The Kimberley Process & the Trade of Ethical Diamonds

_{Rough Diamonds}

The Kimberley Process (KP) is an international, multi-nation initiative that was formed to provide oversight on the trade of diamonds, by increasing transparency over the process and by setting fixed standards on the trade of these precious stones. To ensure that all stakeholders at the local and international level, who are engaged in the trade adhere to strict standards in ensuring the fight against conflict diamonds. The origins of the Kimberley Process goes back to May 2000 when key diamond-producing states met in Kimberley, South Africa: a major diamond-producing region; to find ways of confronting the evils of conflict minerals. Notably the use of funds that accrue through the sale of diamonds to support rebel movements that seek to undermine the authority of legitimate governments. The fruitful discussions among these stakeholders eventually led to a UN General Assembly resolution in 2002, which supported the formation of an international certification scheme for the trade of rough diamonds (more on this below). The support of UN-mandated culminated in 2003 with the formation of the Kimberley Process Certification Scheme (KPCS), the central pillar of the Kimberley Process.

The Kimberley Process became fully active in 2003, and involves the participation of 82 countries who have signed on to its key protocols: that governs the practices related to the trade in rough diamonds between countries in the agreement, and requires the implementation of a certification scheme that ensures that the trade-in rough diamonds are transparent and secure; and importantly prohibits the trade in diamonds with non-participants. 54 participants representing 82 nations (the EU with its 27 member countries count as one), participated in the Kimberley Process. That also brings in representatives from industry and civil society, who participate as observers. The scope of this global initiative is vast as the participation countries cover around 99.8 per cent of total global production in rough diamonds.

_{Kimberley Process Participating Countries}

Key Elements of the Kimberley Process Certification Scheme

The main fruit of the Kimberley Process is the centrality of its certification scheme. The Kimberley Process Certification Scheme (KPCS) mandates participant countries to adhere to strict standards that relate to national laws and regulations regarding the production and trade of rough diamonds. A process that requires the establishment of dedicated local bodies for oversight, the collection of data on business practices that relate to the trade in rough diamonds, and also imposes limitations on who the participant countries are allowed to trade with. The authoritative document points out the main aims and practices that would govern the scheme, notably its main function which outlines the Kimberley Process as: “[A]n international certification scheme for rough diamonds, based on national laws and practices and meeting internationally agreed minimum standards, will be the most effective system by which the problem of conflict diamonds could be addressed” (1). Which relate to the following areas:

The Setting of Minimum Standards

Transparency in Practices Related to the Trade in Diamonds

Trade-in diamonds permitted only with Co-participants

Shipments Certification Process for Traded Diamonds (2)

One of the advantages of the Kimberley Process is its international character, which gives all participating countries, big or small, a place at the table, as they are given the opportunity and the platform to express their views and share concerns on the working of the scheme. Further, the leadership of the Kimberley Process is shared between all participant countries, with the Chairmanship of the scheme being carried out on a rotational basis. With poorer, developing countries being given a seat at the top, ensuring better representation. 

_{The Big Hole mine in Kimberly is considered the deepest mine excavated by hand}

Challenges facing by the Kimberley Process

Despite the advantages presented by this scheme the Kimberley Process, in term of its effectiveness, it has raised a number of questions. The most notable being that not all countries in the world have signed on to this scheme. Whilst these countries are not at the forefront when it comes to diamond production and trade, in a globally connected world, where supply chains are spread across the world, and the demand for such precious stones stretch to all corners of the globe, the absence of most countries is a cause of concern. Especially since the trade-in diamonds do not all always involve the movement of gemstones that fall strictly within the “rough” category, and all countries contribute to the global demand for diamonds.

Rough vs Cut Diamonds

The central focus of the Kimberley Process is the regulation of the trade in rough diamonds. In the trade of diamonds, one needs to understand that from the time that it is mined from its natural environment, the gemstones undergo a prolonged process that involves many industrial stages. From cleaning, purification, cutting, polishing etc. Each of these represents a stage in the supply chain and involves a number of stakeholders. The problem is that the Kimberley Process mainly (or solely) focuses on rough diamonds: which relates to the supply of uncut diamonds that are traded in bulk. A matter which is compounded by the character of diamond mining in countries like Africa (the top diamond producing continent); where many of the diamond mines are managed by artisanal miners: who are local, low-investment, often weakly poorly managed and lack the organizational oversight that is needed when it comes to such investment-heavy project.

Whilst major diamond producers like De Beers who are active in the major diamond mines in Africa are able to commit fully to the demands of the scheme, the large number of smaller diamond mining operations that are managed by such locals are not always bound by its requirements. Many of these are controlled by personnel who are desperate to make a living and hence are less bound by the ethical and legal demands that relate to the trade of diamonds, and often times are not fully aware of the rules that pertain to the trade. Given the need to integrate artisanal diamond miners, in 2006 the Diamond Development Initiative (DDI) was set in place. That was aimed to bring together relevant stakeholders in the diamond trade to work closely with artisanal miners, in order to address their specific concerns (3). Awareness aside, one of the major problems that relate to the Kimberley Process is the lack of a strong mechanism for implementing and monitoring these activities. This brings us to the next part of the problem. 

The Lack of an Independent Physical Organization

According to info provided on the Kimberley Process’s FAQ page, the Kimberley Process is not an “international organisation”. Meaning it does not have a designated body with dedicated offices, staff, and presumably the resources to carry out the mandates that are set in the scheme. Rather the effectiveness of the initiative rests on the contributions made by the participants. The governing principle of the Kimberley Process is ‘burden-sharing, which requires interested stakeholders in the industry, civil society and other observers to make contributions in aiding the data collection, monitoring and enforcement of the key elements of the KPCS. This becomes problematic since the Kimberley Process is not an international agreement, with internationally binding legal mandates. Since the elements of the Kimberley Process are implemented through the national governments, the actual implementation of the key elements of the scheme may not always meet the high standards of the agreement (4). Further, since many of the top diamond mines are located in developing countries in Africa, parts of the world which are notorious for their weak legal environment, unstable politics and weak economies. All of which contribute to the poor enforcement of the mandates of the certification scheme.

The Rebels are Always the Bad Guys

The main aim of the Kimberley Process is to stop the trade in rough diamonds, whose profits are used to fund conflicts, carried out by rebel movements (a common sight in parts of Africa) against established governments, which are understood to be legitimate. However, this only addresses part of the problem, since many countries are rife with political instability; where the governments are characterised by corruption, autocracy and poor economic management. Factors that give to rebel movements, and hence the need for funding. Which of course does not justify armed conflict, however, it is important to understand that things are not as clear as they are made to be.

References

1. https://www.kimberleyprocess.com/en/kpcs-core-documet

2. https://www.kimberleyprocess.com/en/what-kp

3. https://www.kimberleyprocess.com/en/diamond-development-initiative

4. https://www.kimberleyprocess.com/en/faq