The NDC report not only dispels the myths about lab diamonds as previously announced, but also presents mined diamonds in an extremely positive light. It addresses a wide variety of points on which mined diamonds have been repeatedly criticized in recent years, and these are then refuted by the NDC. One common criticism is that mining is unethical, that it finances conflict, and that there is too little independent monitoring of working conditions. The NDC Report has devoted the chapter "How are natural diamonds ethically sourced?" to this issue. In this section of the report, the NDC explains the control mechanisms in place to ensure that NDC members' natural diamonds are sourced ethically. DIAVON has researched these control mechanisms in more detail, with the result that there are definitely some weak points and possibly not everything is done as ethically as presented by the NDC.
The NDC report says it is very important to ensure that diamonds are mined under ethical conditions. "This includes upholding labor
rights, decent working conditions, no child labor,
the existence of health and safety measures and
importantly, strong business ethics with respect
for local communities." In addition, trade in conflict diamonds must be excluded. Below, the NDC outlines three control mechanisms through which all of these points are to be ensured: the Kimberley Process, the World Diamond Council's System of Warranties, and the Responsible Jewellery Council's certificate, which also comes with strict controls. We took a closer look at the extent to which these three control bodies can actually deliver what the NDC Report promises.
The Kimberley Process - a guarantee for conflict-free diamonds?
The Kimberley Process is a system designed to stop the trade in conflict diamonds. The Kimberley Process came into force in 2003 in response to the bloody diamond trade receiving increasing international attention in the 1990s. At the time, some countries were experiencing civil wars or civil war-like conflicts in which rebel groups financed themselves through the illicit diamond trade and attempted to overthrow governments. All countries participating in the Kimberley Process are only allowed to import diamonds from other member states, and similarly only allowed to export to member states. This ensures that all diamonds that receive a Kimberley Process certificate come from conflict-free sources - at least in theory.
The problem with the Kimberley Process starts with the definition, which has been the same for 20 years and has never been adjusted. On the homepage, the Kimberley Process is defined as follows:
"The Kimberley Process is an international certification scheme that regulates trade in rough diamonds. It aims to prevent the flow of conflict diamonds, while helping to protect legitimate trade in rough diamonds. The Kimberley Process Certification Scheme (KPCS) outlines the rules that govern the trade in rough diamonds." (https://www.kimberleyprocess.com/en/faq)
The Kimberley Process thus only regulates the trade in rough diamonds. Consequently, however, it is still possible for rebel groups to trade in conflict diamonds if they have been roughly cut or, for example, provisionally processed into a pair of earrings (cf. Burkhalter 2003 in: Rush & Rozell 2017: 103). The Kimberley Process could therefore be far more effective against conflict diamonds if it applied generally to all diamonds (cf. Rush & Rozell 2017: 103).
Another problem with the Kimberley Process is the definition of conflict diamonds. According to the homepage, conflict diamonds are defined as follows:
"onflict diamonds, also known as ‘blood' diamonds, are rough diamonds used by rebel movements or their allies to finance armed conflicts aimed at undermining legitimate governments."
Thus, no unethically mined diamonds fall under the definition as long as the diamond trade is not intended to finance the overthrow of a legitimate government (cf. Henleben 2020: 120). This allows for different constellations in which the Kimberley Process does not apply in reality, although this would make sense.
Russian diamonds, for example, are not officially considered conflict diamonds. The Russian company Alrosa, one of the largest diamond producers in the world, is admittedly 20% owned by the Russian Federation, which is presumably why the revenues from the diamond trade also flow into the war of aggression against Ukraine. However, since a legitimate government is being financed by the diamond trade, and not a rebel group trying to overthrow that government, the Kimberley Process does not apply in the case of Russia.
A similar problem already existed with Zimbabwe in 2010, when Robert Mugabe, president of the corrupt but legitimate regime there, used the trade in conflict diamonds to expand his power and remain in office (cf. Rush & Rozell 2017: 102). The problem that now arises with Russia is thus by no means new and surprising for the participants of the Kimberley Process.
Lack of policy enforcement
Zimbabwe has also set a precedent in terms of enforcing the Kimberley Process guidelines. In the course of diamond mining, the government committed numerous human rights violations, which is why the country was initially suspended from the Kimberley Process ( cf. Rush & Rozell 2017: 102). In response, Zimbabwe threatened to simply resell its diamonds on the illegal market. In this case, control and prevention of human rights violations would have become definitively impossible and for other countries this would have sent the message that conformity with the Kimberley Process guidelines is not necessary to trade diamonds (ibid.). Therefore, despite the human rights violations, Zimbabwe was allowed to continue participating in the Kimberley Process and conflict diamonds originating from there could continue to be traded under a "facade of legitimacy" (Hilson & Clifford 2010: 432).
The Zimbabwe case already shows that the Kimberley Process can reach its limits in enforcing its guidelines. However, there is a general problem with the control mechanisms in the Kimberley Process Certification Scheme. This is also indicated by the case of Venezuela. Venezuela is also a member of the Kimberley Process, but since 2005 the country no longer provides statistics on mined diamonds, import and export volumes to the Kimberley Process authorities. Officially, Venezuela claims that it no longer mines diamonds and has stopped importing and exporting. However, Global Witness reports that Venezuela is still mining and trading diamonds. Presumably, the stones are smuggled to neighboring countries and certified there (see Rush & Rozell 2017: 103). This example reveals a major problem of the Kimberley Process: there is a lack of reliable controls to ensure that the diamonds were really traded according to the Kimberley Process guidelines (ibid.).
This is mainly due to the fact that the participating states are largely responsible for the corresponding controls themselves and can proceed more or less strictly (cf. Henleben 2020: 121). Although the enforcement of legal regulations is a prerequisite for participating in the Kimberley Process, there are hardly any guidelines that determine the content or even the strictness that the laws of the member states must demonstrate (ibid.).
All these points make it clear that an adjustment of the definitions and a restructuring of the Kimberley Process Certification Scheme with independent controls would be necessary to make the Kimberley Process more effective. However, another problem arises: the consensus of all 59 member states is necessary for a decision to be made; even the veto of a single state can block a decision (cf. Henleben 2020: 121). Because of this inherent ineffectiveness, it is extremely difficult to implement changes to increase the efficiency of the KPCS (ibid.).
The World Diamond Council's System of Warranties (SoW)
The SoW is intended to cover areas outside the Kimberley Process. It requires a guarantee statement from professional buyers and sellers on all invoices whenever a diamond, whether rough, cut or already incorporated into a piece of jewelry, changes hands. The SoW guidelines also govern compliance with human rights, general labor rights, as well as anti-money laundering and anti-corruption, at least that's how the NDC Report explains the benefits of the SoW for maintaining ethical standards in the diamond trade.
The System of Warranties consists of 23 guidelines that can be divided into four areas: Implementation of the Kimberley Process Certification Scheme and Industry Self-Regulation under the KPCS, Human Rights, Prevention of Corruption, and Prevention of Money Laundering.
The first 9 guidelines are dedicated to the implementation of the KPCS, here it is specified exactly from whom WDC members are allowed to buy diamonds, which certificates a diamond has to bring etc.. All members are supposed to implement these guidelines and at the end of this first section it literally says:
"Failure to abide by the aforementioned principles exposes the member to expulsion from industry organisations."
The next three sections cover all ethical aspects not covered by the Kimberley Process. In the section on human rights, the binding formulation " should " can only be found in guideline 10. It says that WDC members should "respect human rights, which means that they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved". However, there follows no addition as in points 1.-9. that violation of this guideline will lead to expulsion from the industry organizations. Therefore, it is questionable what the consequences would be for a violation of this guideline.
Guidelines 11-17 are also dedicated to human rights, but seem to have a less binding character. Here the SoW Guidelines state, "WDC members and all other adherents to the SoW are encouraged to..." follow the guidelines below. The same wording is found in the sections on prevention of money laundering and corruption. Again, there is no longer an addendum indicating that violation of these guidelines will result in expulsion of the member from the industry organizations.
A closer look at the SoW's guidelines thus reveals that it is primarily the guidelines on compliance with the KPCS and the first general guideline on compliance with human rights that have a binding character. This does not seem to be the case with the remaining guidelines, nor is it regulated what the consequences of a violation of guidelines 11.-23. will be. Therefore, it is doubtful whether the SoW is really able to effectively guarantee those ethical standards in the diamond trade that the Kimberley Process does not take into account, if the guidelines have such a non-binding character.
Membership in the RJC as a guarantee for ethically impeccable diamonds
Last but not least, the NDC report mentions the Responsible Jewellery Council as a control authority in the diamond trade. The members of the RJC are subject to strict controls that guarantee a sustainable value chain as well as regulations on "due diligence for human rights, responsible sourcing in high-risk areas, labor rights with regard to contracts, wages, health and safety, grievance procedures, child labor, forced labor, freedom of association and the right to collective bargaining". What is interesting here is that apparently only four of the six members of the Natural Diamond Council are also members of the RJC. In a search of the RJC's membership database, neither Petra Diamonds nor Murowa Diamonds can be found. So even if the RJC can indeed guarantee high ethical standards in the diamond trade, this is apparently a valid argument for only four members of the Natural Diamond Council.
Our research has shown that there is still a lot to be done in the diamond trade so that one can really speak of 100% conflict-free and ethically mined diamonds. The many control bodies show that the industry is interested in transparency and regulation and wants to guarantee certain values to the customers. We hope that this can be implemented even better in the future, for example by adapting the framework conditions of the Kimberley Process or possibly also by making the System of Warranties of the World Diamond Council more binding and ensuring that violations have clear consequences.
Burkhalter, H. (2003). A diamond agreement in the rough. Foreign Policy, 73 (2), 72-73 in: Rush, S. J., & Rozell, E. J. (2017). A Rough Diamond: The Perils of the Kimberley Process.
Henleben, Claire (2020). The Kimberley Process' Legacy: How the 2000 Certification Process for Conflict-Free Diamonds Can Help Solve Contemporary Human Rights Violations Within the Cobalt & Coltan Mining Industries. Loyola University Chicago International Law Review, 16(1), 115-127.
Hilson, G, and Clifford, M . (2010). A 'Kimberley Protest': Diamond Mining, Export Sanctions, and Poverty in Akwatia, Ghana. African Affairs, 109(436): 431-50. DOI: http://dx.doi.org/adq020
Rush, S. J., & Rozell, E. J. (2017). A Rough Diamond: The Perils of the Kimberley Process. Archives of Business Research, 5(11), 101-107. DOI: https://doi.org/10.14738/abr.511.3858.
Kimberley Process: https://www.kimberleyprocess.com/en/faq. Last accessed 1 June 2023.
World Diamond Council: System of Warranties Guidelines, 2nd edition (2020).
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