‘Killing Kimberley?’ PAC Finds Lack of Vigilance, Action by KPCS Since 2005

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RAPAPORT… Ahead of the Kimberley Process annual meeting –to be held November 6-9, 2006,  in Gaborone,  Botswana–  Partnership Africa Canada (PAC,) released its report titled Killing Kimberley? Conflict Diamonds and Paper Tigers. 

In the 12-page report PAC urged participants to focus on the controls in place and  to deal with the reality of conflict diamonds rather than on the possible ramifications of Warner Bros.’ Blood Diamond film, which is scheduled for release in mid-December.

Download PAC’s Report


In PAC’s report dated October 27, the organization acknowledges the success of the Kimberley Process Certification Scheme (KPCS,) which began in 2003, to regulate the international trade in rough diamonds — however PAC notes that beginning in 2005 the KPCS began to show some serious weak spots.


“Implementation in some countries was poor and major problems emerged. Massive Kimberley Process related fraud was uncovered in Brazil and Guyana, and a United Nations report documented the wholesale laundering of conflict diamonds from Cote d’Ivoire through neighboring countries,” the report stated.


“In each case, the Kimberley Process behaved like a disinteresting bystander, its response tepid, late or non-existent,” PAC added.


The report accuses the KPCS of ignoring the growing problems in its internal three year review carried out during 2006 and blames government members of the review committee for vetoing almost every recommendation that might have tightened or improved the system.


According to PAC, the draft report was “watered down, sanitized and parts were even censored by virtue of the Kimberley Process concept of consensus.”


PAC concludes that in order for the Kimberley Process to be effective in the eradication of conflict diamonds, it must be prepared to be more vigilant, pro-active and more insistent that its standards be enforced in participating countries.


Accomplishments of the Kimberley Process 


“The very fact of the negotiations began to have an impact on conflict diamonds and the diamond industry at large,” PAC acknowledged.


In places were diamond controls were lax, the rules began to tighten and warlords found it more difficult to sell diamonds. Sierra Leone’s diamond-smuggling rebel army, starved of ammunition, suffered its first-ever military defeat in the summer of 2000.


A huge amount of public awareness was given to this issue, and by the United Nations, NGOs and by the Kimberley Process negotiators. Today it is much more difficult  for criminals to sell large volumes of high-value diamonds as governments must certify all rough diamonds before export, stating that not just are they conflict free, but that there is an auditable paper trail tracing the diamonds back to where they were mined, or to the point of import.


In the mid to late 1990’s, PAC maintains that conflict diamonds represented as much as 15 percent of the world’s total, and today it is less than 1 percent.  PAC attributes much of this success to the Kimberley Process.


The KPCS has also helped to bring illicit diamonds to the surface, reduce the amount of diamonds used for money laundering, and dramatically reduced tax evasion, drug money, and weapons buys through diamond trade.


PAC provides the clear example of Sierra Leone and the Democratic Republic of the Congo, where official diamond exports had declined precipitously during the 1990’s.

In 1995, the Democratic Republic of the Congo exported only $331 million worth of diamonds, but since the advent of KPCS, official exports from the country in 2005 rose to $895 million. In Sierra Leone, the turnaround was much more pronounced. Just five years ago, Sierra Leone’s diamond exports stood at nearly nothing. In 2005, the country’s diamond exports had risen to $142 million.


Open Problems with Kimberley Process


While the Kimberley Process system has proven successful in the past, in order to maintain its strength, regulatory systems must be monitored, and where weaknesses are identified, they must be strengthened, PAC stated.


“New systems are needed, but the police act as though they are asleep at the switch, the most serious investigations are being done by NGO’s and the United Nations, and Kimberley Process politicians deny the need for serious change,” the PAC report concludes.




The report provides several examples of where it views the Kimberley Process as inactive or ineffective. In May 2005, PAC released a report that discussed the flaws in Brazil’s Kimberley Process system. PAC released a second report in April 2006 titled Fugitives and Phantoms: The Diamond Exporters of Brazil. Following the release, Brazil conducted its own internal review, finding 49 of the 147 Kimberley Process certificates it had issued since joining the system to be fraudulent.


According to PAC, the Kimberley Process took no action on this issue for more than one year. In June 2006, a Kimberley Process review team visited Brazil and has yet to issue a finalized report. Brazil issued new diamond regulations and has resumed diamond exports.

“In all of this, the Kimberley Process has seemed to be little more than a bystander,” said PAC.




In April 2006, PAC released a report on Brazil’s neighbor Guyana titled Triple Jeopardy- Triplicate Forms and Triple Borders: Controlling Diamond Exports from Guyana. The report claimed that a significant proportion of Guyana’s diamonds have crossed at least one border illegally before they are officially presented for export in Georgetown.


As of October, PAC has received no reaction from the Kimberley Process or the government of Guyana to the PAC report, its allegations or its recommendations, PAC stated.


Cote D’Ivoire, Togo, and Ghana


According to the PAC report, while Cote d’Ivoire has been a member of the Kimberley Process since 2003, no official diamond exports have been released.

Another report released by Global Witness was released in November 2005, which detailed how diamonds mined in rebel-held areas were being smuggled out through neighboring countries.


“In fact, nothing of substance was done,” states PAC. “The Kimberley Process review, carried out in December 2005 languished in draft form eight full months later.” The Kimberley Process report on Togo also remained unfinished ten months after the Kimberley Process review visit, adds PAC.




In its report, PAC highlighted Kimberley Process’s difficulty in extracting annual reports and timely diamond statistics from Venezuela — a neighboring country with Brazil and Guyana.


“Although diamond mining continues, Venezuela has mysteriously recorded no shipments since March 2005,” the report states. In April 2006, PAC reported that diamond buyers from Brazil were operating freely in the Venezuelan border town of Santa Elena and that smuggling was rampant. This activity continues without any reference to the Kimberley Process control, the report adds.


United States


In July 2004, PAC and Global Witness produced a report entitled The Key to Kimberley- Internal Diamond Controls: Seven Case Studies. The report recommended improvements in the United States diamond statistics, random spot checks of imports and exports by the Customs Service, and spot checks and audits for Kimberley Process compliance among companies trading in rough diamonds. PAC maintains that nothing has been done to follow up on the report.


House Cleaning Issues


According to PAC, hundreds of thousands of diggers are operating in the informal sector without any serious corporate of government oversight. “Kimberley Process  related internal control remain weak in such countries, which include some of those mentioned above, as well as Guinea, Sierra Leone, the Democratic Republic of the Congo, Angola and others,” PAC added.


The KPCS is losing the fight for effectiveness, claimed PAC. The peer review system is highly dependent upon the regular participation of a few countries.

The two NGO Kimberley Process members bear the disproportionate expense of financing a civil society team member on each review.


The Statistics Working Group is strained by its dependence on voluntary labor from group members and by lengthy delays in data production. “Worse, when confronted with overt examples of obvious and serious non-compliance in Brazil, Guyana, Ghana, and elsewhere, the Kimberley Process slowed to a snails-pace or became paralyzed,” the report stated.



Three Year Review


Recommendations during the three year review revolved around four basic themes; improving and enforcing internal controls in participating countries, the KPCS peer review mechanism should be strengthened, statistical work should be outsourced to a professional body and the KPCS should find new ways to finance a KPCS that has become larger and more complex over time.


According to PAC, all of its recommendations, with the exception of the peer review system, were rejected by at least one or more of the members of the ad hoc committee. The result was to seriously dilute the conclusions of the original draft.



Money, Statistics, and Monitoring


NGOs support a strengthened KPCS with tougher internal controls, a comprehensive approach to data gathering and analysis and a more equitable form of financial burden sharing.


They have long argued that the way statistics and monitoring were being handled by the KPCS is simply not sustainable and the cost was the primary reason that no other country had been willing to take it on.


PAC Recommendations


In conclusion, PAC believes that the KPCS can be an effective regulatory system for conflict diamonds if it is strengthened and most importantly, if its provisions are enforced.


PAC urges the KPCS to deal as a matter of urgency with the problems that have been identified in Brazil, Guyana, Cote d’Ivoire, Ghana, Togo, Venezuela and elsewhere.


The Kimberley Process must focus on improving and enforcing internal controls in participating countries, particularly those that produce alluvial diamonds. Additionally, the KPCS peer review mechanism should be strengthened and the Kimberley Process should establish a research capacity of its own.


Statistical research should be outsourced to a professional body, the Kimberley Process must find new ways to finance the larger KPCS, and changes must be carried out urgently, according to PAC.


“The Kimberley Process must have the capacity to move quickly when there are credible indications of non-compliance with its standards, and to take decisive action that demonstrates to all participants, the industry and diamond consumers that it is protecting their interests and – more importantly- that it is working to ensure that the scourge of conflict diamonds end, forever.”

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