New PAC Report Calls Diamond Industry Regulation Inadequate

150 150 Rapaport News

(Rapaport… June 5, 2003) A new report issued on June 5, 2003, by Partnership Africa Canada (PAC) criticizes the lack of follow-up on a 2002 UN report dealing with diamond exploitation in the Democratic Republic of the Congo (DRC) and says that the United Nations (UN) Security Council must take immediate action to halt all unofficial diamond exports.

The PAC Report, Motherhood, Apple Pie and False Teeth: Corporate Social Responsibility in the Diamond Industry, by Ian Smillie, examines the findings of the UN study, which relied on guidelines developed by the Organization of Economic Cooperation and Development (OECD) to assess companies engaged in what it said was systemic bribery, asset stripping, tax fraud, sanctions busting, embezzlement and extortion in the Congolese diamond industry and other extractive industries. The PAC Report reviews the OECD Guidelines for Multinational Enterprises, finding them to be without power and virtually unknown to companies, whether or not they are involved in such behavior. It suggests instead, that the Constitution of the Nuremberg Military Tribunal would have been a more appropriate reference, in a conflict that has led to the death of more than three million people in recent years.

The PAC report also reviews the concept of corporate social responsibility as it applies to the diamond industry and says that corporate codes, which rely on voluntary guidelines, are completely inadequate. Much greater transparency in corporate financial transactions is necessary in developing countries.

According to the report the Kimberley Process Certification Scheme for rough diamonds lacks any clout. Without provision for regular independent monitoring of national control mechanisms, it allows the companies and countries that have traded in blood diamonds for the past decade to continue “regulating” themselves, without regular independent monitoring. The Kimberley agreement “will create false consumer confidence and the appearance of probity where none can be assured. It will do nothing to stop conflict diamonds where they still exist, and it will do nothing to prevent their return where controls are weak and predators are strong.”

The release of Motherhood, Apple Pie and False Teeth coincides with an Environment Canada-sponsored ‘Workshop for Sustainable Development in the Diamond Mining Sector,’ to be held in Ottawa on June 5 and 6, 2003.

Leave a Reply

Your email address will not be published.