Global Witness Presses Industry To Monitor Self Regulation

June 27, 2003

Global Witness Presses Industry To Monitor Self Regulation

Global Witness called on the World Federation of Diamond Bourses and the International Diamond Manufacturers Association, who are meeting for their biennial presidents' meeting from June 29 to July 2 in Sun City, South Africa, to strengthen their efforts to prevent conflict diamond trading. The human rights organization, which first called attention to the conflict diamond problem, says it is particularly concerned about the diamond industry monitoring its members for compliance with the industry's system of warranties. "Without adequate monitoring, the self-regulation is nothing more than a rubber-stamping exercise with no credibility behind it," says Corinna Gilfillan, campaigner with Global Witness.

In October 2002, the WFDB and IDMA passed a resolution requiring all members to implement self-regulatory measures to prevent conflict diamonds from entering the legitimate diamond trade. This includes a system of warranties requiring that members buy diamonds only from companies that provide guarantees that their diamonds do not come from conflict sources.

Global Witness is calling on the WFDB and IDMA to take the following actions:

  • Survey and monitor members' implementation of the self-regulation and efforts to educate the diamond industry about the Kimberley Process and relevant regulations.
  • Assess efforts by member organizations to expel any company in violation of the self-regulation and to publicize this information in accordance with the guidelines outlined in the resolution.
  • Press for regular, independent monitoring of the Kimberley Process to ensure that the process works and is not open to abuse.
  • Take actions to prevent diamonds from funding terrorism, including by pressing governments to implement anti-money laundering initiatives as is being done under the USA Patriot Act.

The Kimberley Process Certification Scheme, launched in January 2003, requires governments and the diamond industry to implement import/export control regimes on rough diamonds to prevent conflict diamonds from fueling conflicts and human rights abuses. The KPCS was negotiated by governments, civil society organizations and the diamond trade. Global Witness believes the Kimberley Process urgently needs to be strengthened to include regular, independent monitoring of all national diamond control systems.

Meanwhile, the WFDB issued a press release saying that the primary focus of the presidents' meeting will be the difficulties being faced by small and medium-sized companies in the international diamond community, especially following the implementation of De Beers' Diamond Trading Company's Supplier of Choice program.

The state of the small and medium-sized manufacturers has been a prominent fixture on the WFDB agenda, ever since the organization's current president, Shmuel Schnitzer, was elected to the post in London in 2002. In May, Schnitzer led a delegation from the WFDB to London, where it conducted meetings to discuss the issue with DTC . "We came away from the meeting with the impression that the DTC appreciates the structure of our industry, where the small and medium sized diamond firms form the broad base of a pyramid, and without whom the larger companies would find it difficult to exist," Schnitzer said. "However, the DTC's recent decision to cut its sightholder list by about one third apparently concentrates the supply of rough diamonds among an even more limited group of larger companies." Representatives of De Beers and the DTC have been invited to address the presidents' meeting in Sun City.

Among the other issues on the WFDB agenda in Sun City will be the Kimberley Process; the Russian and Indian diamond exchanges' preferences for corporate instead of individual bourse membership; the Shanghai Diamond Exchange's request for WFDB membership; the establishment of associates or associate bodies of the WFDB; HPHT-treated diamonds; the prospects of an international diamond trade show for members of WFDB-affiliated bourses; and a range of gemological matters, including the SI-3 diamond grade, the ongoing business of the International Diamond Council, and the relationship of the WFDB and gemological institutes in general.

The WFDB holds a presidents' meeting every two years, between years in which a World Diamond Congress is held. At congresses, a full general assembly of the federation is gathered. The 2003 presidents' meeting is being hosted by the Diamond Dealers Club of South Africa.

by Peggy Jo Donahue

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