Campaign Group pulls out of 'failing' Blood Diamonds scheme

Published by MAC on 2011-12-12
Source: Statements, AFP

Campaign Group Pulls Out of 'Failing' Blood Diamonds Scheme

Agence France Presse

5 December 2011

A campaign group which helped found the Kimberley Process to stop the trade in so-called blood diamonds announced on Monday it was pulling out of the scheme, saying it had failed.

Global Witness, which helped set up the voluntary certification scheme in 2003 to cut the links between diamonds and conflict, said a recent decision to allow Zimbabwe to sell gems tainted by army killings was the final straw.

"The decision to endorse unlimited diamond exports from named companies in the Marange region of Zimbabwe -- the scene of mass killings by the national army -- has turned an international conflict prevention mechanism into a cynical corporate accreditation scheme," said founding director Charmian Gooch.

The World Diamond Council, which represents the industry, expressed regret at Global Witness's decision, insisting that while the Kimberley Process was sometimes slow, "it is effective and does have teeth".

Kimberley approval was meant to guarantee that stones often given as a symbol of love were not used to fund some of Africa's most brutal civil wars, such as in Sierra Leone and Liberia.

For the past eight years, the scheme has gathered governments, industry and activists into a global regulator that makes decisions by consensus.

But Global Witness and a number of other groups walked out of a Kimberley meeting in June after the chairman gave the green light to two companies to sell diamonds from the Marange fields.

In a statement on Monday, Gooch said: "We now have to recognise that this scheme, begun with so many good intentions, has done much that is useful but ultimately has failed to deliver."

He added: "The sad truth is that most consumers still cannot be sure where their diamonds come from, nor whether they are financing armed violence or abusive regimes."

Global Witness said the process failed in three key areas: in dealing with the trade in conflict diamonds from Ivory Coast; in managing what it alleged were "blatant breaches" of the rules by Venezuela; and in failing to stop diamonds fuel corruption and violence in Zimbabwe.

"It has become an accomplice to diamond laundering, whereby the dirty diamonds are mixed in with clean gems," the non-governmental organisation (NGO) said.

Gooch said its failure proved that such voluntary schemes could not work when companies and countries competed for mineral resources, and urged governments to put Kimberley's standards into law.

However, the World Diamond Council said that on Zimbabwe, the Kimberley Process agreed last month to allow exports only from those Marange operations that demonstrated compliance.

It also noted that Ivory Coast and Venezuela were both suspended from the scheme while efforts were made to try and improve their controls.

"The overriding goal of the Kimberley Process Certification Scheme has been to protect the integrity of the diamond, so that it properly contributes to bettering the lives of ordinary people living in the areas in which it is mined and processed," said WDC president Eli Izhakoff.

"The system is not perfect, and is in need of constant review. However, you cannot contribute to the process if you are no longer engaged."

More than 75 of the world's diamond producing, trading and manufacturing countries participate in the Kimberley Process, which requires member states to pass national legislation and set up export and import controls for diamonds.

Global Witness has written to the chairman of the process announcing its withdrawal as an official observer, although it said it would still work with other NGOs to reform the sector.

---

Why we are leaving the Kimberley Process - A message from Global Witness Founding Director Charmian Gooch

Global Witness Statement

5 December 2011

The diamond trader looked me in the eye and said "If I don't buy them somebody else will". He was talking about blood diamonds from Angola, Sierra Leone and elsewhere. It was 1997 and I was sitting in a cramped and anonymous office in Antwerp. I had just returned from investigations in Angola that revealed the awful truth that diamonds were funding and fuelling conflict and the world didn't appear to realise there was a problem. Millions of people were caught up in the horror of this protracted war, with many hundreds of thousands dead, maimed, or homeless.

Following more research and investigations in Europe, Africa and America, Global Witness launched a campaign to alert the world to what was happening in late 1998. We questioned the accepted view that this was just how the diamond trade worked, and challenged governments, the United Nations and the industry to face up to responsibilities and do something about it.

There was a swift response and recognition of the problem from all involved and mass media coverage internationally. An increasing number of other campaigning groups took up the issue and the Kimberley Process (KP) - a global scheme designed to break the links between diamonds and conflict - was negotiated and then launched at the start of 2003.

The diamond-fuelled wars came to an end for a range of reasons, and countries put in place systems and structures to control the trade in rough diamonds. So that should have been deemed a success, right? Sadly not. Global Witness and a coalition of NGOs - the Kimberley Process Civil Society Coalition - have pushed continuously to make the KP work. However, the shameful truth is the governments just won't hold each to account.

For its part, the diamond industry avoided regulation at the time the Kimberley Process was set up by undertaking to deliver a meaningful supply chain control scheme. But nine years on, the industry's 'system of warranties' lacks independent verification. The fact is that most consumers still cannot be sure where their diamonds come from, or whether they are financing armed violence or abusive regimes.

The world has moved on but the Kimberley Process remains stuck in time. Ever more insular, the KP has spent the past few years lurching from one shoddy compromise to the next in a manner that strips away its integrity and undermines its earlier achievements. The KP has failed to deal with the trade in conflict diamonds from Côte d'Ivoire, breaches of the rules by Venezuela and diamonds fuelling corruption and state-sponsored violence in Zimbabwe.

Most recently, the decision to endorse unlimited diamond exports from named companies in the Marange region of Zimbabwe - the scene of mass killings by the national army - has turned an international conflict prevention mechanism into a cynical corporate accreditation scheme.

We now have to recognise that this scheme, begun with so many good intentions, has done much that is useful but ultimately has failed to deliver. It has proved beyond doubt that voluntary schemes are not going to cut it in a multi-polar world where companies and countries compete for mineral resources.

The Kimberley Process's refusal to evolve and address the clear links between diamonds, violence and tyranny has rendered it increasingly outdated. It is time for the diamond sector to start complying with international standards on minerals supply chain controls, including independent third party audits and regular public disclosure. Governments must show leadership by putting these standards into law.

---

Some Thoughts on Global Witness, the Kimberley Process and All That

By Ian Smillie

7 December 2011

Early this week, Global Witness announced its withdrawal from the Kimberley Process, saying "The Kimberley Process's refusal to evolve and address the clear links between diamonds, violence and tyranny has rendered it increasingly outdated... Despite intensive efforts over many years by a coalition of NGOs, the scheme's main flaws and loopholes have not been fixed and most of the governments that run the scheme continue to show no interest in reform."

Global Witness, with Partnership Africa Canada, has been a leader in the campaign to end conflict diamonds for more than a decade. The utter frustration that these organizations and other members of the Civil Society Coalition have felt within the Kimberley Process is not new. I left the KP myself two and a half years ago because despite the best efforts of some governments and industry leaders, I could no longer tolerate the hypocrisy and inaction on its most glaring problems.

Internal controls in some of the countries most badly affected by conflict diamonds - DRC, Angola, Liberia, Sierra Leone - remain so weak that their governments cannot say with any assurance where as much as half their exports really originate. The KP knows this. NGOs, the media and the KP's own review teams have reported on this time and again. The KP issues polite recommendations and then moves on. Nothing changes. The KP has a terrific data base on rough diamond production and trade, but some of the statistics make no sense. Liberian, Guinean and Lebanese statistics, for example, are so far out of line with reality that even a March Hare would notice. The KP has done little or nothing about it.

When it became apparent in 2006 that 100% of Venezuela's diamonds were being smuggled out, the KP argued and dithered, and then accepted Venezuela's lie that diamonds would no longer be mined (or smuggled). For years now, the KP - a body set up to stop smuggling, has actually condoned it.

And then Zimbabwe. For three years the KP again dithered and procrastinated on the violence and human rights abuse in that country's diamond fields. It has ignored the fact that the industry in Zimbabwe operates under an almost complete absence of the rule of law, and that vast qualities of diamonds are smuggled across the border into Mozambique on a daily basis, with the active connivance of government officials and armed forces.

The Civil Society Coalition boycotted the KP Plenary last month in Kinshasa where Zimbabwe was given a green light, and now Global Witness has decided that enough is enough. As a regulatory body, the Kimberley Process has become a laughing stock. It does not guarantee or protect anything where diamonds are concerned.

Can anything be done? Some jewellers and some industry bodies, like the British Jewellers Association and the National Association of Goldsmiths have issued statements of concern, setting up ethics committees and the like.

This is not enough. Industry bodies and industry leaders - from mining companies through to the retail end - must tell the Kimberley Process in no uncertain terms that the time for equivocation is over. The industry is represented in the Kimberley Process by the World Diamond Council, which has for years been too quick to make a deal, to compromise, to try to smooth things over, to promise that "it is getting better" when it clearly is not.

The Civil Society Coalition (now minus Global Witness), has this week issued a new demand for reform. Their ideas have been discussed and rejected many times by the Kimberley Process. Most have had little or only lukewarm support from industry. Have a look and see if you think they are unreasonable:

• Respect for human rights in the diamond industry must be made part of the KP standards;
• There must be independent monitoring to complement the KP's own, often shoddy peer review mechanism;
• There must be inclusion of the cutting and polishing industry in the KP chain - a loophole that currently invalidates the KP imprimatur on virtually every diamond at the retail end of the chain;
• An end to the KP's ridiculous "consensus" decision making, which gives every one of the body's 55-odd member states a veto, blocking almost every reform proposal over the past seven years;
• Transparency: publication of all KP monitoring reports, participants' annual reports and statistics. Sunlight is the best disinfectant;
• A system of standardized and graduated penalties, along with a formal technical support mechanism, to remedy issues of non-compliance. There are absolutely no penalties at the moment;
• Greater attention to the developmental challenges faced by countries where diamonds are mined artisanally;
• A small, professional secretariat to manage the process properly.

The Civil Society Coalition intends to work with the highest bodies of the United Nations, human rights and transparency organizations, to inform them and the public that the KP certificate is meaningless until these demands are met. The industry should do the same.

The Civil Society Coalition is also talking about a "Cleaner Diamond Initiative": "Until there are clear indications of serious KP reform, we intend to pursue with immediate effect, with interested governments and industry, a parallel diamond regulatory body that will include all of the existing KP standards and those included in the many reform proposals that have been discussed over the years. This initiative aims to create a higher level of certification for consumers - a 'Triple-A Rating' that will build confidence and greater value in the diamonds of those countries and companies that participate."

The time for statements of concern has passed. The Kimberley Process has teeth and it can be made to work. If it is not, something else - probably much more draconian - will replace it. There will be no return to the chaotic, bloody free-for-all of the 1990s. If nothing else, 9/11 guarantees that Western governments will not allow unregulated rough diamonds to become a vehicle for the money laundering that is already beginning to re-emerge.

The Global Witness critique of the Kimberley Process was 99% accurate. Their one mistake was in saying that the KP is "outdated". It isn't outdated; it's ineffective. The problems that it seeks to address are as timely today as they were when the KP began. In case anyone needs a reminder, the budget for UN peacekeeping operations in Côte d'Ivoire, Liberia and DRC between July 2011 and June 2012 is US$2.4 billion (that's $2.4 billion) -- and they are barely keeping a lid on the violence.

The Kimberley Process was a remarkable initiative, showing other extractive industries what could be done to halt and prevent conflict, adding lustre to a commodity that is important to the economies of many poor countries. The Kimberley Process can still work, but for that to happen, everyone with a stake in diamonds must understand that the cost of failure will be high, that there is very little time left, and that business as usual is not an option.

The Civil Society Coalition communique is available at: www.pacweb.org/Documents/Press_releases/2011/KP_CSC_Brussels_Communique_Dec2011-fra.pdf