The Kimberley Process - By Alexander Elving, Raw Materials Group
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POLINARES is a project designed to help identify the main global challenges
relating to competition for access to resources, and to propose new approaches to
collaborative solutions
POLINARES working paper n. 64
December 2012
The Kimberley Process
By Alexander Elving, Raw Materials Group
The project is funded under Socio‐economic Sciences & Humanities grant agreement no.
224516 and is led by the Centre for Energy, Petroleum and Mineral Law and Policy
(CEPMLP) at the University of Dundee and includes the following partners: University of
Dundee, Clingendael International Energy Programme, Bundesanstalt fur
Geowissenschaften und Rohstoffe, Centre National de la Recherche Scientifique,
ENERDATA, Raw Materials Group, University of Westminster, Fondazione Eni Enrico Mattei,
Gulf Research Centre Foundation, The Hague Centre for Strategic Studies, Fraunhofer
Institute for Systems and Innovation Research, Osrodek Studiow Wschodnich.POLINARES D4.1 – Framework for evaluation of future approaches
Grant Agreement: 224516 Dissemination Level: PU
14. The Kimberley Process
Alexander Elving
In an effort to curb the flow of conflict, or blood, diamonds the Kimberley Process (KP) was
initiated jointly by governments, the diamond industry and NGO’s in the early 2000’s. With
the aim of extinguishing the trade of conflict diamonds for the purpose of funding warfare,
The Kimberley Process Certification Scheme (KPCS) was subsequently set up to regulate the
control of the production and trade of rough diamonds. The initiative can be seen as a result
of the emerging norms of corporate responsibility and citizenship coupled with humanitarian
considerations at large, in a time when the role of conflict diamonds in several bloody civil
wars where highlighted. In examining how well the KP meets a set of political, economic and
legal criteria, this case study shows that while transparency is increased among the member
states in the KPCS, the voluntary nature of membership together with limited options for
sanctions hampers the ability to stem the flow of conflict diamonds. And because the KP lacks
an organizational structure with administrative and financial resources, this further
compounds the problem. This is tied to the costs of participating, which are unevenly
distributed. Finally the legitimacy of the KP is discussed, which is where the main challenges
are found. In the last section, the KP’s role is envisioned in four future world scenarios. The
predictions give cause for both optimism and pessimism, with the latter view dominating. The
case study concludes with a discussion on the role of, and the challenges for, the KP in order
to succeed in its stated aim of stemming the flow of conflict diamonds.
Abbreviations
GW Global Witness
KP Kimberley Process
KPCS Kimberley Process Certification Scheme
PAC Partnership Africa Canada
WDC World Diamond Council
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1. Introduction
The Kimberley Process (KP) is an initiative that came about in 2000 as a response to the
prevalence of conflict diamonds 1 in the trade of rough diamonds. In the decade leading up to
the inception of the KP, several African (most notably West African) countries experienced
civil wars which in part were fuelled by trade in rough diamonds as rebel armies used the
proceeds from trading to finance the ongoing warfare. By the late 1990’s the role of conflict
diamonds in fuelling conflicts had become a well publicized issue with NGO’s and
subsequently the media shining a spotlight on the issue. This in turn directed attention to the
diamond industry as a whole, and its responsibility in human rights abuses.
The KP is an UN-mandated tripartite initiative constituted by 50 governments (with the
EU counting as one), NGO’s such as Partnership Africa Canada (PAC) and the industry
through the World Diamond Council (WDC). The KP is chaired on a rotating basis annually
by the participating governments, and working groups comprised of representatives from
governments, NGO’s and the industry meet regularly (The Kimberley Process, 2012).
In 2003 The Kimberley Process Certification Scheme (KPCS) was created. The KPCS is
designed to regulate the control of production and trade of rough diamonds from and between
the member states (participants). The KPCS require participants to implement national
legislation covering export, import, and production in order to meet the minimum
requirements of certification. Only participants in the scheme can trade rough diamonds with
each other and certificates are issued guaranteeing that the rough diamonds are conflict free
(The Kimberley Process, 2012).
The KP is relevant to POLINARES because it is an initiative where governments,
industry and civil society in a collaborative effort comes together to address conflicts fuelled
by natural resources. Although not directly aimed at risk in relation to access, the KP presents
an example of an initiative sprung out of human rights concerns and aiming at regulating the
trade of a single commodity globally in order to prevent conflicts. The reasons behind the KP
1
The United Nations define conflict diamonds as follows: “Conflict diamonds are diamonds that originate
from areas controlled by forces or factions opposed to legitimate and internationally recognized
governments, and are used to fund military action in opposition to those governments, or in contravention of
the decisions of the Security Council” (United Nations, 2000).
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are partly to be found in the zeitgeist and societal forces reacting to human rights violations in
the 1990’s. The reasons are also tied to the properties of the commodity itself as a
consolidated industry dealing with a consumer product with high emotional value facilitated
the initiative. This case study sets out to determine the nature of the KP and how it came
about, followed by an assessment of how the KP has managed to reach its aim. This is done
by examining how the institution meets a set of political, economic and legal criteria. The
study concludes with four future world scenarios, in each of which the fate of the KP is
envisioned.
2. Assessing the Kimberley Process
2.1 Institutionalism
2.1.1 Inception
The 1990’s witnessed the emergence of norms in the international community regarding
humanitarian intervention in civil wars and conflicts. This was coupled with emerging norms
of corporate responsibility, perhaps aided by increased attention given to it in various issue
areas by NGO’s among others. With this backdrop it is no coincidence that the KP saw
daylight in 2000. In the late 1990’s intense NGO pressure brought the diamond industry under
scrutiny, criticizing it for not taking responsibility for how trade of rough diamonds was
managed (Haufler, 2010). Also, the emergence of norms of world citizenship helps explain
how an entire industry that had enjoyed very little regulation during decades became regulated
within a couple of years. The speed and cooperation with which the KP was constructed has
been highlighted as an anomaly in global regulatory regimes, which begs the question what
the driving forces where. To begin with, the diamond industry has always been concentrated
and hierarchical, which aided the implementation from the industry side. Also, the diamond
industry stood to lose significantly from being targeted for being a part of the problem in the
then raging civil wars in Africa. As gem diamonds has no intrinsic value other than
sentimental, a shaming campaign would have caused tremendous damage to the industry.
Other conflict related commodities are less susceptible to boycotts than a luxury product like
diamonds, which explains why industry embraced the initiative (Bieri, 2009 and Haufler,
2010). And although the NGO torch-bearers are attributed with agenda-setting, a multi-
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stakeholder initiative such as the KP fit well with governments and companies at the time
eager to further the cause for responsibility (Haufler, 2010). As such, the KP can be viewed as
the result of norms of (corporate) responsibility and citizenship becoming embedded at large.
2.1.2 Governance
Although voluntary, membership in the KP required member states to enforce legislation as
trade in rough diamonds is only allowed between member states. This effectively makes
membership in the KP a necessity for any diamond producing country. Hence the KP
succeeds in regulating the trade by motivating prospective states to introduce the legislation,
although still being voluntary (Haufler, 2010). By being formal, though not legally binding,
the KP manages to incentivize or force governments to join and the KP could perhaps be
characterized as an institutional environment of sorts even though enforcement is weak.
2.2 Political principles
The KP was initiated to put a stop to conflict diamonds funding civil wars and insurgencies in
particular but also to curb human rights violations in general. At the time widespread poverty
in many diamond producing countries fuelled corruption and conflicts over control of the
commodity. And the unregulated flow of rough diamonds had at the birth of the initiative for
a long time caused serious harm, mainly in Africa, by destabilizing entire countries most of
which to begin with had weak institutions and where generally unstable.
The most important feature of the KP is regulation of trade and thus transparency.
Although corruption is not the foremost issue, there was a lack of transparency in many
diamond producing countries at the time of the KP’s inception. The main merit of the KP is
that the participants are encouraged to regulate and certify the trade, thereby closing the
opportunity for armed groups to profit from conflict diamonds. Although still a work in
progress, the process is facilitated by broad-based participation from industry, governments
and civil society. The drawbacks of an initiative of this kind are the weak enforcement
mechanisms available and the pressing issue of defining conflict diamonds in relation to
human rights violations. This is the result of speedy implementation coupled with the absence
of administrative and financial muscles of the process itself.
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State sovereignty is one of the principles adhered to in the KP and conflicts between
member states are not addressed. Promotion of human rights is only indirect and fails to
address human rights violations committed by others than a predefined group (rebel armies).
The Kimberley Process is open to all countries involved in diamond production and/or
trade. The institution is thus in this sense inclusive; however membership is only voluntary on
paper meaning that any diamond producing or trading country more or less has to join. The
KP is equitable in the sense that all members have to adhere to the same rules. However,
because the burden of implementation weighs heavier on poorer members the KP is less
equitable in this regard. The same is true for the NGO’s participating in the initiative, who has
limited financial means to participate.
Membership in itself does not enhance state capacity, although meeting the requirements
of membership does in the sense that more control is exerted. But whereas membership
pushes countries to gain more control, this does not overcome the problems of weak
institutions.
2.3 Economic principles
The Kimberley Process does not easily lend itself to an assessment using economic criteria.
The reason is that there is no defined organizational structure because of the KP’s nature of an
initiative. Also, no administrative or financial means are allocated to the KP from its
members. So instead of a discussion of a reallocation of resources, the question is whether
there should be a shared budget to begin with. Because the financial resources of the
participating countries vary widely, and the strength of the institutions differs greatly,
participation in the KP places a substantial burden on poorer countries.
Because rough diamonds are virtually impossible to trace back to their country of origin,
the certification scheme has to be sufficiently strong in order to provide the guarantee that the
diamonds are conflict free. If I single member country fails to enforce the certification scheme
that would render the whole process futile. Because the scheme is only as strong as its
weakest link, it would be in every diamond producing country’s interest that no member fails
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to live up to the commitments as that could have adverse effects on trade for all involved.
Economic efficiency could thus be enhanced if the KP was to become a centralized
organization with a shared budget.
2.4 Legal principles
As membership in the KP is voluntary and legislation regarding trade in rough diamonds is
implemented nationally, the KP and the provisions in the KPCS more specifically are not
legally binding. However, it is still fruitful to analyze the KP in terms of justice and
legitimacy in order to determine the fairness of the institution.
2.4.1 Justice
At the outset of the KP it was envisioned that the industry would finance the lion’s share in
implementing the system. As it turned out, the cost of implementing the scheme has fallen
primarily on the governments of the participants (Smillie, 2010). Even though the participant
states are the formal implementers of the KPCS, the process itself, includes the NGO’s that
initiated the KP. The NGO’s participate with observer status, but having limited resources to
participate because of budget constraints, some of them have been forced to leave the KP
(Bieri and Boli, 2011). Generally, more provisions are placed on those participants with
domestic production regarding control and statistics than on those participants who do not.
And as the institutions in the producing member states in many cases are weak (the reason for
the KP’s creation to begin with), the provisions place a substantial burden on those
participants in order to be compliant.
Although the fact that membership in the KP is voluntary might preempt a discussion on
equitable allocation of costs and burdens, the costs of compliance falls unevenly among
participants. However that is not to say that the provisions set forth in the KP are inequitable
in themselves.
As for potential tension with state sovereignty, it does not directly apply to the case of the KP.
The KPCS Preamble acknowledges “…that state sovereignty should be fully respected…”
(The Kimberley Process, 2002). Again, the KP does not impose any legislation, but rather
prescribes legislation that the participants should implement in order to become members. It is
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better to regard the KP provisions as encouraging the participants to exert more control rather
than them surrendering parts of it.
2.4.2 Legitimacy
The foremost sanction available for the KP against participants failing to live up to the
standards of the KPCS is expulsion, whereby the expelled country is left outside the global
legitimate trade of rough diamonds. Several participants have experienced this but most,
though not all, have reentered the KP after reforms. As regards determinacy the KP suffers
from inconsistency in dealing with participants not living up to the standards of the KPCS.
The Central African Republic (CAR) was suspended in 2003 as a consequence of a coup
d’état and the following suspension of the constitution. CAR was later reinstated after
meeting the requirements of the KPCS. Lebanon was expelled 2004 due to the want of a
presidential approval (all the required documents were in place). After a review, Lebanon was
readmitted. The Republic of Congo (ROC) was suspended in 2004 due to questioned
production statistics. The ROC was subsequently readmitted (in 2007) after extensive
reviews. In these three cases the rulings of the KP were consistent and straightforward
(Smillie, 2010). Two cases however challenge the determinacy of the KP: Venezuela and
Zimbabwe. In the former case, non-communication (starting in 2005) broke the rules of the
KPCS and led to discussions of suspension. Venezuela however preempted this action and
instead self-suspended their membership to reorganize its diamond industry while halting
production. In 2008, in the Marange fields in Zimbabwe, events occurred that pointed to non-
compliance with the KPCS. While Zimbabwe has yet to provide evidence that it is compliant,
it remains a participant (Smillie, 2010). Both cases sparked controversy over how to deal with
apparent breaches of the KPCS, and in the case of Zimbabwe the issue is still very much
inflamed.
Today the KP is undermined by its handling of the highly publicized situation Zimbabwe.
The legitimacy of the KP as a whole has been tarnished because of the perceived inability to
deal with the issue. As one of the two founding NGO’s, Global Witness, opted out of the KP
in protest in late 2011, the KP by many is not longer seen as possessing symbolic validation in
its rulings.
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On the face of it coherence is lacking judging from the above accounts of determinacy
and symbolic validation. However, the perceived deficiency in coherence is to be traced to the
definition of conflict diamonds. While several accounts display telling tales about human
rights violations in the Zimbabwean diamond industry, there is yet to be proven that the
KPCS rules have been broken. The reason is that the KP only targets rebel groups and not
legitimate governments. In this case the KP passes the test of coherence as no rebel groups are
implicated in Zimbabwe and any suspicion of human rights violations therefore is not
regulated by the KP. The case of Zimbabwe, with the KP choosing to take no action, is a good
example of adherence although to the detriment of the perceived legitimacy of the KP as a
whole. As it comes down to a matter of definition as regards conflict diamonds, adherence in
this case reveals the weakness of the KP.
2.4.3 Fairness
In all, the picture painted above lead to the conclusion that although possessing several of the
elements required to be regarded as legitimate, just, and fair, the KP does not lend itself easily
to a clear cut verdict. While this would mean that the KP by definition is unfair, it is also the
case that the necessary preconditions for fulfilling the status of fair are in place. The
subjective nature of determining the substantive elements of justice is in this case
problematic, and so is the determining of the objective elements of legitimacy.
3. Future World Images
In the following future world scenarios we will envision the role the Kimberley Process will
have, if at all. Not being a strategic commodity, the case of diamonds is different than that of
other commodities, most notably in energy, minerals and agriculture. Therefore the logic of
supply and price risk respectively is played out differently regarding the commodity in itself
(not being a necessity in a strict sense) and has implications for how an institution like the KP
evolves in the future.
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3.1 Bretton Woods 3.0
The spirit of a Bretton Woods 3.0 world is one of norm deepening and convergence. It is a
scenario where international governance has matured and become cohesive, thus more able to
confront and solve a range of issues in many areas including the trade of commodities. In this
inclusive scenario the KP has overcome its initial problems of compliance as the mode of
governing has evolved into one where the participants are aided both financially and
administratively as it has been recognized that the chain is only as strong as its weakest link.
The KP is now a collective that, as before, works as a sub level of international trade but with
the distinction that it is now more substantive. The near breakdown of the KP a decade after
its inception highlighted the need to adopt a more cooperative approach. As the difficulties of
compliance in almost all cases could be traced back to weak institutions and lack of funds in
the participating states, a system where funds and expertise could be injected into participants
not living up to the standards of the KP was launched. This created a stronger and more
resolute institution that had experienced that sanctions did not work, and was badly bruised by
reputational damage caused by inertia and bewilderment over issues of non compliance.
Access to rough diamonds has in this scenario become more open as a result of extensive
requirements regarding statistics. As figures on production and export/import have become
comprehensive and reliable, the once clouded market has become transparent. This is best
witnessed in the accounts of once war torn participants, where exports now match production
and export earnings and royalties contribute to the state coffers.
3.2 Celestial Dragon
China, having the largest luxury market in the world, has overtaken the U.S. as the world’s
largest diamond market, a shift already witnessed in many other commodities as well. This
however has not prompted China to champion the cause of a regulated trade of rough
diamonds. Diamonds are far down the list of strategic commodities that needs securing.
China, true to its tradition of nonintervention and vetoing sanctions does not have the same
incentive to control the trade as the former norm setters did. On the other hand, after
experiencing reputational damage in Sub-Saharan Africa due to the way Chinese companies
conducted business (especially in the extractive industries) in the beginning of the century,
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China is now more sensitive to bad will. As the leading diamond importer this places pressure
on China if not to be more proactive in the KP then at least not undermine it. But being
accustomed to bilateral agreements, China is reluctant to abandon its relationship model of
barter agreements. Furthermore, after its ascent to the top spot in the world economy, China is
less prone to subscribe to the norms of the institutions that governed the international system
in the beginning of the century. Instead they prefer to be norm setters themselves. After
numerous clashes with the WTO during China’s ascent, the WTO is now less capable of
applying pressure on China. For the KP, although in full effect since several decades, and
other international trade institutions, China’s bilateral relationships circumscribes its
effectiveness and therefore legitimacy. Still, China has not yet managed to secure supply in a
range of strategic commodities to keep up with their pace of growth. Although in control of a
higher share of minerals produces controlled by Chinese companies outside China in the
2010’s, it is nowhere near self-sufficiency in several strategic commodities. This relationship
speaks to the advantage of institutions like the KP where China still has to be a norm taker in
some areas, while being norm setters in others. As China is also the biggest market in terms of
beneficiation (cutting and polishing), China has a significant interest in supply. But whether
the KP is the glove that fits China’s hand is less certain in this scenario.
3.3 Rubik’s Cube
In this scenario the KPCS has disintegrated and the KP itself exists in name only. The issue of
conflict diamonds has long since waned as more pressing issues regarding scarcity of supply
of food, water and other commodities occupy the minds of policymakers around the world.
Russia is a free agent in world trade and manages to market their rough diamonds fairly easy
while African producers see China’s beneficiation industry as its partner of choice. Regional
trade schemes targeting trade in rough diamonds has sprung up, most notably in western
Africa. Barring an international certification scheme like the KPCS, this has become the
surrogate in order to achieve a premium. Growth is sluggish and high costs for extracting
diamonds coupled with shortages of water and power (essential for mining) has left many
producing mines abandoned, creating a seedbed for illegal mining which in turn presents
ample preconditions for conflict. Seemingly returning to square one in the trade of rough
diamonds, there is no longer a coherent international community to address the issue. And this
time the NGO’s, albeit vocal, are hard pressed to instigate action.
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Trade schemes function reasonably well regionally but because different standards are
employed, trade between regions remains bearish rendering any KP-style institution toothless.
Botswana, being blessed with early development, is able to withstand pressure due to
reasonably strong institutions. By now the beneficiation initiative instigated in the early
2010’s has matured and offers more choices than perhaps Sierra Leone or Liberia which have
been unable to move up the value chain. Branding of rough diamonds has become the new
strategy, which has been aided by the presence of downstream processing in the case of
Botswana.
3.4 Fracture
The wave of nationalization in the mining sector set in motion in the early 2010’s, especially
in sub-Saharan Africa, has in this scenario become entrenched. Not content with what was
perceived as not enough rents, royalties and taxes accruing from foreign mining companies,
several mining laws were revised to either increase the level of domestic ownership, increase
the windfall taxes, or both. As foreign mining companies was forced to relinquish control of
their local subsidiaries and/or having much larger levies imposed on their proceeds, the flow
of much needed foreign investment slowed to a trickle in several commodity dependent
countries. In this Darwinian scenario hybrid organizations control the resources, be they
national or regional. Regulatory risk is high and transparency nil. The preconditions for a
scheme like the KP are nonexistent, and so are the incentives for regulating the trade. There is
no international community voicing its concern for conflict diamonds. For many diamond
producing countries this scenario represents history repeating itself.
4. Outlook
Today, some ten years after its creation, the KP is experiencing criticism for the perceived
failure to deal with cases such the much publicized Zimbabwe case. In late 2011 Global
Witness, one of the founding NGO’s opted out of the KP citing its inability to address human
rights violations in Zimbabwe, Venezuela and Ivory Coast (Global Witness, 2011).
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The Kimberley Process was designed and implemented at speed, and the definition of
conflict diamonds has now become a bone of contention. As the KP remains powerless in
cases where governments recognized as legitimate by the UN are accused of human rights
violations, its failures to exert pressure on misbehaving participants have become an inflamed
issue. At the outset of the KP, complex issues like these where not anticipated and calls to
change the definition of conflict diamonds are now being voiced, in order to regain legitimacy
of the KP.
Nevertheless, the Kimberley Process has been successful to some extent in its stated aim
of stemming the flow of conflict diamonds. From estimates of up to 15% of the trade of rough
diamonds in the 1990’s, it is now estimated that the figure is less than 1% (The Kimberley
Process, 2012). But there is a risk that all this progress might become undone as a single
rogue participant can taint the whole process, rendering the whole scheme delegitimized.
Because it is virtually impossible to distinguish the exact origins of a diamond, the chance of
there being even a fraction of conflict diamonds traded would collapse the whole idea of
certification. The Marange fields in Zimbabwe present a formidable challenge for the KP, one
it will have to overcome in order to fulfill its purpose. A change of the definition of conflict
diamonds to a more encompassing one is however easier said than done.
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5. References
Bieri, Franziska (2009). “The Quest for Regulating the Global Diamond Trade”, ICIP
Working Papers 2009:5
Bieri and Boli, (2011). “Trading Diamonds Responsibly: Institutional Explanations for
Corporate Social Responsibility”, Sociological Forum 26:501-526
Haufler, Virginia (2010). “The Kimberley Process Certification Scheme: An Innovation in
Global Governance and Conflict Prevention”, Journal of Business Ethics 89:403-416
Kimberley Process Certification Scheme Preamble (2003),
www.kimberleyprocess.com/documents/10191/14969/0004_KPCS_Document_en.pdf
The Kimberly Process, www.kimberleyprocess.com
Murphy, Shannon K. (2011). “Clouded Diamonds: Without Binding Arbitration and More
Sophisticated Dispute Resolution Mechanisms, the Kimberley Process Will Ultimately
Fail in Ending Conflicts Fueled By Blood Diamonds”, Pepperdine Dispute Resolution
Law Journal 11:207-228
Smillie, Ian (2010). “Paddles For Kimberley: An Agenda for Reform”, Partnership Africa
Canada
Smillie, Ian (2005): “The Kimberley Process Certification Scheme for Rough Diamonds”,
Partnership Africa Canada
United Nations (2000), www.un.org/peace/africa/Diamond.html
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