Kimberley Certified Diamonds

By Alyssa on April 30, 2013 at 12:35 pm

 

If you are shopping for a diamond, you may have come across the term “Kimberley Certified.” Even for professionals within the ethical jewelry industry, this term can be vague and confusing. For some, it is associated with ethical diamonds, and for others it signifies the exact opposite. In this article we attempt to define the Kimberley Process, comb out the many intricate complexities behind Kimberley Certification, and objectively lay out the positives and negatives of the Kimberley Process Certification Scheme (KPCS). We hope that by the end of this article you will be better able to make an informed opinion about Kimberley Certified Diamonds.

It used to be that when you bought a diamond, you had no way of knowing its origin or history. But since the late 1990‘s the jewelry industry, as well as the general public, has gained an awareness of the dark and complex issues that have plagued the diamond trade throughout its long and sordid history. One major turning point in diamond industry reform was the creation of the Kimberley Process Certification Scheme (KPCS) in the early 2000’s. While the KPCS has significant shortcomings, it provided the impetus for change in the diamond industry, and continues to serve an important role today.

At Bario Neal we source ethical, traceable diamonds from sources that offer more stringent oversight than the KPCS whenever possible, including Namibian, Canadian, and certified Recycled diamonds. However there are some cases where Kimberley Process diamonds are the best option available. In this article we will give a brief overview of the KPCS and the impact it has had on the diamond industry.

History of the Kimberley Process

Conflict diamonds, also known as blood diamonds, are generally defined as diamonds that have been used to fuel conflict and human rights abuses. As you’ll see below, the KP employs its own definition of “conflict diamond.” Conflict diamonds have funded brutal civil wars in Angola, Democratic Republic of Congo, Cote d’Ivoire, Liberia, and Sierra Leone that have resulted in the death or displacement of millions of people. [2] As small, highly valuable goods, diamonds can be easily smuggled and used in black market trading. Diamonds are untraceable except in certain very specific circumstances, and have historically been mined in war zones, partly because alluvial diamond mining requires few tools and resources since it happens on the surface of the earth. For these reasons, diamonds have also been used for money laundering purposes, and by terrorist groups such as al-Qaeda to finance their activities. [2]

In the late 1990‘s the public learned through media sources that rebel groups in countries in Central and Western Africa were illegally using funds from the diamond trade to subsidize conflicts against legitimate governments. [1] In May 2000, Southern African diamond-producing countries met in Kimberley, South Africa to discuss a method to halt the trade in conflict diamonds, and ensure that diamond purchases were not funding terrorism against legitimate governments. By December 2000 the United Nations General Assembly had adopted a landmark resolution supporting the creation of a certification scheme for rough diamonds. Negotiations between governments, the international diamond industry, and civil society organizations resulted in the creation of the Kimberley Process Certification Scheme in November 2002. The KPCS lays out a set of requirements for controlling rough diamond production and trade. Its implementation began in 2003. [3]

 

Who Participates

Any country that is willing and able to implement the requirements of the KPCS may participate in the KP. The KP reports that as of November 2012, it had 54 participants, representing 80 countries, with the EU recognized as one participant. The World Diamond Council, which represents the international diamond industry, and civil society organizations such as Partnership-Africa Canada, also participate in the KP. Implementation of the KP in a given country is monitored through review visits and annual reports, as well as by exchange and analysis of statistical data. KP members now account for approximately 99.8% of global diamond production. [3]

 

How it Works

In order to qualify as “conflict free” under the KP, a member must meet the minimum requirements of the KPCS, including the implementation of national legislation and institutions, import and export controls, and commitment to transparency and the exchange of statistical data. Participants can only legally trade with other participants who have also met the minimum requirements. International shipments must be accompanied by a KP certificate, ensuring that the diamonds are conflict free. [3] Diamond producers are responsible for purchasing the Kimberley Certificates that accompany their diamond shipments, but the cost may be displaced onto buyers or others further along the supply chain.

A typical example of the supply chain in the diamond industry goes something like this: miners obtain a KP certificate from a government authority for a batch of diamonds. The miners then go to a buying house to trade their diamonds. The buying house has a responsibility to make sure the certificates are valid, and if it deems them so, it buys the diamonds. The buying house then sells the diamonds to a dealer, which often involves exporting to another country. At this point the Exporting Authority is responsible for validating the KP certificate, which involves getting a declaration from the exporter, or the buying house, that the rough diamonds being exported are not conflict diamonds. Once the Exporting Authority receives this statement and validates the KP certificate, the dealer then brings the diamonds to a cutter. The dealer then sells the cut diamonds to a distributor, which often involves importation. The Importing Authority is supposed to receive an email with the arrival of the rough diamond shipment stating the carat weight, value, country of origin, name of exporter or buying house, and the serial number of the KP certificate. The Importing Authority is responsible for inspecting the contents of the shipment to make sure the seals have not been tampered with, and that the contents match the information on the KP certificate. Once all of this information has been verified, the Importing Authority releases the shipment to the dealer, who sells the diamonds to jewelers. The jewelers then sell the diamonds to customers. As you can see, there are many steps along the way from mine to hand, each of which could potentially involve corruption, human rights abuse, and fraud–an issue we will address later in this article.

 

Positive Impacts of the KP

The KPCS was the first effort in the international diamond industry to stop the flow of diamonds that were funding horrific civil wars in Central and West African nations in the late 1990’s and early 2000’s, and it initiated the movement toward transparency in an industry that was notorious for having none. The civil wars that were funded by conflict diamonds are now either over or close to ending.  Conflict diamonds have been reduced from approximately 4-15% to less than 1% of the global diamond supply since 2003, in part because of KP implementation. [4] In an interview with a reporter from JCK, Ian Smillie, formerly of Partnership Africa Canada, said, “a collapse of the KP . . . would be catastrophic for the industry and for the poor countries that depend on diamonds for a portion of their economies. A return to where we were in the 1990’s with diamonds being used for guns and drugs and money laundering, is almost inconceivable after all we’ve learned, after all we’ve created, and after all we’ve done.” [5] It is not unthinkable that similar conflicts may arise in the future, but with the work the KP continues to do, they are hopefully far less likely, especially as the main source of funding has been nearly eliminated.

Many countries in Africa, like Namibia and Botswana, have developed an exemplary diamond trade, sometimes including the whole process from mining to cutting and polishing, all in a safe working environment where workers are well-trained. In fact, the diamond industry comprises over 40% of Namibia’s annual export earnings, and in Botswana the diamond export industry ensures free education for every child up to the age of 13. [4] Both the Namibian and Botswanian programs are DeBeers initiatives, launched as a way to reform the company and repair its bad reputation as an exploitative corporation. While the KP is not responsible for this development, diamonds coming from these mines in Namibia and Botswana receive KP certifications.

Sierra Leone is now at peace, and in 2006 exported approximately $125 million in diamonds. [4] An estimated 10 million people around the globe are directly or indirectly supported by the diamond industry. [4] Along with DeBeers, progressive government programs in these nations, and NGO’s, the KP helped establish this new reality in the diamond industry.

With the recent expansion of diamond mining in developed countries like Canada, Australia, and Russia, it is important to remember that there are African economies that rely on their diamond sectors. Many of the diamonds coming from those African countries are KP Certified diamonds. Developed countries have the resources to make their ethical diamonds more accessible, but by choosing to purchase those diamonds, we take business away from countries who actually need the business more.

 

Where the KP Falls Short

One of the most obvious shortcomings of the KPCS is that it addresses only a narrow set of issues present in the diamond industry. A Kimberley Certificate certifies that a diamond has not financed rebel groups in war-torn countries, as KPCS’s definition of “conflict” only encompasses violence against legitimate governments. But other issues such as child labor, torture, rape, extreme poverty, environmental harm, and violence perpetrated by governments are sad realities of the diamond industry, and are not addressed by the KP. [6] In other words, a Kimberley Certified diamond may still have been mined using child labor, or by adults making less than a dollar a day, and it may have come from a mine that is destroying the local environment. A Kimberley Certified diamond may also be tied to killings, beatings, rape and torture by a government army. Zimbabwe, which continues to allow horrific violence in its Marangue diamond fields, is still allowed to be a member of KPCS–the violence is not against Zimbabwe’s government, but against its people. Early this year, Emily Armistead, a Global Witness diamonds campaigner said, “Global Witness investigations point to a serious risk that diamond revenues [in Zimbabwe] could be used to fund violence in this year’s election.” [7] In the US, there are sanctions in place against Marange diamonds, making them illegal. [5]

As an important side note, Global Witness pulled out of the Kimberley Process in December, 2011, deeming it outdated and a failure after 9 years in action.  As it’s justification for leaving KPCS, Global Witness director Charmian Gooch stated, “The scheme has failed three tests: it failed to deal with the trade in conflict diamonds from Cote d’Ivoire, was unwilling to take serious action in the face of blatant breaches of the rules over a number of years by Venezuela, and has proved unwilling to stop diamonds from fueling corruption and violence in Zimbabwe.” [8] The diamond trade continues to fuel conflicts in Zimbabwe, Venezuela, Cote d’Ivoire, and the Democratic Republic of the Congo today, yet these countries are all a members of the KPCS. This is because as an international agreement, the KP has no overarching governing body. Instead, it essentially functions on the honor system. Each member is expected to enforce the rules and regulations of the KP itself. The KP is comprised of many governments from different parts of the world, each of which functions very differently, with diverse values and perspectives. In order to reach the agreement in the first place, many compromises had to be made.

Additionally, the KPCS is easily avoided by smugglers who bring diamonds from countries that are not Kimberley certified into countries that are. This is because the KP does not require diamonds to be traced to their mine of origin, only their country of origin. [8] Those smuggled diamonds are then sold as if they had come from the Kimberley certified state. Kerin Lanyi of The Rough Stone talks about this issue in an interview we did with her last year. It could be argued that the KP helped avoid a black diamond market in Zimbabwe by not kicking them out, as Alex Twersky explains in an interview we did with him last March. However, if the KP maintained stricter controls and regulations, it could be helping to reduce the diamond black market in more honorable ways.

Another problem with the KP is that many of the labor abuses that occur in the diamond industry happen during the cutting process. Because the KP only covers rough diamonds, or diamonds that have not yet been cut, a diamond may receive its Kimberley Certification, and then be shipped off to a cutting factory that employs children or does not properly train and protect its employees from dangerous side effects such as silicosis. You can read more about the dangers of the diamond cutting process in a recent article we posted.

Unfortunately there is also a problem with fraudulent Kimberley Certificates, as the real thing costs money, but is also easily replicated. [9] Diamonds are often exported from poorer to wealthier countries, making this an especially complex issue. A common question on online diamond buyer forums is, “how do I know the Kimberley Certificates are valid?” Buyers pay extra to cover the costs of Kimberley Certificates, however it is nearly impossible to ensure that the batch of diamonds they are purchasing will come with a valid certificate. Again, the Kimberley Process is essentially based on the honor system, and without any overarching authority to regulate the process, corruption is inevitable. Adding an additional layer of complexity to the cost issue is the fact that smaller stones aren’t worth enough to encourage Kimberley Certification. Thus most small, or “melee,” stones don’t come with the minimum ethical standards of a Kimberley Certification. Bario Neal is working on this particular issue by sourcing its melee diamonds from certified ethical suppliers, which you can read more about here.

After reviewing many of its shortcomings, it is clear that the KP’s most serious issues include the narrowness of its definition of “conflict diamonds,” and its lack of ability to impose the narrow set of regulations it currently has in place. But over the past year, the KP has begun to undergo a major review, and it has proposed an expanded definition of “conflict diamond”: “a diamond whose extraction is directly associated with violence, regardless of actor”–meaning that the violence could be perpetrated by the government, a private security force, or a rebel group. [5] This still does not directly address the issues of child labor, environmental destruction, or extreme poverty, but it is an improvement. The KP is aware that in order to ensure the traceability of a diamond, it needs to move toward tracing the diamonds to individual mines rather than just the country of origin, however mine to market traceability through the Kimberley Process remains a far way off. Luckily, other organizations have begun doing just that.

 

Beyond the KP 

While the KP is far from addressing every issue in the diamond industry, it spawned a movement to overhaul the diamond trade, and that movement has inspired the creation of several organizations and innovative companies that are raising the bar for ethical standards in the jewelry industry, in particular by cutting out many steps in the diamond supply chain that allow for corruption and make regulation difficult:

  • Jeweltree is developing a new model for integrating all aspects of the jewelry industry through a system of membership with rigorous regulations and rules that must be followed. Ethical mines, cutting and polishing facilities, suppliers, and jewelers are all being connected by this organization. You can learn more about Jeweltree from an article we posted here.
  • The Diamond Development Initiative is an organization that is attempting to gather all interested parties to address the issues of the artisanal diamond mining industry, which encompasses most of the diamond mining in Africa, in order to optimize its beneficial impacts on the communities it affects.
  • Open Source Minerals is among only a handful of companies offering a new, ethical trading platform for the jewelry industry. They source fully traceable and ethical stones, gold and silver for jewelers.
  • Finesse Diamonds is another company that embraces ethical sourcing of high quality stones. They offer CanadaMark® diamonds from the Ekati Mine in Canada, which are laser inscribed with a hallmark making the diamond fully traceable. They also offer The Kalahari Diamond® from an ethical mine in Namibia where local workers are paid fair wages and trained well in safe facilities. The Kalahari Source will be available soon, which will be laser inscribed with a tracking number similar to that of the CanadaMark®, offering the first fully traceable African sourced diamond. And finally, they offer the new 88Cut® diamond, which are either CanadaMark® or Namibian diamonds that are cut in high tech facilities by well trained workers.
  • Inspira is a JewelTree certified company that acknowledges that the supply of diamonds and gemstones is finite and non-replenishable, that they were formed millions of years ago, and that we remove them from the earth for our enjoyment. They honor these products as rare resources, and acknowledge that there is a disconnect between ethical beliefs and buying behavior. They are able to source melee diamonds and gemstones from mines that are ethical regarding both the environment and human rights.
  • Fair Jewelry Action (FJA) is a coalition founded by Marc Choyt and Greg Valerio working on issues of human rights, environmental justice and sustainability within the jewelry sector. They run a comprehensive blog addressing these issues.
  • The Madison Dialogue is a cross sector initiative established to promote information sharing among companies, civil society groups and others seeking to encourage best practices, sustainable economic development, and traceable sources of gold, diamonds and other minerals.

Efforts to address the environmental and human rights issues of the jewelry industry are ever increasing. Bario Neal continually evaluates and improves upon its efforts to play a role in this movement. An important part of our effort, aside from offering ethically-sourced stones, is our dedication to informing our customers of the industry issues, and giving them the information they need to make a decision that is right for them.

To find out what type of diamonds Bario Neal uses, please refer to our sourcing page.

 

Conclusion

The Kimberley Process Certification Scheme has been essential in helping to nearly eliminate the trade of diamonds to support terrorism and violence directed at legitimate governments. While conflict diamonds have been a very real issue even in the past decade, and may still be today if it wasn’t for the KP, this is not the only issue presented by the diamond industry. Government-perpetrated violence, environmental destruction, human rights abuses, and lack of transparency continue to be present in the diamond industry today, and are not currently addressed by the KP. Thankfully, there has been a cross-sector effort, involving many different players in the jewelry industry, to help eradicate these other issues and enhance the positive impacts of the diamond industry on local communities. Though it may be inadequate in certain ways, the KP was the catalyst for this sea change, and we can thank it in part for helping to create an environment that encourages the development of ethical companies and civil society groups in the diamond industry.

 

[1] What Are Conflict Diamonds? http://www.diamondfacts.org/pdfs/industry/ConsumerBrochure.pdf

[2] Conflict Diamonds, http://www.globalwitness.org/conflict-diamonds

[3] KP Basics, http://www.kimberleyprocess.com/web/kimberley-process/kp-basics

[4] Diamond Facts, http://www.diamondfacts.org/index.php?option=com_content&view=article&id=86&Itemid=133&lang=en

[5] No, 25% of Diamonds Are Not Blood Diamonds. However…, JCK Magazine, 24 Jan 2013 http://www.jckonline.com/blogs/cutting-remarks/2013/01/24/no-25-diamonds-are-not-blood-diamonds-however

[6]Flaws in Kimberley Process Certification http://www.brilliantearth.com/conflict-free-diamonds/

[7] EU Warned on Blood Diamond Love Triangle, 12 Feb 2013, http://www.globalwitness.org/library/eu-warned-blood-diamond-love-triangle 

[8] Global Witness Pulls Out of Blood Diamond Scheme, Reuters, 6 Dec 2013, http://www.reuters.com/article/2011/12/06/ozatp-diamonds-ngo-idAFJOE7B500K20111206

[9]Efforts to Control http://www.brilliantearth.com/kimberley-process/

[10] An Interview with Alex Twersky http://bario-neal.com/blog/an-interview-with-alex-twersky-from-finesse-diamonds-about-kalahari-diamonds-ethical-diamond-sourcing/

 

 

Further Reading:

 

History Channel Documentary on Blood Diamonds: http://topdocumentaryfilms.com/blood-diamonds/

 

Comments (2)

Leave a Reply

Your email address will not be published. Required fields are marked *