Can the EU revive a troubled scheme against conflict diamonds?

Devex
By Vince Chadwick, Lisa Cornish

An artisinal diamond miner at work in Kono district, Sierra Leone. Photo by: Kenny Lynch / CC BY-NC-ND

BRUSSELS — The European Union began its year-long leadership of the global effort against conflict diamonds this month, pledging to focus on “effectiveness” and “dialogue.” But observers say the notionally tripartite Kimberley Process, or KP, risks becoming a “farce,” as expert NGOs leave in frustration after years of failed attempts at reform.

The EU is one of 54 state-based actors in the process, first implemented in 2003 to check the provenance of diamonds through a certification scheme. Countries must only trade with other participating states that meet the agreement’s requirements on transparency, exchange of data, legislation, import and export controls, and shipment certification.

Almost $14 billion worth of diamonds were traded through the Kimberley Process Certification Scheme in 2015. Participants now claim to prevent 99.8 percent of the worldwide trade in “conflict diamonds,” defined as “rough diamonds used by rebel movements to finance wars against legitimate governments.”

However, Joanne Lebert, executive director of Impact, a nonprofit working on natural resources, told Devex that number is misleading, because “the definition is so narrow as to be obsolete.”

Franziska Bieri, an academic and author of a book on the KP, said that in the early 2000s much of the focus was on rebel groups, but that the definition fails to capture other human rights abuses, including by governments.

Global Witness, an international NGO, has reported on links between Zimbabwe’s state security and military, and the country’s diamond companies, for instance, calling the disappearance of billions of dollars in diamond revenues an “inside job.” Diamonds from the large Marange field in Zimbabwe were banned from trade with other KP members in 2009. But the ban was lifted two years later, to the dismay of civil society.

“Oppressive security forces are using diamond revenues to oppress their own people and perpetrate human rights violations,” said Michael Gibb, who worked on the reports. “The Kimberley Process is actively silent and certifies Zimbabwe’s diamonds.”

Another grievance is the use of a consensus model, whereby each state in the KP holds a veto.

Bieri said the result is stasis, as “one country is always willing to veto for another country, which is an ally or needs a favour.”

“More than ever,” Lebert added, “within the Kimberley Process you have some very clear geopolitical blocs that have formed that are intent on blocking reform in some measure.”

As a result of these and other frustrations, in 2011, Global Witness quit the KP’s Civil Society Coalition.

“As a civil society organisation with limited resources, continuing to plow resources into trying to internally reform an institution that’s shown no interest in reforming doesn’t offer a particularly strong return,” Gibb said. “So we’ve decided to focus our efforts on other initiatives.”

In 2017, Impact left too.

“Essentially, it doesn’t work,” Lebert said of the KP. “It doesn’t offer the assurances that it says it does.”

The Civil Society Coalition most recently proposed a multidonor trust fund to provide an “unfettered, earmarked budget” to support the involvement of civil society members and “resource-constrained participants” in the KP. It also called for reinforcing internal controls, such as requiring all traders to submit annual audits of their stock, and greater follow up on recommendations made through the KP’s peer review mechanism.

“The other civil society coalition members are equally dissatisfied, but they’re staying for now,” Lebert said, suggesting that Impact’s move “could open the floodgates for others leaving as well.”

There are 10 civil society groups remaining in the KP, one from Belgium and nine from Liberia, Côte d’Ivoire, Sierra Leone, Cameroon, the Democratic Republic of the Congo, Zimbabwe, and Guinea. The Belgian group International Peace Information Service said it is considering its position after the KP plenary in December failed to address its concerns.

Impact and Global Witness told Devex they planned to remain active on the issue of conflict diamonds, but Bieri said their departure seriously undermines the KP’s claim to being a tripartite body representing states, civil society, and industry.

“Without the NGOs aboard this really doesn’t have any credibility and would eventually, if not already, be seen as a farce,” Bieri said, adding that Global Witness and Impact were among the initiative’s most highly regarded non-state actors.

“They were lauded from day one for their expertise on the subject matter. So this will certainly be missed, and whether those smaller NGOs who are still in the process can contribute depends on governments funding them.”

The EU’s foreign affairs chief, Federica Mogherini, said the main strength of the KP has always been its inclusion of the private sector and civil society, and that “this is our main asset as we chart the way ahead.” An EU spokesperson added that “the EU is committed to ensuring an open and constructive space for all of our civil society partners, both within the Civil Society Coalition and beyond.”

The diamond industry, represented in the KP by the World Diamond Council, is also calling for many of the reforms favored by NGOs. A spokesperson for WDC said that although the process “continues to serve an important role in keeping conflict diamonds from entering the legitimate diamond supply chain, there is an opportunity to evolve our purpose to address the current state of affairs.” It wants to see the EU focus this year on trying to broaden the definition of conflict diamonds, establishing a permanent secretariat, and strengthening peer reviews.

WDC said it was “saddened” and “disappointed” at the NGOs’ departure, but that “a successful outcome on KP reform requires patience, openness, and compromise. Disappointment is part of any process, but maintaining our commitment to progress is our duty.” The industry group is putting its hopes in a review process, begun under Australia’s chairmanship last year. A communiqué from the KP’s plenary in Brisbane last month announced an Ad Hoc Committee on Review and Reform to work over the next year “to examine ways to enhance administrative and financial support to the process.”

One long-called-for change, to be considered under the review, is the creation of a permanent secretariat. The WDC said this would help provide the necessary “institutional memory and capability,” as well as improving data collection and country review visits, and help ensure governments follow through on recommendations.

Yet Lebert argued a secretariat may still be hamstrung by the KP’s consensus model.

She said a bigger issue is supply chain due diligence, which is already provoking conversations among those disillusioned with the KP. “There is certainly discussion around a global coalition on diamond governance, drawing from experiences with gold, tin, tantalum, tungsten, and other sectors,” Lebert said. “Chain of custody, transparency, and internal controls in producer nations are absolutely doable, irrespective of the commodity.”

Civil society groups hope the EU will draw inspiration from another of its chairmanship roles this year, leading implementation of the Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

Under the KP, Lucy Graham, a researcher at Amnesty International, said “it’s governments that put in place the internal checks, it’s governments that issue the Kimberley certificates. So companies in the supply chain don’t actually have to do anything themselves.”

To address this, Gibb from Global Witness said the EU should “help affirm what is increasingly becoming the reality, which is that the KP is no longer the sole body within which these issues are discussed and are relevant.” Gibb argued that Brussels can play a role this year in speaking to companies “to make sure they don’t just look to the Kimberley Process and its certificates to meet their responsibilities, but recognise its limitations and the other resources available to them.”

Diamonds are not covered by the EU’s Conflict Minerals Regulation, passed last summer and due to enter into full force in 2021, but Gibb said that instruments created under it, such as a transparency register, could be opened to diamond companies to show they are meeting the OECD standard.

The WDC agreed that responsibility for keeping conflict diamonds out of the global supply chain “is shared by all parties, not just governments.” It pointed to its voluntary System of Warranties, whereby suppliers declare rough and resulting polished diamonds are of conflict-free origin.

But Bieri explained this system can only be as good as the KP itself.

“If the rough diamonds are falsely certified as conflict-free then any system down the road is failed too, because they first rely on the conflict-free certificate from the KP before then offering this system of warranties,” she said. “That’s why it’s also in their interest that the KP is actually effective.”