April 23, 2014

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Why The Kimberley Certification Process For “Conflict Free Diamonds” Must Be Abandoned (Part One)

The Kimberley Process Certification is fatally flawed, providing cover for serious human rights violations while purporting to guarantee conflict-free status. Part One of a two-part series examines the problems.

Marc_choyt

 by Marc Choyt

The big family secret in the jewelry sector is that the Kimberley Process Certification (KP), which created a system to prevent blood diamonds from entering the supply chain, now certifies blood diamonds as “conflict free.”

Yet, jewelers continue to rely on this now discredited system as an assurance of ethical diamond sourcing. This is an unacceptable practice and its time for KP to be abandoned by jewelers and the public, now.  

Just two years ago, no responsible jeweler would have argued that the KP was an obstacle to moral veracity. Many, including jewelers such as myself, who pioneer ethical practices, held out hope that the framework might include human rights and environmental issues.

But the opposite has become true. 

The lynchpin concern has been the conflict-free certification of diamonds from the Marange region of Zimbabwe, one of the richest fields in Africa. Rape, torture and killing has been well documented in these diamonds fields. 

At a recent conference on Zimbabwe diamonds, Ambassador Gillian Milovanovic, U.S. chair of the KP said, “KP certification is not designed to address human rights, financial transparency, economic development or other important issues.” The Mugabe government has claimed the rights to Marange (with an estimated value of $800 billion) and used the revenue (blessed by KP) to prop up his despotic state.

However, violence by a government perpetrated on its people is not considered a violation of the KP “conflict free” label. 

But this is only one symptom of a deeply corrupt chain of custody system supported by an industry diamond ringthat wants to keep doing business as it has always been done. Among many jewelers, the deaths in diamond-funded wars of three million Africans has been treated merely as a marketing problem. As Stalin said, ‘one death is a tragedy, a million deaths just a statistic.’

They key issue that has never been addressed is that many of the same people complicit in diamond-related atrocities lead and shape KP and other  “responsible” initiatives created to bring ethics to the diamond supply chain.  

The Kimberley Process In Practice

The name “Kimberley” comes from the Earl of Kimberley, an English nobleman for whom the original diamond mining area of South Africa was named. The first diamonds were found in deep “Kimberlite” veins, which sink into the ground like giant carrots. Kimberley, the location of the first DeBeers mine, was named after the DeBeers Farm. The founder of DeBeers, Cecil Rhodes, started the company in 1871.   

With the support of the United Nations, KP was started in 2003 in reaction to the blood diamond conflicts, to track rough diamonds, not polished diamonds. Even before KP certified in 2011, Zimbabwe blood diamonds were still being illegally exported through Dubai, or directly to cutting centers in India, South Africa, and elsewhere, where they are cut and resold as “conflict free.”  

These days, Zimbabwe diamonds are boycotted by the EU and U.S. However, they are still entering the supply chain through cutters in India who can purchase them at a discount, cut them, and sell them at a high profit undermining more legitimate suppliers.  

No one knows what percentage of diamonds are black market diamonds or blood diamonds. I’ve heard that the percentage might be between 10 and 20 percent. 

Kimberley Abandoned By Critical Stakeholders

However, harsh criticism of KP ineffectiveness is old news.

Key original stakeholders of KP that brought credibility to the KP scheme, including Martin Rapaport, Ian Smillie, and Global Witness, (the NGO which exposed the blood diamond issue) have publically denounced the scheme.

Calling for its dissolution and end is the next step.  

Diamond business accounts for about 50 percent of total jewelry revenue, which explains why mining for diamondspropping up the “conflict free” deception has been the practice of all but a few jewelers. Such actions place the entire jewelry sector at risk. Jewelers depend upon the apathy and ignorance of the public.

What we have is a public relations disaster waiting to happen.  

This multilayered crisis in the diamond sector was recently outlined in Martin Rapaport’s editorial, Moral Clarity And The Diamond Industry. Though Rapaport has been a very respected advocate for fair trade jewelry issues, he puts forth a set of proposals that unfortunately, still fall short.

To start, they rely too heavily upon Chain of Custody (CoC) certification. 

Chain of Custody Obfuscation

Much of the (CoC) certification is driven by the Responsible Jewellery Council (RJC). The RJC, currently with over 400 members, was initially created by large mining interests, retailers and representatives from trade groups. Their stated mission:

“To advance responsible ethical, social and environmental practices, which respect human rights, throughout the diamond, gold and platinum group metals jewellery supply chain, from mine to retail.”

The focus on chain of custody is relatively easy to implement for RJC’s large mining and retail firms.  They can work within their network, acting like a de facto cartel.  

Essentially, CoC has gained favor because it creates an appearance of change without impacting mining for diamondssupply chains or the bottom line profit. Chain of custody is a distraction from the real issues of economic disparity generated from multinational mining companies, which can continue to treat producer nations like colonies. It does not address the environmental issues, such as dirty gold.

Nor does it concern itself with the 20 million small-scale miners that supply much of the source material for the jewelry sector. Historically, blood diamonds come from these small scale miners. 

In a Fair Jewelry Action interview, former RJC CEO Michael Ray, outlined candidly that a company can be an RJC member and still sell gold mined by children in Peru. It is possible for an RJC member, or any jeweler, in fact,  to sell KP-certified blood diamonds from Zimbabwe as “conflict free.” Case in point: when mining giant and RJC member Rio Tinto was granted RJC certification, the standards were questioned by mining watch groups.

Chain of custody is a red herring.

By focusing on CoC, a large company does not have to address communities most impacted by the resource curse.  As I will discuss in the next post, we must cut through the current deceptions by diving into the jewelry sector’s heart of darkness and begin to support the emerging ethical jewelry pioneers.   

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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