THE KIMBERLEY PROCESS

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THE KIMBERLEY PROCESS

An Evaluation of its Effectiveness and an Assessment of its Replicability in the Democratic Republic of the Congo

by Brigit Moore Submitted to the

School of International Service of American University in Partial Fulfillment of the Requirements for the Degree

of Master of Arts

in

International Peace and Conflict Resolution

Course Number: ________________________ Course Title: ___________________________ ______________________________________ Credit Hours: __________________________ Semester of Registration: _________________ Comprehensive Examination: Unsatisfactory: _________________________ Satisfactory: ___________________________ Distinction: ____________________________ Graduate Office Certification:

______________________________________ Date: _________________________________

Evaluation and Certification:

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CHAPTER 1: INTRODUCTION

Introduction

In early 2003, the Kimberley Process Certification Scheme (KPCS), an international certification system for rough diamonds, officially entered into force. The KPCS was the culmination of nearly three years of international negotiations which commenced in 2000 after the international community began to recognize that diamonds were funding violent conflicts in

Angola, Sierra Leone, and the Democratic Republic of the Congo (DRC).1 Diamonds that

contribute to conflict are collectively referred to as ‘conflict diamonds.’ The KPCS set out requirements for controlling rough diamond production and trade with the intent of eliminating the trade in conflict diamonds and ensuring that diamond purchases were no longer funding violence.2

In the nearly nine years since its inception, the effectiveness of the KPCS has been greatly debated. While some herald it as having greatly reduced the negative impacts of diamond sales on conflicts, others criticize it as flawed and in need of substantial modification and improvement. This paper will analyze the KPCS to determine its effectiveness in

eliminating, or at least reducing, the presence of conflict diamonds in the international market and ensuring that diamond purchases are no longer funding violence. More specifically, which parts of the KPCS work and which do not work? The paper will then examine the conflict in the DRC, a conflict that is negatively affected by several kinds of minerals that are not currently covered by a comprehensive certification scheme, to determine whether a Kimberley-like certification scheme could be usefully replicated there.

1

Smillie, I. (2005) “What Lessons From the Kimberley Process Certification Scheme?” in Karen Ballentine and Heiko Nitzschke (eds), Profiting from Peace: Managing the Resource Dimensions of Civil War. Boulder: Lynne Rienner and IPA. p. 47

2

Kimberley Process. “Background” <http://www.kimberleyprocess.com/background/index_en.html> Accessed on 11 September 2011.

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2 Purpose of the Study

The purpose of this research project is to closely examine an international resource certification process – the Kimberley Process Certification Scheme (KPCS) – to determine its effectiveness in counteracting the negative impacts of conflict diamonds. This analysis will lead to a better understanding of how natural resource certification processes should be structured to most effectively combat the negative impacts of natural resources on violent conflicts. It will also lead to a better understanding of what factors within a conflict context determine the feasibility of developing an international certification scheme.

Research Question

The specific research question of this project is the following: How effective has the Kimberley Process been in eliminating conflict diamonds from the international market, and can the process, or key elements of the process, be replicated for the conflict minerals in the DRC, where no comprehensive conflict minerals certification process has been developed?

Importance of the Study

A thorough examination of the KPCS and its effects on diamond-fueled conflicts, the first part of this research project, is essential for several reasons. First, examining the successes and strengths of the KPCS not only identifies which aspects of the scheme should be preserved but also provides useful starting points for other conflict mineral certification schemes. Second, examining the failures and weaknesses of the KPCS provides an opportunity to make

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3 development of other international certification schemes. Because the usefulness of the KPCS as a starting point for other certification processes depends on its replicability in other, possibly very different, conflict situations, this research project will not only focus on the strengths and weaknesses of the KPCS, but also on if and how it might be replicated effectively in other contexts. Essentially, does the KPCS work? How well does it work? Should it be replicated?

Once these questions have been examined, I will analyze the conflict context in the DRC to determine if the Kimberley Process could be replicated there. Since 1996, the DRC has been experiencing a devastating conflict that is frequently referred to as Africa’s World War due to the significant regional involvement in the conflict. In addition to its international scope, all sides of the conflict have used rape as a weapon of war and have conscripted child soldiers to fight on the front lines. The war has left the eastern part of the country devastated: millions have died, millions have been displaced from their homes, starvation and disease are rampant, medical care is largely unheard of, and threats of violence against local populations are constant.3

The conflict in the DRC is driven by the trade of multiple minerals; this makes the DRC a compelling case through which to discuss the replicability of the KPCS. Specifically, the DRC is endowed with vast stores of tin, tantalum, tungsten, and gold, each of which are vital

components in popular electronics devices and therefore have the potential to bring great wealth to the DRC. The people of eastern DRC have not reaped any of the potential financial benefits from these minerals, however. Instead, various parties to the conflict have gained control of the mines through violence (most mines have changed hands multiple times throughout the conflict) and have forced local populations to work in the mines. Mining is often the only available means for civilians to survive. The conditions under which miners work are difficult at best, and

3

International Rescue Committee. “Fact Sheet – Congo Crisis.” http://www.theirc.org/resource-file/irc-fact-sheet-congo-crisis-pdf. Accessed on 11 December 2011.

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4 their meager earnings are barely enough to support their families.

These natural resources, or more specifically the potential profit available to whoever extracts them, are cited as drivers of the conflict in the DRC.4 Because of this, over the past several years there has been a growing push within the international community to regulate the use of ‘conflict minerals’ in electronics manufacturing and thereby cut off funding to the armed groups. This increases the importance of understanding the successes, ongoing challenges, strengths, and weaknesses of the Kimberley Process; this type of analysis could provide important lessons for a potential certification scheme to regulate tin, tantalum, tungsten, and gold. Overall, this examination of the KPCS could both assist in efforts to improve the certification process itself, as well as providing a starting point for other conflict mineral certification processes that would increase their likelihood of success, specifically in the DRC.

Significance of the Study

The significance of this study is potentially quite large. First and foremost, by assessing the effectiveness of the KPCS, this project will contribute to the ongoing conversation on how the Kimberley Process could be improved and made more effective. Second, by examining the replicability of the Kimberley Process in the DRC, this project will determine the

appropriateness and feasibility of developing an international certification for the conflict minerals there – tin, tantalum, tungsten, and gold. Third, since many conflicts around the world are, or have been, negatively affected by natural resources, the results of the project could improve our general understanding of how natural resource certification processes should be structured, which would in turn increase their likelihood of their success. This research has the

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Enough Project & the Grassroots Reconciliation Group. (2009) “A Comprehensive Approach to Congo’s Conflict Minerals” Enough Project. p. 1 & International Alert. (2009) “The Role of the Exploitation of Natural Resources in Fuelling and Prolonging Crises in the Eastern DRC.”

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5 potential to positively impact many conflicts around the world. Ultimately, what is learned as a result of this analysis has the potential to save lives, not only in countries affected by conflict diamonds and conflict minerals, but in other conflict contexts that are affected by different conflict resources.

Outline of the Paper

Following this introduction, Chapter 2 provides a review of the relevant literature on the negative impacts of natural resources, called the resource curse, specifically highlighting its evolution from negative economic effects to negative political effects and most recently to its negative effects on conflict. Chapter 2 also reviews the literature on natural resource

certification processes and evaluations of their effectiveness. Chapter 3 reviews the design of the study, including the underlying assumptions and rationale, the limitations of the study, and information collection, analysis, and verification procedures. The first part of Chapter 4 presents an overview of the Kimberley Process Certification Scheme (KPCS), as well as an analysis of the scheme’s effectiveness and lessons that can be learned from it. The second part of Chapter 4 provides an overview of the conflict in the Democratic Republic of the Congo (DRC) and an analysis of the KPCS’s replicability in the DRC. In Chapter 5, the relevant findings are

summarized and related to the literature on the resource curse and natural resource certification processes as well as to the field of International Peace and Conflict Resolution as a whole. Finally, Chapter 6 concludes this research project, discussing the significance of the findings and implications and recommendations for future research and practice.

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CHAPTER 2: A REVIEW OF THE LITERATURE

The Resource Curse

The effects of abundant natural resources on a country were long thought to be wholly positive. Not until more recent decades did academic work begin focusing on potential negative effects, which are collectively referred to as the ‘resource curse.’ At first, the academic

conversation focused on the negative effects of abundant natural resources on a country’s economy. In the last decade, however, the discussion has expanded to include the negative effects of natural resources on politics, government institutions, and, most relevant to this paper, violent conflict.

The idea of a resource curse really began to take shape in the 1980s, when scholars began to take note of the fact that abundant natural resources can lead to low or negative economic growth. The first work on this topic was on the concept of Dutch disease, or the relationship between increasing natural resource exploitation and declining manufacturing, resulting in overall lower economic growth. One of the first scholars to explore the concept of Dutch disease was Sweder van Wijnbergen, who in 1984 developed a model that showed how the abundance of natural resources in a country can reduce aggregate income. Essentially, van Wijnbergen argued that a temporary decline in the non-natural resource traded goods sector (which would result from an increase in the trade of natural resources) may permanently lower income compared with what could have been attained. The reason this is the case is that economic growth is caused by technological progress and technological progress is achieved faster in the traded sectors of an economy than in the non-traded sectors.5 More recent work on Dutch disease shows that this effect is not limited to the export of natural resources, but applies to the

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7 exploitation of natural resources in general: Javier Capó, Antoni Riera Font, and Jaume Rosselló Nadal introduced the idea that increased wealth from the tourist industry’s exploitation of natural resources, such as beaches or other natural areas, can lead to Dutch disease as well.6

Following the academic discourse on Dutch disease, scholars began to focus on the concept of resource rents, or the idea that the discovery of a new income possibility from natural resources leads to increased rent seeking and reduces the net increase in income for society. A seminal work on resource rents is that of Aaron Tornell and Philip Lane, who demonstrated how the voracity effect – when different groups attempt to grab a greater share of the national wealth by demanding more transfers – causes the tax rate to go up in a country. This leads to the reallocation of capital to the informal sector where it is safe from taxes and reduces the overall growth rate of the economy.7 Another example of academic work on resource rents is that of Ragnar Torvik, who demonstrated that the more natural resources available in a country, the more likely entrepreneurs will pursue rent seeking instead of running productive firms. This increased rent seeking results in a drop in income that is greater than the increase in income derived from the natural resources.8

Over the past several years, academic work on the resource curse has expanded to include certain features of natural resources that lead to lower economic growth. For example, Katharina Wicke and Erwin Bulte incorporated the idea of a resource’s pointiness, or its geographic

clustering, and find that an abundant and pointy resource is associated with both intense contests over the resource and with overall lower economic performance.9 Furthermore, Anne Boschini,

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Capó, J., A. R. Font, & J. R. Nadal. (2007) “Dutch Disease in Tourism Economies: Evidence from the Balearics and the Canary Islands.” Journal of Sustainable Tourism, 15(6): pp. 615-627.

7

Tornell, A., & P. R. Lane. (1999) ‘The Voracity Effect.’ American Economic Review, 89(1): pp. 22-46

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Torvik, R. (2002) “Natural Resources, Rent Seeking and Welfare.” Journal of Development Economics, 67(2): pp. 455-470.

9

Wicke, K. & E. H. Bulte. (2006) ‘Contesting Resources – rent seeking, conflict and the natural resource curse.’ Public Choice, 128: pp. 457-476.

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8 Jan Pettersson, and Jesper Roine discussed how the lootability of natural resources, or the ability for groups to easily extract and trade the resource, and the quality of institutions already in place in a country affect economic growth; they found that highly lootable resources (such as

diamonds) combined with bad institutions lead to the worst possible growth effect.10

In the late 1990s, research on the resource curse expanded even further to include not only negative economic effects, but also the negative political effects of abundant natural resources. These negative political effects include, among other things, reduced democratic governance and increased corruption. The most notable works on the political effects of the resource curse are that of Terry Lynn Karl and Michael Ross. Karl discussed how the discovery of oil in Venezuela led to bad economic as well as political development in the country.11 Although this work has been criticized following its publication, the debate it sparked has

created a wealth of literature on the negative political effects of abundant natural resources. Ross is one example of the work that Karl inspired; Ross showed how timber booms in several

countries in Southeast Asia have resulted in politicians intentionally destroying institutions so that they could benefit financially from the timber trade.12 Furthermore, in another work, Ross demonstrated that countries that are rich in oil are less democratic on average than countries that are not rich in oil.13

Beginning in 1998, the effects of natural resources on the generation of violent conflict began to be examined. In this work, Paul Collier & Anke Hoeffler found that the presence of natural resources increases the risk of war. They also found that initial income, ethno-linguistic

10

Boschini, A., J. Pettersson, & J. Roine. (2007) “Resource Curse or Not: A Question of Appropriability.” Scandinavian Journal of Economics, 109(3): pp. 593-617.

11

Karl, T. L. (1997) The Paradox of Plenty: Oil Booms and Petro States. Berkeley: University of California Press, Berkeley.

12

Ross, M. L. (2001) Timber Booms and Institutional Breakdown in Southeast Asia. New York: Cambridge University Press.

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9 fractionalization, and initial population size to be significant and strong determinants of the duration and the probability of civil wars.14 Collier concluded that conflicts begin because of groups’ economic agendas (what he calls the greed model) rather than ethnic or religious hatred, economic inequality, the lack of political rights, and/or government economic incompetence (what he calls the grievance model).15 This theory has subsequently been dubbed the “greed or grievance” model. He supported this model with an analysis of different conflicts between 1960 and 1995 to determine if the cause of the conflict was greed or grievance. In order to measure greed, Collier focused on three factors: the prevalence of “lootable” resources (proxied by the predominance of primary commodity exports in a state’s gross domestic product), the costs of attracting recruits to join the fight (proxied by the proportion of young men in a society), and the availability of other income earning opportunities (proxied by the number of years of education the population has received).

In subsequent works, Collier and Hoeffler have reevaluated and modified their theory; in a 2004 article, they reframed it as the opportunity theory. In this work they replicated their earlier study, but this time they concluded that while the opportunity model is superior, there are in fact some elements of the grievance model that can explain the occurrence of conflict.16 More specifically, they found that the following factors influence the opportunity for rebellion: the availability of finance (specifically, primary commodity exports because of the opportunities such commodities provide for extortion), the cost of rebellion (specifically, that low foregone earnings facilitate conflict), and dispersed populations. While they found most proxies for grievance to be insignificant, they found ethnic dominance (or the majority of one ethnic group)

14

Collier, P. & A. Hoeffler. (1998) “On economic causes of civil war.” Oxford Economic Papers, 50: pp. 563-573

15

Collier, P. (2001) “Doing Well Out of War,” in Mats Berdal and David M. Malone (eds), Greed and Grievance: Economic Agendas in Civil Wars, Boulder: Lynne Reinner.

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10 to have negative effects. Also interesting, they found that the longer it had been since the end of a conflict, the less likely another conflict would arise in that country.

In their 2008 work, Collier and Hoeffler amended their earlier findings once again: rather than concluding that motivation can account for civil war risk, they found that the important determinant is the feasibility of rebellion; essentially, where rebellion is feasible (economically as well as militarily), it will occur.17 Similar to their 2004 work, they found that income, growth, natural resources, peace duration, and population are important when it comes to the likelihood of increased conflict. Specifically, they found that lower per capita income, collapses in

economic growth, a high ratio of primary commodity exports to gross domestic product, a small amount of time passed since the last conflict, and finally, larger population sizes all increase the likelihood of conflict. Additionally, in their discussion surrounding primary commodity exports, they note that there are three ways in which primary commodity exports could lead to conflict: increased opportunity for predation by rebel groups making rebellion feasible, the desire to capture resource rents, and strong grievances over unequal distribution of benefits.

Although their work has highlighted many variables that can increase the likelihood of conflict, this paper is only interested in the theory that natural resources increase the likelihood of conflict. As is evident from the review of their work, Collier and Hoeffler’s theory has evolved substantially since it was first proffered in 1998. It is important to note, however, that throughout their work, they continue to argue that natural resources increase the likelihood of conflict. The main difference between their studies in 1998, 2004, and 2008 is how natural resources increase the likelihood of conflict. At first, they argued that it was greed caused by an abundance of natural resources that generated conflict. Their theory then transformed into a

17

Collier, P. & A. Hoeffler. (2008) “Beyond greed and grievance: feasibility and civil war.” Oxford Economic Papers, 61: pp. 1-27

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11 theory that the likelihood of conflict increases if parties have the opportunity, because of

abundant natural resources, to rebel. Most recently, their work supports the idea that, rather than greed or simply opportunity, it is the feasibility of rebellion, created by abundant natural

resources, that increases the likelihood conflict will occur.

Since Collier and Hoeffler first developed the greed and grievance theory, a number of other scholars have researched the effects of natural resources on conflict. For example, Michael Ross examines the varied effects of different kinds of resources in generating or lengthening conflicts. In addition to lootable resources, Ross was interested in obstructable resources (resources whose transportation can be easily blocked by a small number of people with few weapons) and the legality of trading or selling resources in the international market. Based on his research on the effects of these different kinds of resources on conflicts between 1990 and 2000, Ross proposed several hypotheses about how natural resources influence civil wars. Summarized, these hypotheses are as follows: lootable resources are more likely to benefit rebel groups and lead to and prolong nonseparatist movements; unlootable resources are more likely to benefit the government and lead to separatist conflicts; obstructable resources are more likely to prolong and intensify conflicts; and illegal resources will benefit rebels unless the government is willing to endure international sanctions.18 Another interesting addition to theories about the link between natural resources and conflict is that of Päivi Lujala, who described how the location of resources impacts the duration of a conflict – for example, if resources are located inside the actual conflict zone, the duration of conflict is doubled.19

It should be noted that not all academic work supports theories that natural resources can

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Ross, M. L. (2003) “Oil, Drugs and Diamonds: The Varying Roles of Natural Resources in Civil War,” in Karen Ballentine and Jake Sherman (eds), The Political Economy of Armed Conflict: Beyond Greed and Grievance. Boulder: Lynne Rienner and IPA.

19

Lujala, P. (2010) “The spoils of nature: armed civil conflict and rebel access to natural resources.” Journal of Peace Research, 47(1): pp. 15-28.

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12 cause conflict. While not in complete opposition to it, Karen Ballentine cautions against the idea that conflicts are caused by economic factors alone and argues instead that, while including economic factors in analyses of conflict will lead to a clearer understanding of the dynamics of violent conflict and can help develop effective policies aimed at preventing or ending conflicts, more holistic approaches to conflict prevention and resolution are required.20 Achim Wennmann argues that the emphasis on natural resources in conflict financing is unhelpful since natural resources are just one source of conflict financing for armed groups, who shift from one source of financing to another as they need to.21 Therefore, rather than focus on individual methods of conflict financing such as natural resource extraction, conflict economies should be approached as a combination of financing strategies. Christa Brunnschweiler & Erwin Bulte disagree with the idea that conflict and natural resources are linked, arguing that naturally resource-rich countries are actually less likely to enter a civil war, but that if they do enter a civil war, their dependence on resource extraction increases.22 Although certain scholars take issue with the greed or grievance model and some reject it entirely, this research project will be guided by the idea that there exists a link between an abundance of natural resources and conflict, and that methods to counteract the negative impacts of natural resources on conflict should be studied and evaluated wherever possible.

Combating the Resource Curse

Some authors, in addition to analyzing the link between natural resources and conflict,

20

Ballentine, K. (2003) “Conclusions,” in Karen Ballentine and Jake Sherman (eds), The Political Economy of Armed Conflict: Beyond Greed and Grievance. Boulder: Lynne Rienner and IPA. pp. 259-283.

21

Wennmann, A. (2007) “The Political Economy of Conflict Financing: A Comprehensive Approach Beyond Natural Resources.” Global Governance, 13(3): pp. 427-444.

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Brunnschweiler, C. & E. H. Bulte. (2009) “Natural resources and violent conflict: resource abundance, dependence, and the onset of civil wars.” Oxford Economic Papers, 61(4): pp. 651-624.

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13 also recommend ways to prevent and end resource-fueled conflicts. As Michael Ross notes, natural resources are never the only source of conflict, nor do they make conflict inevitable. He adds, “...for every resource-rich country that has suffered from violent conflict, two or three have avoided it. Better policies may help to reduce the likelihood that resources will generate conflict and to direct resource wealth instead to education, health, and poverty reduction.”23

Philippe Le Billon provides several examples of policies that would help mitigate the resource curse. He argues that preventing resource-fueled conflict requires ensuring that the financial wealth created by resource exploitation is captured and diffused in the interest of society, and that interest coalitions are able to sustain this situation.24 More specifically, in order to prevent resource-fueled conflicts, it is important to increase corporate responsibility, maximize and cushion resource revenues, allocate revenues fairly and efficiently, diversify the economy, and promote peaceful and secure resource supply.25 To end resource-fueled conflicts, Le Billon mentions targeted sanctions, international investigations by the United Nations (UN) and civil society organizations, the use of judicial trials and aid conditionality, market regulation and commodity certification schemes, and economic supervision.26

Paul Collier and Ian Bannon also discuss several ways to mitigate the negative effects of the resource curse on conflict. They argue that the best protection against civil war is

development that raises and sustains economic growth, diversifies the economy, and assists countries to cope more effectively with commodity price shocks.27 They also argue that, since so

23

Ross, M. (2003) “The Natural Resource Curse: How Wealth Can Make You Poor.” in Ian Bannon & Paul Collier. (eds). Natural Resources and Violent Conflict: Options and Actions. Washington, DC: The World Bank. p. 19

24

Le Billon, P. (2003) Fuelling War: Natural Resources and Armed Conflict. New York: Oxford University Press. p. 53 25 Le Billon, P. (2003) p. 53 26 Le Billon, P. (2003) p. 64 27

Bannon, I. & Collier, P. (2003) “Natural Resources and Conflict: What We Can Do.” in Ian Bannon & Paul Collier. (eds). Natural Resources and Violent Conflict: Options and Actions. Washington, DC: The World Bank. p. 8

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14 many low-income countries depend on primary commodities for their revenues, and the vast majority of resources that sustain and fuel civil wars depend on access to the global economy, several tactics aimed at improving natural resource governance should be pursued.28 These include increasing transparency of natural resource revenues, shutting rebel organizations out of markets, criminalizing the finance of illicit commodities, tightening scrutiny on illicit payments, and attracting reputable companies to risky environments.29

Evaluating Efforts to Combat the Resource Curse

Although the above recommendations are diverse, it is important to note that there seems to be some consensus that any effective measure to prevent and end resource-fueled wars should include efforts to cut off the financing abilities of rebel organizations through better regulation of the markets. The KPCS is an example of this type of market regulation. Unfortunately,

evaluation of efforts by the international community to cut off the financing abilities of rebel organizations is largely missing from the literature on the resource curse. From the limited literature available, most works focus on the results of the Kimberley Process; however, even in the aftermath of the Kimberley Process, relatively few authors have attempted to analyze the process in depth (Haufler, 2010; Murphy, 2011; and Wexler, 2010).

This project intends to add to the body of knowledge on natural resources and conflicts by evaluating the Kimberley Process and illuminating the lessons learned from it. Additionally, this paper will analyze the conflict in the DRC to determine if replicating the KP for conflict minerals is an appropriate and feasible approach. Current efforts by NGOs and international organizations to mitigate the negative effects of conflict minerals in the DRC will also be

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Bannon, I. & Collier, P. (2003) p. 11

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15 examined. Much more work needs to be put into evaluating international efforts to cut off the financing abilities of rebel organizations, specifically efforts of natural resource certification such as the Kimberley Process, and it is my intention that this research will benefit the small body of work that already exists on the topic.

CHAPTER 3: DESIGN OF THE STUDY

Type of Design

The primary research method for this qualitative research paper is an in-depth case study of the Kimberley Process. Although other certification processes exist – such as the UN

Convention on International Trade in Endangered Species of Fauna and Flora, the Convention on the Conservation of Antarctic Marine Living Resources, the Cartagena Protocol on Biosafety, the Basel Convention on the Control of Transboundary Movements of Hazardous Waste and Their Disposal, the Montreal Protocol on Substances that Deplete the Ozone Layer, and the Stockholm Convention on Persistent Organic Pollutants30 – the Kimberley Process was selected for this study because it is the only international certification process that is designed to mitigate

negative consequences of a natural resource in conflict situations. The goal of this case study is to analyze the effectiveness – defined as the reduction or elimination of conflict diamonds from the international markets – of the KPCS and then examine its potential replicability in the DRC. This latter part of this research project will require an in-depth investigation of the conflict context in the DRC.

The case study is the most appropriate method for this project because it affords the

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Crossin, C., Hayman, G., & Taylor, S. (2003) “Where Did It Come From? Commodity Tracking Systems.” in Ian Bannon & Paul Collier. (eds). Natural Resources and Violent Conflict: Options and Actions. Washington, DC: The World Bank. pp. 99-100

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16 opportunity to examine the KPCS in great detail. Bruce Berg writes that, since case studies involve a systematic gathering of information about a particular phenomenon that enables understanding how the phenomenon functions or operates, case studies can provide a deep understanding of a phenomenon.31 This kind of deep understanding is required to evaluate the effectiveness of the KPCS.

In the KPCS analysis, I will examine three different types of data: primary source documents (such as UN resolutions and various Kimberley Process documents), statistics on conflict diamonds and the diamond trade, and secondary source documents (such as academic articles and NGO reports). The primary source documents will provide information on how and why the Kimberley Process was first initiated and what its main goals were at its inception. They will also explain the structure and inner workings of the Kimberley Process. The statistics on conflict diamonds enhance the discussion on the KPCS effectiveness, potentially providing evidence of either its effectiveness or ineffectiveness. Last, the secondary source documents will provide an overview of the external debate surrounding the effectiveness and success of the KPSC. Overall, these data sources will provide a holistic understanding of the KPSC and enable a more detailed analysis of its effectiveness.

As mentioned above, the second part of this research project involves examining the conflict in the DRC to determine the replicability of the Kimberley Process for conflict minerals. I will begin this task by providing the necessary background information regarding the conflict in the DRC, including a discussion on what the conflict minerals are used for and how they are mined. This is especially important because differences between conflict minerals and conflict diamonds may limit the replicability of the KP or require, at the very least, a modified version of

31

Berg, B. L. (2009) Qualitative Research Methods for the Social Sciences, 7th Ed. Boston, MA: Pearson Education, Inc. pp. 317, 319

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17 the KP to be replicated in the DRC.

Second, I will examine data from the DRC (and its neighbors) regarding the export of these minerals, specifically looking for any drastic changes in export levels that might suggest the smuggling of the DRC’s minerals to neighboring countries for export. Unfortunately, due to the instability and the central government’s weak presence in eastern DRC, where most of these conflict minerals are located, this type of data may be difficult to find. Therefore, I will likely have to rely on the reports of third party observers (such as non-governmental organizations or international organizations) that work with the conflict in the DRC and/or with these minerals for statistics.

Third, it is also important to examine the efforts of the many international organizations and non-governmental organizations (NGOs) working to mitigate the negative the negative effects of conflict minerals inside the DRC and internationally. With a better understanding of the conflict in the DRC, how the various minerals contribute to the conflict, and other efforts to combat conflict minerals, I will analyze the replicability of the Kimberley Process for conflict minerals by examining the similarities and differences between the conflict contexts. This will help me determine if the Kimberley Process would be both an appropriate and feasible method to resolve the conflict in the DRC.

Assumptions and Rationale

The main assumption of this research design is that lessons learned from one natural resource certification process can be applied in a different context for multiple different natural resources. The reasoning behind this assumption is that, since both processes are attempting to address the negative effects of conflict minerals, there should be general lessons that one case

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18 can provide to another similar, albeit somewhat different, case. In addition, the other cases of certification schemes do not track resources that are linked with conflict, making the Kimberley Process the most applicable case to apply to the conflict minerals in the DRC.

A second assumption of the research design is that the international community can, and should, do something to address the conflict minerals in the DRC. Since the international community (mainly through electronics companies responding to the demands of consumers) is contributing to the problem in the DRC by increasing the demand for products that use conflict minerals, the international community has a moral obligation to mitigate the negative

consequences of their consumerism. If the KP is found both effective and also replicable in the DRC, the international community could develop an international certification scheme for conflict minerals based on the KP and the lessons learned from the KP.

The rationale behind the use of the case study method is that it enables a deep understanding of the only natural resource conflict certification scheme that is designed to mitigate the negative effects of a conflict commodity on conflict. Doing this will lead to a better analysis of the KPCS, a better understanding of the lessons learned from the KPCS, and a better analysis of if the KP could be replicated for conflict minerals in the DRC.

Limitations of the Study

There are two main limitations in this study. First, drawing conclusions from the analysis of one case can potentially lead to problems with the generalizability of the results. Although there is only one existing certification process that is meant to limit the negative effects of resources on violent conflicts, there are other commodity-tracking processes (such as those for endangered species, fish, biosafety, hazardous waste, substances that deplete the ozone layer, and

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19 pollutants that are mentioned above). An analysis of these commodity-tracking processes may provide additional useful information that could be applied to the conflict in the DRC or used as starting points for other natural resource certification processes meant to reduce the negative impacts of natural resources on conflict. Of course, this method also presents its own

drawbacks: if a case (in this instance, a commodity tracking process) has significant differences (such as the context of the tracking process or the type of commodity involved) when compared to other cases, the conclusions from the analysis might not be as applicable to these other cases either.

The second limitation centers on the research methods of the study; specifically, this research project would likely have benefitted from interviews with Kimberley Process members as well as officials from the DRC. The former may stress particular strengths or weaknesses of the KPCS or provide additional insight as to how the KPCS might be successfully replicated elsewhere. Interviews with officials in the DRC would reveal the specific challenges that the country faces and what they believe would be the most effective methods to counteract these challenges. Unfortunately, due to a lack of time and other resources, this project does not incorporate such interviews.

Information Collection, Analysis, & Verification Procedures

The data that will be used in this study, which includes scholarly articles and books, reports by NGOs and international organizations that work in the DRC, statistics about conflict diamonds and conflict minerals, and magazine and newspaper articles about the conflict in the DRC, drawn from a variety of sources, including internet searches, online academic database searches, and library searches. The main procedure for analysis is synthesizing the data obtained

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20 from the various sources that are listed above, which will be cross-checked to ensure its validity.

CHAPTER 4: OUTCOMES

The Kimberley Process Certification Scheme

Background Information

In the 1990s, diamond-fueled conflicts were occurring in Angola, Sierra Leone, and the Democratic Republic of the Congo. Unfortunately, it was not until later in the decade that the international community began to recognize the negative impacts that diamonds were having in these conflicts. In 1998, the NGO Global Witness published the first report that exposed the link between diamonds and the conflict in Angola. The report showed that between 1992 and 1998, the rebel movement National Union for the Total Independence of Angola (UNITA) controlled

60% - 70% of Angola’s diamond trade.32 Because of the high value of Angolan diamonds (only

5% - 10% of the worlds diamonds are of gem quality, but approximately 80% - 90% of Angola’s diamonds are gem quality),33 UNITA made more than $3.7 billion from the sale of diamonds.34 Essentially, according to Global Witness, Angola’s civil war, during which approximately half a million people died and millions more were displaced, was almost entirely funded by

diamonds.35

As a result of the Global Witness report, in June 1998, the UN passed Resolution 1173 which extended its existing sanctions against UNITA to include a ban on any direct or indirect

32

Global Witness (1998) “A Rough Trade: The Role of Companies and Governments in the Angolan Conflict.” p. 3

33

Global Witness (1998) p. 12

34

Global Witness (1998) p. 4

35

Smillie, I. (2005b) “What Lessons From the Kimberley Process Certification Scheme?” in Karen Ballentine and Heiko Nitzschke (eds.), Profiting from Peace: Managing the Resource Dimensions of Civil War. Boulder: Lynne Rienner and IPA. p. 49

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21 diamond imports from Angola that were not officially certified by the Angolan government.36 In May 1999, the UN Security Council’s Sanctions Committee on Angola, chaired by Robert Fowler (the Canadian Ambassador to the UN), organized an expert panel to assess the

effectiveness of the sanctions. Based on this panel’s investigation, the Sanctions Committee on Angola published a report, known as the Fowler Report, in March 2000, that found that UNITA’s ongoing ability to sell rough diamonds for cash and to exchange rough diamonds for weapons not only provided the means for it to sustain its political and military activities, but also to acquire friends, maintain external support, and stockpile wealth.37 The report also “named and shamed” companies, weapons dealers, and heads of state as “sanctions busters” for their

continued involvement in trafficking diamonds and weapons.38

At the same time that the Fowler Report was released, the NGO Partnership Africa Canada (PAC) released a report that detailed how the Revolutionary United Front (RUF), a rebel movement in Sierra Leone, was funding its arms campaign by smuggling diamonds through Liberia.39 The conflict in Sierra Leone began in 1991; over the first several years of the conflict, the RUF began to adopt grisly tactics against civilians – amputating feet, hands, lips, ears, and/or noses.40 These tactics were used to clear the areas surrounding the diamond mines and thereby control the diamond trade.41 Charles Taylor, the warlord-turned-president of Liberia, gave the RUF a base from which to operate, weapons, and a diamond export route. According to PAC, although annual Liberian production is estimated to be at most 150,000 carats, records from 1998

36

Smillie, I. (2005b) p. 49-50

37

UN Panel of Experts on Violations of Security Council Sanctions Against UNITA. (2000) “Final Report of the UN Panel of Experts on Violations of Security Council Sanctions Against UNITA: The ‘Fowler Report’.” United Nations. paragraph 77

38

Smillie, I. (2005b) p. 50

39

Smillie, I., Gberie, L., & Hazleton, R. (2000) “The Heart of the Matter: Sierra Leone, Diamonds and Human Security.” Partnership Africa Canada. p. 6

40

Smillie, I., Gberie, L., & Hazleton, R. (2000) p. 2

41

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22 show imports from Liberia to the Belgian Diamond High Council to be 2.6 million carats; the total for the three preceding years was over 28 million carats. Where did these diamonds come from? A large proportion of them originated in Sierra Leone.42 The United States Geological Survey (USGS) estimated that Sierra Leone, which historically produced several hundred thousand carats annually, exported only 80,000 carats in 1998. Sierra Leonean government officials estimated that 85% of the country’s diamonds were smuggled out of the country, however; if 85% of Sierra Leone’s diamonds were smuggled out, production in 1998 was actually at least 530,000 carats.43 PAC’s report accused the international diamond industry of complicity in diamond smuggling as well as the Belgian government of turning a blind eye to massive corruption in order to protect its diamond industry. Following this report, the UN Security Council passed Resolution 1306, banning the trade of any Sierra Leonean rough diamonds not accompanied by a government-issued certificate of origin.44

The DRC, then known as Zaire, also suffered because of the diamond trade. Under President Mobutu, formal diamond production decreased from 18 million carats in 1961 to one-third that value in the 1990s. Informal diamond production, largely controlled by Mobutu and his cronies for their personal benefit, continued at high levels, however.45 As a result of this corruption, Zairian miners devised a system of smuggling diamonds to the Republic of Congo (ROC) just north of Zaire. The fluctuating Belgian diamond imports from the ROC are a good indicator of the situation in Zaire. When Zaire was in crisis, diamond imports from the ROC increased; at other times, diamond imports from the ROC remained relatively low. For example, high levels of diamond exports from the ROC were seen in 1997, when Laurent Kabila (with the

42

43

44

Smillie, I. (2005b) p. 50

45

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23 help of Rwanda and Uganda) deposed Mobutu, and in 2000, when Kabila proved to be just as corrupt as Mobutu. The human cost of this level of corruption and war, funded mostly by looted resources, was enormous: Smilie et al. estimate that between 1998 and 2002, 3.3 million

additional people died than would have had the war not occurred.46

Between Angola, Sierra Leone, and the DRC, approximately 4 million people died during the 1990s as a result of wars funded at least in part by the illicit diamond trade. Tens of millions of people were displaced, and the economies of entire countries collapsed. In addition, the people and organizations studying the issue revealed how the diamond trade, if left unregulated, could contribute to violent conflict, and exposed the diamond industry’s complicity in the violence.

Kimberley Process Negotiations

In the late 1990s and early 2000s, diamonds, often thought to be a symbol of love, purity, and eternity, had become connected to gruesome images of war, destruction, and children with chopped-off limbs.47 Various NGOs began an ad campaign to raise public awareness about “conflict diamonds” - a term developed by NGOs to refer to diamonds that are used by armed groups to fund conflict. These ads were important in garnering popular support for regulating the diamond trade (See Appendix B for an example of one of these ads).

As a result of the international community’s growing awareness of conflict diamonds and recognition of the diamond industry’s complicity in the conflict diamond trade, in May 2000 the government of South Africa called for a meeting to address the problem of conflict diamonds. South Africa, with a substantial diamond industry that brought in a signification percentage of the country’s revenue, was concerned that the negative press surrounding conflict diamonds

46

Smillie, I. (2005b) p.51

47

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24 would harm their “clean” diamond industry and negatively affect their diamond revenues and

employment.48 The meeting, which included diamond producing countries, diamond trading

countries, diamond industry members, and several international NGOs, took place in the diamond-mining town of Kimberley, South Africa; the resultant certification scheme – the Kimberley Process Certification Scheme (KPCS) bears the name of this town.49 Although the recommendations made at this first meeting, which were finalized one month later at a follow-up meeting in Luanda, Angola, were almost universally included in the final version of the KPCS, it took more than ten additional meetings, unofficially led by South Africa, over the next two years before it was finalized and ratified in Interlaken, Switzerland, in November 2002.50 One of the sticking points during negotiations was the status of the resultant certification scheme. Some participants felt as though it should be a legally-binding treaty; others disagreed, arguing that it was inappropriate given the way in which the industry had developed along national lines (with some countries operating only state-controlled facilities, some only private ventures, and a few mixing the two), that parliamentary ratification of a treaty would take years to achieve and delaying implementation for too long, or that a treaty would be too intrusive on national sovereignty.51

The Kimberley Process Certification Scheme

The Kimberley Process Certification Scheme (KPCS) is an international certification scheme that regulates the rough diamond trade by outlining the rules that diamond producers, diamond traders, and diamond consumers must follow. Its aim is to protect the legitimate trade in rough diamonds while preventing the flow of conflict diamonds. Conflict diamonds, as

48

Bieri, F. (2010) “The Roles of NGOs in the Kimberley Process.” Globality Studies Journal. 20. p. 8

49

50

51

Wright, C. (2004) “Tackling Conflict Diamonds: The Kimberley Process Certification Scheme” International Peacekeeping, 11(4): p. 703

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25 defined in the KPCS, are “rough diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments.”52 The KPCS rests on several basic elements: first, each participant maintains internal controls over rough diamonds through the creation of national laws. For producers, this means establishing an audit trail between mines and the point of export; for traders, it means maintaining a chain of warranties between the point of import and either the cutting factory or the point of re-export. Second, each participant agrees that a Kimberley Certificate will accompany each export; these certificates must be issued by each participating country, have certain common features, and contain adequate security features. Additionally, all international shipments of rough diamonds must be made in tamper-proof packages. Third, no participant will permit the import of rough diamonds unless accompanied by a Kimberley Process certificate from another participant. Finally, each participant must submit quarterly trade statistics and semi-annual production statistics to the KP. A centrally-maintained statistical web site will allow participants and observers (but not the public) to compare and verify exports from one country with imports to another country.53

It is important to mention that several Kimberley Process participants sought a waiver from the World Trade Organization (WTO) since several KPCS provisions could be considered incompatible with the WTO treaty. Although the WTO is set up to guarantee free trade among its members, it does provide exceptions in situations when where trade is contributing to conflict. Based on these exceptions, the WTO granted the Kimberley Process a waiver that covered the period between January 1, 2003 and December 31, 2006, and an extension waiver that lasts until December 31, 2012. The WTO’s decision recognized the extraordinary humanitarian nature of the issue, specifically, the devastating impacts of conflicts fueled by trade in conflict diamonds as

52

Kimberley Process. (2002) “Kimberley Process Certification Scheme.” p. 3

53

Smillie, I. (2005a) “The Kimberley Process Certification Scheme for Rough Diamonds.” Partnership Africa Canada. p. 1

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26 well as the gross human rights violations that have been perpetrated in these conflicts.54

Strictly speaking, the KPCS is not an international organization: it has no permanent offices, staff, or budget. It relies on the contributions of participants and is supported by industry and civil society observers.55 The KPCS is also not a legally binding treaty; it is a voluntary agreement that states can choose to join or not join. In order to become KP members, states (or regional economic organizations) must create national laws that conform to the internationally agreed-upon minimum standards that restrict the trade of conflict diamonds set out by the KPCS.56 Importantly, since the KPCS prohibits participants from trading with non-participants, the participants include all major rough diamond producing, exporting, and importing countries. As of January 1, 2003, the KPCS had 37 participants. Today, the KPCS has 49 participants, representing 75 countries (the European Community represents 27 countries).57 In all, KP participants account for approximately 99.8% of the global production of rough diamonds.58

The Kimberley Process also has diamond industry and civil society observers who monitor the effectiveness of the certification scheme and provide technical and administrative expertise. There are currently three official Kimberley Process observers: the World Diamond Council (a coalition of diamond mining firms, trading companies, and jewelry industry

54

Ad Hoc Working Group on the Review of the Kimberley Process Certification Scheme. Kimberley Process. “The Kimberley Process Certification Scheme Third Year Review.” November 2006. p. 14

55

Kimberley Process. “Frequently Asked Questions.” Accessed 10 November 2011. <http://www.kimberleyprocess.com/faqs/index_en.html>

56

Smillie, I. (2005) “The Kimberley Process Certification Scheme for Rough Diamonds.” p. 3

57

KP Participants: Angola, Armenia, Australia, Bangladesh, Belarus, Botswana, Brazil, Canada, Central African Republic, People’s Republic of China, the Democratic Republic of Congo, Côte d’Ivoire (currently under UN sanctions and is not trading in rough diamonds), Croatia, the European Community, Ghana, Guinea, Guyana, India, Indonesia, Israel, Japan, the Republic of Korea, the Democratic Republic of Lao, Lebanon, Lesotho, Liberia, Malaysia, Mauritius, Mexico, Namibia, New Zealand, Norway, the Republic of Congo, the Russian Federation, Sierra Leone, Singapore, South Africa, Sri Lanka, Switzerland, Tanzania, Thailand, Togo, Turkey, Ukraine, United Arab Emirates, the United States of America, Venezuela (voluntarily suspended exports and imports of rough diamonds until further notice), Vietnam, and Zimbabwe.

Source: Kimberley Process. “Participants World Map.” Accessed 10 November 2011. <http://www.kimberleyprocess.com/structure/participants_world_map_en.html>

58

Kimberley Process. “Background.” Accessed 10 November 2011. <http://www.kimberleyprocess.com/background/index_en.html>

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27 representatives created in July 2000 to represent industry interests),59 Global Witness, 60 and Partnership Africa Canada (the latter two represent civil society).61

Kimberley Process members, including both participants and observers, meet at annual plenary sessions. These meetings provide members with an opportunity to discuss and make decisions regarding the implementation of the KPCS. Since the KPCS operates on the basis of consensus decision-making, each decision that is reached must be agreed to by each KP member; if one member disagrees with a position, it cannot pass.62 The only exception to this rule is the election of the KP Chair, a position responsible for overseeing the implementation of the KPCS, the operations of the working groups and committees (discussed below), and general KP

administration. KP Chairs are elected for a one-year term at each plenary session.63 So far, the Chairs have included South Africa (2003), Canada (2004), the Russian Federation (2005),

Botswana (2006), the European Community (2007), India (2008), Namibia (2009), Israel (2010), and the DRC (2011). At the November 2011 plenary, the United States was elected as the 2012 KP Chair.64

In addition to annual plenary meetings, KP participants gather during annual

intersessional meetings.65 Intersessional meetings involve smaller working groups, which have members drawn from a cross-section of participants as well as representatives of industry and NGOs, that discuss specific technical issues. In addition to the plenary and intersessional

59

Ad Hoc Working Group on the Review of the Kimberley Process Certification Scheme. Kimberley Process. “The Kimberley Process Certification Scheme Third Year Review.” November 2006. p. 13

60

On December 5, 2011, Global Witness quit the Kimberley Process. See p. 35 for more details.

61

Kimberley Process. “Frequently Asked Questions.”

62

Smillie, I. (2005a) p. 3

63

Kimberley Process. “Chair and Secretariat.” Accessed 10 November 2011 <http://www.kimberleyprocess.com/structure/chair_secretariat_en.html>

64

Miller, J. “U.S. to Chair Kimberley Process in 2012: South Africa Becomes Vice Chair.” Rapaport Magazine. Published 3 November 2011. Accessed 6 November 2011.

<http://www.diamonds.net/news/NewsItem.aspx?ArticleID=37698&ArticleTitle=U.S.+to+Chair+Kimberley+Pr ocess+in+2012>

65

Kimberley Process. “Plenary and intersessional meetings.” Accessed 10 November 2011. <http://www.kimberleyprocess.com/structure/plenary_meeting_en.html>

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28 meetings, working groups meet routinely throughout the year, often by teleconference, to discuss technical issues pertaining to their group.66 The development of these working groups enabled the KP to develop much more rapidly and effectively than it might have if decision-making were confined to once- or twice-yearly formal meetings. These working groups include:

• The Working Group on Monitoring, which deals with issues relating to KPCS

implementation, most importantly on the peer-review mechanism, and crises relating to implementation difficulties in specific countries that might endanger the KP’s;

• The Working Group on Statistics, which ensures timely reporting and analysis of

statistical data on the production and trade of rough diamonds and is responsible for identifying anomalies and ensuring the effective implementation of the KPCS;

• The Working Group of Diamond Experts, which assists with technical problems in the

implementation of the KPCS;

• The Working Group on Artisanal and Alluvial Production, which promotes more effective

internal controls on the production and trade of alluvial diamonds (diamonds found on the earth’s surface, usually in riverbeds, rather than deep underground) in order to ensure that only diamonds produced and traded in accordance with KPCS standards can be exported or polished locally;

• The Participation Committee, which assists the KP Chair in handling the admission of

new participants and assessing their compliance with KPCS requirements;

• The Rules and Procedures Committee, which creates and amends the rules and

procedures that allow the KP to function; and

• The Selection Committee, which reviews and assesses candidates for the position of

Vice-Chair.67

The KPCS has three main mechanisms that enable it to review participant compliance, investigate noncompliance, and hold noncompliant participants accountable: annual reporting, review visits, and review missions. According to the KPCS agreement, KP participants are required to submit annual reports to the KP Chair before each plenary session detailing how they implemented the KPCS in the preceding year, including any problems or discrepancies.68 The KP Chair makes these reports available to the Working Group on Monitoring (WGM), which reviews the reports and prepares summaries for each participant to submit to the plenary. The

66

Smillie, I. (2005a) p. 5-6

67

Kimberley Process. “Working Groups.” Accessed 10 November 2011. <http://www.kimberleyprocess.com/structure/working_group_en.html>

68

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29 WGM can also draw on participant statistics, information submitted by participants to the

Participation Committee (PC), and any additional information submitted by any KP participant regarding the KPCS implementation of another participant (in these instances, the WGM makes the information available to the relevant participant and invites a reply).69

In addition to submitting annual reports, participants are invited to volunteer for a review visit from the KP; the eventual goal is for every KP participant to volunteer for one. Review visits assess participants’ implementation of the KPCS, specifically determining whether they have relevant laws and other procedures in place to implement the minimum requirements and the designated authorities to implement them, and if participants’ systems result in their meeting KPCS requirements.70 Review missions are identical to review visits, with the exception that they are not voluntary; they can be ordered any time the WGM finds credible evidence of significant noncompliance with the KPCS.71 It is also noteworthy that both participants and observers can communicate with the WGM on the compliance of other participants outside of the regular review and report mechanisms.72

Although the above review mechanisms are overseen by the WGM, the PC is also involved in monitoring participant compliance. If the WGM questions a participant’s compliance, they submit it to the PC for review. The PC determines whether the referred participant is willing and able to meet the KPCS minimum requirements by examining its national laws and regulations and scrutinizing its KP Certificate to ensure that it contains the security features. If the PC determines that a participant meets the KPCS minimum

requirements, it informs the KP Chair, the WGM, and the participant concerned.

69

Kimberley Process. “Administrative Decision: KPCS Peer Review system.” Brussels. November 2007. p. 1

70

Kimberley Process. “Administrative Decision: KPCS Peer Review system.” p. 9

71

Kimberley Process. “Administrative Decision: KPCS Peer Review system.” p. 2

72

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30 If the PC finds that the participant does not meet the minimum requirements, however, it informs the KP Chair in writing and recommends further action.73 These recommendations, developed in coordination with the WGM, could include requesting additional information or clarification from the participant; specific actions by the participant; specific actions by other participants that complement the action required of the relevant participant (including targeted trade or customs controls); monitoring visits and reports; enhanced cooperation with relevant international organizations; the use of specific technological instruments, such as mapping, satellite imagery, and dedicated research; and review missions.74 In serious cases of

noncompliance, the PC may recommend the suspension of rough diamond exports and imports until the participant reestablishes KPCS compliance. This can be accomplished voluntarily by the noncompliant participant or by official KP decisions made at plenary sessions, and can be applied together with other measures (such as enhanced monitoring, for example).75

Successes

In the nearly nine years since its inception, the Kimberley Process has been successful in addressing some issues regarding participant noncompliance with the KPCS. Most significant is the case of the Republic of Congo (ROC), which was removed from the KP in 2004 after a review mission concluded that the country was not complying with KPCS minimum

requirements. The review mission, invoked because the country’s rough diamond exports far exceeded its production capacity, found that the ROC’s authorities were unable to account for this massive discrepancy. It also found that the ROC was issuing Kimberley Process Certificates

73

Kimberley Process. “Administrative Decision: Participation Committee Terms of Reference.” Gatineau, Quebec. 29 October 2004. p. 2

74

Kimberley Process. “Guidelines for the Participation Committee in Recommending Interim Measures as regards Serious Non-compliance with KPCS Minimum Requirements.” New Delhi. Published 5 November 2008. p. 2

75

Kimberley Process. “Guidelines for the Participation Committee in Recommending Interim Measures as regards Serious Non-compliance with KPCS Minimum Requirements.” p. 3

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31

for diamonds smuggled in from neighboring countries.76 The removal of the ROC for

noncompliance demonstrated that the KP did, in fact, have the “teeth” necessary to enforce its minimum requirements. In 2007, after reestablishing and demonstrating compliance, the ROC was readmitted to the KP.77

Ongoing Challenges

Despite its success in the Republic of Congo, the KP faces ongoing challenges in several different countries – Côte d’Ivoire, Venezuela, and Zimbabwe – that call its effectiveness into question. Côte d’Ivoire, one of the original KP members, has never issued KP Certificates and therefore officially prohibits the export of rough diamonds from its territory because its diamond mines are under the control of a rebel group. After a failed coup in Côte d’Ivoire in 2002, the country was unofficially divided in two: the south was controlled by the government and the north was controlled by the New Forces (FN), an amalgam of several different rebel groups.78 Cote d’Ivoire’s diamond mines, which are located in the north, fell under the control of the FN, which began to smuggle diamonds out through several neighboring countries in order to fund their movement.

In addition to Côte d’Ivoire’s internal ban, in 2005, the UN imposed sanctions on the Ivoirian diamond trade, thus extending the KP’s prohibition on the trade of Ivoirian diamonds to all UN members. Unfortunately, despite the KP ban and UN sanctions, a UN investigation in 2011 found that diamond production in the north continues unabated, and may have even

increased. Regional and international buyers continue to procure diamonds from Ivoirian mines,

76

Kimberley Process. “Kimberley Process Removes the Republic of Congo from the List of Participants.” News Release, No. 004. Published 9 July 2004.News Release: Kimberley Process Removes the Republic of Congo from the List of Participants. July 9, 2004.

77

Kimberley Process. “2007 Kimberley Process Communiqué.” Published 8 November 2007. p. 2

78

United States Department of State. “Background Notes: Côte d’Ivoire.” Updated 27 October 2011. Accessed 9 November 2011. <http://www.state.gov/r/pa/ei/bgn/2846.htm>

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32 and neighboring countries, several of which are KP participants, continue to be major transit routes for Ivorian rough diamonds. The UN report estimates that annual revenues from the sale of rough diamonds range between $12 million and $23 million, and suspects that much of these revenues are used to purchase arms.79 The report also finds evidence that these revenues may have even funded the government-sponsored violence that followed the 2010 Ivoirian

presidential election.80

In October 2007, Global Witness called for the expulsion of Venezuela from the KP for noncompliance, arguing that Venezuela was smuggling large quantities of diamonds, worth millions of dollars, into Guyana and Brazil, where they entered the legitimate diamond trade.81 At its 2007 plenary, however, the KP did not expel Venezuela; instead, they noted Venezuela’s progress in implementing the KPCS minimum standards, specifically its submission of statistical and annual reports as well as requesting a review visit for early 2008. In 2008, however, after Venezuela ignored several attempts by the KP to organize a review visit, the WGM referred the matter to the PC so that it could examine Venezuela’s compliance. Shortly thereafter, Venezuela announced that it would cease certifying its diamonds and voluntarily remove itself from the KP for a period of two years so it could establish credible internal controls.82

After suspending itself from the KP, Venezuela recorded production levels of zero carats in 2009 and 2010, despite having recorded production levels of 14,502.84 carats in 2007 and 9,380.94 carats in 2008.83 Global Witness claims that Venezuela is simply ignoring KPCS rules

79

UN Group of Experts on Côte d’Ivoire. (2011) “Report of the Group of Experts on Côte d’Ivoire pursuant to paragraph 14 of Security Council resolution 1980 (2011).” United Nations. pp. 13-14

80

UN Group of Experts on Côte d’Ivoire. (2011) p. 18

81

Global Witness. “Kimberley Process Must Expel Venezuela: Illicit trade risks undermining international scheme to combat blood diamonds.” Published 9 October 2007. Accessed 18 November 2011.

<http://www.globalwitness.org/library/kimberley-process-must-expel-venezuela>

82

Khullar, R., KP Chair 2008. [Letter directed to “All the Members of the KPCS.”] Dated 9 July 2008. p. 1

83

Kimberley Process. “Annual Global Summary: 2007 Production, Imports, Exports and KPC Counts.” Kimberley Process. “Annual Global Summary: 2008 Production, Imports, Exports and KPC Counts.”

THE KIMBERLEY PROCESS