Kimberley Process Report Card

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Governments, the diamond industry and NGOs have been meeting since May 2000 to create a certification system that will end the trade in conflict diamonds. Here is a Report Card on what they have accomplished.

Subject Grade Comments
Controls in Producing Countries Good Comprehensive details have been agreed; the major challenge will be monitoring and enforcement (see below) Some countries have already taken action: Botswana has reviewed its legislation and regulatory framework for Kimberley Process (KP) compliance; Namibia’s new Diamond Act aims for KP compliance.
Controls in Trading & Consumer Countries Fair Details agreed but some countries still reluctant to implement new procedures, with complaints about the complexity and projected cost. However, the cost would undoubtedly be much less than 1% of the $7 billion annual trade. The EU will manage controls on behalf of, and in, all its members states. This could lead to either a dismantling of existing controls in some countries (e.g. Belgium), or their extension to all others – it must be the latter. Adequate EU controls must be installed throughout the EU. Most EU member have few or no diamond controls of any sort at present.
Certificate of Origin Good Concept and format well developed and agreed by all producing countries. Working examples now exist in Angola, Sierra Leone and Guinea, with help from Belgium, Diamond High Council, US & UK.
Re-Export Certificate Fair Principle now accepted that trading countries (e.g. Israel, Belgium, US, UK)must ‘guarantee’, to the best of their ability, that diamonds in their systems are conflict-free. Some countries are balking at cost and complexity; there are differences of opinion as to what a government can actually guarantee.
Industry Chain of Warranties Good The World Diamond Council (WDC) has proposed an industry-managed ¡¥chain of warranties¡¦ in each producing and trading country. This may be audited by governments as required. Details have yet to be worked out, but the principle is essential to ensure good control at all levels of the chain. Any industry-sponsored mechanism must be regulated and monitored by governments; voluntary approaches are unsatisfactory.
WTO Issues Fail US, Canada and others want the diamond certification system to comply with WTO regulations and not viewed as a restriction of trade. They want free entry to the system; others want entry criteria. There are solutions to this, but KP members have left this issue and negotiations with the WTO to the 11th hour, and they remain as divided and confused on the subject as they were on Valentine’s Day 2001.
Statistics Fail There is general agreement that good and comparable statistics on rough diamond production and trade are essential to halting the trade in conflict diamonds. However, 4 plenary meetings and several working groups have so far failed to find a formula.
Coordination Fail While all recognize the need for a secretariat function, many (especially Russia and the US) refuse to come to grips with the details, and coordination issues have not been discussed in 12 KP meetings. The KP needs backup on data gathering and analysis, the organization of reviews, and problem identification. It also needs a dispute mechanism, and deterrents for countries failing to meet minimum standards. Worries about the cost and authority of a secretariat have prevented any meaningful discussion.
Monitoring Fail Credible independent monitoring of national systems and industry warranties is essential to an effective system. Current monitoring provisions are tentative, timid, voluntary, limited, optional. Credible independent monitoring of national systems and industry warranties is essential to an effective system. Weak monitoring will actually assist traffickers in conflict diamonds by covering their trail with bogus paperwork. Russia, China, Israel and others actively support the current weak provisions. Not one government spoke in favour of more effective monitoring at the November 2001 KP meeting. Weak monitoring? Only the killers will win.
Overall Grade: An ‘A’ for good intentions and hard work. An ‘F’ – Failure – for not creating what the UN General Assembly called for in December 2000: a system that is effective, pragmatic and transparent, with ‘appropriate measures to help ensure compliance’. The system as it currently exists will be neither effective nor transparent. It is a watchdog without teeth. And it may actually make it easier to disguise conflict diamonds than before.

Amnesty International * Fatal Transactions (Netherlands) * Global Witness (UK) * Oxfam International * Partnership Africa Canada * Physicians for Human Rights (US) * World Vision (US)

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