Kimberley Process to Launch in November; Group Addresses Criticisms

March 27, 2002

Kimberley Process to Launch in November; Group Addresses Criticisms

Delegates at the Kimberley Process meeting in Ottawa, Canada, March 18-20, announced its secure trading network for diamonds will formally launch in November 2002. The Kimberley group also addressed specific criticisms of the network, created to prevent conflict diamonds from entering the legitimate trade.

The Kimberley plan will require each rough diamond exporting country to issue certificates with sealed containers of diamonds guaranteeing the gems are conflict free. Rough importing countries will check the certificates and containers to be sure no additional diamonds have been added.

After rough diamonds have been vetted conflict free, subsequent sellers will take part in a voluntary industry system in which they will continue to warrant diamonds are conflict free at each point in the diamond trading, cutting, jewelry manufacturing and retailing network.

Cecilia Gardner, executive director and general counsel of the Jewelers Vigilance Committee, attended the Ottawa meeting and outlined the Kimberley Process response to criticism of its certification plan leveled by human rights groups and the U.S. General Accounting Office.

• Administration. Despite protests a central administration is needed for the new diamond trading network, a majority of Kimberley participants concluded administrative functions can be handled by the individual governments, the industry's World Diamond Council, or the Kimberley Process's plenary chairman. A technical committee was formed to review this decision and finalize it by the November 2002 launch date.

• Sharing Data. Critics of the Kimberley Process wanted the group to have a base where data would be collected and shared. In Ottawa, the WDC was asked to perform this function and it accepted. The WDC will maintain specimens of all countries' certificates, in case one is disputed; it will keep a database of all countries' legislative initiatives to implement the Kimberley Process; and it will collect production figures and import/export statistics to ensure large numbers of diamonds aren't escaping the secure trading network. A technical group will also review this Ottawa decision before the November 2002 launch, says Gardner.

• Monitoring Compliance. Critics of the Kimberley Process wanted the group to more carefully monitor compliance with the certification trading network. But the Kimberley group says this function will be handled by existing systems. For example, if a complaint is received that a country is violating the rules of the network, representatives of the Kimberley Process governments will form a review commission and report their findings to the larger Kimberley group for action. Specific punishments will be delivered to proven violators by the government where the violation occurred. The U.S. Customs, for example, will be authorized by law to punish Kimberley violators importing to America. Critics also wanted outside auditing of the industry's voluntary system of warranties. But Gardner says this is taken care of by each diamond company's personal auditors, who each year will affirm that the companies they audit are maintaining records of the warranties coming in and the warranties being issued.

• World Trade Organization Concerns. A specific committee of experts on WTO law met prior to Ottawa to answer criticisms that the new secure trading network, might risk WTO challenges. The committee concluded that the network should just go forward, since it's unlikely it will run into major WTO problems, even if it has to exclude a country for non-participation in the Kimberley Process. To avoid WTO challenges, the U.S. government had wanted the Kimberley Process to accept non-participating countries, as long as they had a "functionally equivalent" certification system. But the group decided to maintain the position it will bar participants from trading with non-participants in the Kimberley certification system.

by Peggy Jo Donahue

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