Monday 24th October 2016

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Kimberley Process indicted

Tougher measures needed to end conflict diamond trade, says Amnesty International

by Greg Klein

One of the advantages Canadian diamonds bring to the market is their certifiably ethical character. Ensured by a tiny laser inscription on each stone and a verifiable record of its movements from kimberlite to consumer, the gems distinguish themselves for a quality apart from their beauty. The Kimberley Process was supposed to do the same for diamonds from all countries by banning the trade of conflict stones. Instead it simply “camouflages” the problem, according to Amnesty International.

“This is a wake-up call for the diamond sector,” the group stated on releasing a September 30 report focusing on the Central African Republic. “States and companies can no longer use the Kimberley Process as a fig leaf to reassure consumers that their diamonds are ethically sourced.”

Tougher measures needed to end conflict diamond trade, says Amnesty International

Amnesty castigates the organization, which describes itself as an initiative of governments, industry and civil society “to stem the flow of conflict diamonds—rough diamonds used by rebel movements to finance wars against legitimate governments.” Its membership consists of 81 countries, with the EU counting as a single state. But failures by both countries and companies mean consumers might unwittingly buy diamonds “associated with conflict and abuses,” the report states. “Despite more than a decade of the Kimberley Process, diamond supply chains are characterized by opaqueness, abuse and unjust enrichment.”

Amnesty’s report comes as the KP reconsiders its ban on CAR diamonds.

Those stones have long provided a major source of revenue to the CAR, one of the world’s poorest countries. In 2010 roughly 80,000 to 100,000 workers relied on artisanal diamond mining for their employment. Rough exports under the KP brought in US$60.8 million in 2011 and $62.1 million the following year, producing about half the country’s exports. Global rankings placed the CAR 12th by value and 14th by volume up to 2013.

But in March of that year, Muslim rebels known as Selekas overthrew the government. Reprisals by Christian and animist Anti-Balaka militias followed, along with atrocities on both sides. Over 5,000 people died. Diamonds, mined by artisanal workers in small operations, helped fund both groups. In May 2013 the KP banned its members from importing CAR diamonds.

The multi-million-dollar production and trade of CAR conflict stones persisted, however. Already rife, smuggling increased. Export companies located in the CAR continued buying the gems, which they stockpiled while waiting for the KP to end the ban.

Thanks to foreign peacekeepers, a transitional government took office in January 2014 and now holds a degree of control over parts of the country. A presidential election is scheduled for October 18. Not surprisingly, the country wants to regain revenue from its largest export.

In July of this year, the KP said it would allow exports provided certain circumstances were met. Seeing no indication they can be met, Amnesty fears the KP will lift the ban nevertheless.

The KP would require that diamonds come from “compliant zones” free of effective rebel activity. The organization would also allow stockpiles to be exported, provided they stand up to a forensic audit. Amnesty maintains neither condition’s plausible.

Control over compliant zones is tenuous, the group states. One zone considered potentially compliant by the KP actually suffers from significant rebel activity. Peace, where it exists, is fragile. Just days before the report’s release, the worst outbreak of violence in a year hit the CAR’s capital of Bangui, home to most export companies. By September 30, media reports said the death toll reached at least 42.

Meanwhile diamonds from rebel-controlled zones have been mixed with compliant output. No one can realistically verify the stockpiles’ sources. And unless buyers can find a way to verify that, their stockpiles should be confiscated and sold, with the money being spent for the good of the people, Amnesty argues.

Nor does the KP effectively address smuggling. Amnesty’s report takes the major sorting and distribution centres of Antwerp and Dubai to task for taking advantage of what it calls the limitations and weaknesses of the KP. The Antwerp World Diamond Centre quickly shot back, criticizing Amnesty for “factual errors.” The centre insisted it “implements a 100% strict control mechanism for each import or export of diamonds, which led to the interception and seizure of two shipments, containing rough diamonds potentially originating from CAR.”

Amnesty also charges that the UAE government “may be complicit in the illicit flow of wealth out of Africa.”

Despite more than a decade of the Kimberley Process, diamond supply chains are characterized by opaqueness, abuse and unjust enrichment.—Amnesty International

The report sees human rights abuses in other aspects of the trade as well. Sharp practice, extortion and outright theft deprive miners of reasonable remuneration. Tax evasion deprives the government of money that could alleviate poverty. Mining itself involves heavy, unnecessarily dangerous work—and often child labour. The KP doesn’t consider such problems, labelling conflict diamonds simply as “diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments.” That also exempts diamonds that finance abusive government forces, Amnesty states.

Meanwhile the KP holds countries, not the companies themselves, responsible for ensuring ethical sources.

Amnesty’s report complements the work of other NGOs scrutinizing conflict minerals. But its scathing indictment of the Kimberley Process casts a shadow on much of the world’s diamond trade. In an announcement accompanying the report, the group calls not only on governments but companies like De Beers and Signet to push for wide-ranging reform. In addition, “diamond companies should be investigating their supply chains for human rights abuses, conflict and other illegal or unethical practices, and disclosing the steps taken.”

Next March responsible sourcing will be the featured topic at the Jewelry Industry Summit, a three-day international event preceding the JA New York trade show.

Download the Amnesty International report Chains of abuse: The case of diamonds from the Central African Republic and the global diamond supply chain.

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