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Jewelry Industry

Ethics in the 21st Century Diamond Jewelry Industry (II/III): The Kimberley process and beyond

This is the first of a three part articles series on ethical issues related to the jewelery industry.
Part 1 examined the more recent history of mining for precious stones, while Part 3 will present a more close up of the problems encountered in specific areas as well as point out what high street consumer can do to bring about change.

The author has co-founded a diamond jewelry business in Japan, but has relocated to Toronto, Canada, since. One problem he was facing was what to do about the ethical issues involved.

By: Michael Werneburg, @mwerneburg, founder of Caritas

Following a call from the United Nations for action, ten years ago, in May 2000, the Kimberley Process Certification Scheme (KPCS) was proposed, and the diamond industry responded to the threat of sanctions and boycotts by forming the World Diamond Council to find an industry-based solution.

Given shape at a meeting of representatives from government, industry, and non- governmental organizations, the KPCS was designed from the outset explicitly to prevent conflict diamonds from entering the global market. The ultimate aim was the prevention of the slave labour, violence, and criminal exploitation that allowed for wars to be funded by the sale of diamonds. The basic mechanism was simple: if the funding for violent rebel groups could be removed, the wars would end.

The KPCS was adopted by diamond producing countries throughout the world as well as by the major consuming nations in Europe, Asia, and North America. The process requires:

  • that no country trading in diamonds will deal with a non-compliant country
  • that all compliant countries will put in place a certifying agency that has the ability to validate the origin and production of diamonds in that country
  • that all shipments of rough diamonds crossing an international border will be secured in a sealed and tamper-proof container and accompanied by a uniquely numbered certificate that identifies the content of the package and the source of the diamonds

Though the KPCS is entirely voluntary, the ease by which shipments of diamonds can be determined to be either compliant or non-compliant was originally intended to give the process strength.

The Kimberley Process explained

Explanation of the Kimberley Process

Initially, the KPCS was successful. Prior to its 2003 inception, conflict diamonds made up as much as 15% of the global trade. With the implementation of the KPCS, that figure fell to a fraction of one percent. The diamond-buying public was assured that blood diamonds had been all but eradicated from the market.

But it didn’t take long for critics to point out a number of failings in the system. Diamond – producing countries were found circumventing the KPCS through smuggling. This happened in the Republic of Congo in 2004 and Cotê D’Ivoire in 2006 — both countries simply smuggled diamonds out to friendly neighbors. Moreover, paper certificates were liable to forgery or could be produced officially through bribery or deception. And the KPCS only covers rough diamonds; anyone capable of cutting their own diamonds is exempt from the process altogether.

And then there’s Zimbabwe. As Human Rights Watch puts it:
"Zimbabwe’s armed forces, under the control of President Robert Mugabe, are engaging in forced labor of children and adults and are torturing and beating local villagers on the diamond fields of Marange district. The military seized control of these diamond fields in eastern Zimbabwe after killing more than 200 people in Chiadzwa, a previously peaceful but impoverished area, in late October 2008. Marange has become a zone of lawlessness and impunity, a microcosm of the chaos and desperation that currently pervade Zimbabwe.

In its recent plenary meeting in Namibia, the Kimberley Process Certification Scheme, an international body that oversees the trade of diamonds, decided not to suspend Zimbabwe from participation, nor bar the export of its diamonds, despite finding serious human rights abuses and rampant smuggling during its own investigation of the Marange diamond field. Its weak excuse was a technicality in its mandate that defines blood diamonds as those mined by abusive rebel groups, not by abusive governments."

For a full accounting of the sickening situation unfolding in Zimbabwe, see this Fast Company article or the original report from Human Rights Watch.

See also the following BCC America report on the situation in Zimbabwe:

Critics are now blasting the KPCS as broken and incapable of its basic role. Martin Rapaport, a member of the KPCS plenary, published a scathing indictment of the failure of the process in Zimbabwe. Rapaport’s editorial appeared in the February 2010 issue of his eponymous magazine—the reference periodical in which world diamond prices are published. In a high profile attack subtitled “The Kimberley Process and World Diamond Council are a sham”, Rapaport wrote:
"The KP definition of conflict diamonds does not address human rights violations and does not include blood diamonds. It is a legal definition established by governments to limit the scope and authority of the KP. The KP is a highly politicized process controlled by governments for governments. Its primary function is to protect governments and their revenue—legitimate or not—from rebel forces and consumer boycotts. The KP is essentially agnostic when it comes to human rights."

and

"Blood diamonds from Marange, Zimbabwe, have been issued Kimberley Process (KPCS) certificates and imported into the cutting centers, where they were cut and polished and then sold to dealers, jewelry manufacturers and retailers.Tens of thousands of carats of blood diamonds are now in dealers’ inventories and jewelers’ showcases—and are being actively sold to consumers."
With blood diamonds once again entering a market already plagued by ecological and child labour problems, it’s clear to us as diamond retailers that it’s time to act. In the next article, I’ll explain the course that Caritas is exploring.

Michael Werneburg, Twitter: @mwerneburg, is the founder of Caritas, an ethical jewelry business based in Tokyo, Japan.

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Discussion

One comment for “Ethics in the 21st Century Diamond Jewelry Industry (II/III): The Kimberley process and beyond”

  1. Diamonds are beautiful. But it is indeed important not to forget under which conditions people and even children have to work so that we are able to deal with jewelry and even wear jewelry.

    I appreciate very much your post and I think this has to be made much more public so that more people are aware of this working conditions in certain parts of the world.

    Posted by Frank | April 1, 2011, 6:33 pm

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