Certified, for now

The Kimberley Process finally came into effect on January 1, 2003. All participating governments — today covering more than 75 diamond producing, trading and polishing countries — agreed to track the movement of rough, uncut diamonds within their borders, and to issue certificates of origin and probity for every international shipment. Countries that are not members of the KP may not trade diamonds with countries that are. With WTO approval, non-members are effectively cut off from all legitimate markets.

So while the KP is ‘voluntary’, any country wishing to buy or sell diamonds must be a member. And while there is no KP agreement to sign, a country must enact KP-specific laws and regulations if it wishes to join. The KP, therefore, has the force of national law in each member country, something much more powerful than an international treaty. The KP is a remarkable achievement. But the job is not finished.

The KP is managed on an ad hoc basis which served it well in its first years, but which is today inadequate. There is no budget, no secretariat, no staff, no capacity for independent research and investigation. The chair rotates annually from one member to another, and working groups, also managed by countries volunteering for the job, handle data gathering, monitoring, membership and technical issues. Not bad, but as the KP has matured, so has the diamond underworld.

Following a Partnership Africa Canada exposé of Brazil’s weak internal diamond controls, all Brazilian exports were frozen in 2006 while the internal system was revamped and charges were laid against 14 individuals for KP fraud. The Brazilian case, uncovered not by the Kimberley Process but by an NGO, was important because diamonds from one type of unknown origin can easily be substituted for diamonds from another. While the falsified Brazilian KP certificates may have been covering little more than illegal mining in Brazil, they could as easily have been covering conflict diamonds imported from another country.

Brazil was not alone. Turkey, a non-participant until August 2007, reported imports in 2005, 2006 and 2007 from several KP member countries — from companies that are effectively breaking domestic laws by exporting to a non-KP country. Significant amounts of diamonds are being mined in, and smuggled out of, Venezuela. However, Venezuela, a member of the KP, reports little production and zero exports. The Venezuelan case (again exposed by Partnership Africa Canada and largely ignored by the KP) represents as much as 150,000 carats of illicit goods entering the legitimate stream each year. Diamonds being mined in rebel-held areas of Côte d’Ivoire are also being smuggled into the legitimate stream — despite a 2005 UN embargo on Ivorian diamonds. UN reports have raised concerns that these conflict diamonds may be entering the United Arab Emirates through KP-certified trade.

In addition to simply entering the KP system through a country with weak internal controls, one of the easiest ways to hide illicit traffic is to take diamonds straight to a cutting and polishing factory. But there is no requirement for participating countries to carry out compliance spot checks of any kind on their diamond industries.

As a result, KP enforcement is spotty and inconsistent. A 2006 review of the Kimberley Process prioritised the need for more government oversight of the industry. In support of this, the chair of the World Diamond Council called on all participating governments ‘to increase their oversight […] a credible, transparent and accountable Kimberley Process, accompanied by an effective and appropriately monitored system of warranties is essential to the future of our industry, and those economies and people who depend upon it.’

Little has been done, however, to follow up on this request and others like it from NGOs. The KP has developed a kind of lethargy, perhaps because the government officials dealing with the KP are not sufficiently senior, or perhaps because they are not sufficiently concerned about ending the blood diamond phenomenon, or perhaps because they live in a world of diplo-speak and the politics of consensus, where a spade is rarely called a spade, and where there is a reluctance to admit, much less get tough on, non-compliance and criminality.

The Kimberley Process is a remarkable achievement, and where effectiveness is concerned, it rates a seven out of ten. But it is seven and slipping.

It is not unusual for those involved in illicit behaviour to seek ways around the regulations and laws that have been designed to stop them. That is why regulatory systems have to be nimble, flexible and professional. The Kimberley Process badly needs to be more pro-active, faster, and much more decisive in dealing with obvious non-compliance and criminality. Problems in the system can no longer be disregarded as the occasional aberration. Without serious and urgent remedial action, they undermine and compromise the KP and its objective — to stop and prevent the phenomenon of diamond-fuelled wars in Africa.

Ian Smillie is Research Coordinator at Partnership Africa Canada.