World diamond industry faces shakeup as NGO quits

DUBAI: A little-reported event in Brisbane, Australia, in December has shifted the balance of power in the global diamonds industry and could lead to a greater voice for the African nations at the center of the multi-billion dollar trade.
Impact, the Canadian-based organization that has been one of the most vocal of the advocates of “civil society” — the non-governmental organizations (NGO) that make up the tripartite structure of the world diamonds business alongside producing countries and big corporations — announced it was withdrawing from the Kimberley Process (KP), the regulatory mechanism that polices the sometimes controversial international diamonds business.
Impact, formerly known as Partnership Africa Canada (PAC), was a thorn in the side of the KP leadership for many years, claiming that the regulatory system was ineffective in preventing “blood diamonds” — stones mined in conflict areas mainly in Africa — from entering the global chain.
In particular, its outspoken director of research, Alan Martin, led the campaign to boycott the UAE’s chairmanship of KP in 2016, when the NGO argued that Dubai — the world’s third largest diamond trading center — was not qualified to lead the regulator.
The Brisbane meeting also heard that Martin would not be involved in the KP process any more, and would be looking after other natural resources issues in Africa.
The World Diamond Council, which represented the industry at the Brisbane meeting, said it was “saddened” by Impact’s departure, but there was audible relief, and some sense of triumph, in some parts of the industry that Impact and Martin would no longer be formally involved in KP.
Ahmed Bin Sulayem, the Emirati businessman who was chairman of the KP in 2016, said: “Their withdrawal opens the door to a much needed transition. I think PAC (Impact) got so big that they simply closed down the space for all other actors within the civil society coalition. No one else had a voice. Stepping back could give us the opportunity to restore genuine African agency in civil society.
Bin Sulayem, who is executive chairman of the Dubai Multi-Commodities Center where the diamond trade is based in the Emirates, added: “There was so much power that PSC wielded, and we know that power corrupts and absolute power corrupts absolutely.”
That was not how Impact saw it. In statements, Joanne Lebert, its executive director, said that the KP process, and in particular its scheme to verify diamonds as coming from non-conflict zones, had “lost its legitimacy,” and “did not provide the evidence of traceability to ensure a clean, conflict free and legal diamond supply chain.”
She added that Impact would continue working with some KP members and civil society organizations. A request to Impact from Arab News for further elaboration was not answered.
Criticism of Impact/PAC centered on their control of funding of African organizations, which in effect allowed them to decide which local NGOs were allowed to take part in the KP dialogue. Now, Bin Sulayem believes several African organizations are looking to enter the KP process as independent entities.
While there have been allegations of the “personalization” of animosities between Impact/PAC and Martin on the one hand and UAE diamond executives on the other, the ongoing confrontation distracted the KP from dealing with crucial questions in the international gems trade, at a time when it was battling to deal with financial pressures and commercial competition from synthetic diamonds.
Under the UAE chairmanship of KP, radical plans were launched to develop a valuation process for rough diamonds as well as a system of independent funding for African NGOs and a permanent secretariat to look after their interests. There were also plans launched to use blockchain, the digital accounting system, to establish the provenance of stones.
All these initiatives were continued by the Australian chairmanship of 2017, which has now passed to the EU. The UAE will continue to be involved via the KP’s participation committee.
Founded in 2003, the KP has had a fractious relationship with civil society members. Global Witness, one of the main campaigning organizations, left as an official observer in 2011. It said recently: “The past decade has proven that the Kimberley Process cannot clean up the diamond sector on its own.”