Kimberley Process the Diamond Development Initiative and the

Kimberley Process the Diamond Development Initiative and the Mwadui Community Diamond Partnership Andrew Bone, Head of Public Affairs De Beers Group, External Affairs CASM 6 th annual conference, 12 November 2006 Antsirabe, Madagascar

Conflict Diamonds

Conflict Diamonds & The Kimberley Process What are Conflict diamonds? Conflict diamonds are rough diamonds used by rebels to finance armed conflict aimed at undermining legitimate governments. Where are Conflict diamonds found? At its height, the issue centred around African states such as Angola, Democratic Republic of Congo (DRC) and Sierra Leone… these countries are now in the process of post-conflict redevelopment Today, conflict diamonds are found in northern regions of the Ivory Coast. Liberia, which, while at peace, remains under UN sanctions.

Conflict Diamonds & The Kimberley Process What has been done to stop Conflict diamonds? The Kimberley Process Certification Scheme (KPCS) imposes extensive legally binding requirements on participant countries to certify that shipments of rough diamonds are free from conflict. Who is involved in the Kimberley Process? The KP is composed of 71 Participants, which includes members of the European Union. KP participants trade approximately 99. 8% of the global production of rough diamonds. Are there still conflict diamonds? Conflict diamonds still exist in small quantities having been smuggled out of Ivory Coast. UN sanctions prohibit the trading in rough diamonds Ivory Coast and Liberia.

Conflict Diamonds & The Kimberley Process How Does The KP Work? EXPORTING COUNTRY (must be a member of the KP) IMPORTING COUNTRY (must be a member of the KP) Export Rough Diamonds Sealed in a tamperresistant container + Government validated KP certification KP Certificate accompanying rough shipment Rough Diamonds Permitted to trade, divide or mix diamonds if warranty invoices are issued for each transaction as diamonds pass downstream Resistant to forgery Uniquely numbered Containing data with shipment contents Confirm receipt of rough diamonds

Conflict Diamonds & The Kimberley Process What does the KP require of the trade? Mining companies & rough diamond buyers • Country in which company operates and desired country of export must be KP participants • Must keep auditable records to demonstrate that diamonds were mined or purchased from legitimate source • Need to provide an industry System of Warranties declaration to accompany all transactions Recipients of rough Diamonds • Must be KP participants & shipment must come from KP participant country • If a shipment crosses a national border it must be accompanied by a KP Certificate. In turn, the receiving nation must confirm reception • If a shipment is traded within a country it must be accompanied by the System of Warranties declaration • Recipients must keep records of warranties for auditing Diamond polishers, manufacturers, dealers & retailers • Polished diamonds do NOT need a KP Certificate for export however… • Each sale of polished diamonds requires an industry System of Warranties declaration • Must keep records of warranties for auditing by own accountants To re-export, recipients must apply for Re-export Certificate and show that all previous transactions were accompanied by a System of Warranties declaration

Conflict Diamonds & The Kimberley Process Who is Involved in the KP? WORKING GROUPS Industry MINING SHIPPING CUTTING & POLISHING KIMBERLEY PROCESS PLENARY Civil Society NGO Coalitions Campaign to Eliminate Conflict Diamonds & Fatal Transactions States/regional economic zones e. g the EU 45 in total all representing themselves Technical Working Group World Diamond Council Global Witness & Partnership Africa Canada Working Group on Statistics Working Group on Monitoring COMMITTEES CHAIR (1 yr term accorded to 1 country, Chairs until now: South Africa, Canada, Russia & Botswana) Selection Committee Participation Committee

The Kimberley Process “The nature of our disagreements is such that the Kimberley Process emerges from them stronger. The nature of the points of agreement is unparalleled, and thanks to them, we are changing the world”. Mr. Karel Kovanda, in-coming Chair of the Kimberley Process, on behalf of the European Commission, Gaborone Kimberley Process Plenary, November 2006. “We came to this meeting with deep concerns about the future of the Kimberley Process. We are very pleased with the great amount of progress made in dealing quickly and effectively with serious problems”. Ian Smillie, Partnership Africa Canada, Gaborone Kimberley Process Plenary, November 2006.

Diamond Development Initiative Where does the DDI fit into the diamond pipeline? Formal Mining ‘Informal’ Mining DDI Export Import KPCS Polishing Manufacturing So. W Retail

MISSION STATEMENT To gather all interested parties into a process that will address, in a comprehensive way, the political, social and economic challenges facing the artisanal diamond mining sector in order to optimize the beneficial development impact of artisanal diamond mining to miners and their communities within the countries in which the diamonds are mined.

Diamond Development Initiative OBJECTIVES To gather and disseminate information on artisanal diamond mining. To promote better understanding of, and possible solutions for: Ø Government regulation and mining regulation; Ø DEVELOPMENT: e. g. creation of alternative livelihoods; Ø Accessible distribution and marketing channels; Ø Organisational aspects of artisanal production and mining community; Ø To promote wide participation in the process including governments, donors, industry and developmental organisations.