Efforts to Control
Public outcry about diamond-fueled violence has led to the establishment of the Kimberley Process, an international diamond certification scheme. Unfortunately, the Kimberley Process misleads consumers and does not even attempt to stop the worst abuses in diamond mining.
The Kimberley Process
The Kimberley Process Certification Scheme is an international diamond certification system established in 2003. It focuses exclusively on stopping the trade in conflict diamonds – defined by the Kimberley Process as diamonds that finance rebel movements seeking to overthrow national governments. The Kimberley Process is made up of 80 member countries and includes participation from advocacy organizations and the diamond industry.
In theory, Kimberley Process member countries do not produce conflict diamonds, and they trade diamonds only with each other. All member countries must also attach Kimberley Process certificates to their diamond exports. By these arrangements, it is hoped that conflict diamonds will be kept out of the certified diamond supply. Regrettably, however, the Kimberley Process is easily evaded by diamond smugglers. Worst of all, it is so limited in scope that it grants "conflict free" certification to diamonds mined in violent and inhumane settings.
The Kimberley Process (Global Witness)
Diamonds and Human Security (Partnership Africa Canada)
Under the Kimberley Process, if a diamond has not funded the rebel side of a civil war, it is not considered a conflict diamond. The narrowness of this definition means that a diamond receiving Kimberley Process certification may still be tied to killings, beatings, rape, and torture by a government army. It may have been mined using child labor, or by adults earning a dollar a day. It may have destroyed the local environment where it was mined.
The Kimberley Process, in short, does very little to stop violence, worker exploitation, and environmental degradation tied to diamond mining – or most of the pressing ethical problems facing the diamond industry today. Some observers even believe that the Kimberley Process may be doing harm. By certifying unethically mined diamonds, the Kimberley Process shields human rights abusers. It also misleads consumers into believing that their diamonds come from certified ethical sources – when in fact, many diamonds approved by the Kimberley Process cause untold human suffering.
Stalemate on Zimbabwe Exposes Need for Kimberley Process Reform (Brilliant Earth Blog)
Kimberley Process: Zimbabwe Action Mars Credibility (Human Rights Watch)
Blood Diamonds are Still a Reality (Amnesty International)
Lack of Controls
The Kimberley Process certification system does not require diamonds to be traced to their mine of origin. Due to this lack of traceability, governments often give Kimberley Process certification to diamonds with unknown histories – making it easy to smuggle banned diamonds into the certified supply. “The government in [the Democratic Republic of] Congo has no idea where 40% of its diamonds come from,” notes Ian Smillie, a leading advocate for ethical diamonds. “They could be coming from Angola or Zimbabwe or even from Mars.”
Furthermore, the Kimberley Process does a poor job regulating the diamond supply chain. It does not require independent auditing of diamond buyers and sellers, permitting diamonds with unsavory origins to enter the diamond supply at any point. The diamond industry does ask retailers and manufacturers to provide a warrantee on their invoices that their diamonds are “conflict free”. But few retailers and manufacturers actually investigate the path their diamonds have taken, and most warrantees do not provide any meaningful assurances.
Diamonds: Does the Kimberley Process Work? (BBC News)
Loup holes: Illicit Diamonds in the Kimberley Process (Partnership Africa Canada)
Loopholes in the Kimberley Process (Global Witness)
Smuggling is rampant in the diamond industry, partly due to the failure of the Kimberley Process to enact stronger controls. The thriving black market in smuggled diamonds reduces transparency for consumers and makes it harder to prevent banned diamonds from entering the diamond supply. Diamond smuggling also contributes to criminal activity. For instance, diamonds are a favorite international currency for money launderers, tax evaders, drug dealers, and even terrorist groups such as Al Qaeda.
When diamonds are exported through illicit channels, no tax revenue is collected. Smuggling therefore deprives governments of funds needed for basic services, reducing the amount of money flowing back into diamond-producing communities. In some cases, government officials themselves trade in smuggled diamonds. In Zimbabwe, Robert Mugabe’s regime runs a giant smuggling operation, stealing hundreds of millions of dollars from the Zimbabwean treasury.
Diamond Smuggling Thrives in Zimbabwe (Bloomberg Businessweek)
Sierra Leone: Tap Into Power of Artisanal Mining, Analysts Say (allAfrica.com)
For a Few Dollars More: How Al Qaeda Moved Into the Diamond Trade (Global Witness)
Bin Laden's $20m African 'blood diamond' deals (The Guardian)
Venezuela, a country that annually produces an estimated 150,000 carats of diamonds, officially exports none. In 2005, Venezuela ceased issuing Kimberley Process certificates on its exported diamonds. Facing international criticism, Venezuela announced in 2008 that it would “self-suspend” from the Kimberley Process. The government explained that it would halt diamond mining and trading for two years, during which time it would improve oversight of the country’s diamond mining sector.
Despite these promises, Venezuela continues to allow diamonds to be mined and exported. Fully 100% of the country’s diamond supply is technically now being smuggled. Most diamonds are brought to neighboring Brazil and Guyana, where they receive false Kimberley Process certification. Partnership Africa Canada reports that Kimberley Process certificates accompanying fully one-fourth of Brazilian diamond exports are fraudulent.
Unregulated diamond mining wreaks environmental havoc in Venezuela (San Francisco Chronicle)
The Lost World: Diamond Mining and Smuggling in Venezuela (Partnership Africa Canada)
Smuggled Diamonds in the U.S.
The United States Government Accountability Office (GAO), an investigative arm of the U.S. government, has determined that diamond smuggling is a serious problem in the United States. In an alarming report, the GAO states that "domestically, the U.S. systems for reporting rough diamond statistics and for controlling imports and exports of these diamonds are vulnerable to illicit trade…."
Sadly, U.S. control systems do not prevent illicit diamonds from entering the U.S. diamond supply. In 2010, the U.S. government intercepted shipments from Ghana, Sierra Leone, and the Democratic Republic of Congo with counterfeit Kimberley Process certificates. Inspecting less than a fifth of diamond imports, customs officials found 14 shipments violating the 2003 Clean Diamond Trade Act, the federal law implementing the Kimberley Process.
Agency Actions Needed to Enhance Implementation of the Clean Diamond Trade Act (U.S. Government Accountability Office)
Comments on Annual Reports to the Kimberley Process by the United States (Partnership Africa Canada)
Our Vision: Fair Trade Diamonds
At Brilliant Earth, we believe that the Kimberley Process could potentially play a useful role, if it is completely revamped. But the most promising kind of diamond certification system has yet to be implemented: a system certifying fair trade diamonds.
More than a million diamond diggers in Africa earn less than $1 a day. A fair trade diamond certification system would give these diggers a fair price for their labor. It would also provide the ability to track diamonds back to specific mining cooperatives, while encouraging the observance of strong labor and environmental safeguards.
Fair Trade Gold Takes a Leap Forward (Brilliant Earth Blog)
Diamond Development Standards (Diamond Development Initiative)