The Midweek Essay: The Kimberley Process and Israel

Published by MAC on 2019-11-20
Source: Middle East Monitor

The Kimberley Process: Israel’s multi-billion dollar blood diamond laundry

Sean Clinton

Middle East Monitor

19 November 2019

Last week there was a callous, brutal attack on a sleeping family in their home in Gaza which killed a husband and wife, blowing their shredded bodies across a street; the ensuing bombardment killed 34 people including a family of eight. That this was all done by a leading member of the global diamond industry illustrates starkly the magnitude of the “conflict free” fraud perpetrated by that industry.

Few people are aware that diamonds are Israel’s number one manufacturing export, a “cornerstone” of its economy. According to Israeli Prime Minister Benjamin Netanyahu, that economy “generates 88 per cent of the vast security budget that funds the Israel Defence Forces, [and security agencies] Mossad and Shin Bet.”

The Jerusalem Post indicates that, “Israel turns over about $28 billion in diamonds a year. The value of exported diamonds is so significant (about a fifth of total industrial exports) that the government reports its figures sans diamonds to ensure the gems do not skew the values.”

All this week, members of the Kimberley Process (KP) diamond regulatory body are meeting in New Delhi to conclude a three year period of review and reform aimed primarily at expanding the definition of a “conflict diamond” in order to outlaw diamonds linked to human rights violations by government forces. That effort is certain to fail. Not a single motion has been tabled to outlaw blood diamonds that enter the supply chain downstream of the mining sector.

Despite the bloodshed, violence and unregulated nuclear weapons funded by its revenue, the jewellery industry claims brazenly that diamonds processed in Israel are responsibly sourced and conflict free. Given the unwavering political, financial and economic support given to Israel by the USA, EU, India, Canada and Australia, and their influence in the KP, none of these countries are ever going to allow the body to ban Israeli blood diamonds; to do so would sound the death knell for Israel’s number one manufacturing industry.

The jewellery industry also wants to keep the lid firmly shut on this Pandora’s Box. Israel is a key player in the diamond supply chain. Unless forced by consumer pressure, corporations and companies won’t cut ties with the Israeli diamond industry without direction from international bodies such as the KP or the UN; that will never happen given the impunity that Israel enjoys and exploits.

This was made clear by Anglo American chairman Stuart Chambers at the company’s AGM in London in April. When I asked why De Beers and Forevermark continue to trade with companies in Israel that generate revenue used to fund war crimes and crimes against humanity he said, “Certainly as a company we would, as you would expect, always respect the political community in their sitting in judgement of national states or countries where they are deemed to have done something which the international community does not accept, they would then be subject to international measure including potential embargoes to trade. Where that happens of course we as an international company would need to take that into account and comply with that. But we as a company cannot sit in political judgement on something which is very difficult to get to the bottom of until such time as the international community has decided that.”

Anglo American thus tries to absolve itself by framing the issue as a political problem rather than an issue of human rights and corporate fraud.

De Beers and Forevermark sell diamonds crafted in Israel and claim that they are 100 per cent conflict free even though the industry there is a significant source of revenue (€1bn/yr) for a regime guilty of human rights violations. Indeed, De Beers sightholders companies ABT Diamonds Ltd and the Steinmetz Group company, Diacore, directly fund the Israeli military. Since this was raised at the Anglo American AGM in April the page confirming this on De Beers’ website has been removed from public view, but an archive of it can be found here. ABT and its owner have “made significant contributions to the Israeli military”.

The Steinmetz Foundation “adopted” a unit of the notorious Givati Brigade. This Israeli army unit was responsible for the Samouni family massacre in Gaza, a war crime documented by the UNHRC and other human rights organisations. Diacore manufactures Forevermark diamonds which frequently adorn the stars of the most prestigious high society red carpet events worldwide.

Governments that benefit from the diamond trade have controlled the KP from the outset. Instead of outlawing all blood diamonds they restricted the scope of the KP regulations to “conflict diamonds” which are narrowly defined as “rough diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments”.

Blood diamonds, both rough and polished, that fund human rights violations by government forces were given a free pass and remain fully legal. This was a major coup for the industry as it kept media and the public focused on “conflict diamonds” and away from the high value cut and polished diamond sector which conceals a blood diamond trade worth over $10 billion each year.

The World Diamond Council (WDC), which represents all sectors of the diamond supply chain from mine to market, moved to cover up the glaring gap in the KP regulations by introducing a bogus System of Warranties (SOW). The WDC claims that the SOW “extends the effectiveness of the KP beyond the import and export of rough diamonds”, an utterly false assertion.

Using the SOW, sellers can declare blood diamonds that aren’t funding rebel violence “conflict free” simply by including a printed statement to that effect with each invoice. Jewellers tell patrons that the Kimberley Process and System of Warranties guarantee that a diamond is conflict free, which is another blatant falsehood.

Of course, the term “conflict free” has never been defined. Cecilia Gardner, the former Counsel General of the WDC, said this about it: “As for ‘conflict free’ – well this claim is so vague as to have no real meaning.”

Those who promote the KP emphasise the overarching cooperation between governments, industry and civil society facilitated by the body’s tripartite structure, but that too is a gross deception. The governments involved are guided by what the WDC will agree to. The KP scheme was originally designed by the WDC and it was the latter that put forward the latest proposal which continues to limit the remit of the KP to rough diamonds in the mining sector.

The skeletal KP Civil Society Coalition (KP CSC) which is supposed to represents the interests of civil society is now little more than a threadbare veil. Global Witness, Impact Transform and others have withdrawn from the KP. Amnesty International and Human Rights Watch declined to join and have published reports scathingly critical of the KP’s failure to outlaw diamonds that fund government violence.

The KP CSC is now led by the Antwerp-based IPIS Research, a supposedly independent non-governmental organisation with a budget of over €1.4 million in 2018. When I asked for a breakdown of the source of its funding I was referred to its 2018 Annual Report, which doesn’t actually provide any such details. The IPIS website indicates that it receives structural funding from a number of Belgian government bodies. It also received funding from EU agencies and other bodies on whose behalf IPIS carries out research.

Biting the hand that feeds can be a difficult proposition for any organisation that isn’t funded independently. This is especially so for IPIS, given that Antwerp is one of the world’s leading diamond trading centres.

The other members of the KP CSC are poorly resourced local civil society groups from countries in Africa impacted by diamond mining. Their participation is supported by a voluntary fund from KP members.

Even though Palestinians are the biggest victims of the diamond industry there isn’t a single voice in the KP CSC to represent them. Diamonds that fund the shredding of their bodies, the sundering of their limbs, their imprisonment without trial, the demolition of their homes, the bombing of their hospitals, schools, libraries, theatres, water and sewage treatment plants, electric generating stations and other vital civic amenities aren’t blood diamonds according to the KP CSC.

The coalition’s latest report, Real Care Is Rare, doesn’t require forensic scrutiny to discover the limit of its tether. The opening sentence of the executive summary spells out the boundaries the coalition dare not breach: “brutal human rights abuses, including killings, torture and sexual violence… in certain diamond mining areas… ” (emphasis added). Blood diamonds in the supply chain downstream of mining are a bridge too far.

The report refers to blood diamonds as “diamonds obtained using serious violence irrespective of who the perpetrator is” (emphasis added). Diamonds that fund “serious violence”, though, aren’t considered blood diamonds, apparently.

The KP CSC report lists the usual suspects at the mining end of the supply chain: Zimbabwe, Angola, Sierra Leone, Tanzania and Lesotho, which the industry hold up to public scrutiny, but it has nothing to say about Israel. And yet, in 2018, Israel exported $2.9 billion of rough diamonds, twice the combined value of the aforementioned African countries. According to a UN monitoring group, in 2018 Israel also killed 295 Palestinians and wounded 29,000 others. These jaw-dropping facts are conveniently absent from the KP CSC report.

The KP CSC is a captive coalition that is tightly embraced by the WDC and governments which need it to provide the KP with a veneer of public accountability. It is beyond farcical that those who profit from blood diamonds should have a veto over reform of the system. That is the situation which exists within the WDC and the KP.

When the WDC tried to broaden the definition of a conflict diamond in 2015, Shmuel Schnitzer, then president of the Israeli Diamond Exchange and uncle of the Magnitsky Act-sanctioned Dan Gertler, blocked the reform as “it would be disastrous… especially for Israel”.

The KP is a clear example of corporate capture. The diamond industry has used its political and economic influence to neuter civil society efforts to end the trade in blood diamonds. However, civil society by way of consumer pressure can bring the change needed to curtail this bloody industry. Just as the slave trade, the ivory trade and the fur trade have been curtailed greatly by public rejection of such inhumane enterprise, so too will the blood diamond industry.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.