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The Kimberley Process Certification Scheme’s 2013 plenary meeting is being held this week, and some attendees hope that the initiative’s shortcomings will be addressed.
As diamond market participants are well aware, the central aim of the Kimberley Process Certification Scheme (KPCS) is to curb trade in conflict diamonds. While member countries have done much to achieve that goal in the past decade, critics have recently started to raise the question of whether they’re doing enough.
That question is one of the issues set to be addressed at the KPCS’ 2013 plenary meeting, scheduled to take place from November 19 to 22.
What is the KPCS?
Though this year is being touted as the 10-year anniversary of the KPCS, the initiative’s website states that in fact it was initially discussed in the spring of 2000, when Southern African diamond-producing states met in Kimberley, South Africa, to talk about how to stop the trading of conflict diamonds. Their hope was that doing so would “ensure diamond purchases were not financing violence by rebel movements and their allies.”
Over the next two years, negotiations between governments, the international diamond industry and civil society organizations ultimately created the KPCS. By 2003, participating countries had begun to implement the rules it lays out, which include:
- implementing export, import and internal controls
- committing to transparency and the exchange of statistical data
- only trading with other participants who meet the minimum KPCS requirements
Currently, the KPCS has 54 participants that represent 81 countries. Together, they account for about 99.8 percent of global rough diamond production, as per the KPCS’ website.
2013 plenary meeting
Speaking at the meeting’s opening address, Susan Shabangu, South Africa’s minister of mineral resources, said that “given the turbulent times faced by the diamond industry since the global financial crisis,” the work done by the KPCS is now more important than ever, as per AllAfrica.
As a result, she said, KPCS members have for the past few years been considering the initiative’s “founding objectives and the extent to which they” have been fulfilled. China Daily quotes her as saying that this week’s meeting is particularly significant because ”the work of the Ad Hoc Committee on Reform will set the tone on how the KPCS ensues going forward.”
Welile Nhlapho, who is representing South Africa at the meeting, hopes that means he and other delegates will be able to “identify the organisation’s shortcomings and boost the struggle against conflict diamonds,” a recent Deutsche Welle article states.
Expressing a similar opinion, Shamiso Mtisi, a representative of the civil society coalition at the KPCS, told the same publication that the KPCS needs to expedite changes such as “mak[ing] mandatory the control and licensing of diamond mines, offer[ing] effective security and giv[ing] licenses to artisanal miners if needed.”
What has gone unspoken is the question of what will happen if the KPCS does not make the changes that representatives like Nhlapho and Mtisi are hoping for.
One possibility is that members will abandon the initiative. That has already happened in one case — last year, Diamond Investing News reported that Global Witness, an international non-governmental organization that played a key role in establishing the KPCS, had quit the KPCS on the grounds that it had been rendered “increasingly outdated” by its “refusal to evolve and address clear links between diamonds, violence and tyranny.”
“Nearly nine years after the Kimberley Process was launched, the sad truth is that most consumers still cannot be sure where their diamonds come from, nor whether they are financing armed violence or abusive regimes,” said Charmian Gooch, a founding director of Global Witness, in a press release.
While, as mentioned, there have thus far been no threats of departure, diamond market participants would do well to keep a close eye on what attendees have to say after the meeting.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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