KIMBERLEY PROCESS CHAIR REMARKS AT WORLD DIAMOND CONGRESS MUMBAI, INDIA — OCTOBER 15, 2012
Thank you for inviting me to be with you today at this joint meeting of the World Federation of Diamond Bourses and the International Diamond Manufacturers Association here in Mumbai. I would like to take this opportunity also to thank the Gems & Jewellery Export Promotion Council and the Bharat Diamond Bourse for hosting this important meeting.
It is an honor to be asked to make a few remarks here in Mumbai, site of the world’s largest diamond bourse, and before such a great gathering.
You, who represent all phases of the diamond industry worldwide, are absolutely central to the continued, healthy functioning of the Kimberley Process and to its evolution to respond to today’s challenges.
Maybe some of you were among those representatives of industry, government, and civil society who gathered in Kimberley, South Africa in 2003 to establish the Kimberley Process, of which the United States is currently Chair.
Now, as the KP completes its first decade, you are being called upon again to rise to a new challenge. I am here today to ask each of you to support an evolution of the KP that keeps us moving in a positive direction, one that ensures that consumer confidence in your product remains steady into the future.
I freely admit I am not a business person, so I really don’t have lessons to teach all of you. But let me say that, in travelling to many KP countries, including in particular here in India, where I had the opportunity to go to Surat as many of you will later this week, I have come to understand the importance of your industry to the lives and the futures of millions of people across the globe.
Frankly, that is a heavy responsibility, one that I feel I share with you and take seriously for the period of my Chairmanship but one you live with your whole working lives as did perhaps your fathers before you and your children into the future. I understand that change must be carefully prepared, carefully conceived, and carefully implemented. But change must come, precisely because so many millions depend on it.
It needs to be said and repeated that the KP has been very successful in preventing diamonds that fund rebel groups from entering global supply chains. This achievement has played a valuable role in diminishing those conflicts the KP was concerned with during its establishment. This success has also contributed to maintaining the reputation of diamonds as symbols of purity, devotion, and enduring love.
As I have learned from all of you throughout my travels as KP Chair, if the diamond industry from production through retail is to remain healthy and strong, it is critical to maintain the reputation of diamonds. Speaking as KP Chair, I believe that the KP must build, not simply take pride in, its achievements and that it is time for the KP to evolve.
Within the KP – and that includes all of you in industry – we need to discuss and eventually adopt a new definition of “conflict diamond,” one that will encompass agreed situations of conflict in which diamonds are directly involved. There should be a definition that applies clearly and predictably to every participant, and one that ensures that KP Certification Scheme assurances correspond to the evolving expectations of consumers.
I do understand that there is anxiety associated with the prospect of change, especially if proposals are not well understood or it is feared that the goal is an overnight change. But please remember that I did say EVOLUTION, not REVOLUTION. I seek an evolution, because resting on our past laurels will not assure future success for anyone.
I also seek your continued involvement, as industry, in making proposals and in querying, evaluating and shaping those of others. You are the experts on how things can be expected to work at the implementation phase. If you see difficulties, or have a better solution to a problem, I welcome your suggestions and your contributions to refining what is proposed.
We in the KP are not in the “take it or leave it” business. As an example, during a negotiation two weeks ago of the KP’s Committee on Review, there was considerable give and take among the participants and demonstrated willingness to listen to positive suggestions and modify proposals to ensure the ideas are clear and easily understood.
Now I know that there have been concerns that changing the “conflict diamond” definition is just a means to resurrect previous, acrimonious disputes and/or to target specific countries. Some have worried that change could have a disproportionately negative effect on producer nations. Others have been just as concerned that manufacturing or trading nations would be damaged collaterally.
I am glad these concerns are being expressed openly because this allows us to provide clear answers and, as needed, to work together to modify proposals. Speaking more broadly, let me respond that while I understand these concerns, especially at what is a stressful time for your industry, I am convinced that together we can ensure that change brings sustained improvement not destabilization to the industry. I believe that clinging to the status quo, no matter the very real achievements of the past ten years, will eventually undermine the KP and the diamond industry it is designed to help and protect. Changes carefully considered and crafted, and adopted by consensus in the KP tradition, on the other hand, will have a strongly positive effect on all segments of the diamond world.
Many of our consultations with government, industry, and civil society, suggest that the KP’s reform of the definition – to focus on the current challenges of conflict prevention – is essential. After much deliberation, I called for a proposal that focused on three key elements:
- KP certificates must continue to ensure that the rough diamonds are free from conflict; certification should not address human rights, financial transparency, and economic development, which are better advanced through the exchange of best practices;
- Additional certification standards beyond the current definition should apply only to armed conflict/violence that is demonstrably related to rough diamonds and independently verified. It should not apply to isolated, individual incidents, or to circumstances or situations in which an armed conflict exists unrelated to the diamond sector; and
- KP safeguards could be implemented site-by-site, consistent with systems for other conflict minerals, such as the International Conference of the Great Lakes Region certification system.
The U.S. proposal to change the definition contains these elements, as well as others that make it, in my view, attractive. For example, it works entirely within the existing processes of the KP, and provides for decisions based on the findings of a review mission and decisions can only be made by consensus of the KP Plenary.
If you have not yet seen the proposal, I urge you to look at it and at all the proposals carefully and to reach your own opinion of whether the proposal is a good basis for further discussion and for eventual adoption by consensus.
The U.S. proposal, like others, is intended to initiate discussion with other participant governments, with industry representatives such as you, and with civil society organizations. If there is something that you don’t understand or that you do not agree with, please say so and give us a chance to respond to your concerns. We always need practical ideas and constructive suggestions.
We in the KP need to be moving forward, and no one is in a better position than you, who are present in this conference room, to advise us on the best way forward. Although governments are the participants in the KP, it is the industry that drives the system.
You need to be sharing your advice with the governments of the countries in which you operate. Give them your perspective as entrepreneurs, as engines of development, as job creators, and as professionals who know that it is better to anticipate problems before they arise, to mitigate and manage risk, rather than try to do damage control after the fact. As businessmen, you know it is better to repair your roof when the sun is shining, rather than wait until the rains come.
Allow me now to say a few words on other important topics:
Pursuing the topic of development, and how it relates to the KP, as Chair, the United States worked with the World Bank, the Diamond Development Initiative, and the U.S. Agency for International Development to sponsor the first-ever KP-focused Development Conference immediately following the June Intersessional.
The KP’s Working Group on Artisanal and Alluvial Production, ably led by Angola, is working on a wide-ranging document that would update the KP’s initial effort to address artisanal mining, the 2005 “Moscow Declaration,” and recommit the KP to a number of policy goals. It is our collective aim to draw artisanal mining communities into the formal sector and provide them the promise of sustainable development, make them less vulnerable to exploitation and prevent conflict.
If you feel better informed about the KP than in the past, it is largely thanks to the KIMBERLEY PROCESS WEBSITE. I want to underline that it is the generosity of industry that has made improvements possible. The AWDC has been an exceptional partner by fully funding the KP website for the last two years. The website has been essential for internal KP communication and also to make the KP’s endeavors accessible worldwide. It has also proven fundamental as a place for countries needing technical assistance to request and receive it from those with expertise. Thank you, AWDC and Stephane Fischler, for your unflagging support to the KP.
And on the topic of support, please remember that diamond evaluation expertise is perhaps the most critical need in developing countries. Your companies can supply this service, to those in the supply chain who need it most, for mutual benefit. Development is not just the province of governments and aid agencies, but of industry too.
Effective ENFORCEMENT, too, is a necessary condition for the successful evolution of the KP. The World Customs Organization and others are organizing a conference on the margins of the plenary in November, which will include only law enforcement and customs officials, so they can push their cooperation further across borders.
KP countries are catching an increased number of false certificates, and we have ensured that they are sent immediately to the World Customs Organization and are uploaded to a central location on the KP website so customs officials worldwide have access to them. Many countries – India chief among them – are reporting higher levels of enforcement action against illicit trade. Slowly but surely, we are getting better at improving implementation and enforcing the rules.
The KP needs industry’s help with improving enforcement. Your efforts, whether it is as individual companies or in association with others, can make a real difference.
You can REPORT illicit activity to the appropriate authorities and to ask them to notify the KP; you can EDUCATE your employees in identifying fraudulent certificates; you can ENSURE that your industry self-regulation practices are up to date. You can HELP fellow industry members in countries with smaller diamond centers to ensure that industry self-regulation works well there. ALL of this strengthening of the rules and tightening of the system can HELP prevent conflict diamonds from entering the system and it is something that governments cannot do alone.
As I said at the outset, the KP is central to maintaining the reputation of diamonds and to preserving and promoting the diamond trade, so that the millions relying on it for their livelihoods – from artisanal diggers to mine operators to traders to cutters and polishers to wholesalers or retailers – can continue to earn their daily bread and flourish. This is something I bear in mind every day as KP Chair.
Every diamond is unique, and the diamond business itself is unique. But the diamond business depends on the prospective consumer. Buying diamonds is an emotion-laden decision that is a choice, not a necessity. These kinds of purchases are particularly vulnerable to changes, sometimes rapid changes, in consumer sentiment. You know far better than I that ensuring that confidence continues – by systematically anticipating changes in economic conditions and consumer expectations – is good management and strategic planning. Consensus on the details of changes may take some time to forge, but there is no real alternative. We need to help the KP evolve and to ensure a prosperous future for all who rely on diamonds.
Thank you for your gracious welcome and for your attention. I am honored to have had this chance to speak with you, and I wish you a very productive conference. Thank you.