured that what you are selling has not contributed to human suffering in another part of the world. It will do the same for your customers, enabling them to continue to view diamonds as products that reflect their aspirations and symbolize the highest of human values. I hope we can count on your support as we move ahead.

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