In search of pure diamonds

Updated: Nov 27 2012, 09:02am hrs
The Kimberley certification process needs to keep pace with worlds challenges

Gillian A Milovanovic

Almost a decade ago, the consensus-based Kimberley Process (KP) certification scheme established minimum requirements for global rough diamond production and trade. Today, to keep pace with a changing world, the KPs 77 participant countries, observers from industry, and civil society must ensure the KP evolves with the global marketplace. Diamonds are an important part of Indias economy. Last year India exported almost $2 billion of rough diamonds, and $28 billion worth of cut and polished diamonds. India was one of the KPs founding members and it was KP Chair in 2008.

The KPs founders agreed unanimously that diamonds must stop funding rebel movements violence. Recognising that millions of people depend on diamonds for their livelihood, they also sought to keep demand for legitimate diamonds strong by preserving the gems reputation.

The KP set a benchmark--and a level playing fieldfor the diamond trade worldwide. No matter where rough diamonds are produced or traded, the KP certificate assures consumers they have not funded rebel groups abuses.

Though the KP has much to be proud of, a critical touchstone, its definition of a "conflict diamond", no longer meets todays challenges. It does not adequately address rough diamonds linked to other types of conflicts.

Diamonds attractiveness depends on their association with purity. Other industries have suffered due to the loss of consumer confidence. There is concern that the association of some diamonds with violence risks infecting the entire diamond market with a negative image. Consumers want the assurance that their diamond is untainted by any kind of violence.

Now is the time for action. Consensus on a KP definition that addresses these concerns, preserves confidence, and forestalls the erosion of sales is the ideal outcome for all from producers through to consumers. Failing KP action, some countries or some elements of the diamond industry may move to independently address evolving consumer expectations.

Consultations with government, industry and civil society suggest KP reform should focus on these key elements:

* KP certificates must continue to ensure freedom from conflict; certification need not address human rights, financial transparency and development, which are better advanced through the exchange of best practices;

* KP certification should apply only to conflict/violence that is demonstrably related to rough diamonds and independently verified and not to isolated, individual incidents;

* KP safeguards should be implemented site-by-site, consistent with systems for other conflict minerals such as the International Conference of the Great Lakes Region certification system.

The governments of the Kimberley Process, encouraged and supported by industry and civil society, have the capacity to manage these risks and take the evolutionary steps required to ensure a solid future for diamonds. They must now develop the will to reach consensus on what defines a conflict diamond. Failure to do so is a losing proposition as reform is an issue that will not go away.

The loss of consumer confidence in diamonds could severely impact nations whose citizens are most dependent on the diamonds in their soil or on the millions of jobs created by the diamond value chain. In the long run, the true cost of failing to tackle this challenge will be far greater than the effort required to forge a consensus on an updated definition for the Kimberley Process conflict diamond.

The author is chair of the Kimberley Process