The Kimberley Process
Appeasement Comes to the Diamond Trade
By Charles Ellias and Richard Hughes
In the year 2002, the world diamond trade put into place a protocol known as the Kimberley Process Scheme, designed to address the so-called "blood" or "conflict" diamond issue. The following article looks at the potential impact of, and the lack of political consistency in, the Kimberley Process.
It's done. Over. Finis. Press the delete key. Burn the one-time pads. The world is now safe.
Whoa, pudner. What's over? War in Iraq? Did we finally nab Osama? No. We speak of a different war - a conflict over blood diamonds. With the recent signing of the Kimberley Process Scheme, it is suggested that a large stone is out of our collective shoes.
But while some might label the Kimberley Process a milestone agreement that will save our trade tremendous grief, we believe following these guidelines will actually chain a millstone around the necks of American diamond suppliers and jewelry retailers.
How so? Read on.
In the late 1990's, it came to the attention of certain human rights groups that rebel armies in Sierre Leone and Angola were enslaving local populations and forcing them to mine diamonds. The rebels then used these diamonds to fund their armies and, in the process, committed countless atrocities.
Congress quickly piled on. The solution? Ban corrupt carbon! Segregate the diamond business. If the rebels can't sell their diamonds, they won't be terrorizing the locals, right? Of course! Pure unadulterated genius!
Only one problem. There is no reliable method of determining the origin of a diamond.
|The Thai government seized a large quantity of opium and dumped it into the sea. I asked [Jimmy Yang] if any of the twenty tons had really been dumped in the ocean. "Oh, yes! Oh, yes!" Jimmy laughed. "All twenty tons were dumped into the ocean - but luckily there was a ship in the way. Not an ounce got wet."
Sterling Seagrave, Lords of the Rim
Lest we be labeled callous mercenary thugs, may we state the obvious. We are just as outraged by the abuse of human rights in Africa as any charter member of Global Witness. But the question is not whether one supports the torture and killing of innocents, but how to best eliminate it. And with the Kimberley Process, we find a protocol that not only does nothing for human rights, but that contains more liability than a fully-gassed Ford Pinto with two broken taillights.
How so? Let's start with the notion that a seal placed on a parcel in a Third-World nation will certify the origin of the contents. Ah heck, let's not even consider the Third World. How about a stamp on a parcel in a First-World nation? Consider the Ramparts scandal in Los Angeles, where multi-kilos of illegal drugs in police lock-up went bye-bye. How good are those seals? Only as good as the salaries of those with access to the vault.
Need another example? A recent Pentagon audit found over $2.3 trillion in expenses that could not be accounted for. While members of Congress wring their hands about a partisan million or three, dozens of tanks and other major weapons systems have literally vanished and never a discouraging word is heard.
As a nation, when are we gonna start looking at the big empty, meaning our taxpayers' pockets? For if a tank or thirty-three can go missing in the land of the free, how difficult will it be for a few small rocks to go AWOL in Angola? Really, based on the evidence, what right have we to point fingers?
Conflict of Interest
Now consider the Kimberley Process Scheme. It requires all diamond wholesalers affix a rider to the invoice stating that such stones are guaranteed to come from "conflict-free zones." The same is recommended for retailers. Specifically:
|The seller hereby guarantees that these diamonds are conflict free, based on personal knowledge and/or written guarantees provided by the supplier of these diamonds.|
The Kimberley Process also calls for this statement to be included on all invoices for the sale of rough, polished and diamond-bearing jewelry. And with this simple sentence, we are told, we can make a difference.
Jeepers, we get all tingly-pingly just thinking about it. The Kimberley Process can prevent human rights abuse - another bullet need not be fired - long-suffering nations will finally know peace.
Why? Because in the post-Kimberley world, there's just no way that a diamond from, say, Angola, might bounce across a few borders into South Africa and get mixed into, God forbid, a parcel from that nation. Absolutely no way.
Why? Because the invoice says so. Because no one along the way will dare salt parcels with conflict diamonds. Every crystal, no matter how miniscule, will be watched from mine to mounting. No one ever misrepresents origin and every stone will be traceable.
We are all safe. Trust us.
But it gets better. The Kimberley Process also suggests the following on our invoices:
|The diamonds herein invoiced have been purchased from legitimate sources not involved in funding conflict and in compliance with United Nations resolutions.|
Legitimate sources not involved in funding conflict? So the diamond people of South Africa were at the forefront of stopping apartheid? We do not recall Nelson Mandela speaking of how diamond dealers were his champions? Anyone foolish enough to believe this probably also believes that apartheid was simply about segregated drinking fountains and restrooms.
And what about diamond rough stockpiled during apartheid? Will those diamonds be destroyed instead of sold? If not, why not? During the 1980s, why was it that the big bad Krugerrand was boycotted and not the "blood diamonds" of South Africa? We are just looking for a bit of consistency here. If we as a nation are so opposed to profiting from atrocities against humankind, then why didn't we stand up and lobby Congress to pass laws against these diamonds? The trade in these diamonds was exponentially larger than today's conflict diamonds.
The Kimberley Process smacks of airport security checks post-9/11. Seizing nail clippers and x-raying old ladies' shoes might make some feel better, but will do absolutely nothing to stop future attacks. You know this - we know this. Kimberley is simply a weekend retreat for the naïve. World to diamond trade - it's now Monday.
But we take issue not just with the mechanisms of the Kimberley Process, but with the entire premise. The very idea that diamonds are somehow to blame for atrocities in Africa is ludicrous. Unlike the trade in weapons and drugs, where a very real cause-and-effect case for the application of mace can be made, the trade in precious stones features no such smoking gun. Diamond is an inert substance. It cannot kill anything.
Daniel and Goliath aside, it's politics that kill, not a stone. The world is filled with scores of countries where human rights atrocities regularly occur and yet where nary a pretty pebble is found. Think Rwanda, think Ethiopia, think Indonesia, think Iraq, think Israel/Palestine. The most egregious omission of the Kimberley Process is that it does absolutely nothing to address the underlying political problems that brought the conflict diamond issue to the forefront.
Bullets and Bibles
|Imagine you are an idiot, and imagine you are a member of Congress. ah, but I repeat myself.
Government rarely misses beat when it comes time to regulate, even when the facts are altogether contrary to its actions. For a glimpse of how such things work, let's look at a couple examples of Washington do-goodery.
Every year the bright lights in the capital are called on to certify whether or not the rest of the world's nations allow religious freedom or support terrorism. Guess what? The lists they produce are nothing except an illusionist's trick - where human rights concerns hover in front of our eyes - only to vanish into back-room smoke when it comes time to actually write law. Take religious freedom. China typically gets the thumbs-down for the suppression of religious cults and free speech. But missing on Washington's bad-for-bibles list is Saudi Arabia, where not only is the Christian good book a banned tome, but where even more lenient interpretations of the Koran are verboten. Call us dense but, Kee-rist, this is a nation where Porky the Pig cartoons are banned because, duh, eating pork is forbidden by the Koran, and yet the great minds in Washington are so occupied with the yellow peril that they can't pay attention to a few loony Muslim terrorists mouthing sweet nothings like: "we will not rest until we have killed you infidels and all of your progeny."
And what of the government's terrorism list? Take a gander at that from the year 2000. In the very year before the notorious Sept. 11 attacks, the US State Department cited Iran, Iraq, Syria, Libya, Cuba, North Korea and Sudan as state sponsors of terrorism. Now look real close. Notice something missing? How about we spot you a few letters. Give us an A, give us an F, a G, an H.
Yes indeedistan, in the list produced just before 9/11, the big A was MIA, despite being home to Osama bin Laden and despite the fact that the US shock-awed Osama's camps in that nation with cruise missiles in 1998.
Lordy! Why didn't Afghanistan make the terrorism list? And for petrol's sake, why didn't Saudi Arabia make the religious suppression list? Welcome to the American Political Repertoire Theater's presentation of Grease, courtesy of your sponsor, Big Oil. With Afghanistan, multinational oil companies wanted to build a pipeline across the country, and if Afghanistan were on the terrorism list, it would have been forbidden. As for Saudi Arabia, the US government again willingly overlooked its suppression of religious freedom because that nation's petrodollars funded so much of the "democracy" that we never tire of lecturing the rest of the world about.
Again, we are looking for a bit of consistency. But digging beneath the pithy public political pronouncements, we find sanctions and trade embargoes have more to do with pure power politics than humanitarian concerns. Like a Rush Limbaugh morality lecture, the charade is over once you catch el-Rushbo popping pills behind the curtain.
Just say: "baaaahhh"
With the above in mind, we have to ask why the gem trade so willingly wilted when Congress and the human rights campaigners came calling for a game of pin the scarlet letter on the idiot.
Rather than bending over, we should have told the Feds that, despite the best intentions in the world.
Controlling the trade in conflict diamonds will be even tougher than controlling the trade in illegal drugs, and.
The Feds' success record at the above totally disqualifies them from substance suppression, and.
There is simply no reliable/cheap method of determining the origin of a diamond, and.
Sanctions to control the 5% of problem diamonds would needlessly harm those mining and trading a product that is more than 95% clean.
This isn't just a case of the cure being worse than the disease, but where the cure produces strange red spots and death within 48 hours! Unfortunately, our sheep-i-fied gem trade was so frightened of being tattooed with the human rights abuser/terrorist label that they willingly consented to a ridiculous law. And now, following the Kimberley Process, diamond wholesalers and jewelry retailers are left completely sheared, with nary a nub or three to keep them warm. Baaaahh.
I guarantee it!
How so? We speak of that little matter of a "guarantee."
Guarantee (noun) -
• a written assurance that some product or service will be provided or will meet certain specifications
• a pledge that something will happen or that something is true
- Source: WordNet 1.7, © 2001 Princeton University.
When a jewelry retailer guarantees a diamond comes from a "conflict-free zone," they leave themselves open to legal ravage.
As a "fer instance," let's say the purchaser brings the stone back six months down the line and says:
You say this diamond is conflict-free? I don't believe you. I think you sold me a diamond mined by rebels in Sierre Leone. I think a young boy - one who watched his sibling get his arm chopped off - was forced to dig that stone. I know this because I saw it on TV!
Just what will be the jewelry retailer's response?
Here, here, my good man. This is patently false. Pureed poppycock! When I bought this stone the invoice included a statement at the bottom guaranteeing it came from a conflict-free zone. Just look at the invoice from my supplier. The guarantee is located right under my wholesale cost.
And then customer says the two magic words: "Prove it." At that point, the jewelry retailer realizes that the conflict diamond is still in his shoe, but now the sharp point is embedded in a real nerve.
Legal straightjacket: Pre-January 2003 Diamonds
We are aware of, and appreciate that a large number of bright, sincere and globally-aware individuals worked countless hours putting together what they believed was an acceptable agreement, one that both addressed human rights concerns and protected the diamond trade.
While the Kimberley Process is an honorable attempt at making things right, its language has opened a vast chain of liability pain. In particular, its "protection" sets a dangerous precedent for an industry obtaining products from virtually every point on the planet. We believe the language of these protocols is a mistake, leaving our industry open to cynical manipulation by both politicians and special-interest groups with less-than altruistic intentions. With money-laundering laws that will impact our industry currently under discussion in Washington, it is all the more imperative that we not just roll over and play dead - or we may well end up that way.
Having rained both feline and canine on the Kimberley charade, just what is our solution? Glad you asked. In our decidedly unhumble opinion, more appropriate language would read something like this:
The seller has attempted to provided conflict-free diamonds, based on personal knowledge and/or relying upon information provided by the supplier(s). To the best of the seller's knowledge, the diamonds invoiced herein have been purchased from legitimate sources not involved in funding conflict and in compliance with United Nations' resolutions. Due to the fact that it is virtually impossible to trace the exact origin of individual diamonds, this is neither a guarantee nor warranty of conflict-free origin.
A wise man once declared that telling the truth beats lying every time, if for no other reason than it's easier to keep the story straight.
The above statement strikes a chord for that reason, because it is honest, something any jeweler can repeat - hand on holy book - with no danger of breaking out into a cold sweat.
And if you choose to follow the Kimberley Scheme? If you get in line like a good little lamb and add the Kimberley statements to your invoices, you are certifying those diamonds as conflict free. This represents an absolute guarantee, but, sadly, one that cannot be proven. Thus you as the seller could be in violation of the law. Can you smell the courtroom?
At that point, the true meaning of "conflict diamonds" will be driven home, as well as the meaning of two other words.
What, pray tell? For starters, we speak of A-P-P-E-A-S-E-M-E-N-T.
And, of course, there's that other nasty little word, the one that truely scares the bejesus out of jewelers. How about we spot you a few letters. Give us an R, give us an E, give us an F-U-N-D.
Think about it. And then next time the regulators come calling, just say "naaah" rather than "baaah." And demand our industry leaders do the same.
Hughes, Richard W. (2000) Blood from a stone.
Hughes, Richard W. and Leber, Brian (2003) Banned! Burmese gems in the crossfire.
About the Authors
Charles Ellias is a consultant for gem artists, lapidaries, wholesale diamond and gemstone dealers, insurance companies, retail jewelers, personal property appraisers, attorneys, independent adjusters, and consumers. He has taught courses on manufacturing arts, appraisal sciences, consumer courses on jewelry and gemstones, along with instructing insurance companies and appraisers on jewelry appraisals and appraisal review.
Richard Hughes is one of the world's top experts on ruby and sapphire and has written on a number of topics related to gems and gemology. He is the author of the classic Ruby & Sapphire , and is webmaster and is webmaster at Pala Gems and his personal web site, www.ruby-sapphire.com.
This article was penned in mid-2003 and first appeared in The Guide (2004, Vol. 23, Issue 1, Part 1, Jan.-Feb., pp. 1, 4-7, 15). This web edition is quite close to what Charles and I originally sketched up, and contains material edited out of the print version.