Business, Boycott & Bureaucracy: The Kimberley Process Certification Scheme and the Global Quest for Conflict-Free Diamonds

Transcription

1 Business, Boycott & Bureaucracy: The Kimberley Process Certification Scheme and the Global Quest for Conflict-Free Diamonds Prepared for presentation at the 7 th Pan European Conference on International Relations Stockholm City Conference Centre, September 9-11, 2010 Holger Meyer Ph.D. Candidate Department of International Affairs The University of Georgia holgerm@uga.edu Comments welcome! Working draft - Not for citation without the author's permission Abstract The trade in so called conflict or blood diamonds has fuelled devastating conflicts in countries such as Angola, Liberia, Cote d'ivoire, the Democratic Republic of the Congo and Sierra Leone. The Kimberley Process Certification Scheme (KPCS) is an international commodity tracking system, designed to prevent the trafficking in these stones. Jointly created by diamond-exporting countries, industry and civil society, the KPCS imposes extensive requirements on its signatories to enable them to certify shipments of rough diamonds as conflict-free. Based on an exceptional WTO-waiver and employing a distinctive approach to multi-stakeholder diplomacy, it stands out as a unique tool to advance international security and conflict prevention. While a substantive literature has evaluated the success of the KPCS from the perspective of international law, few scholars have examined the stakeholder s diverging viewpoints on benefits, burdens and future perspective of the scheme. This paper attempts to fill this gap in the literature by elaborating the interplay of economic and security concerns in shaping the KP. Analyzing interviews conducted with representatives of the diamond industry, government officials, and NGO spokespersons it provides a comprehensive assessment of their diverging evaluations. The responses suggest that the prevailing dissatisfaction with the scheme is rooted in the ongoing dispute about the KPs future area of responsibility rather than in a disappointment with its past accomplishments. Critically assessing the challenges to and future perspective of the KPCS, the paper concludes with an analysis of the scheme's usability as a model for regulating trade in other commodities that have the potential to fuel domestic and international armed conflict. I would like to thank Dr. Susan Ariel Aaronson, Associate Research Professor of International Affairs at George Washington University, for her helpful comments and suggestions. Research funding from George Washington University s Center for International Business Education and Research (CIBER) is also gratefully acknowledged. 1

2 Introduction During the second half of the last century, the trade in illicitly mined diamonds had become a major means for financing large scale internal conflicts in countries such as Angola, Liberia, Cote d'ivoire, the Democratic Republic of the Congo and Sierra Leone (Hirsch 2001; Hirsch 2001; Campbell 2002). UN General Assembly resolution 55/56 defines these so-called conflict diamonds as rough diamonds which are used by rebel movements to finance their military activities, including attempts to undermine or overthrow legitimate Governments (UN General Assembly 2001,1). While some sources claim that conflict diamonds have had a world market share of up to 25% (Lamptey 2002), the generally accepted figure for the late 1990s is 4 per cent (Wright 2004, 702). It is estimated that during Sierra Leone s decade long civil war alone, some $300 to $450 million in diamond revenues were taken out of the country of which over 90% bypassed government coffers and exited through illicit channels via neighboring Liberia, Guinea or nearby Cote d Ivoire (Hirsch 2001). Although the Revolutionary United Front (RUF) rebels were the main benefactors of these illicit diamond proceeds, reports suggest that government forces, as well as the intervening Economic Community Of West African States (ECOWAS) cease-fire monitoring group and some West Africanbased Lebanese diamond traders benefited from the smuggling of conflict diamonds as well (Gberie 2002; McGreal 2000). In another prominent case, the Uniao Nacional para a Independencia Total de Angola (UNITA) reportedly amassed about $3.7 billion in diamond revenues between 1992 and 1997 an amount which by far exceeds the sum it received in aid from the USA and its allies during the Cold War (Grant and Taylor 2004, ) When large scale campaigns by non-governmental organizations (including Amnesty International, Global Witness, and Partnership Africa Canada) brought the issue to the attention of a larger audience in consumer countries, an unprecedented coalition of national governments, corporations operating in the diamond industry, industry associations and NGOs was formed to curb the flow of these 2

3 illicit stones into mainstream markets. Their efforts resulted in the implementation of the Kimberley Process Certification Scheme (KPCS), an international certification protocol for all rough diamonds traded globally. It basically represents an export and import control regime. Producer countries control the production and transport of rough diamonds from mine to point of export. Shipments of rough diamonds are sealed in tamper-resistant containers and accompanied by a Certificate of Origin issued for each shipment. Importing countries will inspect the seal and the certificate at the time of import. Imports of rough diamonds not accompanied by a certificate issued by a Kimberly Process participant are prohibited, as are exports to non-participants. As of today, the scheme encompasses 49 members (representing 75 countries, with the Member of the European Union counting as one single participant), industry groups and NGOs. Research Question & Hypothesis The KP was deliberately designed as a tripartite process. However, the current lively public, political and scholarly debate about the scheme s efficiency and viability is not surprisingly dominated by perspectives and assessments proliferated by NGOs (the third leg of the tripartite setup) in the international media. While official governmental statements do come occasionally into view, the perspectives of the diamond industry appear to be remarkably absent from this debate. In order to avoid the drawing of premature conclusions about the success of the process by adopting the point of view of one group of stakeholders, it is essential to consult all factions involved in the implementation of the KP. It is often implied that for the diamond industry, the Kimberley Process is nothing more than a PR instrument. Chaim Even-Zohar 1, for instance, asserts that most people you talk to will give you the party-line: anything that helps to preserve consumer confidence in diamonds is worth it. As long as the 1 Even-Zohar is the principal of Tacy Ltd, a Tel Aviv-based consultancy specializing in all aspects of the international diamond business. 3

4 consumer believes that KP is working and that diamonds are clean, the KP has served its purpose from a business perspective. I surely agree with that. You will not find diamond merchants that will argue against Kimberley, as no one would argue against the virtues of motherhood, the virtues of clean water and the beauty of a clean environment (Even-Zohar 2009). This paper is intended to address both of these issues. First, it attempts to provide a balanced view on the Kimberley Process by portraying and interpreting the perspectives of members of all three stakeholder groups involved in its creation and implementation NGOs, the World Diamond Council, and national governments. Second, it evaluates the party-line argument by analyzing interview responses of industry representatives and comparing them to those of government officials and activists. Ten years after the implementation of the Kimberley Process Certification Scheme, this paper attempts a review of the scheme from its stakeholders perspectives. By doing so it intends to shed light on the ongoing discussion within and among the stakeholder groups about achievements, shortcomings and future of the scheme. Central research question: Why and in how far do perspectives on the effectiveness of the Kimberley Process Certification Scheme differ between NGO representatives, government officials and members of the World Diamond Council? Will be guided by the following primary hypothesis: Primary Hypothesis: The current dissatisfaction with the Kimberley Process is rooted in the discrepant interpretation of the Kimberley Process purpose by the three stakeholder groups today. Changes in the goal orientation of all three stakeholder groups have led to considerable disagreements about the schemes current purpose and future tasks. 4

5 The Kimberley Process In the late 1990s, so-called conflict diamonds had become the currency and primary financing vehicle of rebel movements in diamond-rich countries like Angola, the Congo, and Sierra Leone. Controlling the diamond mining regions, rebel groups used the proceeds to acquire weapons and wage brutal, decades- long campaigns against unarmed civilians, perpetrating killings, rapes, mutilations, and abductions into their armies or sexual slavery. As many as 3.7 million people ultimately lost their lives to the diamond- financed conflicts, and as many as 6.5 million were displaced, not to mention the untold thousands who suffered other abuses of their most fundamental rights (United States Congress 2003). Eventually, public outrage over the atrocities committed by diamond-funded rebels in Sierra Leone jump-started an international campaign to curb the trade in conflict diamonds. Nongovernmental organizations began to thrust the issue into the popular conscience when they launched a constant barrage of reports and criticism that ultimately drew the attention of diamond-producing states and companies and the global community as a whole (Tamm 2002). Global witness, a non-governmental organization that focuses upon the linkage between the exploitation of natural resources and human rights, released a report titled A Rough Trade: The Role of Companies and Governments in the Angolan Conflict (Global Witness 1998). Among other allegations, the report implicated that the diamond cartel De Beers was buying diamonds from Angolan rebel groups in order to maintain market stability. Confronted with the prospect of a potentially crippling consumer backlash and boycott, companies engaged in the diamond trade and industry associations quickly took notice (Price 2003). In its 2000 annual report, De Beers, the world s largest diamond producer, acknowledged that the possible effect of conflict diamonds on consumer confidence is a threat to the entire legitimate diamond industry. In an interview with CNN, De Beers spokesperson Andrew Lamont cautioned that "there is a great danger of throwing the baby out with the bathwater. We have heard the siren calls that diamonds could go the same way as the fur trade (Durham 2001). 5

6 In May 2000, diamond producing countries of Southern Africa met to plan a method by which trade in conflict diamonds could be halted. At the 29th World Diamond Congress, the International Diamond Manufacturers Association and the World Federation of Diamond Bourses issued a joint, zero tolerance resolution on conflict diamonds, by which they created the World Diamond Council. The WDC was intended to represent the interests of the diamond industry in the work to eliminate conflict diamonds (World Diamond Council 2003). In December of the same year, the United Nations General Assembly adopted Resolution 55/56, requesting the development of an international certification scheme for rough diamonds. Forty-eight states sponsored the resolution, and it was unanimously adopted without a vote (UN General Assembly 2001). This resolution imposed a timeline on the process, with the UN requesting a report by December On January 1, 2003, after some two years of negotiations the KP went into effect. Literature Review Since its implementation the Kimberley Process was hailed as a unique and promising new approach to international, multi-sectoral cooperation. Scholars assessing the novel concept of close government-industry-ngo cooperation highlighted the speed of its implementation and promising early successes. In 2003, Taylor and Mohkawa for example conclude that KP was largely successful [ ] in altering the foreign policies of the main diamond buying states (Taylor and Mokhawa 2003, 164). Others pointed to the advantages of a deliberately narrow and focused scheme. According to Wright, the decision to limit the certification scheme to rough diamonds (excluding the cutting, polishing, and retailing sectors) was essential in ensuring the political feasibility of the project. In 2004, he acknowledges that the KPCS demonstrates what is achievable in the circumstances: it is also something to build on as the realities of implementation sink in. A year ago the international community did not have even the basic tool for tackling conflict diamonds. Now it has, and is learning how best to use it 6

7 (Wright 2004, 707). The development of the KP seemed indeed promising: The ending of sanctions against Angola and Sierra Leone after the ceasing of hostilities and encouraging signs of progress in settling the armed conflict in the Democratic Republic of the Congo and Liberia all pointed towards the beginning of the end of conflict diamonds as a threat to international peace and security (Wright 2004, 705). While most authors acknowledge that other factors, such as the ending of armed conflict in both Sierra Leone and Angola, were influential in bringing down the share of conflict diamonds in internationally traded rough diamonds to less than 1% in the late 1990s, they nevertheless attribute large parts of this development to the existence of the KPCS. Wright, for example, highlights the degree of discipline and sense of responsibility it has brought to the international trade in diamonds: Paperwork and accurate records, long anathema to the diamond industry, have become the norm under the KPCS. Governments too have learned valuable lessons, not least in facing up to their responsibility to do something to help to bring about an end to armed conflict. As a tool for international security and conflict prevention, the KPCS stands out as a practical measure that the international community has adopted (Wright 2004, 702). In a similarly optimistic tone, Grant and Taylor remark that it is apparent that the conflict diamonds campaign and the whole Kimberley Process reflect an intriguing development in global governance and multi-track diplomacy, blurring the line between official and unofficial diplomatic channels [ ]. Thus, the role of NGOs and states in ensuring that diamond-dealing corporations live up to their commitments means that multi-level involvement and observation of the situation will continue. It is this example of global governance that perhaps provides the best hope for maintaining a watchful eye on the global diamond industry (Grant and Taylor 2004, 399). Commenting on the uniqueness of the scheme, Wallis points out that the Kimberley Process was not a proclamation crafted in the halls of the United Nations (UN) and foisted upon states and, in turn, impacted transnational corporations without practical application or enforcement mechanisms. It was instead a 7

8 movement initiated by those state governments and companies themselves, who devised and committed themselves to an executable protocol and monitoring procedures (Wallis 2005, 1). Seven years have passed since the implementation of the KPCS. The optimistic tone of the early assessments has given way to pessimistic, at times devastating critical assessments of the scheme. Recent studies critique the KP s inefficiency, lack of funding, support and enforcement mechanisms, of incentive and speed of action. This increasingly negative assessment of the scheme reached a preliminary peak when Ian Smillie, Research Coordinator at Partnership Africa Canada and one of the architects of the KPCS, announced his resigning from the scheme. In an interview given in July 2009, Smillie remarked that "A couple of years ago, I would've said that the Kimberley Process got a seven out of 10. It wasn't perfect, but it was pretty good. But in the last couple of years, all kinds of problems cropped up and the Kimberley Process seems unable or unwilling to deal with it. I wouldn't give it a passing grade now. And frankly, I think it's getting worse (Hildebrandt 2009). In a reassessment of the KP s development in November 2009 he finally remarked that "[t]he whole thing is farcical, irresponsible and a disgrace (Berger and Thornycroft 2009). The KP s lack of action with regard to the widely reported deaths of hundreds of people when the Zimbabwean army took control of the Marange gem fields ignited international attention. As Smillie points out, [h]ere we have a government that has lied repeatedly to the KP - clearly stated in the KP report - has a tenuous grip on its diamond industry - and that courtesy of gross human rights violations - and the regulatory body that is supposed to assure consumers that the diamonds its certifies are clean ignores its responsibility and sets up an open-ended tea party.[ ] It will turn the KP into a laughing stock and give Zimbabwe more or less carte blanche for business as usual (Berger and Thornycroft 2009). 8

9 Research Design In order to evaluate the degree of and reasons for the contemporary disagreement about the KP s original and current purposes, strengths, weaknesses and future perspectives, 16 questions were devised. The questionnaire (see appendix) was sent out via to all 67 members of the World Diamond Council (WDC), all 49 member-governments and 4 representatives of the three centrally involved civil society organizations, followed by telephone requests for short interviews concerning these questions. As of August 1, 2010, 12 WDC members 2 have granted interviews or answered the questions by , 9 referred to other WDC members, 6 refused to comment and 40 did not (yet) respond. Of the 49 governments contacted (including the European Union as a single political entity), 9 representatives 3 answered the questionnaire, two referred to the US-government representative, and 38 did not (yet) respond. All three representatives 4 of the major NGOs currently involved in the Kimberley Process answered our questions, as well as Iain Smillie, former research coordinator for Partnership Africa Canada. 2 Andrew Bone, DTC/De Beers; Pamela Caillens, Cartier; Philip Claes, High Council for Diamonds Antwerp; Sean Cohen, Codiam, NY; Chaim Even-Zohar, Tacy Diamond Consultants; Jeffrey Fischer, Fischer Diamonds; Cecilia L. Gardner, Jewelers Vigilance Committee /New York; Paul Koppelman, London Diamond Bourse; Pierre Leblanc, Canadian Diamond Consultants Inc.; Matthew Runci, Jewelers of America; Udi Sheintal, Israel Diamond Manufacturers Association, one anonymous source (d). Please consult references for further information about the interviewees. 3 Brad Brooks-Rubin (USA); Stephane Chardon ( EU); Suresh Kumar (IN); Molefhe Gofaone (BW); Louise Rawlings (AU); Teresa Trevino (CA); three anonymous sources (a,b,c). Please consult references for further information about the interviewees. 4 Annie Dunnebacke, Global Witness; Susanne Emond, Partnership Africa Canada; Arwind Ganesan, Human Rights Watch. Please consult references for further information about the interviewees. 9

10 Results: Issue 1: Accordance with UN Mandate Question: How well do design, strategy and structure of the KPCS match the mandate given by UN General Assembly resolution 55/56? Response categories: Representatives of: Very well Well, with Not at all DK/NA reservations NGOs 2 2 National Governments Industry Total Response: Very well Of the four representatives of civil society organizations interviewed for this project, Ian Smillie (Smillie 2009), and Susanne Emond (Emond 2009) confirm that the KPCS s design, strategy and structure closely match the UN mandate. However, both activists voice serious concerns about the usefulness of the original mandate in dealing with the issues facing the scheme today. Four of the interviewed government representatives stated that the current scheme closely matches the original mandate. Teresa Trevino (Trevino 2009) is confident that each and every shipment of rough diamonds is certified by the participants exporting authorities. Gofaone Molefhe (Gofaone 2009) agrees that the mandate asked the international community to develop a detailed yet simple workable international rough diamonds certification scheme based on internationally agreed minimum standards - and I believe KPCS fits that description. Similarly, Suresh Kumar (Kumar 2009) states that [t]he mandate given by UNGA Resolution 55/56(2000) is clear and precise. The mandate is for all diamond producing, processing, exporting and importing countries and the diamond industry to break the link between conflict diamonds and armed conflict through simple and workable international certification scheme for rough diamonds and its implementation through internationally agreed minimum standards and ensuring compliance through periodic reporting and reviews while fully 10

11 respecting sovereignty of States. [ ] The KPCS document, which was negotiated between Governments, industry and civil society, reflects this mandate. Louise Rawlings (Rawlings 2009) underlines that conflict diamonds now represent less than one percent of the international trade in diamonds, compared to estimates of up to 15% in the 1990s. Four industry representatives share this assessment. In Pierre Leblanc s view, (Leblanc 2009) it effectively ended the conflicts in Sierra Leone, Congo and Angola [with] no conflict diamonds as defined by the UN left today. Agreeing with Andrew Bone (Bone 2009) and Cecilia Gardner (Gardner 2009), Sean Cohen (Cohen 2009) states that the Kimberley Process effectively fulfilled the task it was designed for, to help ending the civil wars in Sierra Leone and Liberia and to strengthen legitimate trade and legitimate companies. Response: Well, with slight reservations Slightly skeptical views are being held by the EU s Stephan Chardon (Chardon 2009). To him, the KPCS at many occasions appears to be not always able to eradicate [conflict diamonds] quickly, urgently, immediately where they are. Look at Cote d Ivoire: there, rebels are in possession of and supervising producing areas. Only sending in a real army would be efficient. [The KPCS] is nevertheless still efficient in making it more difficult and costly [for rebels to profit from diamond exploitation] by closing doors in trading and consuming countries. We need to make it so costly that it is not even advantageous. The Kimberley Process comes very close to this. Two anonymous government representatives (anonym 2009b; anonym 2009a) agree that the KPCS matches the original mandate well, but show some concern about the mandate itself. The latter states that, given the complexity of issues, the KPCS was an amazing success at that time. It is a remarkable achievement, but by far not flawless. There was a clear trade off: To get everybody on board one had to settle for the lowest common denominator (anonym 2009a). 11

12 Acknowledging the overall success of the KPCS in their responses, Paul Koppelman (Koppelman 2009) an anonymous source (anonym 2009c), Jeffrey Fischer (Fischer 2009), Matthew A. Runci (Runci 2009), and Philip Claes (Claes 2009) concede that several compromises had to be made. As Claes puts it, everybody agrees that KP is functioning well, but that it is not a 100% watertight system. But which system is? Concerning the controlling mechanisms in Belgium, we know what we are talking about: the strictest and best regulated in the world. Every import and export is physically inspected by experts from customs department and yet, we still cannot have a full guarantee (Claes 2009). Udi Sheintal, one of the founding architects of the KPCS summarizes the development of the KPCS in the following way: [W]e achieved what we planned. We designed a system of regulation from scratch. Before, we had no controls of export and import of diamonds at all. The radical changes introduced through the Kimberley Process are the maximum that could have been done. [ ] Of course, people can still smuggle diamonds, but if you smuggle them and you know there are huge sanctions - for example diamond traders are expelled from all bourses in the world if they are caught trading smuggled diamonds - there is a small reward compared to a big risk. Consequently, funds generated for rebels are getting smaller and smaller (Sheintal 2009). Response: Not at all Even-Zohar is the only interviewee in who s opinion the Kimberley Process has utterly failed and it has not contributed at all to finishing the wars in Angola or Sierra Leone (Even-Zohar 2009) 5. 5 For the remainder of the paper quotes will be identified solely by respondent names, not by in text citations. 12

13 Issue 2: Purpose and limitations Question: Do you think the participants in the Kimberley Process (KP) share an understanding of its purpose and limitations? Response categories: Representatives of: Yes Yes, with slight Yes, with severe No reservations reservations NGOs National Governments 5 4 Industry Total Response: Yes In Emond s view, all participants fully understand KP s mandate. Five government representatives, Gofaone, Trevino, Kumar and anonymous sources (a) and (b) share this assessment. In Gofaone s words, the participating governments, NGOs, Civil Society, human rights groups and various UN bodies share the same resolve of ridding the world off conflict diamonds. Agreeing with Gardner, IDMA s Sheintal states that all parties involved understand perfectly the limitations: local and domestic law is above the Kimberley Process, unless government are ready to change local laws look at the changes in Russia for example. They now declare their diamond statistics; something deemed a national secret before. [All countries] understand that they have to boycott trade relations [concerning diamonds] with non-participants. For this it was essential for the WTO members to get a trade waver. Response: Yes, with slight reservations Convinced that in general people know the scope of the Kimberley Process, Ganesan believes that the recent controversy is about inadequacy of rules and procedures, not a fundamental dispute about the mandate [of the KP]. To Australia s Rawlings, the Kimberley Process has a unique nature and this both creates challenges and provides benefits as the parties involved bring different perspectives and objectives to the 13

14 table and may at times have differing understandings of the process' purpose and limitations. According to anonymous source (b) there is a general, common understanding, but [there are] nuanced differences: some see it through lenses of trade, others see it more though lenses of human rights and human security. Everyone understands that KP does both things, but the emphasis differs depending on who you are in process. Chardon shares this assessment, pointing out that certainly everybody agrees - but with nuances. Everybody shares and has a common understanding of the KPs core and its minimum requirements. The core document is accepted by all without restrictions and questions. [ ] However, over the years KP has developed. New challenges have appeared look at Venezuela and today Zimbabwe. What was foreseen in 2003 has been overtaken by developments on the ground and new questions have arisen. At this moment we are still discussing and have not achieved a consensus yet. How far does the mandate of the process extend? Seconding this point of view, Brooks-Rubin believes that in general participants have an understanding of the purpose and limitations [ ], most agree on the basic structure, the documents are very clear. The issue is: should we expand it? Diverging views emerge when discussing how to assess its limitations. Six of the twelve interviewed industry representatives mention slight reservations in their responses to this question. Agreeing with anonymous source (d), and Caillens, Bone concludes that any sort of structure like this is not always a meeting of minds. Like Runci, Claes believes that everybody shares the same opinion about the original purposes. However the discussion about enlarging [the Kimberley Process] to polished diamonds as well is very, very difficult. Leblanc notes that, while there is consensus to a large extend, the NGOs do not completely understand the limitations. Response: Yes, with severe reservations Two civil society organization representatives, Dunnebacke and Smillie, are very skeptical about the degree of consensus. Dunnebacke remarks that, on the one hand there is definitely a shared understanding of the basics, why it started, how it works, what to achieve. But mostly: no. Everyone 14

15 involved has an own, often country specific agenda. NGOs have different agendas as well [ ]. There are frequent disagreements during the meetings about what the real purpose is or how much reform is necessary [ ]. While certain participants do not want to talk about human rights, this is at the core of the Kimberley Process for the NGOs. Three WDC members share this opinion. Like Cohen, Fischer detects very different lenses, aspirations and conceptions of [the KPs] purposes. Koppelman observes that the NGOs do not really understand everything from an industrial point of view. Coming from a different ankle, they would like to see immense restrictions on trade [ ]. NGOs are reluctant to be tough on African countries; they try to avoid a neocolonial flavor. So, we are strict on the first world, but not on the third. Response: No In Even-Zohar s view, the industry sees KP simply as a PR instrument and is not interested in setting up a truly effective system. Issue 3: Beneficiaries Question: Who benefits most from the existence of the Kimberley Process Certification Scheme? Response categories:* Representatives of: Industry Nat l Governments People in producing Consumers countries NGOs Nat l Governments Industry Total *Multiple responses possible Response: Industry Three out of the four interviewed representatives of civil society organizations perceive the diamond industry in general as one of the main beneficiaries of the Kimberley Process. Like Smillie and Ganesan, Dunnebacke recognizes KPs function as positive PR for the industry. 15

16 Eight out of the nine interviewed government representatives (Anonymous government sources (a), (b), and (c) as well as Brooks-Rubin, Chardon, Rawlings, Kumar and Gofaone) mentioned the diamond industry as a primary beneficiary. While Gofaone points to the important benefit of improved consumer confidence, Chardon distinguishes between actors within the industry. To him, big companies in particular gain through improvements of their reputations. Rawlings, referring solely to the Australian diamond sector, indicates that the success of the Kimberley Process is certainly in our producers' interests. Besides reputational gains, Rawlings explains that the Kimberley Process has brought large volumes of diamonds onto the legal market [ ]. For example, it is estimated that around US $125 million of diamonds were legally exported from Sierra Leone in 2006, in comparison to almost none at the end of the 1990s. The process has clearly assisted legitimate trade in rough diamonds and made it harder for criminals seeking to trade in conflict diamonds. In Kumar s assessment the entire diamond pipeline, starting from the mines to the diamond processing industry benefits from KP. Eight of the interviewed industry representatives explicitly mentioned reputational gains for the industry as a major effect of the establishment of the KP. Agreeing with Bone, Koppelman, Caillens and Claes, Fischer concludes that, the major benefits to the diamond industry are first and foremost, the public image, survival and commercial interests. To Sheinthal legal diamond traders are main beneficiaries of the scheme because it provides answers when people ask where your stones are from. Anonymous industry source (d) voices the hope that KP gives diamonds a better position in the market place. In Even-Zohar s view, KP has served its purpose from a business perspective [ ] as long as the consumer believes that KP is working and that diamonds are clean Response: National Governments Three of the interviewed NGO representatives mentioned the legitimization of formerly illegal segments of the diamond trade and increased revenues for participating countries as positive results of the scheme. 16

17 According to Smillie, a huge amount of illegal diamonds has gone legitimate. The KP was supposed to deal with conflict diamonds, not with illicit diamonds. But, as this distinction is practically impossible, it drove these things to the surface [ ]. It has actually forced a lot of criminal and criminalized parts of the trade to become legitimate. Where it works, it can benefit a lot of poor countries. It can turn diamonds from a problem into an asset. Look at Sierra Leone: In the late 1990 the country officially exported about $2 million worth of stones annually, last year this figure stood at $120 million. This is not lastly due to the KP. Like Emond and Smillie, Dunnebacke argues that by and large producing governments now have significantly increased official revenues from taxes on legally mined diamonds. All interviewed government representatives mentioned government revenue as a major benefit of the KP. Anonymous government source (c) points out that due to KP rebels have largely lost an important source of income. Like anonymous government sources (a), (b) and Trevino, Kumar underlines that the legitimate trade in diamonds is an important source of revenue to many governments around the world. Chardon explains that it is important to consider what was before, and what is now: Since [the KP] was enforced you have good diamonds and bad diamonds [ ] It resulted in a dramatic increase in official stones and government revenues. Rawlings emphasizes that the Kimberley Process has assisted in stabilizing and supporting the development of fragile countries. It has brought large volumes of diamonds onto the legal market which has increased the revenues of poor governments. Underlining the benefits to Botswana, Gofaone s explains that a good, clean image for our product increases consumer confidence and the respect for ruling and legitimate governments, leading to development and economical growth as well as investor attraction. Brooks-Rubin points to the examples of Sierra Leone, Liberia and Angola. They ultimately benefited from it and now have substantial economic benefits as well. Anonymous industry source (d) point to the significant leverage that comes with increased fiscal control, while Bone points out that government taxes and loyalties help foster political 17

18 development in Africa, citing Botswana as a glowing example of democracy and good governance in Africa. Response: People in producer countries Ganesan is the only NGO spokes person who explicitly mentioned people in affected countries as beneficiaries of the scheme. Four interviewed government officials consider the populations of producer countries to be major beneficiaries of the KP. In Gofaone s view, incentives channeling diamond proceeds into development take us a step closer to attaining improved living standards and to attaining regional peace in producer countries. Agreeing with anonymous government source (b), Trevino states that people in affected areas [ ] benefit most from the implementation of the certification scheme. In Chardon s view, as the KP came in contact with other issues such as human rights, smuggling and so on, it raised development issues and - to some extent - helped solve these issues. Agreeing with anonymous source (d), Bone, and Caillens, Koppelman states that especially people in developing countries benefit from the scheme, because there is less child labor, people get reasonable wages and so on. Fischer similarly perceives a genuine concern for the humanitarian issues as being a core element of the process. Response: Consumers Out of all spokespersons interviewed, only two government officials, Chardon and Gofaone mentioned consumers as beneficiaries of the scheme in their responses. 18

19 Issue 4: Public-private partnership Question: How would you rate the functioning of the public-private partnership? Response categories: Representatives of: Very well Well, with Problematic DK/NA reservations NGOs 2 2 National Governments Industry Total Response: Very well A two thirds majority of interviewed government representatives perceives the public-private partnership to be functioning very well. Seconding Gofaone s assessment of a blossoming publicprivate partnership, Rawlings commends the collaborative approach of the KP [ ]. The joint efforts of governments, industry leaders and civil society representatives have enabled the Kimberley Process to curb successfully the flow of conflict diamonds since its inception. In agreement with anonymous source (a), Trevino, and Kumar, Brooks-Rubin remarks that it works as well as it possibly can. This is the only way to make something like this work [ ]: the industry cannot police itself, governments have too many conflicting priorities and NGOs cannot put power on the ground. To De Beers Bone, the KP represents a great example of public-private partnership, notwithstanding its limitations. Agreeing with Gardner, Fischer evaluates the partnership as excellent - from the realization of the problem to the formation of the World Diamond Council and the Kimberley Process, only very little time passed. According to Runci, it evolved from competition in the early days of negotiation to genuine collaboration today. Sometimes it is entirely cooperative, sometimes somewhat conflicted. Today, the preponderance of behavior is collaborative, cooperative. Recent critical statements from civil society are in fact a sign that the partnership is working, a sign of vitality. 19

20 Response: Well, with reservations Acknowledging that the international public-private partnership works fairly well, Dunnebacke cautions that collaboration varies significantly on the national level. KP is much more successful on the international then on the nation level. Ganesan shares these reservations: Given that multi-stakeholder agreements are bound by rules and implementation is monitored, [KP] has pretty robust processes for what it covers. However, political will for collaboration is sometimes lacking. Anonymous government source (c) agrees that in general, [the relations are characterized by] fruitful cooperation, even though opinions on certain subjects may differ. In Chardon s view the process works well, although we go through moments of crisis. As the NGOs are pushing for an extension of the mandate it is normal that you have discussion and confrontation. Apart from this, the partnership has worked well between 2003 and Industry and NGOs take part in discussions, they are important in putting issues on the agenda and are useful in providing research, for example in the cases of Venezuela and Zimbabwe [ ]. In some instances, the industry only provided surprisingly little information and was more passively involved. But they were present at all stages of the discussion and sometimes played a very useful role in pushing for solutions. In the case of Ghana, the industry for example provided technical expertise and implemented an action plan, this will hopefully happen in the case of Zimbabwe as well. Anonymous industry source (d) remarks that cooperation works quite well. In contrast to the image portrayed in the diamond campaigns of the NGOs, we work closely with the NGOs. The public is not aware of this. Many don t seem to realize that the knowledge levels of many lower service staff are very low. For example, many people do not realize that the Kimberley Process Certification Scheme applies only to rough diamonds. Agreeing with Koppelman, Leblanc states that overall it works well but he cautions that the NGOs are at times too pushy. In Claes view everybody has their own role to play and the three go generally very well together, however, there is severe criticism of the authorities: 20

21 They have to step up - not everybody is always on the same page. Take the example of Zimbabwe. Concerning the diamonds coming from the Marange mines [ ], the European Union has been the only participant to take action. This puts European diamond dealers at a competitive disadvantage, trade simply moves to other centers. We ask for a level playing field, the same measures need to be implemented in the same way across the world. Codiam s Cohen thinks that some governments - especially in Africa - are more reluctant to deal with NGOs then others - mostly those of in Europe and the US. This might be due to different conceptions of sovereignty and different political cultures. In Sheintal s view in many instances, governments would not take on an issue by themselves. They only do so because the NGO s mirror shows that they do something good. Response: Problematic In Ian Smillie s view, there was some very good collaboration in the beginning [ ]. The agreement of late 2003 to installing monitoring mechanisms was reached through some very good collaboration. Of course, there was a lot of suspicion in the beginning; the NGOs thought that the industry was the problem. However, the industry is usually very supportive of the NGOs positions. Today governments are the problem, especially with regard to the necessity of unanimity in decision making [ ]. No matter what the issue is, some governments do not agree. To Emond, KPs problematically slow reaction is mainly due to its inability to force governments to be compliant because there are just too many interests involved. Anonymous government source (b) is equally skeptical about the state of collaboration in the KP: NGOs and industry almost walked away from the sluggish negotiations in the beginning. The choice was: Get out or take as much as you can get. Was the decision to stay right? It remains questionable. 21

22 Issue 5: Driving forces Question: Which stakeholder groups are the primary driving forces behind KP and KPCS today? Response categories:* Representatives of: NGOs Governments Industry DK/NA NGOs National Governments Industry Total *Multiple responses possible Response: NGOs, Governments and Industry A majority of respondents agrees that all three groups involved in the Kimberley Process contribute important impulses to the scheme. According to Dunnebacke, NGOs were the initial driving force, generating media attention and thus initially putting pressure on the industry. Today, however, governments and industry people have become driving forces as well [ ]. NGOs continue to play a key role in raising the bar, establishing standards, and pushing [the KP]. But of course, several governments provide positive contributions and industry is very active, though sometimes not active enough in pushing it. Of course there are some spoilers, some countries always say no. Evoking the particular setup of the scheme, Emond points out that The Kimberley Process is a membership system: by definition, members - observers and participants - are the driving forces behind it. Five government representatives see all three groups as essential driving forces of the process. Similar to Rawlings, Kumar states that the driving force behind KP is the desire of governments, the diamond industry and civil society to isolate conflict diamonds from legitimate diamond trade. An anonymous source (b) agrees that all actors - Governments, Industry and NGOs - play an important role. The most vocal are, obviously, the NGOs. To Brooks-Rubin, NGOs still play a very important role in keeping issues alive and identifying issues to work on. They remain very important for pushing the agenda. Obviously, the industry is in many ways still a key partner to governments, responsible for a lot of activities, compliance, technical assistance, and so on. Anonymous source (c) states that the real 22

23 start were the independent field reports by the NGOs Global Witness and Partnership Africa Canada in the 1990s [ ] Industry and NGOs together approached the South African Government and keep [the KP]going. Echoing Caillens assessment, anonymous industry source (d) points out that initially NGOs drove KP, but trade has made a strong effort to take it under its own wings. The industry was very keen to have a trade foundation to this. NGOs seem to have weakened down over the past two years, while government input has become a stronger force. Similar to Fischer s assessment, Runci views the process as driven by governments, civil society and industry [ ]. The three drivers all have particular sets of needs and preferences. Response: NGOs and Governments: Representing the European Union, Chardon points to the case of Venezuela in order to explain how a coalition of NGOs and a number of governments steer the process: Who is driving: At the surface of things definitely the NGOs. They set the agenda; they put the issues on the table. In reality, however, certain governments are essential in getting it going and keeping it going. After all it is governments implementing the scheme, not the NGOs. Gofaone states that participating governments, NGOs, Civil Society, human rights groups and various UN bodies share the same resolve of ridding the world off conflict diamonds and are the driving forces behind it. Recognizing that NGOS are still in the driving seat, otherwise Kimberley would not have much of a future and would disappear, industry consultant Leblanc observes that governments are increasingly becoming the driving force, but at the cost of increasing bureaucracy. Implementation, control, and so on is no longer as efficient as before. In Sheintal s view, initially governments and industry did not understand what they were talking about [ ]. Today, the NGOs are still driving forces - more PAC than Global Witness we will see what will happen as Ian Smillie left. However, today 99% of the countries presented in the process are presented by foreign affairs offices. Once you show 23

24 diplomats a process you will never take it away from them again [ ]. Some countries are happier to carry the burden then others. The United States, the European Union and Canada, South Africa and Israel have become driving forces. Response: NGOs and Industry Three industry representatives consider only NGOs and the Industry to be driving forces behind KP. According to Bone, officially, the driving forces should be the governments, as they own and run Kimberley. In terms of driving inputs, however, it is clearly the NGOs and the industry. Cohen shares this view, explaining that the industry brought the topic up and the industry approached the South African governments to get it going. The Diamond Manufacturer Association saw a clear need for action. The main driving energy today is really a partnership between the industry and NGOs. While the teeth came through government involvement, the substance comes from industry and NGOs. Claes sees still the NGOs in a leading position, taking over the main role, and main responsibility, but the diamond industry has become more active itself in terms of signaling, identifying problems, urging everybody to find solutions and to act. The role of the industry is growing bigger and bigger. The role of the official authorities is a bit disappointing, especially in the African countries. Response: NGOs According to Human Rights Watch s Ganesan, NGO s are the drivers behind any type of standard issues like this. While KP, as an institution has become a reflection of all its members, NGOs remain the primary driving force. Smillie complains that no one actually takes responsibility: no one feels to have a stake in it. Only the NGOs feel to have somewhat more to have at stake in it. Countries are going to meetings, but if things are not working there is no big impact on your industry. If there are problems in Venezuela this does not affect your world. No one says: I am proud of KP it is part of our policy to make sure that it works. While some are more concerned like the United States, Canada, or Israel others like the EU, South Africa, Botswana and Namibia have forgotten about it. An anonymous 24

25 government source (b) agrees that NGOs are still the driving forces who keep the governments honest. Koppelman, concedes that trade has an ambivalent attitude about this we do not like regulations: the less, the better. On the other hand, the industry is well aware of the possible consequences of not dealing with the issue. When the NGOs came out against the animal fur market years ago the industry was decimated. In order to keep industry in good light with the general public it has to abide with the NGOs incentives. It is in the industry s interest to see that it is well done. Response: Governments Treviso, in accordance with Gardner argues that the driving forces are clearly the international community and the united nations. Issue 6: NGO efforts Question: How important is the inclusion of NGOs for the functioning of the Kimberley Process? Response categories: Representatives of: Essential Important Problematic DK/NA NGOs 4 National Governments 4 5 Industry Total Response: Essential Not surprisingly, all four representatives of civil society organizations believe that NGO involvement is essential to the scheme s functionality. As Ganesan puts it, NGOs highlight problems, they have the expertise, and they bring an important perspective to the table. While consumers, producers and the industry have material incentives, we contribute a human right and social conflict perspective. Four of the nine interviewed government representatives voice a similar assessment. Anonymous sources (a), (b), and (c) agree that without the NGOs, the KP would not have come into existence and Brooks-Rubin likewise states that it was the NGOs who got the idea of the KP up and running. 25