Kimberley Process: Making the Team

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Recognizing the importance of the Kimberley Process to their national diamond trade, more and more countries are complying with the new regulations.

Applying for Kimberley Process (KP) membership is no easy process. After both the July 31 and subsequent August 31 deadlines for KP participants expired, 23 countries found themselves off the KP list. This did not sway many of them from their goal of meeting the minimum requirements to be readmitted.

Governments that are not on the list fear being linked to conflict diamonds and penalized by the industry — a diamond trade embargo could have devastating effects on an economy. But it is more than that. Being on the list has become a somewhat coveted membership. It brings with it respect and team spirit — if you’re not on it, you’re not a player.

Ongoing Process

Since the release of the July 31 list, the KP Participation Committee and KP Interim Secretariat have been receiving and reviewing new and revised applications to become KP participants from various countries, including Vietnam, the Czech Republic, Lebanon, Ghana, Brazil, Romania and Bulgaria.

On September 12, 2003, KP Chairman Abbey Chikane issued a statement encouraging “all states and regional economic integration organizations that have yet to meet the KPCS (Kimberley Process Certification Scheme) minimum requirements to continue with their efforts and to forward relevant documentation to the Interim Secretariat” for assessment by the Participation Committee. Those countries and/or regional economic integration organizations whose submissions comply with the requirements “will be welcomed as Kimberley Process participants.”


Vietnam’s Prime Minister, Phan Van Khai, signed an official declaration of Vietnam’s adherence to the KPCS on December 13, 2002. The country’s membership has since been suspended, however, because information about its internal system of controls had not been forwarded to the Committee, even though the Ministry of Trade released these documents internally in January and March 2003. The Committee had also not received information about penalties to be imposed on KP transgressors.

Since then, all requirements were fulfilled, and on September 12, 2003, Chikane informed all KP participants that Vietnam had been accepted as a full KP participant and asked them “to amend their respective legislations to include Vietnam as a participant as soon as possible.”

Czech Republic

The Czech Republic, which was removed from the July 31 list, has been making progress in meeting the minimum requirements in order to be reinstated. However, it is apparent that the higher echelons of the government have yet to be convinced of the importance of the KP concept.

On September 10, 2003, the draft legislation of new KP laws was approved by the Czech Ministry of Finance and passed on to parliament with a proposal to discuss it during the next session on September 23, 2003. Once parliament approves, the legislation must be approved by the senate and then signed by the president. According to government sources, the most important stage in passing the law is getting parliament’s approval.

Once the law is enforced, the government intends to establish a state laboratory that will fulfill gemological duties and control the imports, exports and inner flow of rough diamonds to eliminate the possible presence of illegal goods. The important part of the control lies with customs, which willcooperate with the laboratory.

The import of rough diamonds into the Czech Republic for the nine months ended September 30, 2003, totaled 38,000 carats, with a total value of $950,000. All of the imported rough was industrial or unsorted. Only five carats of industrial diamonds were re-exported to a KP member. In 2002, 47,500 carats of rough was imported, more than 95 percent of which was sorted industrial goods, while 390 carats were nonindustrial with a total value of $1.5 million. No goods were exported that year.


Although Lebanon missed both the July 31 and August 31 deadlines, it was not removed from the list. According to Chikane, Lebanon complied with all the minimum requirements except one section of the law, which has to be ratified by cabinet: “Since the cabinet only sits at the end of this month, I was faced with a challenge — to remove them and then reinstate them after two weeks or give them the opportunity to wait till parliament reconvenes. Removing them would have disrupted the industry, as they would not appear on the legislation of other participants, and in the U.S., for example, it can take up to a month to include new members, such as Vietnam, in their legislation. So I didn’t think it was a good idea. Now they have until the next KP plenary meeting on October 28, 2003, when we will issue a new list,” said Chikane.

According to industry sources, however, even though Lebanon did not meet the minimum requirements, the Participation Committee and Secretariat did not remove it from the list due to an oversight. For this reason, it was decided not to penalize Lebanon and to extend their deadline until September.


Ghana is another country that missed the August 31 deadline to ratify the KPCS, but, according to Chikane, they are doing their best to comply. Yaw Osafo-Maafo, Ghana’s finance and economic planning minister, has stated that as soon as parliament reconvenes, it will rectify the situation. Osafo-Maafo said the government wrote to KP officials asking for an extension in an effort to comply and is awaiting a response.

According to a government spokesman dealing with the KP, Ghana has had the required KP certificate since January 2003: “The only problem is making it a legislative instrument. We have complied with everything and attended all the meetings.”

Diamond production in Ghana in 2002 was 993,000 carats, up from 870,000 carats the previous year. Earnings in 2002 were $20.7 million compared to $18.5 million in 2001, gained mostly through exports to Belgium and Israel.


According to Samir Nahas, Brazil’s KP representative, on July 30, 2003, Brazilian President Luiz Inacio Lula da Silva signed into law the KPCS, missing the official KP deadline for compliance by a day. The Brazilian government was shocked that they were not on the July 31 list. Nahas says the law took a while to sign as three ministries had to approve it. On August 5, a fax was sent to Chikane’s office confirming the newly signed law. The legal details were forwarded to the Participation Committee for examination.

According to Chikane, however, Brazil has not passed into law the draft KP legislation, which still awaits the president’s signature. They have been sent a notice saying they have yet to meet the minimum requirements, but they have not yet responded. “Many countries were shocked that they were not on the list, but I think they did not take the end of the tolerance period seriously. However, at some point we had to reach finality and decided on July 31 and no later,” commented Chikane.


Romania’s original declaration of intent to join the KP has raised questions regarding whether there are circumstances where nonproducing countries can participate without having to fulfill all KP requirements. Romania did pass legislation, but it was not KP-specific.

Although many in the industry say Romania trades in rough diamonds, the country insists these are only industrial goods and, therefore, it does not need to fulfill KP requirements, such as issuing KP certificates. The fact that several Israeli diamond companies polish their rough in Romania, attractive for its cheap labor, is not seen as a reason why they should have to comply. The topic is currently under discussion.


Although Bulgaria is not a diamond producer, it imports rough diamonds and processes them for re-export. On September 4, 2003, Bulgaria’s Council of Ministers adopted a decree on its foreign trade regime for obtaining and processing transactions with precious metals and stones, bringing its legislation in line with KP requirements. To date, Bulgaria is ready to implement the KP.

The decree will be sent through diplomatic channels to the Secretariat before September 24, 2003. Bulgaria’s KP officials expect the application “to be taken into account at the earliest possibility and Bulgaria to become a participant in the Kimberley Process Certification Scheme.”

According to Bulgarian trade statistics, in 2002, the imports of rough diamonds amounted to $5.46 million, while the exports were $0.25 million. In 2002, rough diamonds were imported mainly from Belgium, the U.S., U.K., South Africa and Ukraine. Bulgaria exported rough to Israel, the U.S. and Ukraine.

Chikane has not received any news from other nonparticipants. He says, however, that he is in dynamic contact with all participants, on and off the list, to make sure that they have all of the information they may need to meet KP requirements and join the team.

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