September Kimberley Process Review

Transcription

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2 September 2007 Kimberley Process Review lj}liloldillg Integrity Sinet' 19,\1 ERNESTBLOM PRESIDENT WORLD FEDERATION OF DIAMOND BOURSES

3 Ladies and gentleman, I will speak to you today about the Kimberley Process Certification Scheme, and will begin by giving a brief review of the important work of this international body. For those who are unaware of the background of the Kimberley Process, its start came about in 2000 with a meeting of the Southern African producer states in Kimberley, here in South Africa. With a set of brutal civil wars taking place in Africa, particularly in the western part of the continent, and the role of diamonds in financing these bloody conflicts, the participants were determined to find a way to stop this trade. They were also keen to assure consumers of diamond jewelry purchases that they were not perpetuating the conflicts and assisting in the horrific abuses of civil rights. As for the diamond industry, it was quick to see the vital need to stamp out this appalling trade, and in July, 2000, the World Federation of Diamond Bourses and the International Diamond Manufacturers Association, the two major organisations representing the diamond trade, created the World Diamond Council. The strength of the World Diamond Council is that it does not simply represent the diamond industry. It also has representatives from the producer states and the international banking sector-indeed from just about every sector with a vested interest in tackling the problem. The role of the World Diamond Council is to develop, implement and oversee a tracking system for the export and import of rough diamonds to prevent the exploitation of diamonds for illicit purposes. I will come back to the work of the World Diamond Council a little later because it is important to understand the work that it continues to carry out in countering false claims that the diamond industry has not taken enough action to stamp out the trade in conflict diamonds. As we will see, countering these claims needs a complete and integrated media campaign. Let me briefly return to the Kimberley Process Certification Scheme and outline its operations. It is a system that imposes extensive requirements on members to certify that shipments of rough diamonds do not contain conflict diamonds. The Kimberley Process now numbers 47 members, including the European Community, which effectively gives it a membership of 73 countries. Its high level of success is seen in the fact that Kimberley Process members account for approximately 99.8% of the global production of rough diamonds. This still means that 0.2 % of diamonds cannot be properly accounted, and that is still too much. But we should compare that with an estimated 4% of global production that were regarded as conflict diamonds at the start of this decade.

4 Today, the only country where rebel forces control diamond producing areas is in the Ivory Coast. As I said, these conflict diamonds constitute less than 0.2% of global output. Here, the Kimberley Process is working with the United Nations and neighboring countries to prevent these diamonds entering the legal market. Meanwhile, most of the countries which suffered from conflicts funded in part by diamonds: Sierra Leone, Angola, Liberia and the Democratic Republic of Congo (DRC) are now at peace, albeit sometimes tenuous. I would also note that the cessation of conflict in these areas was in part a result of the efforts of the diamond sector to stem the flow of money to the rebel forces. The Kimberley Process continues to monitor events even though the conflicts have ended. The Kimberley Process consists of a Chair and Secretariat: the Chair is responsible for overseeing the implementation of the Kimberley Process Certification Scheme, the operations of the Working Groups and Committees, and the general administration of the Kimberley Process. The Chair of the Kimberley Process is selected by Plenary and rotates annually between members. The current Chair is the European Union, headed by the deputy head of the European Commission, Karel Kovanda, who is a Czech national. In the past, the Chair was held by Botswana, Russia, Canada, and during its early years, South Africa, when the man heading the organisation was our own Abbey Chikane, who is today the State Diamond Trader. Plenary meetings provide participants, industry leaders, and civil society members with the opportunity to meet face to face to discuss and assess the implementation of the certification scheme. A Final Communique outlining the decisions and events of the meeting are made public and are posted in the Documents section of the Kimberley Process website. The working groups monitor and assess implementation of the Kimberley Process Certification Scheme by all members. The diamond industry, via the World Diamond Council, and civil society groups, such as Global Witness and Partnership Africa Canada, are also integral parts of the Kimberley Process. These organisations have been involved with the Kimberley Process since its very beginning and continue to contribute to the effective implementation and monitoring of the scheme. As I mentioned a minute ago, Turkey, which initially applied for membership in the Kimberley Process in 2003, became the 47th Kimberley Process member country when it was accepted into the organization on August 14th. With this large and important country's continuing development as a producer of diamond jewelry, its accession to the Kimberley Process is vital. Situated as it is between Europe and Asia, diamonds can easily be smuggled from one continent to another. Turkish diamond exports say this has been going on for many years, with diamonds smuggled in and out of the country with relative ease. We must hope and be confident that this will now come to an end.

5 Another important recent development was the admission in May of Liberia as a participant following an assessment made by an expert mission sent to the country. The mission, led by the European Commission together with representatives from Botswana, industry and civil society, went to Liberia in March and concluded that it met the conditions for admission following the UN Security Council's decision on April 27th to lift its diamond embargo on Liberia. It will now be able to export its rough diamonds legally to other Kimberley Process members. As I said earlier, this leaves Ivory Coast as the only country subject to UN diamond sanctions. I should make clear that the Kimberley Process is determined to investigate all cases of diamond smuggling. In this respect, the World Diamond Council organized a delegation to Zimbabwe, which I was part of, following that gems from that country were being smuggled into South Africa where they are being certified as legitimate and exported abroad. As Eli Izhakoff, the World Diamond Council chairman, so succinctly put it: "Such illegal exportation presents a clear threat to the integrity of the legitimate export process as a whole." [ADD PERSONAL COMMENTS] t:1!tilhi[ll Similarly, Venezuela, which was on the brink of expulsion from the Kimberley Process due to allegations of extensive smuggling and its refusal allow a delegation visit, stepped back from the edge in June. The country undertook to submit an annual report containing diamond production and export data. What these cases have in common is the understanding and acceptance that countries have an overwhelming duty to abide by the Process and its rules. Ejection from membership of the body is a painful blow, and reacceptance is neither automatic nor a speedy process. I would like, at this point, to return to the work of the World Diamond Council. I doubt that there is anyone in this hall who did not either read, hear about or see the film Blood Diamond which was released last December. Featuring Hollywood stars such as Leonardo DiCaprio and having a racy plot, the movie had all the elements needed to make it a blockbuster. I can tell you that many members of the diamond industry had, ifnot sleepless nights, then certainly a great deal of fears about the film. Our main concern was that it was out of date. We did not dispute the fact that the situation as depicted was largely true. But it was true in 1999 and completely out of touch with the situation in This is where the World Diamond Council came into play. Rather than adopt a defensive stance, the World Diamond Council decided to be pro-active. It asked the producers of Blood Diamond to provide viewers with historical context, it launched

6 an educational web site called DiamondFacts.org offering information to jewelry retailers and manufacturers, consumers, the general public and the media. In this age of instant news, it also ensured that knowledgeable diamond industry representatives were available for interviews with all the major news outlets and many of the smaller ones in the United States. Above all, the World Diamond Council took advantage of the film to explain how Africa has benefited from diamonds and to show consumers that their diamonds were ethically mined and traded. So, we see that the World Diamond Council has been highly successful in its work, but it is not resting on its laurels. Indeed, some important members of the Council have even suggested expanding its mandate. This call was made by De Beers Managing Director Gareth Penny at the World Diamond Council's fifth annual meeting earlier this year in Jerusalem. He called for the W orid Diamond Council to address issues arising from the governance of the diamond industry, its business ethics, environmental issues and to demonstrate awareness of the issues facing the communities in which the industry operates around the world. Ladies and gentlemen, I would like to finish my address by describing to you a recent initiative launched by the World Federation of Diamond Bourses, of which I happen to be president, which is a perfect fit with the work of the Kimberley Process. It's called the WFDB Mark and is a type of brand aimed at diamantaires who are members of the 27 diamond bourses around the world. Our intention is boost consumer confidence, and the WFDB Mark will be awarded only to members who are in good standing. Based on the WFDB' s code of ethics, the Mark will be marketed chiefly to retailers who want to ensure they are buying diamonds from a reliable source. Approved members will have the right to display the WFDB Mark logo, which will be accompanied by a member number, and use it as a quality mark. Our intention with the WFDB mark is to shore up the integrity of the loose diamond industry and trade, just as the Kimberley Process was able to at the rough end of the diamond pipeline. These are essential activities, for when you deal with a luxury product, its reputation and that of the business community that handles it are of vital importance. We are only as strong as our weakest link. I thank you.

7 Kimloerley t-'rocess II1II evle ERNESTBLOM PRESIDENT WORLD FEDERATION OF DIAMOND BOURSES

8 The Kimberley Process was, born out. of a meeti'ng in Kimberly in the year 2000, the aim of which was to formulate~ a response to the use of diamonds in the financi.ng of civil war. UDiamondsare forever~f it is often s8fd. But lives are not. w~ must spa re neonle the ordeal

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10 47 members including the European Community, providing a total of 73 countries. Member countries account for 99.8% of global production of rough diamonds. Th,e Ki'm,berley tj'rocess AS OF SEPTEMBER 2007

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12 The Kimberly roicess First KP Chairman Abbey Chikane South Africa Current KP Chairman Karei Kovanda European Union

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