The Kimberley Process: Has It Stopped the

Conflict Diamond Trade?

John Koh

EDGE term paper

Fall 2003

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 Conflict in Africa has been notoriously protracted and difficult to resolve. Part of this

intractability may be attributed to conflict or blood diamonds diamonds that fuel African

wars by providing rebel groups with an illicit source of funding. Such diamonds are

concentrated mostly in central Africa. A quick glance at some statistics provides some insight

into the magnitude of this problem. According to the industry, the African war zones at the

centre of the original controversy accounted for no more than 4 per cent of global supply. But the

whole sector was tainted, an $8bn (4.7bn) annual business in uncut diamonds, produced by

more than 20 countries across the world, supplying a $50bn-plus retail trade. (The Financial

Times, 2003) Rough diamonds valued at approximately US$370 million in 1999 and $170

million in 2000 passed through rebel territory in this region. Angolas rebel movement, the

Unio Nacional para a Independncia Total de Angola (UNITA) controlled the export of

approximately $300 million in rough diamonds in 1999, a figure which fell to around $100

million in 2000 (Cilliers and Dietrich 2000). The main rebel groups in the Democratic Republic

of Congo (DRC) do not mine the diamonds themselves, although they maintain control over the

trade by taxing and regulating artisan miners who sell the diamonds to foreign dealers operating

in towns such as Kisangani, Goma and Gbadolite. The diamond trade in eastern and northern

Congo, much of which may completely bypass rebel taxation, is estimated to be worth $70

million a year or more.

In view of this issue, talks began in May 2000 in the city of Kimberley, South Africa over

possible means by which the illegal trade in diamonds could be halted. What started out as a

consultative process became a negotiating process that culminated in the adoption of the

Kimberley Process Certification Scheme (KPCS) at a Ministerial Meeting in Interlaken,

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Switzerland in November 2002. According to the official website1, (t)he Kimberley Process is

an international initiative aimed at breaking the link between legitimate trade in diamonds and

conflict diamonds... The KPCS sets an international benchmark for national certification

schemes to be implemented by each Participant country through national legislation.

However, analysts have expressed skepticism about the impact of the process, which

some African non-governmental organizations have derided as a toothless watchdog, chained to

a kennel. (Business Day, January 28, 2003) Jakkie Celliers, director of South Africa's Institute

for Security Studies and author of a book on blood diamond trade, said the Kimberley Process

was a step in the right direction, but would ultimately have a limited impact. Advocates of the

Kimberley Process, however, have held out optimistic views of its potential significance.

Chairman of the Kimberley Process Abbey Chikane proclaimed that (w)e are very optimistic

that the Kimberley Process is going to make a difference in the industry and definitely reduce

trade in conflict diamonds. (Ibid) It has been nearly a year since the KPCS has been

implemented a good time, perhaps, to assess what the process has achieved and where it has

failed. It is also useful to try to determine what it could potentially achieve and where it could

potentially fail. To this end, this paper will conduct a preliminary assessment of the successes

and failures of the process itself, paying particular attention to how it has affected the illicit

diamond trade in the DRC, Sierra Leone, and the Central African Republic. Looking further, any

intrinsic flaws in the KPCS will be examined, which will provide the basis for recommendations

as to what (if anything) needs to be done in order for the Kimberley Process to realize its

mission.

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www.kimberleyprocess.com

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What Exactly Does the Kimberley Process Involve?

Before any further discussion can take place, it is necessary to first outline the mechanics

of the Kimberley Process. All participating countries must provide every diamond with a

government-backed certificate of origin; countries outside the agreement are not allowed to sell

to big markets such as the US and Europe, or trade with diamond-processing countries such as

Belgium, India and Israel. As of 31 March 2003, 58 countries have adopted and ratified the

Kimberley Process. In essence, these countries have agreed that they will only allow for the

import and export of rough diamonds if those rough diamonds come from or are being exported

to another Kimberley Process participant. Shipments of rough diamond exports must be

transported in tamper-resistant containers and must be accompanied by a government-validated

Kimberley Process certificate. In addition, the World Diamond Council proposed that the

industry create and implement a System of Warranties for diamonds. Under this system, which

has been endorsed by all Kimberley Process participants, all buyers and sellers of both rough and

polished diamonds must make a written guarantee on all their invoices that their diamonds have

been purchased from legitimate sources not involved in funding conflict and in compliance with

United Nations resolutions. (World Diamond Council 2003) Hence, the success of the

Kimberley Process hinges on a combination of national legislation and industry self-regulation.

In short, the KPCS is an attempt to design a system that will certify that:

conflict diamonds do not enter the legal trading system between the point of mining and

first export from a producing country

diamonds are not tampered with between their dispatch from a producing country and

their first arrival in a country where they will be cut, polished or traded

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 countries that cut, polish and trade in rough diamonds have adequate controls and

procedures to ensure that conflict diamonds cannot enter their trade (ActionAid 2002)

Success and Failure: the Democratic Republic of Congo, Sierra Leone and the Central

African Republic

Failure in the Democratic Republic of Congo (DRC)

In theory then, the Kimberley Process appears to be a sound step towards eliminating

illegal trading in rough diamonds. However, the experience of the DRC with the process appears

to show that theory does not always hold up so well in practice. Plagued by civil war in the

north east region of the country, efforts by the DRC to clean up its diamond sector are being

undermined by extensive smuggling through the neighboring Congo Republic. Diamond exports

represent the DRC's major source of income. Unfortunately, it is estimated that of the US$800

million a year exported annually, half is smuggled out principally through Congo Republic, and

sold chiefly in Antwerp. (Muller, PolishedPrices.com 2003)

Although Congo Republic has complied with Kimberley Process regulations by

producing certificates of origin for diamonds that leave the country, authoritative industry

sources, including De Beers, claim it has never been a diamond producer and certainly hasn't

produced the US$200 million worth according to the last production figures it published in 2001.

The DRC has not issued one KP certificate of export to the Congo Republic, said the report.

Congo Republic is considered an important smuggling route for diamonds from DRC, Angola,

and to a lesser extent, the Central African Republic (CAR). Export data for August published by

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the Democratic Republic of Congo reveal that, while the quantity of diamonds rose, their overall

value fell substantially. This implies that the country's output of higher-value gems is evading the

controls of the Democratic Republic of the Congo's Centre for Evaluation, Expert Analysis and

Certification of Precious Minerals (CEEC). However, there are no up-to-date export figures from

Congo Brazzaville to verify these suspicions. In 2001 the country traded $223m worth of

diamonds, mostly from Angola and the Democratic Republic of Congo.

Despite numerous requests, Congo Republic officials declined to answer inquiries. The

Canadian officials charged with collating global diamond statistics for the Kimberley Process

would also not discuss the scale of trading out of Brazzaville. Even the Diamond High Council

in Antwerp, where most of the world's rough diamonds end up, and where several diamond

industry officials say Democratic Republic of Congo gems traded illegally through Brazzaville,

Uganda and Rwanda are still heading, refused to reveal statistics on trade out of Brazzaville.

This secrecy is one sign that the Kimberley Process is failing to bring about the promised

transparency. (Wallis, The Financial Times, 2003)

In view of this smuggling problem, Global Witness, a key campaigner for the worldwide

implementation of the Kimberley Process underlined the importance of having Non Government

Organizations (NGOs) set up a monitoring mission to verify compliance with Kimberley Process

regulations. According to Alex Yearsley at Global Witness, there are stories that Congo

Republic has some alluvial up at the border, but the government is not cracking down on

smuggling. It encourages it with lower export tax at 2 per cent. (quoted in Muller,

PolishedPrices.com, 2003) The DRC has a 6 per cent export tariff and the CAR 12 per cent.

There are also serious questions about the low level of values at which Congo allows goods to be

exported, so not only is the tax lower but calculated on a lower figure.

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 Smuggling appears to be only part of the DRCs woes. Recently, international pressure

groups have found evidence that companies may have profited from conflict in the DRC. The

Security Council can no longer ignore clear evidence linking the exploitation of resources to the

war in the Congo," said the groups, which included Human Rights Watch and Oxfam

International. "It must insist that member states hold the companies and individuals involved to

account, including companies based in western countries. (Turner, The Financial Times, 2003)

In an October 2002 report, the panel alleged that 85 companies involved in Congo breached

international norms, including the Guidelines for Multinational Enterprises of the Organization

for Economic Co-operation and Development (OECD). Those companies include De Beers, the

giant diamond conglomerate, Das Air, Avient Air and Oryx National Resources.

The final report covers those companies' responses to the allegations, placing them in five

categories. Those categories list companies' cases as resolved (I), partially resolved (II), or

requiring further investigation at national level (III, and IV). A final category (V) deals with

companies which did not respond. NGOs took issue with the process that led the panel to

determining how companies or individuals were assigned to categories, including those deemed

"resolved". NGOs fear the report may not have received adequate follow-up. "None of the

governments participating in the OECD has yet investigated the conduct of any of the companies

listed. Instead several governments have pressured the panel to remove the names of companies

registered in their jurisdictions or to declare that such cases have been resolved," the NGOs said.

(quoted in Turner, The Financial Times, 2003) The report also calls for a monitoring mechanism

to oversee an arms embargo in the east of the country. According to the report, "serious

consideration" should be given by the Congolese authorities to breaking up and selling off

Congo's large state-owned mineral resource enterprises, such as the Gecamines copper company,

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and diamond concern MIBA. The Kimberley Process offers no recourse to either of these

suggestions, which may indicate an oversight in the process.

In fact, Charles Wyndham, a diamond valuer, believes that the involvement of Congo

Republic and other non-producing countries in the Kimberley Process is encouraging rather than

eliminating incentives for smuggling. (Wallis, The Financial Times, 2003) This is because it

gives non-producing countries the chance to launder and legitimize illicit gems. This is no trivial

issue: it is becoming increasingly clear that the criminal gangs and political elites that derived

their power during the civil war from their control of mines, trade, timber and taxes are adapting

their strategy to the new diamond regime. Politicians, traders and warlords from various factions

are flocking to Kinshasa. For example, Rwanda-backed former rebels control an area with an

estimated $70 million of annual diamond production. In addition, there are reports that the

Rwandan government has allowed diamond-polishing plants to be set up in Kigali, the capital.

The problem now for western policymakers is whether to draw attention to such activities

and risk derailing a fragile peace. Groups such as Human Rights Watch say officials at the UN's

Department of Peace Keeping were nervous that any publicity-generating complaints about the

role neighboring countries still play in arming Congolese militias and trading Congolese

minerals could damage one of the UN's trickiest and most expensive peacekeeping operations.

But the obvious danger remains that the disparate factions committed officially to Congo's peace

process will continue funding their movements, armed or otherwise, by illicit means and that this

will undermine efforts to pacify and reunite the country.

A controversial contract covering most exports from the Democratic Republic of the

Congo's principal diamond company shows up the murky side of the business and some of the

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obstacles to greater transparency. The contract, pushed through by the government secretly this

year is between the state-controlled MIBA group and Emaxon, a Canadian-registered company.

MIBA is 80 per cent owned by the government. The remaining 20 per cent is held by Sibeka, a

Belgian company in which De Beers, the leading force in the diamond industry, is a shareholder.

Under the deal, Emaxon received rights to export 88 per cent of MIBA's production over a four-

year period in return for loans to MIBA worth $15m. Eugene Ndongola Diomi, the mines

minister representing the unarmed opposition in the country's transitional unity government, is

highly critical of the contract. He says a clause allowing Emaxon a 5 per cent discount is

"prejudicial to the interests of the state". The deal was approved in apparent contravention of an

undertaking by MIBA to inform creditors of any changes in export arrangements. It has since

emerged as a bone of contention between factions in the power-sharing government appointed in

July as part of efforts to end Congo's five-year war.

Reports obtained by the Financial Times allege "systematic undervaluation and theft of

diamonds" at MIBA costing tens of millions of dollars annually. Industry experts and western

government officials have corroborated these reports. The reports allege that a criminal

syndicate has been siphoning off high value gems within MIBA. They also point to serious

shortfalls in the application of Kimberley Process recommendations at MIBA. The transcript of

a taped OSS presentation to Joseph Kabila, the Democratic Republic of Congo's president, talks

of a "Byzantine paper trail" deliberately obscuring vital data and "ghost packages" created by

"separation and falsification of data during the initial weighing process". The ghost shipments

were not recorded in official MIBA data. The reports suggest that some Belgian suppliers to

MIBA and at least one other Belgian diamond interest have turned a blind eye to theft. There is

concern within the Democratic Republic of Congo over smuggled gems being used to fund

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armed opposition groups in the central province of Kasai - where there has been a surge in ethnic

nationalism - as well as high-level politicians in Kinshasa, the capital. War and mismanagement

have led to a decline in Congo's official copper, gold and other mineral exports. Diamonds, long

used by the country's rulers as a private source of cash, now account for more than 60 per cent of

official export earnings. Diamond industry officials estimate that MIBA has potential annual

revenues of more than $170m. According to 2000 estimates by FINAM, a Belgium-based group

representing MIBA creditors, systematic theft of gems cost the company 30-50 per cent of its

revenues that year. Nigel Morgan, former OSS operations director, says of OSS's findings: "This

has got everything to do with whether the Kimberley Process is going to be made to work, or

whether it will simply be a fig leaf for a diamond industry which gets up to the same old tricks."

Mixed Success in Sierra Leone

While it appears that the Kimberley Process is floundering in the DRC, it has had a much

more positive effect in Sierra Leone although that success has come with some unforeseen

costs. The KPCS has allowed war-ravaged Sierra Leone to experience greater prosperity with a

sharp rise in export earnings. In 2002, revenues from the export of diamonds amounted to only

$21 million. In the first three months of 2003 alone, that level of earnings has already been

reached, with export revenues hitting $23.8 million at the end of March. (Mac Johnson, AFP,

2003) If this trend continues, export earnings are project to exceed those of 2002 by 300 per

cent. The contrast is even greater when figures from previous years are examined. In 2000,

diamond exports brought in $10.1 million in earnings, while in 1999, a paltry $1.2 million. What

is more important than this spectacular rise in export earnings, however, is the fact that the

Kimberley Process has succeeded in halting the ability of rebel groups to fund their activities

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through the sale of diamonds. The rebel group Revolutionary United Front (RUF) was able to

prolong the bloody conflict that razed Sierra Leone until January 2001 through the smuggling

and sale of diamonds, which funded the purchase of weapons. Mineral Resources Minister

Mohamed Swarray-Deen remarked that the Kimberley Process had helped to legitimize the

industry in his country. It has returned the diamond industry back to the community which is

rightly the main beneficiary. It was originally hijacked by a few greedy and corrupt people.

(quoted in MacJohnson, AFP, 2003)

However, the success of the Kimberley Process in halting rebel involvement in the

diamond trade does not paint a complete picture. It is suspected that other powerful interests

have stepped in to keep both illegal mining and smuggling alive. In an interview with Agence

France-Presse (AFP), Lebanese diamond merchant Ansa Farouk said that other individual

powerful interests have stepped in to keep both illicit mining and smuggling alive. They have

their contacts in Conakry and Monrovia (the Guinean and Liberian capitals) and where the

diamonds go to after this, I cannot say. There are lots of mafia-like movements involved.

(MacJohnson, AFP, 2003) More significantly, David Crane, the US prosecutor for the Special

Court on Sierra Leone, set up in January 2002 to try those accused of war crimes, recently said

he had uncovered evidence that al Qaeda was operating in west Africa, chiefly to buy diamonds.

Diamonds fuel conflict, and diamonds fuel the war on terrorism, Crane said, specifically

naming Liberian President Charles Taylor as a guilty party. Charles Taylor is harboring

terrorists from the Middle East, including al Qaeda and Hezbollah, and has been for years... he is

a player in the world of terror and what he does affects lives in the United States and Europe.

(MacJohnson, AFP, 2003)

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 Another issue that taints the relative success of the Kimberley Process in Sierra Leone is

the rampant use of child miners by unscrupulous mining companies. In order to cut production

costs and increase profits, children aged between 10 and 15 years of age are paid 50 cents a day

and live in dismal surroundings. Thus while conflict may have been stemmed, the quality of life,

especially for these child miners, may in fact have worsened.

The Central African Republic: A Test for Kimberley

The Central African Republic (CAR) is proving to be a much more complicated test of

the Kimberley Process than the DRC or Sierra Leone. In March 2003, President Ange-Felix

Patasss government was deposed by a coup detat led by General Franois Bozize, the CARs

ex-chief of the military. The significance of the CAR to the diamond producing world should not

be underestimated it is the 10th largest diamond producing country in the world, generating

about $100 million in diamond export revenues a year. (Global Witness, 2003) While the move

was condemned by the African Union in March, italsoraisesimportantquestionsintermsofthe

implementationoftheKimberley.WhatistobemadeoftheCARsstatusinKimberleyuntil

suchatimewhenthenewauthoritiesinBanguiareinternationallyrecognized?Somemight

arguethatatotalbanonCARdiamondswouldbenecessaryuntilthenewregimeinBangui

(CARscapital)isdeemedlegitimate;otherscouldarguethatsuchstepsareunnecessaryusing

theprinciplesofinternationallaw.

Fromalegalstandpoint,itappearsthatwhetherornotBozizesgovernmentislegitimate

doesnotaffectitsstandingininternationalcontractsbetweenstates.AccordingtotheInstitute

forPoliticalandInternationalStudies,internationallawprovidesforaproceduretorecognize

states,butnotgovernments.Diplomatically,thismaybeadifferentmatter,butitisalmost

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inevitablethatsomestateswillbegintodealwithanewgovernmentofarecognizedstate,such

asBozizeintheCAR.Thesediplomaticrelationsaregenerallydeterminedbyanadherenceto

oneoftwotheories:somestatesapplyatheoryofeffectivity,bywhichanewregimeis

recognizedbymeritofitsrealcontrolofthestate,whileothersapplythetheoryoflegitimacy

andonlycommencediplomaticrelationsoncetheregimeisdeemedtoupholdcertainnorms

suchasconstitutionallaw.Neitherappearstoaffecttheapplicabilityofcontractsconcluded

betweenstates,suchastheKimberleyProcess,becauseanewgovernmentisboundbythese

obligationsdespiteillegallydeposingtheprevioussignatory.Whetheranewgovernment

obtainedpowerthroughlegalmeans,andwhetherornotitisconstitutional,haslittlebearingon

thismatter.Thegovernmentthathasdefactocontroloverthestateisthegovernmentthatwill

showupforKimberleymeetings.(IPISResearch,2003)

Ontheotherhand,ifKPCSparticipantsacceptBozizesgovernmentanditsabilityto

upholdtheprinciplesoftheKimberleyProcess,itessentiallymeansthattheyareplacingtheir

trustinanillegalmilitarygovernment.Thisacceptancemaysetadangerousprecedentforother

rebelgroupsindiamondproducingcountries.Thelargerissueatstake,however,isthedegreeto

whichtheKimberleyProcessplacesfaithinitsparticipantsabilitytomonitorthemselves.Even

iftheCARsstatusintheKimberleyProcessremainsunchanged,otherparticipantsmaycallfor

moreefficientmonitoringofinternalcontrolswithinBangui.

Given these circumstances, then, the steps that KPCS officials have undertaken are signs

that the process is credible and practical. Following the coup in March, the CAR was removed

from the list of Kimberley Process participants for several weeks while KPCS officials debated

their course of action. It was reinstated as a participant after CAR authorities provided

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assurances they could implement the Kimberley Process and agreed to let a review mission

evaluate the country's national diamond control system. Consequently, a review mission, tasked

with establishing if the CAR was meeting KPCS requirements, was sent in June 2003. The

review mission was hosted by CAR's Ministry of Mines, and comprised of government officials

from several Kimberley Process countries, a diamond industry representative and Global Witness

(an international NGO) representing civil society. The mission met with relevant government

authorities responsible for implementing the Kimberley Process as well as conducted on-site

visits of diamond production and trading sites. While the results of the review have not yet been

released, this review mission is a strong sign that the Kimberley Process provides for effective

and credible monitoring of its participants.

Intrinsic Flaws in the Kimberley Process

Excessive Respect for State Sovereignty

Many NGOs have argued that the most glaring weakness of the Kimberley Process is its

excessive respect for state sovereignty. The process is highly reliant on self-verification on the

part of participant countries. At this stage, there are no means by which KPCS authorities can

take action against countries that do not conform to Kimberley Process regulations. Part of the

problem is that the process is no more binding than an economic contract. Unlike the United

Nations, KPCS officials cannot send peacekeeping forces to participant countries.

Lack of Independent Monitoring

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 This excessive respect for state sovereignty highlights the importance of having

independent monitoring of all national control systems. This is seen as a necessary prerequisite

without which the system cannot be credible or effective. While the Kimberley Process has

addressed some concerns such as process monitoring, stricter membership criteria, participant

co-ordination and collection of accurate trade and production statistics the most important

concern is still to be resolved. The outstanding issue of an independent monitoring body will be

discussed at the Kimberley Process's next plenary meeting, to be held in South Africa in

November 2003. It appears, at least, that KPCS officials view this issue with equal urgency.

Chairman of the KPCS board Abbey Chikane stated that he would be very happy to announce

such a development. (quoted in Innocenti, The Financial Times, 2003)

At present, however, the Kimberley system has no independent monitoring mechanism to

assess performance or compliance by any of the member countries. This shortcoming in the

process is magnified by the fact that it does not cover polished stones or diamond jewelry

which account for the bulk of all US diamond imports. And it does not currently address

diamonds that continue to fuel conflict in countries like the DRC or diamonds that finance the

activities of groups like al Qaeda. Furthermore, in an effort to assure consumers their diamonds

are clean, the industry had agreed to track the gems from the moment they are mined to their

destination in retail stores through an auditable chain of warranties. However, the industry's

recently revealed warranty consists solely of an affirmative statement that diamonds are

from legitimate sources; that they are conflict free, based on personal knowledge and/or

written guarantees provided by the supplier of these diamonds. (World Diamond Council, 2002)

Nicky Oppenheimer, Chairman of De Beers Corp underscored this point when he remarked that:

transparent verification of both government and industry procedures is essential to the

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credibility of the certification scheme in the eyes of the world...the industry wholeheartedly

supports the NGOs' objectives in securing a credible system of monitoring. (quoted in Amnesty

International, 2003)

Diamond Identification: Mission Impossible?

Like any other document, KPCS certificates can be falsified or forged. However, unlike

fake passports or drivers licenses, it may be even more difficult to identify if a diamond carrying

a KPCS certificate is a conflict diamond or not. Some geoscientists argue that chemistry and

physics can help to identify conflict diamonds. Like a fingerprint, unique characteristics such as

composition or microscopic structural imperfections could indicate the origin of a diamond.

Diamonds entering the market could be tested to determine their origin, and gems found to come

from conflict zones under U.N. sanctions could be confiscated. While such identification

process would greatly bolster the efficacy of the Kimberley Process, scores of difficulties abound

to make this ideal virtually unattainable.

Firstly, the uniformity of gem-quality diamonds poses a very large problem. Many other

precious stones have relatively complex structures that are more amenable to identification. For

example, emeralds are composed of beryllium aluminum silicate with traces of chromium. The

ratios between these two components are produced by different geological processes. Small

differences in impurities and chemical makeup of these gems readily betray their origin.

Diamonds, in contrast, are relatively pure, and all are created under similar conditions.

Identifiable impurities crop up in parts per million, per billion, or even smaller concentrations,

making it next to impossible to distinguish among the gems geographic sources.. The more

valuable the diamond is, the harder it is to identify. According to Peter Heaney of Pennsylvania

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State University, Consumers want diamonds to be pure with no . . . imperfections, he notes, but

these are exactly the characteristics that might help mineralogists determine the gems origin.

(quoted in Pickrell, Science News, 2002)

Secondly, techniques that would require slicing the gem or affecting its physical

appearance in any way would clearly not be feasible to diamond exporters. This seriously limits

the scope of testing techniques. Moreover, testing techniques developed so far are so time-

consuming and complex that it would be highly impractical to apply on a large scale to the

millions of diamonds that are being mined. Added to the fact that these techniques are applied to

each individual gem, one at a time, and one can clearly see that the costs of implementing any

such identification scheme are potentially staggering. Finally, James E. Shigley of the

Gemological Institute of America points out a more basic reservation about the possibility of

identifying diamonds by their origins. Diamonds don't come from conflict countries, they come

from the center of the Earth, he says. Consequently, they're more likely to reflect conditions in

Earth's mantle than any that define political boundaries. Furthermore, he says, many of the

characteristics of rough diamonds, such as overall shape, surface markings, and some mineral

inclusions, are systematically removed during cutting and polishing. This makes identification of

jewels even more difficult than that of the rough diamonds that researchers have used in their

analyses. (quoted in Pickrell, Science News, 2002)

It appears, however, that all hope is not lost. In July 2003, a team of Belgian scientists

developed a method by which they could accurately determine the origin of a diamond. A result

of a joint project at the research center of the Antwerp Diamond High Council and the University

of Ghent, the researchers found that they were able to obtain a unique chemical image of each

diamond by drilling a microscopic hole in it with a laser beam. This drilling releases elements in

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the diamond that can be analyzed. Since diamonds are extremely pure carbon products, very

small quantities of atoms from sub-microscopic inclusions can be traced. However, even this

breakthrough method of gem identification runs into serious implementation problems. It

requires an extensive, comprehensive database of diamond samples from mines the world over

including diamonds from conflict mines. This process could take several years to complete, and

would require the complete cooperation of mine owners in submitting samples. Thus while

trying to establish a scientific method for determining the origin of a diamond is a worthwhile

avenue for further research, the Kimberley Process must continue to rely on less concrete means

of verification. This means that the monitoring of participants compliance takes on even greater

importance.

Lack of Statistics

A final problem is the lack of progress in collection and analysis of statistics - an

important tool for detecting conflict diamond trading. Many governments have failed to submit

the required statistics, calling into question their commitment to the Kimberley Process. NGOs

will argue that governments that have not submitted their statistics before the Plenary Meeting

should be suspended from the Kimberley Process Certification Scheme.

What Needs to be Done?

It is clear that the Kimberley Process has still a long way to go before it achieves the lofty

goals set out by its creators. Given its failings and flaws, what needs to be done in order for the

process to be an effective means by which trade in conflict diamonds is halted? The following is

a list of recommendations:

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 First, the Kimberley Process certification scheme for rough diamonds must make

provision for regular, independent monitoring of all national diamond control systems. Without

this, it will create false consumer confidence and the appearance of integrity where none can be

assured. Such false confidence will do nothing to stop conflict diamonds where they still exist,

and it will do nothing to prevent their return where controls are weak and predators are strong.

Second, the United Nations Security Council must, as a matter of priority, address the

issue of conflict diamonds in the DRC. It should embargo all unofficial diamond exports from

the DRC, and insist that the Kimberley Process develop a more rigorous approach to statistics

and monitoring.

Third, civil society organizations should take an active role in promoting the Publish

What You Pay campaign. This, initiative, founded by NGOs such as Global Witness and Oxfam,

is aimed at helping citizens of resource-rich developing countries hold their governments

accountable for how revenues from the oil, gas and mining industries are managed and

distributed. Together with Kimberleys certification scheme, consensus on basic corporate

transparency in developing countries can be reached, and corruption can be diminished.

Fourth, governments should actively support the Extractive Industries Transparency

Initiative. The Initiative was announced by UK Prime Minister Tony Blair at the World Summit

on Sustainable Development in Johannesburg, September 2002. Its aim is to increase

transparency over payments by companies to governments and government-linked entities, as

well as transparency over revenues by those host country governments. Revenues from oil, gas

and mining companies, in the form of taxes, royalties, signature bonuses and other payments

should be an important engine for economic growth and social development in developing and

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transition countries. However, the lack of accountability and transparency in these revenues can

exacerbate poor governance and lead to corruption, conflict and poverty.

Fifth, mining contracts that were acquired through bribery or military action prior to

implementation of the Kimberley Process should be nullified and considered void, while

contracts entered into during the implementation of the process should be monitored and

regulated. For example, to counter UNITA's previous monopoly on Angola's diamond industry,

the Angolan diamond corporation, Endiama established a partnership with the powerful South

African diamond corporation, De Beers. In an effort to protect their joint diamond ventures De

Beers and Endiama hired hundreds of South African mercenaries to guard their legitimate

diamond enterprises against UNITA attacks. However, De Beers simultaneously aimed to buy

up the illegally produced gems before they left the country. In 1995, De Beers bought $80

million worth of diamonds. From 1992 to 1993, however, De Beers bought $500 million to $800

million worth of diamonds from UNITA to maintain its grip on prices, despite having contracts

with the Angolan government. An additional attempt by Endiama to halt UNITA mining

operations took place in August 1995 when it signed a mining agreement with a Brazilian mining

firm. The company, Odebrecht Mining Services (OMS) was given mining rights to the rich

Luzamba area in the Cuango Valley. Although the OMS/Endiama deal was legitimized, the

UNITA elements were too powerful to remove, and the OMS was forced to strike deals with

UNITA. UNITA has been supported covertly by several additional mining firms from South

Africa and Israel (Gordon 14). Up till 1997, the Brazilian based OMS had been unsuccessful in

signing a mining rights agreement with UNITA. UNITA, with assistance from its foreign mining

companies, had increased its mining operations in the Cuango Valley. UNITA continues to

19
receive South African aid in the forms of hired scuba divers and mining equipment to mine the

river-bed of Cuango Valley more effectively.

Finally, the diamond industry can and should endorse all of these recommendations.

Endorsements can begin with apex bodies such as the World Diamond Council, the International

Diamond Manufacturers Association, the World Federation of Diamond Bourses, the

Confdration internationale de la bijouterie, de la joaillerie, de lorfvrerie, des diamants, perles

et pierres (CIBJO), national diamond manufacturers associations, national diamond exchanges,

national and international diamond mining associations. Much has been done already. With

greater commitment to an effective Kimberley Process and greater overall transparency, the

diamond industry could become a world leader in corporate social responsibility.

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References

1. ActionAid Editorial, Campaigners give cautious welcome to the launch of the

Kimberley Process scheme to curb the trade in conflict diamonds, ActionAid,

November 4 2002

2. Agence France-Presse Editorial, Conflict diamonds in focus Agence France-Presse

(AFP), November 5 2002

3. Amnesty International, Diamonds Still Drip Blood: Coalition Calls for Immediate

Reform of New Diamond Regulations, November 4 2002

4. Amnesty International, Kimberley Process still in process - Progress made, but key

issues remain, April 30 2003

5. BBC News Editorial, Diamond Origin Can Be Determined, BBC News, July 25 2003

6. Belfast Telegraph Editorial, UN says war in Congo is fuelled by foreign firms, in The

Financial Times, October 31 2003

7. Business Day Editorial, 'Blood Diamond' Crackdown to Begin, Business Day, January

28 2003

8. Cilliers, Jakkie and Dietrich, Christian Angolas War Economy: The Role of Oil and

Diamonds, (eds) Institute for Security Studies, Pretoria, September 2000.

21
9. Dietrich, Christian, Have African-based Diamond Monopolies Been Effective?

Central Africa Mineral and Arms Research Bulletin, edition 2, 18 June 2001

10. Global Witness Editorial, The First Real Test of the Kimberley Process Is In The

Central African Republic, Global Witness, March 18 2003

11. Global Witness Editorial, Kimberley Process undertakes first review mission to the

Central African Republic, Global Witness, June 11 2003

12. Global Witness Editorial, Conflict diamonds: Kimberley Process at a turning point,

Global Witness, Oct 28 2003

13. Innocenti, Nicol Degli, Africa's Diamond Trade Seen as No Longer So Rough, The

Financial Times,June 30 2003

14. Innocenti, Nicol Degli, Strong support for 'conflict diamond' curbs, The Financial

Times, August 1 2003

15. Innocenti, Nicol Degli, Compromise deal struck on conflict diamonds, The Financial

Times, October 31 2003

16. Institute for Political and International Studies, Central African Republic: Hard

Questions Ahead for Kimberley? Antwerp, 26 March 2003

17. Lewis, Lloyd R. III Angola diamond mining and war Trade and Environment

Database, case no. 32, June 14 1997

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18. MacJohnson, Rod, Blood diamonds" initiative a mixed success in war-scarred Sierra

Leone, Agence France-Presse (AFP), May 18 2003

19. Muller, Emma, Diamond Smugling Through Congo Republic Makes Mockery Of

Kimberley Process, PolishedPrices.com, July 10 2003

20. Muller, Emma, Kimberley Process faces one of its biggest challenges, Business Day,

Oct 30 2003

21. Pickrell, John, Scientists Struggle to Identify Conflict Diamonds, Science News,

August 10 2002

22. Smillie, Ian, Motherhood, apple pie and false teeth: corporate social responsibility in

the diamond industry, Diamonds and Human Security Project, 2003

23. The Financial Times Editorial, Comment: Crystal Clarity The Financial Times,

October 30 2003

24. Turner, Mark, UN 'must seek inquiry into Congo war profits,' The Financial Times,

October 28 2003

25. UN Integrated Regional Information Network, NGOs urge greater transparency of

diamond control, October 29 2003

26. Wallis, William, Africas conflict diamonds: is the UN-backed certification scheme

failing to bring transparency to the trade? The Financial Times, October 29 2003

27. http://www.dfid.gov.uk/News/News/files/eiti_guide_b.htm

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28. www.publishwhatyoupay.org

29. www.kimberleyprocess.com

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