Diamond Scheme Nears Completion Amid Skepticism

In a monumental decision, diamond producers and importers meeting in the central Swiss town of Interlaken on Tuesday brought to a end two years of talks and negotiations by agreeing to implement the Kimberley Process certification scheme initiated in 2000.

Named after the South African mining town where the process was started, the Kimberley Process was chaired by South Africa and involved more than 30 governments, the European community and the diamond industry.

The aim of the process is to establish minimum acceptable international standards for national certification schemes for trade in rough diamonds and to halt the illegal trade in uncut gemstones that fuel conflicts.

"The certification will be recognized by the United Nations and will bind everyone who is involved in the diamond trade from those producing and selling to those who are importing and those who are processing," Phumzile Mlambo-Ngcuka, South African minerals and energy minister, told a news conference.

Diamonds a deadly reality in Africa

For years rough diamonds have proved a lucrative funding source for corrupt government officials and ruthless rebel leaders in war-torn areas in Africa. According to the United Nations, poor African countries, such as Angola and Sierra Leone, often use the revenues from diamond-mining to fund and sustain bloody civil wars, conflicts, murder, stockpile arms and displace and maim thousands.

The glittery gems are ideally suited for this "blood trade." They are of indeterminate origin, fairly easy to smuggle over porous borders and worth a fortune.

According to official estimates, conflict or blood diamonds make up four percent of the $7 billion a year global market in rough stones.

Kimberley scheme on the heels of EU proposal

The newly-adopted Kimberley scheme includes some 50 nations involved in mining, producing or working rough diamonds. Starting Jan. 1, 2003 most of the countries will begin using certificates that detail the origin of rough diamonds and oblige buyers to reject consignments without the necessary paperwork.

The latest move echoes a similar radical proposal put forth by the European Commission in August this year which stated that rough diamonds will only be allowed into the EU if they have a certificate showing that they do not come from conflict zones and are accompanied by a certificate of origin.

NGOs say provisions don't go far enough

But now as then, several non-governmental organizations have raised doubts about various loopholes which are unlikely to be plugged by the Kimberley Process certification scheme as well as the lack of independent monitoring.

"NGOs are deeply concerned that there is still no system of regular, independent monitoring of all national diamond control systems," numerous NGOs, including Global Witness and Amnesty International, said in a joint statement. "Without this, the overall process remains open to abuse," they said.

Several NGOs are also worried that gem smugglers could easily get around the system of an accompanying certificate of origin by passing the stones through at least one country before being exported. Another concern remains that diamond traders might now become lax about monitoring the origin of uncut diamonds, once the new system is in place.

A question of trust

Host nation Switzerland has conceded that while the certificates would solve some issues, the process still had obvious flaws.

"The certification scheme will enable us to ensure consumers that the diamonds they buy do not finance any weapons," Swiss Economics Minister Pascal Couchepin told Reuters. "But this certification scheme is not perfect. We know that our solution is only partial."

Couchepin also acknowledged that the scheme is based to a large extent on trust as the world’s diamond producers have agreed to a voluntary process of self-regulation as have governments.

"We have negotiated with sovereign governments and we must trust those governments," Couchepin said. "If somebody cheats, public opinion will punish them."