IMPACT, a Canadian-based civil society entity, has withdrawn from the Kimberly Process, citing lack of credibility.
In a report published on its website, Impact claims that unscrupulous individuals and organisations are raking in billions of dollars from the sale of diamonds sourced from conflict-ridden regions in Africa, exploiting loopholes in the Kimberly Process.
The organisation is concerned that the narrow scope of the Kimberly Process (KP) has resulted in illicit diamonds entering the legal supply chain.
In a report, IMPACT says: “A KP Certificate only applies to rough diamonds as they are exported from their country of origin to the refining centre, where they may be cut and polished. The KP does not apply to cut and polished stones. Some diamond industry members voluntarily “self-regulate” throughout the entire supply chain through a scheme known as the “System of Warranties.” However, when purchasing diamond jewelry there is no guarantee as to the origin of your diamond.
“There is a weakness with KP Certificates and internal controls that allow conflict diamonds from countries under embargo, such as CAR to be smuggled and sold legally through neighbouring countries like Cameroon. Additionally, lax trading practices at diamond trading centers such as the United Arab Emirates, allow diamonds from conflict areas to enter the legal supply chain.”
The Kimberley Process Civil Society Coalition, of which IMPACT (formerly Partnership Africa Canada), is part of, have noticed that the KP has not been able to cope with developments in the diamond industry.
Reform of the KP is long overdue, according to IMPACT. While the KP may have restored consumer confidence, the scheme has failed to evolve and deal with new challenges.
IMPACT laments, “By continuing to use the original definition of “conflict diamonds” that emphasises rebel group financing, the KP ignores the majority of conflict diamonds traded today— those used by legitimate governments, private military companies, or other actors for their own interests.”
The organisation notes that during a periodic reform cycle of the KP in 2012, the Civil Society Coalition undertook efforts to introduce a new, broader definition that would acknowledge the various actors, including government officials that can benefit from conflict diamonds, and the importance of tackling illicit trade.
“Despite months of negotiations over language, the adoption of a new definition was blocked due to the need for consensus. Attempts by civil society and some governments to include respect for human rights in KP’s minimum standards have been blocked by a number of countries including South Africa, India, China, and Russia,” says the report.
In the report, IMPACT recommends that the KP must ensure the world’s diamond supply chain is clean, legal, and does not contribute to armed conflict and human rights abuses, but as well must respond to emerging issues such as the impact of synthetics on the natural market, the withdrawal of support by leading banks from the diamond industry, how to tackle undervaluation, and money laundering.
The KP is now 17 years old.
In December 2000, the United Nations General Assembly adopted Resolution A/RES/55/56 to stem the role of diamonds in fueling conflict. This led to a series of meetings between governments, civil society, and the diamond industry, known as the Kimberley Process (KP). After months of negotiations, the KP Certification Scheme—a system that certifies rough diamonds as conflict-free—launched on January 1, 2003.
According to the definition adopted by the United Nations and the KP, conflict diamonds are rough diamonds used by rebel movements or their allies to finance their military activities aimed to undermine legitimate governments. Many civil society groups consider the KP’s definition outdated. They believe the definition of conflict diamonds should consider smuggling, tax evasion, human rights abuses, and importantly, violence perpetrated by other groups such as governments or other actors.