If warring between NGOs and the UAE chair of the Kimberley Process continues, the entire initiative against blood diamonds is threatened.
The Kimberley Process (KP) – the international agreement designed to certify all diamonds, thereby exposing illegally-traded “blood diamonds” that might fund civil wars – was forged out of conflict, and appears as though it may soon be a fatality of conflict.
The warring party in this case is a group of 11 NGO’s that serve as Observers of the KP initiative. They are known as the Civil Society Coalition (CSC) and this year they boycotted the KP Chair for 2016, the UAE. They claim that the country is reluctant to confront its own transparency issues and that it has an antagonistic attitude towards civil society.
The KP has a tripartite structure composed of the participant countries, the mining companies and the NGOs in the field. It has a revolving chairman, who hails from one of the leading countries, and annual intersessional and plenary meetings are held in the chair’s country.
The main aim of the boycott by the CSC is to obtain action on transfer pricing, which the group says is rife in the Dubai diamond exchange. Transfer pricing involves the deliberate under-valuation of rough diamonds when they are imported so that the valuation can be sharply increased when exported to a trading hub. The NGOs say that transfer pricing is to the detriment of the producing nation.
The group of NGOs appears to be split on the need for the boycott and at least one NGO is contesting it. This division was revealed on 23 October, when Albert Kabuya Muyeba of the Centre National d’Appui au Développement et à la Participation Populaire (CENADEP) announced that the organisation had accepted the UAE’s invitation to attend the annual plenary meeting in Dubai next month. CENADEP acknowledged the efforts of the UAE over the past year to resolve not only its own internal issues, but to reinvigorate the KP into a proactive and effective force for change.
However, no sooner had Albert Kabuya Muyeba’s made his announcement on CENADEPs withdrawal from the boycott, than Danny Singoma, another representative of CENADEP, stated that the group would resume the boycott. He said that the CSC remained united in its boycott of the UAE. Circumstances surrounding this change remain murky. Internal correspondence I have seen indicates that Albert Kabuya Muyeba and CENADEP were put under pressure by PAC to retract their announcement. Yesterday (27 October), Zuzia Danielski, a spokesperson for PAC, told the diamond industry publication JCK that:
“The boycott is still in effect, and that is not going to change”.
It is clear the NGOs are divided between those wishing to engage with the UAE in order to implement change, and those who see disengagement as a means for progress.
Many observers question the intentions behind the NGOs boycott, on a number of grounds. First, they point to the fact that transfer pricing is a systemic problem for the diamond markets, that is not merely practiced in Dubai, but in all diamond trading hubs, including New York.
Second, they say that the UAE is aware of the problem and has sought to tackle it by holding seminars on the issue. They question the sincerity of the NGOs in targeting this issue as these seminars are designed to find a solution to the transfer pricing problem. The boycott prolongs the problem, and doesn’t solve it.
Third, and further to the last point, they say that the UAE has produced a broad set of best practices for rough diamond valuation. Their goal is to have all participants of the KP implement a system that provides real benefit of the producing nation.
Fourth, the UAE has used its chairmanship to strengthen the KP. It has mooted a series of reforms to the KP including the establishment of a permanent body to oversee the diamond industry. This will ensure continuity and break the deadlock imposed by the veto held by participants. The UAE has also proposed the establishment of a Fund to support KP-related activities of individual CSC members, so that they can participate in review missions and attend intersessional and plenary meetings independently.
The last proposal would bring an end to the hold that Partnership Africa Canada (PAC), a prominent Ottawa-based NGO, has over its African partners. PAC, despite effectively being the only non-African member of the CSC, serves as the coalition’s coordinator and controls the funding of the other members. Using this dominant position within the group, it speaks on behalf of its African partners. It can be argued this is often to the detriment of their interests. This would be particularly the case if the KP were to unravel.
Alan Martin, the research coordinator at PAC, recently told me that:
“I think when the plenary meeting happens next month in Dubai – our absence will make it very difficult for some governments to make decisions on key issues”.
The failure of the KP would have a devastating impact on the African diamond producing countries for whom the industry contributes a large part of their revenues, and for whom the KP prevents a return to the violence that gripped central and western Africa during the 1990s.
The KP has in many ways become a victim of its own success. By all but eradicating the existence of blood diamonds, the initiative has struggled to refine its purpose and it has become unwieldy in the process. This is largely due to the necessity for consensus decision-making by the participant countries, resulting in deadlock. Adding to the structural issues, the KP is also being eroded from within by the dissension.
In fact for some, the passing of the Kimberley Process into history would bring few tears. One of these is Global Witness, the NGO that for some eight years was the KP’s most powerful voice.
However at the end of 2011, it quit the KP, saying ‘Global Witness and a coalition of NGOs – the Kimberley Process Civil Society Coalition – have pushed continuously to make the KP work.
However, the shameful truth is the governments just won’t hold each to account…. The KP has failed to deal with the trade in conflict diamonds from Côte d’Ivoire, breaches of the rules by Venezuela and diamonds fuelling corruption and state-sponsored violence in Zimbabwe.’
For many, , however, the Kimberley Process is the only game in town, and it is too important to be destabilised by a single NGO venting its grievances with the UAE. Yet this is what is at stake if the infighting continues. Africa’s economy and security is at risk if its diamonds are again tarnished with blood. That would be a disaster for all those involved in the diamond business, from producing countries to the woman who wears diamonds round her neck, with pride.