Kimberley Process Certification Scheme

The Kimberley Process Certification Scheme, popularly known as KPCS, is a process designed to certify the origin of rough diamonds from sources which are free of conflict. [http://diamondfacts.org/conflict/eliminating_conflict_diamonds.html#kim The Kimberley Process] World Diamond Council Website - Diamondfacts.org, accessed November 6, 2006] The process was established in 2003 to prevent rebel groups and their rivals from financing their war aims from diamond sales. The certification scheme aims at preventing these "blood diamonds" from entering the mainstream rough diamond market. It was set up to assure consumers that by purchasing diamonds they were not financing war and human rights abuses.

Establishment of KPCS; Compliance with KPCS

The United Nations Security Council imposed sanctions against UNITA in 1998 which specifically targetted their diamond trade. [ UN document |docid=S-PV-3891 |body=Security Council |type=Verbotim Report |meeting=3891 |page=4 |anchor=pg004-bk02-pa07 |date=12 June 1998 |speakername=Mr. Amorim | speakernation=Brazil |accessdate=2008-08-28 ]

The KPCS originated from a meeting of Southern African diamond producing states in Kimberley, Northern Cape in May 2000, and culminating in a ministerial meeting in September in Pretoria. [ UN document |docid=A-55-PV.79 |body=General Assembly |type=Verbotim Report |session=55 |meeting=79 |page=2 |anchor=pg002-bk01-pa09 |date=1 December 2000 |speakername=Mr. Holbrooke | speakernation=United States |accessdate=2008-08-28 ]

In December 2000, the United Nations General Assembly adopted a resolution supporting the creation of an international certification scheme for rough diamonds,UN document |docid=A-RES-55-56 |type=Resolution |body=General Assembly |session=55 |resolution_number=56 |accessdate=2008-08-28|title=The role of diamonds in fuelling conflict: breaking the link between the illicit transaction of rough diamonds and armed conflict as a contribution to prevention and settlement of conflicts|date=1 December 2000] and every year since the General Assembly has renewed its support for the KP - most recently in December 2006.UN document |docid=A-RES-61-28 |type=Resolution |body=General Assembly |session=61 |resolution_number=28 |accessdate=2008-08-28|title=The role of diamonds in fuelling conflict: breaking the link between the illicit transaction of rough diamonds and armed conflict as a contribution to prevention and settlement of conflicts|date=4 December 2006] In order for a country to be a participant, it must ensure that any diamond originating from the country does not finance a rebel group or other entity seeking to overthrow a UN-recognized government, that every diamond export be accompanied by a Kimberley Process certificate and that no diamond is imported from, or exported to, a non-member of the scheme.

This three-step plan is a simple description of the steps taken to ensure a "chain" of countries that deal exclusively with non-conflict diamonds.

Requirements of KPCS

The requirements of the KPCS are as follows:
* Each shipment of rough diamonds crossing an international border must be:
** Transported in a tamper-resistant container;
** Accompanied by a government-validated Kimberley Process Certificate;
* Each certificate must be resistant to forgery, uniquely numbered and describe the shipment's contents;
* The shipment can only be exported to another KPCS participant country;
* It is illegal for uncertified shipments of rough diamonds to either be imported or exported by a KPCS participant country;
* Failure to comply with these procedures can lead to confiscation or rejection of parcels and/or criminal sanctions; and
* If any concerns arise regarding a country's adherence to the KPCS, they must be investigated and dealt with at an intergovernmental level.

ystem of Warranties

The World Diamond Council created a System of Warranties for diamonds that has been endorsed by all KPCS participants. Under this system, all buyers and sellers of both rough and polished diamonds must make the following affirmative statement on all invoices::“The diamonds herein invoiced have been purchased from legitimate sources not involved in funding conflict and in compliance with United Nations resolutions. The seller hereby guarantees that these diamonds are conflict free, based on personal knowledge and/or written guarantees provided by the supplier of these diamonds.”

It is considered a violation of the KPCS to issue a warranty declaration on a sales invoice unless it can be corroborated by warranty invoices received for purchases. Each company trading in diamonds must also keep records of the warranty invoices received and the warranty invoices issued when buying or selling diamonds. This flow of warranties in and out must be audited and reconciled on an annual basis by the company’s auditors.

In addition, the diamond industry organizations and their members have adopted the following principles of self-regulation:
* to trade only with companies that include warranty declarations on their invoices;
* to not buy diamonds from suspect sources or unknown suppliers, or which originate in countries that have not implemented the Kimberley Process Certification Scheme;
* to not buy diamonds from any sources that, after a legally binding due process system, have been found to have violated government regulations restricting the trade in conflict diamonds;
* to not buy diamonds in or from any region that is subject to an advisory by a governmental authority indicating that conflict diamonds are emanating from or available for sale in such region, unless diamonds have been exported from such region in compliance with the Kimberley Process Certification Scheme;
* to not knowingly buy or sell or assist others to buy or sell conflict diamonds;
* to ensure that all company employees that buy or sell diamonds within the diamond trade are well informed regarding trade resolutions and government regulations restricting the trade in conflict diamonds.

Failure to abide by these principles exposes the member to expulsion from industry organizations.

Working Procedure

The KPCS is essentially a self-enforced mechanism. Supervision of the process is done by the Chair, elected on an annual basis at a plenary meeting. A Working Group on Monitoring monitors each participant to ensure that it is implementing the scheme correctly. The Working Group reports to the Chair. Other working groups include the Technical Working Group (or Working Group of Diamond Experts) which reports on difficulties in implementation and proposed solutions, and the Statistics Working Group, which reports diamond trading data. The Participation Committee reports to the Chair on its recommendations on proposed members hoping to join the KPCS. The Selection Committee reports on its recommendations on who should be the next Vice-Chair. After a year of being Vice-Chair, the successful candidate becomes the Chair.

While the Process has been broadly welcomed by groups aiming to improve human rights in countries previously affected by conflict diamonds, such as Angola, some say it does not go far enough. For instance, Amnesty International says " [We] welcome the Kimberley Process as an important step to dealing with the problem of conflict diamonds. But until the diamond trade is subject to mandatory, impartial monitoring, there is still no effective guarantee that all conflict diamonds will be identified and removed from the market." Canadian aid group One Sky (funded in part by the Canadian government) concurs with Amnesty's view saying "If effectively implemented, the Kimberley Process will ensure that diamonds cannot be used to finance war and atrocities... However, without a system of expert, independent and periodic reviews of all countries, the overall process remains open to abuse." An example of abuse would be smuggling conflict diamonds into a certified facility or country. The German group medico international started together with other European NGOs the campaign Fatal Transactions on the financing of African conflicts through diamonds.

Another form of criticism is whether the Kimberley process is realistically enforceable. There are many factors that can jeopardize the "Officialdom of certificates and paperwork" [ [http://news.nationalgeographic.com/news/2003/02/0212_030212_diamonds.html National Geographic documentary on blood diamonds, accessed December 19,] and also [http://www.ruby-sapphire.com/kimberley_process.htm "Kimberley Process: appeasement in the diamond trade] by leading gemological experts ] from lack of enforcement on the ground to the secrecy in the diamond trading centers such as Antwerp.

A serious potential flaw in the scheme is that there is no mechanism by which to ensure that jewelers only sell diamonds which have been Kimberley certified. However, most major firms operating in the UK have now at least expressed support for the Kimberley process.

Working Groups

KPCS has established a number of working groups for carrying out its programs. These are: Working Group of Diamond Experts (WGDE), Working Group on Monitoring (WGM), Working Group on Statistics (WGS), Working Group of Artisanal Alluvial Producers (WGAAP). There is also a Coordinator for Technical Assistance.

Current Membership

As of September 2007, there were 48 participants in KPCS representing 74 countries, with the European Community counting as a single participant. The participants include all major rough diamond producing, exporting and importing countries. [ [http://www.kimberleyprocess.com/faqs/index_en.html FAQs from Kimberleyprocess.com] ] The new entrants are Turkey and Liberia, in addition to Congo which has been re-admitted in 2007. It may be noted that Burkina Faso, Cameroon, Egypt, Chinese Taipei (Taiwan), Mali, Mexico and Tunisia attended the Brussels Plenary 2007 and affirmed their intention to join the Kimberley Process. Also, Bahrain, Cape Verde, Gabon, Swaziland and Zambia have expressed their interest in future participation. Latest information may obtained from KPCS official website. [ [http://www.kimberleyprocess.com/ Kimberley Process] ]

Waiver

The World Trade Organization (WTO) in December 2006 approved a waiver for the KPCS while recognizing the importance and effectiveness of the KPCS.

Chairs

The current chair of KPCS is the nation that held the position of vice chair the previous year.
2003: South Africa (vice chair Canada)
2004: Canada (vice chair Russian Federation)
2005: Russian Federation (vice chair Botswana)
2006: Botswana (vice chair European Commission)
2007: European Commission (vice chair India)
2008: India (vice chair Namibia)
2009: will be Namibia

uccess

The KPCS has been able to bring most of the world's rough diamond trade under its control. Within only a few years it has asserted an effective body of global governance. It has been estimated that trade outside KPCS has become significantly low.

tatistics

KPCS emphasizes collecting and publishing data relating to actual mining and international trade in diamonds. Member countries are required to officially submit statistics that can be verified through audit. Also, all member countries are required to produce and submit an Annual Report on the trade in diamond. According to the Working Group on Statistics (WGS) of KPCS, in 2006, the KPCS monitored $35.7 billion in rough diamond exports representing more than 480 million carats. The number of Certificates issued by KPCS members was 55,000.

Peer Review

In 2003 KPCS initiated a process of peer review of implementation of KPCS in different countries. Nominated by the governments, experts form a team to visit KPCS countries and inspect implementation of the scheme. According to the Working Group on Monitoring (WGM) of KPCS the Kimberley Process has completed the first round of peer review visits in 2007 with more than 50 on the ground inspection visits conducted to Participants and applicants since 2003.

Annual Report

Annual Report by all KPCS members is a very important component of Peer Review mechanism established by KPCS.

Expulsion

In 2004, Congo-Brazzaville was removed from the scheme because it was found unable to prove the origin of its gems, most of which were believed to have come from the neighboring Congo-Kinshasa. For countries economically dependent on diamond exports, this can be a substantial punishment, as it disallows trade with much of the rest of the world. However, Congo's membership in the KPCS was reinstated in the Plenary of 2007.

In 2005, trade with diamonds from Côte d'Ivoire was prohibited. Ivorian diamonds and cocoa are considered to be conflict resources.

In 2008, Venezuela voluntarily removed itself from the KPCS, after it had been in non-compliance for several years. The nation ignored several correspondences from Kimberley working groups, finally responding to an ambassador from Angola in 2007. Venezuela invited Kimberley officials to visit the nation, but this required authorization, and the deadline came and went without further correspondence. Finally Venezuela agreed it would remove itself from the KPCS and work toward strengthening its infrastructure.

It should be noted that Congo, Côte d'Ivoire, and Venezuela are still considered Kimberley Process members, but not Kimberley Process participants.

Brussels Plenary 2007

Kimberley Process Plenary of 2007 (the 5th Plenary) was held in Brussels on 05 - 08 November 2007, under the chair of the European Commission. 73 participants, including governments, NGOs and private business representing 47 countries participated, including the United Nations, the African Diamond Council (ADC) & ADPA, the governents of Mali, Egypt, Chinese Taipei (Taiwan), World Diamond Council and Partnership Africa Canada. India was elected chair for 2008. Brussels Plenary emphasized adding a development dimension to KPCS so that the mining and trade in diamond in low income countries could be utilized for development of the country and reduction of poverty of its people. More than 300 delegates participated in the plenary. Important decisions include re-admission of the Republic of Congo and a program for improving regional cooperation on rough diamonds from Cote d'Ivoire. It endorsed the Brussels Declaration on internal controls of KPCS participants with rough diamond trading and manufacturing. [ [http://www.kimberleyprocess.com/images/stories/docs/plenary_meeting_brus/kp_communique_2007.pdf] ]

Global Witness

Global Witness is a London-based NGO that oversees the working of the KPCS and was one of the first organizations to bring the issue of 'conflict diamonds' to international attention. [ [http://www.globalwitness.org global witness ] ] They state that a report they wrote, "A Rough Trade," was partial inspiration for the film Blood Diamond.

References

ee also

* Diamonds as an investment

External links

* [http://www.africandiamondcouncil.org AFRICAN DIAMOND COUNCIL - Africa's official diamond governing body]
* [http://www.diamondfacts.org Facts about non-conflict diamonds from the World Diamond Council]
* [http://www.kimberleyprocess.com/ kimberleyprocess.com]
* [http://www.worlddiamondcouncil.com/Updated%20documents%202003/Clean%20Diamonds%20Trade%20Act.shtml A transcript of the Clean Diamond Act]
* [http://ec.europa.eu/external_relations/kimb/intro/index.htm#kpcs]
* [http://ec.europa.eu/external_relations/kimb/intro/index.htm#kpcs European Commission website]