Session 1 - The Kimberley Process: Its role and contribution to a conflict-free diamond industry in Africa

 

This session was led by Ambassador Welile Nhlapo, Chairperson of the Kimberley Process, and Honorable Edward Chindori-Chininga, Chairperson of the Parliamentary Portfolio Committee on Mines and Energy of Zimbabwe.

In his presentation, Ambassador Nhlapo focused on three areas: the African perspective on the KP; the continued role and relevance of the KP; and the role of Non-Governmental Organisations (NGOs) in supporting a clean, apolitical, transparent and people-centred KP.

Claude Kabemba's picture

Director of the Southern Africa Resource Watch (SARW)

October 30th, 2013

 

This session was led by Ambassador Welile Nhlapo, Chairperson of the Kimberley Process, and Honorable Edward Chindori-Chininga, Chairperson of the Parliamentary Portfolio Committee on Mines and Energy of Zimbabwe.

In his presentation, Ambassador Nhlapo focused on three areas: the African perspective on the KP; the continued role and relevance of the KP; and the role of Non-Governmental Organisations (NGOs) in supporting a clean, apolitical, transparent and people-centred KP.

From the outset, Ambassador Nhlapo wanted to dispel the view that African minerals are conflict minerals. He argued that Africa’s natural resources should not be stereotyped as conflict minerals as this creates a negative perception against Africa’s natural resources as a whole. However, he acknowledged that there is a need to promote good governance in how resources are managed and affirmed that Africa’s resources belong to both present and future generations. As such, sustainable extraction methods are necessary if future generations are to benefit from their country’s natural wealth.

He stressed the need for Africa to create its own governance mechanisms and establish and fund its own projects if the continent’s development projections are to be achieved. He warned African leaders against adopting non-African governance mechanisms, which might not provide the best guide to how the continent should be extracting and managing its natural resources. He emphasised that such obligations belong to African governments and not external actors.

Ambassador Nhlapo proposed the creation of a common African defence and security mechanism to guard against the outbreak of mineral-related violence, and suggested that the KP could be integrated within the frameworks of the African Union Peace and Security Council. Such a move, he argued, is likely to promote the KP’s objectives of peace, security and development. He suggested that the structures of the KP should also collaborate and complement the works of the United Nations, especially in areas where sanctions have been imposed on KP member states.

The ambassador did not shy away from stating that western and emerging countries are already embarking on a new scramble for Africa, which is opening up opportunities but also creating serious challenges for the continent. He argued that most extractive concessions between African governments and developed and emerging governments generally fail to benefit Africa.

On the subject of the role and relevance of the KP, the ambassador argued that the KP should be a dynamic vehicle that is capable of adapting to changing circumstances and challenges. He reiterated the importance of the scheme to the African extractive sector and argued that the KP remains the most suitable resource governance mechanism for assisting African countries to develop their infrastructure and strengthen their internal administrative and legislative frameworks.

Linking the relevance of the KP to the Central Africa Republic (CAR), he argued that it is the duty of the KP to assist in rebuilding that country, strengthening its internal diamond control systems and adopting the minimum requirements of the KP. Indeed, the role of the KP is particularly important in countries whose economy relies to a large extent on the diamond trade. As such, the case of the CAR provides a number of lessons for the KP, especially about how best to respond to challenges facing a weak state. The ambassador further argued that the African Union failed to take into consideration the role of diamonds in its efforts to come up with a relevant conflict resolution mechanism in the CAR. As a result the root causes of the conflict in CAR were not properly identified, leading to the failure of the government of national unity that was agreed upon in Gabon. He stressed that the diamond trade played a key role in the conflict in CAR and it needs to be incorporated into the search for peace.

The ambassador stressed that he felt that those civil society actors who were calling for the abandonment of the KP were either misinformed or did not have Africa’s best interests at heart. He argued that it is because of these voices that the KP has been used as a smokescreen to deflect attention away from the real challenges affecting the extractive sector in Africa. He encouraged civil society activists to utilise the advantages of globalisation in terms of mobilising public opinion but to make sure to refer their issues to the relevant authorities.

In conclusion, the ambassador urged all member states and participants to continue supporting the KP as a relevant tool for Africa’s natural resource governance. He insisted that dismissing the KP as a failure is not an option since it offers a platform for relevant parties to constructively engage on matters of resource governance. He insisted that the KP could only be improved through open dialogue as opposed to debates in the media. He urged civil society to take advantage of such platforms and express their views and arguments.

Honorable Edward Chindori-Chininga focussed on a range of issues, including the structural composition of the Kimberley Process, its impact on member states, its sustainability, consistency in the application of its provisions, diamond smuggling, the application and effects of sanctions, and the deviant application of its minimum requirements in the case of Zimbabwe’s Marange diamonds.

He reminded participants of the key objectives of the KP, which are assuring consumers of clean, traceable and conflict-free diamonds, and creating and facilitating dialogue between respective actors within the global diamond industry. He argued that it was because of this unique mechanism that trade in conflict diamonds fell from 15 percent of global trade in the 1990s to less than 1 percent now. However, he was quick to highlight that the true success of the KP is not measured by the number of carats flowing into the legitimate diamond market but by the advancement of people’s livelihoods.

On the role the KP has played in recent times, especially in Zimbabwe, he raised a number of challenges experienced by member states. He suggested that the KP, which was designed to operate as an apolitical mechanism, had become vulnerable to political manipulation, especially by powerful states. He argued that the imbalance of power in the global arena works against the interests of Africa – and insisted that Africa and the developed world should foster a symbiotic relationship that benefits both parties.

As the interest of global powers in Africa’s natural resources increases, Chindori-Chininga advised African governments to jealously guard their natural resources against former colonial powers. In such an environment, he argued that international resource governance mechanisms could no longer protect the interests of Africa. Indeed, he complained that the KP had permitted itself to be used to pursue the political interests of a few powerful member states. As such, it is the role of Africans themselves to protect their own resources. He further argued, with regards to the scope of the KP, that there is a need for the scheme to exercise its mandate within its agreed limits and not meddle in the national political affairs of member states. He stated that the KP’s minimum requirements should be applied equally across all participants. In his view, the case of Zimbabwe demonstrates how the KP has allowed itself to be used – by selectively interpreting and applying its statutes in relation to the Marange diamonds with the aim of appeasing a few stakeholders who share a different political perspective to that of the government of Zimbabwe.

Chindori-Chininga also argued that the KP is failing to adopt necessary reforms, which have allowed the diamond supply chain to become opaque and unreliable. KP member states have weak internal diamond controls and it is the KP’s responsibility to continue pressuring its participants to adopt and domesticate the minimum requirements into national legislation. This is true in the case of Zimbabwe, where diamonds continue to be smuggled out through neighbouring Mozambique, which is not a member of the KP. Besides Mozambique, other countries that provide overland passage for conflict diamonds are Burkina Faso, Niger, Mali, Uganda and Panama. It is likely that these countries find no political or economic gain in acceding to the KP and as a result they are not motivated to take action against the trade in conflict diamonds across and within their borders. However, he maintained that the KP certification scheme was not designed to solve the root causes of the problems facing the diamond-mining sector – a sector that is prone to economic predators and violence.

Chindori-Chininga supported reforms of the KP. Firstly, he proposed that the decision-making structure of the KP be restructured because a single member state can currently block the adoption of any decision, which can thereby hinder progress. As a result, the KP has been unable to take strong decisions against non-compliant member states. This has greatly undermined its effectiveness and credibility in the eyes of consumers and participants alike since decision making in the KP appears to be driven by patronage and political interests rather than the need to transform the diamond industry.

Secondly, he argued in favour of strengthening the KP’s independent technical capacity. He identified a number of key weaknesses of the scheme, including the lack of a permanent secretariat, adequate funding, a central knowledge database and connection between past and present KP chairpersons as well as its slow response to critical issues and its inability to follow up on recommendations and other issues of concern. To solve these challenges, he called for the introduction of an independent professional body to support KP’s administrative matters as well as its statistical and legal analysis.

And thirdly, Chindori-Chininga proposed that the KP should also control the cutting and polishing centres around the world, which absorb most illegal diamonds. He stated that there is evidence to show that diamonds smuggled or stolen from Zimbabwe, Gabon, Cameroon, Ivory Coast, Venezuela, and even some European airports are finding their way to diamond cutting and polishing industries across the globe. To reduce such problems, he suggested that participative governments should be permitted to conduct reviews of diamond cutting and polishing companies so that transparency is restored to the entire value chain. If reforms are not made, the cutting and polishing industry will likely remain a ‘black hole’ through which illicit diamonds continue to be processed.

On the KP’s intervention in Zimbabwe, he praised the Zimbabwean government for its unceasing commitment to the KP. However, he stated that Zimbabwe’s national interests were severely affected by the unprecedented prejudice propagated by some KP member states. He blamed the KP for allowing itself to be used to disgrace its noble apolitical and developmental orientated agenda. He argued that, despite Zimbabwe demonstrating her willingness to meet the KP minimum requirements and uphold standards of transparency and cooperation, the KP continued to bend to the foreign policy aims of stronger states. He argued that sanctions imposed upon Zimbabwean diamond companies (by western countries and their allies) were proving to be counterproductive since some of the affected diamond companies were opting to deal with informal diamond markets, thereby compromising the transparency of the diamond supply chain. He questioned the agenda of the United States and European countries in relation to Zimbabwe, particularly why these actors approved Zimbabwe’s diamonds as KP compliant in 2011 only to label the same diamonds conflict diamonds in 2013.

Chindori-Chininga recognised the governance challenges that the diamond industry is experiencing in Zimbabwe – admitting that the Zimbabwean government has struggled to collect significant diamond revenues due to a range of internal and external factors ever since the discovery of the Marange diamond fields. In 2012, the government projected revenue of around US$600 million from the diamond fields, but that was not achieved. As for 2013, Zimbabwe’s Finance Minister (at the time), Tendai Biti, confirmed that the Treasury had not received any diamond revenue from Marange. Chindori-Chininga blamed the sanctions imposed by the US as the major reason why diamond revenues were not filling the Treasury’s coffers.

Discussions       

Very important comments and observations were made by participants in response to the two speakers. The issue of illegal diamonds and how they are being smuggled out of KP member states to overseas diamond retail markets via non-KP member states was raised. It was observed that, for example, Zimbabwean diamonds are continuously smuggled out through Mozambique, a non-KP member state. Overseas diamond retailers in countries such as Belgium were accused of purchasing illegal diamonds from Africa too easily, which is perpetuating the illegal trade in diamonds.

Participants also discussed how the KP’s definition of conflict diamond fails to take into account the governance capacity of member states or the specific geographical landscape. For this reason, there was a proposition that a new definition be found that will encompass ‘economic conflict’.

The suggestion that the trade in conflict diamonds makes up less than 1 percent of all trade was disputed. It was argued that there were significant unrecorded illegal diamond transactions, which continue to take place across the globe. In response to this objection, it was clarified that the 1 percent referred to illegal diamonds that are officially traded. Even so, considering all the illegal transactions, the KP might require the assistance and intervention of Interpol and the World Customs Organisation. The meeting was also informed that a concept document identifying areas of key concern in the diamond industry was currently being formulated.

In relation to reforms of the KP, it was suggested that the decentralised nature of the KP had its advantages and disadvantages. It was also suggested that the KP needed to have permanent structures to enforce and monitor the adoption of minimum requirements and to coordinate ideas raised by participants and observers. The idea of situating the KP’s policies within the African Union framework to improve natural resource governance on the continent was supported.

One issue that attracted a lot of comments was multi-stakeholder meetings. Participants recommended that there was a need to consolidate and strengthen a multi-stakeholder approach involving government, the private sector and civil society. While the scheme has been successful in creating an international platform where state, business and civil society meet, it is imperative that this is replicated at the national level. Participants agreed on the need to have multi-stakeholder meetings at the national level, which would also include mining communities.

It was also suggested that the KP includes, within its minimum requirements, environmental standards, human rights protection, and citizen participation. However, for these values to be incorporated as part of the KP, participants recommended the creation of a vibrant secretariat with adequate capacity. This view embraced by many participants who argued that a secretariat can only be successful if issues of membership, coordination, transparency, control and research are first agreed upon on by all member states. Participants also agreed that it would be the duty of each member state and the diamond industry to finance the secretariat. However, the meeting was concerned about the many challenges that such a secretariat would probably face – from funding to human resources to political domination by powerful actors. It was suggested that, if a secretariat were established, Africans would have to own the structure by playing a pivotal role within the secretariat. It was also noted that the failure of the KP to produce and disseminate country review reports is compromising the effectiveness of the scheme.  

On the issue of extending the duration of the KP chairpersonship, no real consensus was reached in terms of proposing an alternative to the current arrangement, which sees each chairperson staying for 1-2 years and which is clearly stipulated in the KP’s core document.

Issues around South Africa’s leadership were also raised with some participants calling for South Africa to demonstrate its commitment to global governance by joining governance mechanisms such as the Extractive Industry Transparency Initiative (EITI). This proposition was countered by the argument that sovereign states join different mechanisms on the basis of their national interests.

The behaviour of civil society was also addressed. It was argued that civil society does not exist in a vacuum, hence it should acknowledge other actors and respect registration processes enacted by various governments.

Overall, it was agreed that reforms were required to strengthen the KP but that these changes, such as including human rights in the KP, must take into account the sensitivity of some of these issues in relation to state sovereignty.

About the author(s)

Claude Kabemba is the Director of the Southern Africa Resource Watch (SARW). In 2006, the Open Society Initiative for Southern Africa (OSISA) asked him to spearhead the formation of SARW. He holds a PhD in International Relations (Political economy) at the University of the Witwatersrand (Thesis: Democratisation and the Political Economy of a Dysfunctional State: The Case of the Democratic Republic of Congo). Before joining SARW, he worked at the Human Sciences Research Council and the Electoral institute of Southern Africa as a Chief Research Manager and Research Manager respectively. He has also worked at the Development Bank of Southern Africa and the Centre for Policy Studies as Policy Analyst. Dr. Kabemba’s main areas of research interest include: Political economy of Sub Saharan Africa with focus on Southern and Central Africa looking specifically on issues of democratization and governance, natural resources governance, election politics, citizen participation, conflicts, media, political parties, civil society and social policies. He has consulted for international organizations such Oxfam, UNHCR, The Norwegian People’s Aid, Electoral Commissions and the African Union. He has undertaken various evaluations related to the work of Electoral Commissions and civil society groups interventions in the electoral process in many African countries. He is regularly approached by both local and international media for comments on political and social issues on the continent. His publication record spans from books (as editor), book chapters, journal articles, monographs, research reports, and newspaper articles.

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