House Passes Conflict Diamond Bill; Kimberley Process Reaches Agreement

November 29, 2001

House Passes Conflict Diamond Bill; Kimberley Process Reaches Agreement

The U.S. House of Representatives passed the Clean Diamond Trade Act, and the Kimberley Process meeting in Gabarone, Botswana, reached a consensus recommendation for a worldwide system of rough diamond controls to stop the conflict diamond trade.

The House bill, H.R. 2722, passed 408-6, after intense negotiations with the Bush administration to ensure compatability with U.S. national interests.

The legislation now goes to the Senate for consideration.

The administration's influence on the bill led to substantial changes from the original, which was devised by a coalition of legislators, industry and human rights groups earlier this year. The key changes are:

• The final bill gives the president the authority to decide to prohibit imports of rough diamonds from countries failing to institute a controls system to prevent conflict diamond trading. The president's decision may be influenced by the consideration of U.S. foreign policy and essential security interests. The original bill mandated sanctions to be automatically triggered against countries without a system of controls.

Matt Runci, president of Jewelers of America and executive director of the World Diamond Council, says wartime concerns caused the change. "The administration didn't want its hands tied with sanctions on sensitive countries that could be assisting with the U.S. war effort," he says. Runci reports the administration said more presidential control would protect the U.S. from World Trade Organization challenges, though the bill's crafters say the bill addressed any danger that the WTO could win challenges.

• The passed bill covers only nations importing and exporting rough diamonds, where the old version included countries that deal in polished diamonds and finished diamond jewelry. The president would still have the authority, however, to block shipments of diamond products where credible evidence suggests conflict diamonds were included.

Runci says the administration wanted the U.S. bill to be compatible with the requirements of the Kimberley Process, which only includes countries that import and export rough diamonds. The administration also said including polished diamonds and finished jewelry would be too burdensome for the industry and could also lead to WTO challenges. Legislators and human rights groups were disappointed with this change, as they lobbied hard for its inclusion. But Runci says the change definitely makes monitoring of the conflict diamond certification system easier.

Other significant changes in the final bill included an immediate effective date for the bill after passage, instead of six months. Also, the president is required to report twice – not once – yearly to Congress on why sanctions have not been imposed on any country without a certification process. The bill also authorizes $5 million in funding in each of two years, instead of one, to nations which face financial difficulties setting up programs to stop conflict diamonds.

Though there is disappointment among some human rights organizations and legislators that the bill was weakened, representatives of these groups and the WDC agree the importance of the legislation's passage outweighed its flaws. "This legislation gives impetus to the Kimberley Process, an international effort to track diamonds from their point of origin to ensure that only clean stones find their way to retailers around the world," says Runci. The next hurdle for the bill's advocates is lobbying the Senate to pass its version of the Clean Diamond Trade Act.

Process Progress
The Kimberley Process reached its own long-awaited consensus yesterday on a set of recommendations to eliminate the trade in conflict diamonds. It will present its agreed-upon system of certificates for rough diamonds to the United Nations in December. "All of us in the international diamond industry look forward most eagerly to the Kimberley Process recommendations being implemented swiftly by individual countries, so the legitimate supply chain can be secured, the trade in conflict diamonds eliminated and consumers worldwide certain that their diamonds are untainted," says Nicky Oppenheimer, chairman of De Beers, in a statement applauding the Kimberley consensus.

The Bush Administration is reportedly not pleased with the Kimberley Process's requirement that all diamond importing and exporting nations sign on to the new certification system, reports the New York Times. Instead, the administration says countries should be allowed to either participate in the Kimberley Process or devise an equivalent system of controls. But human rights advocates and others who created the certification system say the Kimberley Process system will only work if all importers and exporters are a part of it. The United Nations meeting in December will be the next forum at which such matters will be discussed.

- by Peggy Jo Donahue

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