Abbey Chikane, the Kimberley Process Monitor tasked with ensuring that diamonds from Marange meet the minimum requirements of the KP Certification Scheme, has come under a lot of flak for certifying diamonds worth about $160 million without authority from the chairman of the diamond body or its Working Group or Monitoring. But he has explained why he did so. He argues that he had no option but to oblige to the request by the Zimbabwean government to save the entire diamond industry.
On the 4th of November 2010, the government of Zimbabwe repeated its demand for the KP Monitor to immediately return to Zimbabwe to certify the current production and stockpile. The message from the Zimbabwean authorities stated that “there shall be consequences should the Monitor not avail himself to perform his functions in terms of the supervised export mechanism and that the government of Zimbabwe reserves its rights”.
The KP Monitor did not return to Zimbabwe as requested by the government of Zimbabwe because the chairman of the Kimberley Process Certification Scheme had assured plenary that further negotiations with key stakeholders were under way. During the week of the 11 November 2010, the government of Zimbabwe informed the KP monitor that diamond buyers had been invited to view the stockpile and that the Zimbabwean leadership had decided to sell all rough diamonds that were mined in Marange.
On Friday 12 November 2010, diamond buyers visited Zimbabwe to view the goods and offers were made to Mbada and Canadile. The KP Monitor was concerned that the leadership of Zimbabwe had finally carried out a serious threat that it had been making over several months and had given its agencies and mining companies a permission to sell Marange diamonds (estimated at just below 4 million carats) and that the consequences of such an action would result in, amongst others, the following:
- The credibility of the Kimberley Process was most likely to be shaken if not destroyed completely;
- The government of Zimbabwe would sell and export rough diamonds outside the Kimberley Process system;
- Rough diamonds sold and exported by unknown diamond dealers would end up in the possession of unscrupulous persons who would most likely launder money for undesirable activities;
- The diamond market would be flooded with millions of illicit diamonds resulting in a major crisis in the diamond market, low prices, and the loss of jobs in diamond producing regions, including Africa, India and Belgium;
- Consumer confidence would be shattered resulting in less sales during the December period;
- Zimbabwe would be expelled from the Kimberley Process, a move that would encourage non participants to trade among themselves outside the Kimberley Process system;
- Zimbabwe’s neighbouring diamond producing countries would face a major challenge of stopping Marange diamonds from entering their countries.
Against this background, the KP Monitor offered to engage Zimbabwean authorities. At their invitation, he arrived in Zimbabwe on Friday 12 November 2010. On arrival, protracted discussions and disagreements ensued and a compromise was reached. The following principles laid the basis for the KP Monitor’s judgment call:
- The Zimbabwean authorities must delay the sale of the stockpile and other parcels for a few days in order to give the Chairman of the Kimberley Process some time to conclude negotiations with key stakeholders on Marange diamonds;
- The KP Monitor must examine Mbada and Canadile stockpiles and record production that was presented to him, confirm carats, seals, pictures/photos of diamonds in question and all the necessary information to enable participants to identify such goods;
- In the event that the Marange diamonds are sold and exported, Zimbabwe will not flood the market. This meant that the Zimbabwe authorities needed to prepare a plan for the disposal of the stockpile;
- Marange diamonds should not be sold to non-participants;
- Marange diamonds will not be sold without the Kimberley Process certificate;
- The government of Zimbabwe designated a person who will ensure that the proposed approach is respected;
- The KP Monitor will conduct a supervised export mechanism on all rough diamonds that were destined for export outside the Kimberley Process with the understanding that the goods will then be handled in accordance with the Kimberley Process Certification Scheme; and
- The Zimbabwe authorities will only sell the diamonds if the chairman of the Kimberley Process failed to facilitate an agreement with participants and observers.
It is important to note that the KP Monitor’s judgment call does not constitute a formal agreement with the Zimbabwean authorities. However, in the interest of the Kimberley Process Certification Scheme and Zimbabwe, the global diamond industry and the consumer, Marange diamonds should only be exported through Kimberley Process Certification Scheme channels.
The KP Monitor’s understanding on this matter is that Marange diamonds are still in safe keeping (unless proven otherwise) and that they remain within the Certification Scheme.
The possibility that Marange diamonds could have been sold in the open market outside the Kimberley Process Certification Scheme system should be a source of serious concern. The ripple effects of such a move will be felt in Southern African diamond producing countries as well as the entire global diamond industry. Consumer confidence will be shaken and the sale of diamond jewellery during the festive season (December 2010), particularly in New York, which consumes over 40 percent of the diamond jewellery, will experience a knock-on effect.
Last, but not least, the price of diamond jewellery will fall below the market rate and as a consequence, jobs will be lost on poor diamond producing countries.
All the constructive engagements within the Kimberley Process among stakeholders on human rights issues, corporate social responsibility, transparency, accountability and responsibility which are progressing well would be pushed back and overshadowed by these events.
It is the KP Monitor’s view that in the past nine months, much has been achieved and much more can be gained if all the relevant stakeholders could be actively engaged in the finalisation and conclusion of negotiations on this important and very sensitive matter.
The KP Monitor Terms of Reference states that his job is to support the implementation of the Swakopmund Plenary Administrative Decision and Joint Work Plan and to work with Zimbabwe towards full compliance with the minimum requirements of the Kimberley Process Certification Scheme.
In respect of the above, the KP Monitor, as the co-architect of the Kimberley Process Certification Scheme, also provides advice to both the Kimberley Process and the government of Zimbabwe, especially when the system fails. The visit to Zimbabwe and the certification which took place in terms of the supervised export mechanism were not sanctioned by the Working Group on Monitoring or by the chairman of the Kimberley Process due to the special nature and context of the visit. Also, the KP Monitor did not have the expectation that the Working Group on Monitoring would be in a position to decide on the matter due to the dynamics in the Working Group on the status of Zimbabwe, as demonstrated over the last year.
At the time that the KP Monitor was negotiating a sensible solution to the problem of Zimbabwe seeking to export goods outside the Kimberley Process Certification Scheme, it was the personal assessment of the KP Monitor that the Working Group on Monitoring would not have the ability or capacity to reach an urgent decision on the matter.
As a result, under great personal duress, the KP monitor chose to make a decisive move by conducting the supervised export mechanism on all rough diamonds that were destined to be exported by Zimbabwe outside the Kimberley Process system. He weighed up and considered all the complex matters mentioned above as the basis of his decision. His comfort was that these diamonds, if exported would still be tracked and traced inside the Kimberley Process Certification Scheme system. To date, these diamonds are still in safe keeping in Zimbabwe, until the chairman of the Kimberley Process has concluded his negotiations on the shipment of Marange diamonds.
It is the sincere hope of the KP Monitor that the Kimberley Process is able to demonstrate the political will to rise to the serious challenge facing the Scheme and reach a workable acceptable agreement that will serve the interests of the Scheme and the participants and observers that have invested considerable time and effort to ensure that conflict diamonds, as defined in the core document of the Scheme, do not find their way into the legitimate international trade in rough diamonds.
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