A long-awaited diamond industry ‘chain of warranties’, aimed at halting the trade in conflict diamonds, is so general that it is virtually worthless, say NGOs that have been campaigning on the issue over the past four years. International negotiations on a certification system for rough diamonds will culminate at a Ministerial Meeting of the ‘Kimberley Process’, on November 5, in Interlaken, Switzerland.
The Kimberley Process aims to stem the trade in conflict diamonds through a diamond certification and verification system to be launched on 1 January 2003. Forty-five diamond producing, trading and marketing countries, including Switzerland, will establish new legislation and regulations. As part of this agreement, the diamond industry has repeatedly committed to developing a system of self-regulation to ensure that conflict diamonds do not enter the legitimate diamond trade. Details of the industry proposal have been delayed until this week.
At the World Diamond Congress, held in London on 27-29 October 2002, the diamond industry adopted the following resolution: “Each member organization undertakes to require its members to make the following affirmative statement on all invoices for the sale of rough diamonds, polished diamonds and jewelry containing diamonds: ‘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’.”
“This is not the auditable chain of warranties that the Kimberley Process has been discussing for more than a year,” said Ian Smillie, Research Coordinator for Partnership Africa Canada. “There is nothing auditable in it. There is no reference as to how records are to be kept, or for how long, no reference to technical details on stocks, carry-overs, accounting periods or issues of commercial confidentiality. There is nothing for governments to ‘legally endorse’; there is nothing for ‘independent auditors’ to verify.”
“Despite two years of repeated promises, the diamond industry has failed to deliver a detailed and credible self-regulation system that will stem the flow of conflict diamonds,” said Alex Yearsley, Lead Campaigner for Global Witness.
A global coalition of NGOs is calling on governments and the diamond industry to follow through on their commitments to stem the trade in conflict diamonds with meaningful action. “The clock is ticking. Governments and industry must take strong action to stop the trade in conflict diamonds, which has fuelled wars in Africa and funds terrorist activities,” said Amboka Wameyo of ActionAid. “There are no credible guarantees that this system will serve to break the link between diamonds and human rights abuses. For example, it is likely to do nothing to stop blood from being spilled on a daily basis in the diamond fields of the Democratic Republic of Congo,” Amnesty International said.
NGOs have sent a letter to Kimberley Chair Abbey Chikane and World Diamond Council Chairman Eli Izhakoff expressing their concerns. The letter is attached.
For further information, please contact:
Alex Yearsley or Corinna Gilfillan, Global Witness, Tel 44 207 272 6731, +44 (0) 7968 799 815
Partnership Africa Canada: Ian Smillie Tel (613) 728-9725; Bernard Taylor 613-237-6768
Amboka Wameyo, ActionAid, Tel 44 (0) 020 7561 7556
Open Letter to:
Mr Abbey Chikane, Chairman, Kimberley Process
Mr. Eli Izhakoff, Chairman, World Diamond Council
Dear Messrs. Chikane and Izhakoff,
Re WFDB and IDMA Chain of Warranties Proposal
All those participating in the Kimberley Process have worked for almost two years under the assumption that the diamond industry was preparing a ‘chain of warranties’ that could be used as part of the overall rough diamond certification system that is being developed by the Kimberley Process. Several governments have seen this chain of warranties as a key part of their own effort to monitor and certify diamonds as being conflict free. The promise, made to governments, civil society, and the media, was a fundamental basis for forward movement in our discussions. What has now emerged at the 11th hour is completely and totally deficient.
The final communiqué of the Kimberley Process Meeting in Moscow in July 2001 stated that ‘Participants welcomed proposals from the World Diamond Council for a system of industry self-regulation, based on a chain of warranties. Wherever possible these warranties would be legally endorsed by the respective governments. It was recognized that such a system of self-regulation would form an integral part of the overall certification scheme’.
The Twickenham Meeting communiqué in September 2001 noted ‘the useful role of self-regulation by the diamond industry which will fulfill minimum requirements.’ The Luanda Meeting in October 2001 made a similar pronouncement. The Ministerial Statement in Gaborone said, ‘We welcome voluntary self-regulation initiatives announced by the diamond industry and recognize that a system of such voluntary self-regulation contributes to ensuring an effective internal control system of rough diamonds based on this scheme.’
A World Diamond Council press release following the WDC Annual Meeting in March 2002 said that the WDC had ‘announced its own measures to combat the trade in conflict diamonds. Members of the Council unanimously voted for the implementation of a system of warranties that will endorse each transaction of rough diamonds in trading centers around the world.’ At that meeting, De Beers Chairman Nicky Oppenheimer said that with this decision, the diamond industry was turning words into action, ‘because it is right to do so. We have a clear duty to the societies in which we operate to act, and act effectively.’
Several versions of the Kimberley Process Working Document, including the most recent, have referred to ‘a system of warranties underpinned through verification by independent auditors of individual companies and supported by internal penalties set by industry, which will help to facilitate the full traceability of rough diamond transactions by government authorities.’
Through all this time, participants have awaited details of the industry scheme. We now understand that the one-paragraph statement on a ‘system of warranties’ issued by the World Federation of Diamond Bourses and the International Diamond Manufacturers’ Association on October 29, 2002 is the ‘system’ referred to in all the communiqués and working documents to date. This states that
Each member organization undertakes to require its members to make the following affirmative statement on all invoices for the sale of rough diamonds, polished diamonds and jewelry containing diamonds: “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 an/or written guarantees provided by the supplier of these diamonds.”
This is followed by a Code of Conduct
This is not the auditable chain of warranties that the Kimberley Process has been discussing for more than a year. There is nothing auditable in it. There is no reference as to how records are to be kept, or for how long, no reference to technical details on stocks, carry-overs, accounting periods or issues of commercial confidentiality. There is nothing for governments to ‘legally endorse’; there is nothing for ‘independent auditors’ to verify. There is no suggestion of pro forma documents, consistency, or anything other than a simple statement of authenticity to be issued by individual diamond dealers on their own cognizance.
If this is the ‘system of warranties underpinned through verification by independent auditors of individual companies’, it is wholly deficient. It is far too little, and it is far too late.
We are deeply concerned that this issue, along with the issue of how national statistics are to be collated and disseminated, and how the overall Kimberley system is to be monitored, remains unformed and inadequate to the task of dealing with the issue of conflict diamonds.
We feel that this very serious matter must be an issue for urgent discussion at the forthcoming Interlaken meeting.
As a very short space of time has been available since the World Diamond Congress, please accept the following names as representative of much wider civil society interest in this issue:
Amnesty International, London
Amnesty International USA, Washington
Global Witness, London
Medico International, Frankfurt
Press Release / Nov. 1, 2002