With its civil society partners, PAC’s vision for the diamond supply chain is one in which the diamond sector is responsibly managed by governments, industry and local communities so as to strengthen and support human security, local community beneficiation and national economic development.
To achieve this vision, PAC takes a multi-faceted approach to governance, recognizing that accountable institutions need to be built at the local, national, regional and international levels, and that a multiplicity of actors need to be involved in the design, development and implementation of these institutions.
This multi-faceted approach is based on the idea that contemporary efforts to manage global supply chains in pursuit of socially responsible objectives cannot depend on any one type of governance system, or any one type of governance actor. Instead, efforts to achieve sustainable development outcomes in supply chains should tap into multiple, intertwining governance mechanisms.
Accordingly, PAC works on designing and improving governance through:
- Inter-state agreements (e.g. the Kimberley Process Certification Scheme).
- National action (e.g. training customs officials to tackle diamond smuggling).
- Community projects (e.g. supporting civil society groups to monitor human rights violations and analyze how diamond revenues are distributed).
- Private-sector activities (e.g. advocating for industry to develop more robust ‘non-state market driven mechanisms', such as the Responsible Jewelry Council’s Chain of Custody initiative or improving the World Diamond Council inadequate system of warranties).
PAC and its partners also invest substantial resources into monitoring the implementation of the KPCS and identifying ways to strengthen its ability to be a global governance tool. This work has focused primarily on providing reform options for the KP, as well as fostering better collaboration among enforcement agencies (customs and police) in KP countries.
PAC’s research is recognized internationally for its accuracy and influence. In-depth studies on important and major problems within the diamond industry or KP participating countries have earned us praise, and sometimes the wrath of our targets.
Our work led an American Senator and two Congressmen to co-nominate PAC for the 2003 Nobel Peace Prize. Two of PAC’s research associates—Ian Smillie and Lansana Gberie—were also awarded the prestigious Canadian Policy Research Award, in recognition of their ground breaking research in West Africa.
Other examples of the impact of PAC’s work include:
- Evidence of rights abuses and smuggling uncovered in Diamonds and Clubs: The Militarized Control of Diamonds and Power in Zimbabwe was used by several governments in June 2010 to maintain an export ban on Marange diamonds and call for greater compliance by Zimbabwe.
- Two PAC reports on Brazil revealed massive fraud in its diamond industry, resulting in a complete shutdown of Brazilian diamond exports for more than six months in 2006, and a complete restructuring of the country's control systems.
- A PAC report in 2006 showed that 100% of Venezuela's diamond production is non-compliant with KPCS standards and is being smuggled out of the country, leading Venezuela to self-suspend from the KP.
- A joint 2004 PAC-Global Witness report, "Rich Man, Poor Man – Development Diamonds and Poverty Diamonds: The Potential for Change in the Artisanal Alluvial Diamond Fields of Africa," led to the creation of the Diamond Development Initiative.
- A PAC report on Liberian diamond sanctions in June 2004 was used by members of the UN Security Council to inform their deliberations.
- PAC’s seminal 2000 report “The Heart of the Matter” provided most of the background information for the 2006 film, Blood Diamond, starring Leonardo DiCaprio.
While PAC has often played a watchdog role in the Kimberley Process and other fora, our reports have always been solutions oriented, providing realistic policy solutions to decision-makers in governments and industry that are aimed at improving resource governance in Africa.
What is the Kimberley Process?
The Kimberley Process Certification Scheme for rough diamonds came into effect on January 1, 2003.
Over 80 countries, including all those represented by the European Community, participate.
Under the terms of the KPCS, each participating government agrees to issue a certificate to accompany any rough diamonds being exported from its territory, certifying that the diamonds are conflict-free. Each country must therefore be able to track the diamonds being offered for export back to the place where they were mined, or to the point of import, and it must meet a set of standards for these internal controls.
All importing countries agree not to allow any rough diamonds into their territory without an approved KPCS certificate. It is forbidden to trade diamonds with any non-KP member countries.
Given the large volume of diamonds being traded across borders, it was deemed necessary to produce trade and production statistics which can be compared and analyzed in order to ensure that the diamonds leaving one country match those entering another, by volume and by value.
PAC and the Kimberley Process
The 'Kimberley Process (KP)' was initiated in May 2000, in the town of Kimberley, where South African diamonds were first discovered in the 1860s.
Concerned about how diamond-fuelled wars in Angola, Sierra Leone and the Democratic Republic of the Congo might affect the legitimate trade in other producing countries, the government of South Africa called for a meeting between diamond producing and trading country governments, industry and NGOs in an effort to grapple with the problem of conflict diamonds—a problem that NGOs and the United Nations had brought to public attention over the previous 18 months.
It then took three years of meetings on a regular basis to develop an international certification system for rough diamonds – The Kimberley Process Certification Scheme (KPCS).
PAC became involved in the conflict diamond issue in 1999 out of concern about the lack of international interest in Sierra Leone's conflict. The investigation focused on what was sustaining the various groups into carry out the protracted conflict, and attention turned to diamonds.
In January 2000, PAC published "The Heart of the Matter: Sierra Leone, Diamonds and Human Security," which received widespread attention in the media. It provided the first "logical" explanation for the war and its duration, and helped bring badly needed international attention to Sierra Leone. A UN Sanctions Committee on Angola later released a report on the connection between diamonds and weapons that confirmed what PAC had said about the diamond industry at large, and the particular role of the industry's main trading centre, Antwerp.
In May 2000, PAC participated in the first meeting, convened by South Africa, of what eventually became the Kimberley Process. Two months later, in July, engagement with the diamond industry led to an invitation to the Antwerp World Diamond Congress, which resulted in the creation of the World Diamond Council, the other observer group in the KP. Ian Smillie, PAC's Research Coordinator at the time, also took a leave of absence to participate in the second United Nations Security Council Expert Panel, examining the connection between weapons and diamonds in West Africa.
PAC was directly involved in all KP negotiating meetings between 2000 and 2002, and has participated in every major meeting since the official launch of the KPCS in 2003. PAC currently participates in KP working groups on monitoring, statistics, rules and procedures, and membership, and we have been part of review missions to more than 15 countries. We also coordinate the work of the KP Civil Society Coalition, a network of non-governmental organizations in Africa, Europe and North America which are working to end diamond-related conflict.
In recent years we have voiced our concerns at the way in which the KP has floundered when faced with clear cases of non-compliance by participant countries—particularly the examples of Venezuela and Zimbabwe. We draw two conclusions from this experience. The first is that the KP is too important to fail, and the prospect of a return to a world in which such a potentially dangerous commodity is unregulated is not an option. This is particularly true in a post-9/11 context in which diamonds lend themselves so easily to funding terrorist activities. The second is that the KP alone is an insufficient tool to respond to the myriad ways in which criminal elements seek to illicitly control, smuggle from, and terrorize in, diamond producing zones.
With this in mind, PAC’s response has been two-fold. Despite our grave reservations about the direction the KP has taken in recent years, we, along with our civil society partners, have redoubled efforts to push for structural reforms that will make the KP more adaptive and responsive to evolving criminality and any other challenges it may face. On many occasions we have crafted and championed ambitious reforms both inside and outside the KP.
PAC has also adopted a multi-faceted approach to creating a sustainable and responsibly managed diamond industry. It is detailed more fully here.
Conflict Diamonds Today
Some in the diamond industry like to say that conflict diamonds never represented more than four percent of the world's total, and that today they represent a fraction of one percent. However, in the mid to late 1990s, conflict diamonds represented as much as 15 percent of the world's total—backed up by the well documented cases of diamonds haemorrhaging out of Angola, the DRC and Sierra Leone.
While the KP has undoubtedly lowered the flow of conflict diamonds, accurately quantifying the current levels of illicit diamonds in the supply chain is difficult. The reason is as much historical, as definitional.
One the one hand, the diamond fuelled wars in Angola, Liberia and Sierra Leone have ended. The political situation in the Democratic Republic of the Congo is fragile, and while diamonds may be fuelling some of the instability, there are no major pockets of traditionally defined conflict diamonds. The only recent sources of such conflict diamonds have been in Central African Republic and northern Côte d'Ivoire, which was under rebel control until the 2011 elections.
The greater challenge in assessing current illicit flows is definitional. Traditionally the KP has defined conflict diamonds as only those that finance conflict waged by rebel groups against governments. The KP, however, has not accounted for the way in which conflict and illegality changes over time.
In recent years the worst perpetrators of violence in diamond producing areas are not rebels but state actors. The worst examples of this are Zimbabwe and Angola, where security forces control contested mining areas and have been documented to routinely and systematically abuse artisanal miners and local communities.
PAC has long called for a newer and broader definition of conflict diamonds that reflects the role state actors play in human rights abuses in diamond zones. In our mind, all human rights abuses in diamond producing zones are abhorrent, irrespective of whether the perpetrator is a rebel or government soldier. To this end, PAC is currently working with governments and the World Diamond Council to have a more comprehensive definition adopted by the KP that takes into consideration such modern realities.
Conflict Diamonds: The Facts
During the 1990s and into the beginning of this century, rebel armies in Angola, Sierra Leone and the Democratic Republic of the Congo (DRC) exploited the alluvial diamond fields of these countries in order to finance wars of insurgency.
Alluvial diamonds, unlike those mined in the deep kimberlite "pipes" of Botswana, Russia and Canada, are found over vast areas of territory, often only a few inches or feet below the surface of the earth. Alluvial diamonds have proven difficult to manage and to regulate. Because of their high weight-to-value ratio, the ease with which they can be mined and smuggled, and endemic corruption in the global diamond market, alluvial diamonds became a ready target for rebel armies.
The trade in conflict diamonds began in the early 1990s with Jonas Savimbi's National Union for the Total Independence of Angola (UNITA) in Angola, but was quickly copied by the Revolutionary United Front in Sierra Leone, with assistance from Liberia's warlord president, Charles Taylor. It was then taken up by rebel and invading armies in the Democratic Republic of the Congo (DRC) and has affected the diamond industries of Guinea, Liberia and Côte d'Ivoire as well. As much as 15% of the world's $10 billion annual rough diamond production fell into the category of conflict diamonds in the late 1990s. Hundreds of thousands of people died as a direct result of these wars, and many more died of indirect causes. Millions of people were displaced, health and educational infrastructure was destroyed, and development was reversed.
Historically, effective diamond regulation has proven almost impossible, whether in Africa, Europe, Asia or North America. This is partly because of the necessary security issues around such a valuable commodity, but it is also because much of the trade in diamonds, after they have been mined and marketed – in some cases by very large companies – has traditionally been in the hands of small, close-knit family enterprises, the kind of enterprise that defies effective governmental regulation. For example, high taxes have only served to drive diamonds underground, and most governments long ago stopped trying to impose more than minimal duties on rough diamond imports and exports. Even so, a parallel diamond economy, operating in grey and black markets, has always existed. Diamonds have thus proven useful in money laundering, and have been used to finance drugs and other illicit goods.
In Africa, where more than 70% of the world's gem diamonds (by value) were produced throughout most of the 20th century, diamonds were used to hide and export profits and capital, and – as an alternative hard currency – to finance imports in weak economies. Corrupt and predatory governments in Sierra Leone, the DRC and Angola drove the diamond business even further underground. In addition, beyond the largest diamond mining companies, much of the legitimate diamond trade operated largely on a cash basis, without formal contracts or auditable paper trails. Diamonds were almost ideally suited to the purpose for which rebel armies came to use them. This is what the Kimberley Process Certification Scheme sought to end.
Lightweight, valuable, easy to mine and smuggle, rough diamonds have been responsible for fuelling some of the worst armed conflict in Africa—from Sierra Leone and Liberia, to Angola and the Democratic Republic of Congo.
More recently countries like Zimbabwe and Angola have emerged as the main perpetrators of diamonds-related human rights abuses, as their governments have waged violent campaigns to control lucrative diamond fields. Diamonds are often used to perpetuate corruption and deprive states of much needed revenues.
For over a decade we've been at the forefront of a global campaign to stop violence in diamond producing areas and create a responsibly managed diamond supply chain.
Our investigation and reporting on conflict financing and diamonds in the Sierra Leone war, led to PAC's publication of "The Heart of the Matter: Sierra Leone, Diamonds and Human Security," which drew international attention to the issue of conflict diamonds.
PAC has played an integral leadership role in the creation of the Kimberley Process (KP), a UN mandated system initiated in 2000 to break the link between rough diamonds and armed conflict. We helped negotiate the Kimberley Process Certification Scheme, the regulatory mechanism used by the Kimberley Process which came into effect in 2003, and we continue to be an active member in the process.
For our work to end the trade of conflict diamonds, PAC was nominated for a Nobel Peace Prize in 2003.
We continue to carry out extensive investigative and policy research, public education and advocacy on conflict diamonds, and the developmental potential of diamonds. We collaborte with civil soceity, governments, and the diamond industry across Africa and globally to ensure greater development impact from diamonds, especially in countries emerging from conflict, so that diamonds become an asset for, rather than a detriment to peaceful and long-term development.