.

For a worldwide annual production valued, according to some of the latest Tacy LTD estimates, at more than $8.5 billion with sales toppling the $58 billion mark, the diamond industry remains quite conspicuously on the sidelines of global political concerns. Aside from a sudden and very short-lived spike in popularity caused by the appearance of a top model at a hearing for former Liberian President Charles Taylor’s war-crimes trial, where Naomi Campbell made the headlines for having received ‘blood diamonds’ from the African warlord, global talks about these precious stones and their international impact has been limited—if not inexistent.

Part of a broader debate on the interconnection between resources and conflict, a problem that has quickly returned on the diplomats’ agendas with the civil war in Libya and the questions surrounding oil exports, diamonds have long been far more than a trade issue. Intertwined with dynamics of world politics such as the challenges of near-collapsed and civil war-ridden countries, or the rise of Latin American counter-hegemonic claims to the U.S. dominance, as well as many sub-Saharan conflicts such as that in Ivory Coast or the long-lasting clashes of Congo, they have occupied an important role in much of the ‘hot’ issues of international affairs, which deserves closer scrutiny. As such, diamonds are back in the spotlight in 2011 with Zimbabwe. This is thanks to both civil society advocacy, spearheaded by the UK-based NGO Global Witness, as well as a popular Time Magazine article denouncing in December 2010 how the country’s new diamonds can imperil global trade.

The question of regulating the production, transport and sale of diamonds is one that goes back, at least in the international arena, more than a decade, to the days of the Angolan civil war and Global Witness’ late-1990s campaign against what the NGO dubbed ‘a rough trade’. Recognizing the role of these stones in funding parts of that conflict, a linkage then confirmed in 2000 in a report by Canadian diplomat Robert Fowler, the United Nations set to gather key industry, non-governmental and state actors to give birth to an international certification scheme for rough diamonds known since then as the Kimberley Process (KPCS). Based on a compliance mechanism that requires member states to validate the legal export of rough stones with a certificate attesting that the diamond does not finance war-like activities, and that is designed to avoid export and import of roughs from non-members to prevent conflict stones from entering the supply chain, the Process is now in its eleventh year of operation. 75 countries of the major producers are involved in its system of warranties entered into operation in 2003. Yet, does the KPCS work?

Faced from the start with complex challenges raised by the Liberian and Sierra Leonean civil wars in the early-2000s, the Process has had to tackle continuing challenges and relentless criticism, even despite the substantial decrease in the portion of conflict diamonds on the market that has declined in the single digits from the estimated 15% of the 1990s. Symptomatically, the process has progressively been hailed as moribund by many both in the field of diamond trade as well as in specialized international media. So what is wrong with this international mechanism? Ian Smillie, veteran of the Process, denounced the lack of willingness to make it work by abandoning the KPCS in late-2009: “We are spending most of our time patrolling country roads for jay walkers and ignoring the criminals operating openly downtown in front of us.” Smillie’s outcry remains perhaps the best description of the state of the diamond industry’s problems to date.

The Kimberley scheme has in this sense encountered three major challenges. First, it remains a largely imperfect mechanism when it comes to defining what a ‘conflict’ diamond is beyond the idea of illegal trade that funds ‘rebel’ actions, and how that can be effectively tied to action. Ivory Coast roughs, officially the only gemstones currently fitting that description as rebel forces control much of the nation’s northern mines, still flooded the markets at the beginning of the year via neighboring countries despite Kimberly provisions and UN Security Council sanctions. This leads to the problems of implementation, generally considered Kimberley’s weak point right from the start. If a few success stories can certainly be identified, as in the case of Ghana’s 2006 attempt to certify diamonds smuggled from Ivory Coast, obstacles to compliance abound. Countries have easily ‘exited’ the process but not the global market (considered beyond its legal extension), as for Venezuela’s lack of observance of reporting duties between 2005 and 2008, when the country suspended its membership. Likewise, Congo-Brazzaville, accused of falsifying certificates, was expelled from the Process between 2004 and 2007 because, without any official diamond mining industry, had a large export of stones whose origins where not detailed—a situation still lacking full observance. Even the current chair of the Process, the Democratic Republic of Congo, has been struggling to account for a substantial amount of its diamonds, some of which are quite well known to be original of its smaller neighbor.

However, perhaps the most worrying challenge for Kimberley is an internal one, which in turn brings us back to Zimbabwe. Based on a consensus-making decisional mechanism, the Process has stalled in the recent months due to the Congolese chair’s decision to clear Zimbabwean diamonds for sale despite opposition by several KPCS members. The country, a relative newcomer to the trade which gained prominence only in 2006 when it opened up the large Marange diamond fields in the southeast, was accused of taking extreme measures to tackle the problem of illegal miners in the area as it carried out a series of air strikes in November 2008 in the Mutare area, resulting in numerous deaths. Coupled with the poor water, sanitation and housing conditions of workers, reflective of Zimbabwe’s wretched state, as well as the problems of authoritarian reforms putting the country on the global headlines, the ambiguity of the situation led to many to call for a halt in Zimbabwean exports. Following the Kimberley chair decision, the EU has rapidly called for an emergency meeting in April 2011 to express its concerns, but this resulted in a series of boycotts by African producers (led by South Africa) which did not participate to this Dubai special working group on monitoring and are likely to reject its proposals—while there remains much uncertainty as to whether the United States will allow Zimbabwe to take up the next chair of the KPCS. In short, the Process’ internal cracks are looming large on its future, while Zimbabwean, Ivorian and Congolese undocumented diamonds continue to trickle into the global market via third parties such as Mozambique. The titles from two recent Global Witness reports sum up this progressive derailing, calling on the ‘return of the blood diamond’ via Zimbabwe, and pointing at the ‘lessons unlearned’ on the international trade in minerals.

A solution in this case might come from the alternatives. On the one hand, industry leaders have sought to demonstrate to the wider public their capacity for self-regulation. De Beers, controlling more than a third of the global production, has promoted a series of initiatives such as the Diamond Development Initiative, the Responsible Jewelry Council, and the ‘Forevermark’ which seeks to imprint on each gemstone a code of production. The World Diamond Council, on its part, has also sought to improve a system of warranties now accepted by all Kimberley members, while governments such as Canada have taken up unilateral initiatives to distinguish themselves. Global Witness and the NGO community are committed to pushing governments to fully implement the scheme, but in the meantime survey alternatives. However, the mechanisms continue to be loose, easily circumvented, and at times contrasting, while internal squabbles in the Kimberly scheme and continuing cross-border smuggling maintains a substantial flow of conflict roughs in the global market. The diamond trade remains, at the end of the day, a bloody affair with little attention on the world stage.

About
Michele Acuto
:
Professor Michele Acuto is Professor of Urban Politics at the University of Melbourne and Pro–Vice Chancellor (Global Engagement) at the University of Bristol.
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.

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www.diplomaticourier.com

Diamonds: Still a Bloody Affair

May 16, 2011

For a worldwide annual production valued, according to some of the latest Tacy LTD estimates, at more than $8.5 billion with sales toppling the $58 billion mark, the diamond industry remains quite conspicuously on the sidelines of global political concerns. Aside from a sudden and very short-lived spike in popularity caused by the appearance of a top model at a hearing for former Liberian President Charles Taylor’s war-crimes trial, where Naomi Campbell made the headlines for having received ‘blood diamonds’ from the African warlord, global talks about these precious stones and their international impact has been limited—if not inexistent.

Part of a broader debate on the interconnection between resources and conflict, a problem that has quickly returned on the diplomats’ agendas with the civil war in Libya and the questions surrounding oil exports, diamonds have long been far more than a trade issue. Intertwined with dynamics of world politics such as the challenges of near-collapsed and civil war-ridden countries, or the rise of Latin American counter-hegemonic claims to the U.S. dominance, as well as many sub-Saharan conflicts such as that in Ivory Coast or the long-lasting clashes of Congo, they have occupied an important role in much of the ‘hot’ issues of international affairs, which deserves closer scrutiny. As such, diamonds are back in the spotlight in 2011 with Zimbabwe. This is thanks to both civil society advocacy, spearheaded by the UK-based NGO Global Witness, as well as a popular Time Magazine article denouncing in December 2010 how the country’s new diamonds can imperil global trade.

The question of regulating the production, transport and sale of diamonds is one that goes back, at least in the international arena, more than a decade, to the days of the Angolan civil war and Global Witness’ late-1990s campaign against what the NGO dubbed ‘a rough trade’. Recognizing the role of these stones in funding parts of that conflict, a linkage then confirmed in 2000 in a report by Canadian diplomat Robert Fowler, the United Nations set to gather key industry, non-governmental and state actors to give birth to an international certification scheme for rough diamonds known since then as the Kimberley Process (KPCS). Based on a compliance mechanism that requires member states to validate the legal export of rough stones with a certificate attesting that the diamond does not finance war-like activities, and that is designed to avoid export and import of roughs from non-members to prevent conflict stones from entering the supply chain, the Process is now in its eleventh year of operation. 75 countries of the major producers are involved in its system of warranties entered into operation in 2003. Yet, does the KPCS work?

Faced from the start with complex challenges raised by the Liberian and Sierra Leonean civil wars in the early-2000s, the Process has had to tackle continuing challenges and relentless criticism, even despite the substantial decrease in the portion of conflict diamonds on the market that has declined in the single digits from the estimated 15% of the 1990s. Symptomatically, the process has progressively been hailed as moribund by many both in the field of diamond trade as well as in specialized international media. So what is wrong with this international mechanism? Ian Smillie, veteran of the Process, denounced the lack of willingness to make it work by abandoning the KPCS in late-2009: “We are spending most of our time patrolling country roads for jay walkers and ignoring the criminals operating openly downtown in front of us.” Smillie’s outcry remains perhaps the best description of the state of the diamond industry’s problems to date.

The Kimberley scheme has in this sense encountered three major challenges. First, it remains a largely imperfect mechanism when it comes to defining what a ‘conflict’ diamond is beyond the idea of illegal trade that funds ‘rebel’ actions, and how that can be effectively tied to action. Ivory Coast roughs, officially the only gemstones currently fitting that description as rebel forces control much of the nation’s northern mines, still flooded the markets at the beginning of the year via neighboring countries despite Kimberly provisions and UN Security Council sanctions. This leads to the problems of implementation, generally considered Kimberley’s weak point right from the start. If a few success stories can certainly be identified, as in the case of Ghana’s 2006 attempt to certify diamonds smuggled from Ivory Coast, obstacles to compliance abound. Countries have easily ‘exited’ the process but not the global market (considered beyond its legal extension), as for Venezuela’s lack of observance of reporting duties between 2005 and 2008, when the country suspended its membership. Likewise, Congo-Brazzaville, accused of falsifying certificates, was expelled from the Process between 2004 and 2007 because, without any official diamond mining industry, had a large export of stones whose origins where not detailed—a situation still lacking full observance. Even the current chair of the Process, the Democratic Republic of Congo, has been struggling to account for a substantial amount of its diamonds, some of which are quite well known to be original of its smaller neighbor.

However, perhaps the most worrying challenge for Kimberley is an internal one, which in turn brings us back to Zimbabwe. Based on a consensus-making decisional mechanism, the Process has stalled in the recent months due to the Congolese chair’s decision to clear Zimbabwean diamonds for sale despite opposition by several KPCS members. The country, a relative newcomer to the trade which gained prominence only in 2006 when it opened up the large Marange diamond fields in the southeast, was accused of taking extreme measures to tackle the problem of illegal miners in the area as it carried out a series of air strikes in November 2008 in the Mutare area, resulting in numerous deaths. Coupled with the poor water, sanitation and housing conditions of workers, reflective of Zimbabwe’s wretched state, as well as the problems of authoritarian reforms putting the country on the global headlines, the ambiguity of the situation led to many to call for a halt in Zimbabwean exports. Following the Kimberley chair decision, the EU has rapidly called for an emergency meeting in April 2011 to express its concerns, but this resulted in a series of boycotts by African producers (led by South Africa) which did not participate to this Dubai special working group on monitoring and are likely to reject its proposals—while there remains much uncertainty as to whether the United States will allow Zimbabwe to take up the next chair of the KPCS. In short, the Process’ internal cracks are looming large on its future, while Zimbabwean, Ivorian and Congolese undocumented diamonds continue to trickle into the global market via third parties such as Mozambique. The titles from two recent Global Witness reports sum up this progressive derailing, calling on the ‘return of the blood diamond’ via Zimbabwe, and pointing at the ‘lessons unlearned’ on the international trade in minerals.

A solution in this case might come from the alternatives. On the one hand, industry leaders have sought to demonstrate to the wider public their capacity for self-regulation. De Beers, controlling more than a third of the global production, has promoted a series of initiatives such as the Diamond Development Initiative, the Responsible Jewelry Council, and the ‘Forevermark’ which seeks to imprint on each gemstone a code of production. The World Diamond Council, on its part, has also sought to improve a system of warranties now accepted by all Kimberley members, while governments such as Canada have taken up unilateral initiatives to distinguish themselves. Global Witness and the NGO community are committed to pushing governments to fully implement the scheme, but in the meantime survey alternatives. However, the mechanisms continue to be loose, easily circumvented, and at times contrasting, while internal squabbles in the Kimberly scheme and continuing cross-border smuggling maintains a substantial flow of conflict roughs in the global market. The diamond trade remains, at the end of the day, a bloody affair with little attention on the world stage.

About
Michele Acuto
:
Professor Michele Acuto is Professor of Urban Politics at the University of Melbourne and Pro–Vice Chancellor (Global Engagement) at the University of Bristol.
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.