‘Weak KPCS’ casts shadow on diamond industry
Written By
Sumit Khanna
| Updated:
The 2009 edition of Diamonds & Human Security Annual Review by Partnership Africa Canada, says the KPCS is failing.
In what could be bad news for the Indian diamond industry just before the Christmas season, a report by a NGO has cast serious question marks on the functioning of Kimberley Process Certification Scheme (KPCS), which monitors world trade in rough diamonds.
The 2009 edition of Diamonds & Human Security Annual Review by Partnership Africa Canada, says the KPCS is failing. The refusal of governments at the centre of KPCS' administration to get tough on blatant smuggling, human rights abuses and money laundering are reasons for failure, says report, and warns of disastrous effects if KPCS collapses.
"A collapse of KCPS would reopen doors to a criminalized diamond trade and to conflict diamonds. It would be disastrous for an industry that benefits so many countries, and for millions of people who depend directly and indirectly," the report says.
KPCS was established in 2003 to prevent blood diamonds from entering diamond trade, and to assure consumers that diamonds purchased by them are not financing war and human rights abuses. Currently, it comprises 49 participants representing 75 countries.
Tracking of diamonds is the main purpose of KPCS, to guarantee that they come from a known, clean source. However, in two of Africa's largest diamond producing countries - Angola and DRC - the report says, the internal controls are so weak that nobody can be certain where the diamonds they export really came from.
PAC is a Canadian NGO involved in efforts to halt trade of conflict diamonds since a decade. The Diamonds & Human Security Annual Review includes detailed reports on a dozen diamond producing countries including Angola, Zimbabwe, Ghana, Liberia, Venezuela, Guyana, Democratic Republic of Congo, among others.
While stating that governments world over are doing all they can to prevent conflict diamonds from entering the trade, industry sources in Surat accepted that reports of human rights violation or smuggling in diamond producing countries can put off buyers and hit demand in western countries.
Aagam Sanghavi, chairman, South Gujarat region, CII, said, "KPCS has installed great discipline and improved transparency in diamond trade. It is difficult to say how the system is working or failing in another part of the world. There may be loopholes, but they can be plugged."
The report mentions how discrepancies in trade & production statistics from Lebanon, Guinea and Republic of Congo have raised unanswered questions. It also mentions inaction of KPCS on smuggling, mismanagement & govt massacre of diamond diggers in Zimbabwe.
KPCS also stands accused of inaction in spite of flagrant non-compliance such as smuggling of Ivorian conflict diamonds through neighbouring countries and smuggling of entire Venezuelan diamond production from other countries.
"Accountability is the key issue. There is no central KPCS authority as the 'chair' rotates annually and has virtually no responsibility beyond a convening function. The problems are shifted from one working group to another and debates on important issues extend for years," the report says about the problems plaguing KPCS.
Stating that KPCS is too important to fail, and it is too important to too many countries, companies and people to be a sham, the PAC report says that while the scheme does not need to be redesigned, its provisions need to be enforced.
"KPCS requires an independent, proactive and efficient core body of expertise that can analyze problems and act quickly," the report suggests.
The 2009 edition of Diamonds & Human Security Annual Review by Partnership Africa Canada, says the KPCS is failing. The refusal of governments at the centre of KPCS' administration to get tough on blatant smuggling, human rights abuses and money laundering are reasons for failure, says report, and warns of disastrous effects if KPCS collapses.
"A collapse of KCPS would reopen doors to a criminalized diamond trade and to conflict diamonds. It would be disastrous for an industry that benefits so many countries, and for millions of people who depend directly and indirectly," the report says.
KPCS was established in 2003 to prevent blood diamonds from entering diamond trade, and to assure consumers that diamonds purchased by them are not financing war and human rights abuses. Currently, it comprises 49 participants representing 75 countries.
Tracking of diamonds is the main purpose of KPCS, to guarantee that they come from a known, clean source. However, in two of Africa's largest diamond producing countries - Angola and DRC - the report says, the internal controls are so weak that nobody can be certain where the diamonds they export really came from.
PAC is a Canadian NGO involved in efforts to halt trade of conflict diamonds since a decade. The Diamonds & Human Security Annual Review includes detailed reports on a dozen diamond producing countries including Angola, Zimbabwe, Ghana, Liberia, Venezuela, Guyana, Democratic Republic of Congo, among others.
While stating that governments world over are doing all they can to prevent conflict diamonds from entering the trade, industry sources in Surat accepted that reports of human rights violation or smuggling in diamond producing countries can put off buyers and hit demand in western countries.
Aagam Sanghavi, chairman, South Gujarat region, CII, said, "KPCS has installed great discipline and improved transparency in diamond trade. It is difficult to say how the system is working or failing in another part of the world. There may be loopholes, but they can be plugged."
The report mentions how discrepancies in trade & production statistics from Lebanon, Guinea and Republic of Congo have raised unanswered questions. It also mentions inaction of KPCS on smuggling, mismanagement & govt massacre of diamond diggers in Zimbabwe.
KPCS also stands accused of inaction in spite of flagrant non-compliance such as smuggling of Ivorian conflict diamonds through neighbouring countries and smuggling of entire Venezuelan diamond production from other countries.
"Accountability is the key issue. There is no central KPCS authority as the 'chair' rotates annually and has virtually no responsibility beyond a convening function. The problems are shifted from one working group to another and debates on important issues extend for years," the report says about the problems plaguing KPCS.
Stating that KPCS is too important to fail, and it is too important to too many countries, companies and people to be a sham, the PAC report says that while the scheme does not need to be redesigned, its provisions need to be enforced.
"KPCS requires an independent, proactive and efficient core body of expertise that can analyze problems and act quickly," the report suggests.