Tag Archives: Marange Diamonds

UK Jewellery industry reacts to the KP decision on Marange

Posted on November 14, 2011 | 1 Comment

For release 14th November 2011

UK Jewellery Industry Confused by KP Decision

The UK jewellery industry has been left baffled following the recent announcement that Zimbabwe is once again to be included in the Kimberley Process. The message from inside the UK trade has been of confusion and disappointment on the lack of effectiveness of the KP to prevent diamonds mined from the troubled Marange diamond fields from entering the supply chain.

At a meeting in Kinhasa on the 1st November 2011, the Kimberley Process agreed to allow the export of rough diamonds from two KP compliant operations in the Marange region.

A third site at Anjin will be inspected within 14 days to check for compliance. This inspection may be subject to Zimbabwean army and central intelligence approval.

Since 2009, Marange diamonds have consistently been refused KP accreditation owing to human rights abuses and alleged non-compliance with KP certification requirements.

However the diamond stockpiles accumulated by Zimbabwe in 2008 and 2009 when the bouts of violence against artisanal miners were at their height will now too enter the world market.

In a press statement Zimbabwe’s Minister of Mines Mpofu announced “We want to shock the world with our stockpiles. We are going to unleash our worth to the world and Zimbabwe will not be asking for anything from anyone. I hate begging myself and Zimbabwe will not be begging from anyone,”

The Kimberley Process was established in order to prevent the flow of conflict. In allowing the market to become flooded with Marange ‘Blood diamonds’, has the KP failed in its duty and is it now fit for purpose?

Michael Hoare of the NAG said:
“NAG members are concerned about the future of the KP and have been contacting me suggesting that it has to take a firm line; being more transparent and rigorous in pursuit of its objectives. I had sincerely hoped that the Kinshasa meeting would counter retailer’s doubts once and for all so that they could pass on credible assurances to the public about the provenance of their diamonds. I fear that it has in fact generated a ‘lot of heat but not a lot of light’ and failed to put their doubts to rest.”

One of the unintended consequences outside the remit of the KP is that the largest customers of Marange diamonds, India and China are already discounting stones owing to the abundance of new supply. This will have a serious impact on the world market particularly in the supply of cut, polished diamonds and finished jewellery.

China is a huge investor in Zimbabwe and in March of this year lent $585m to the Zimbabwean government in the biggest deal of its kind.

The owners of Marange Resources; Mbada and Anjin Field; are owned or co-owned by ZMDC which remain under US, UK and EU sanctions, therefore no trade of rough can be made in these territories
However, will it now be impossible to prevent Marange Blood diamonds from entering the UK as long as retailers continue trade with China? It looks likely that any item of diamond jewellery manufactured in the Far East will now present an open route to market for a Marange diamond on to the UK high street.

The BJA has been very close to the KP process. CEO Simon Rainer comments

’At its inception, the KP was designed to prevent the sale of rough to fund conflict against democratically elected governments. Today, the KP under the same remit struggles to prevent “democratically” elected governments from using the profits of diamond rough to sponsor political violence against its indigenous population.
Whilst Marange diamonds maybe now compliant to the KP scheme, they are not compliant with the moral and ethical standards that the majority of the world subscribes to”

On November 1st, MP Under-Secretary of State for Foreign and Commonwealth Affairs, Henry Bellingham stated in the Hansard report on the situation “This will help the Zimbabwean Finance Ministry to collect tax and royalties owed to it, and thereby ensure the financial benefits of the diamond sales can reach the Zimbabwean people”.

That view was today slammed as ‘naïve in the extreme’ by Fair Trade Jeweller and Activist Greg Valerio. He went on to say ‘I support the view that to allow Zimbabwe diamonds into the KP system is a grave mistake. It will erode consumer confidence in the diamond. It’s permanently comatosed the credibility of the KP and forces the jewellery trade back to square one in terms of integrity of the diamond supply chain. It’s a sad day for the diamond industry and a sad day for human rights’.

Vivien Johnston of Ethical Jewellery brand Fifi Bijoux agrees
“This does nothing actually to address the torture, beatings or sexual assault to miners in the Marange diamond fields. It has been alleged by BBC reporters and witnesses as recently as August of this year that miners are being held captive and subjected to brutal assaults, rape and extreme violence in Marange. Under no circumstances should the perpetrators of crimes against humanity be allowed to openly profit from their corruption. Whilst the export ban has only been lifted from two sites so far, this opens the door to middle men who will exploit any opportunity to profit from the lifting of the ban. I understand the pressure on the KP to engage with Zimbabwe but this action has only weakened its integrity and thrown the diamond industry further into disarray. We must not forget why Zimbabwe was excluded”.

Talk of the need for a ‘KP Plus’ to provide a new coherent compliance suitable for today’s political challenges give rise to further speculation that the KP in its current format is creaking under the responsibility to make itself fit for purpose.

Certainly, the feedback from the UK jewellery sector demands further assurance on the provenance of diamonds entering our market.
In the US the new Dodd Frank legislation is making strides to prevent metals from “areas of conflict” entering their supply chain. Perhaps this, with other due diligence and chain of custody initiatives to prevent the trade of conflict minerals will become vehicles to prevent cut and polished stones from entering the US market.
Simon Rainer of BJA has already noted activity:

“In Washington on November 17th, the US State department will be holding a series of informal meetings engaging with US jewellery industry representatives, UK/EU public office officials and NGO’s. The purpose of these meetings will be to invite US industry to set its own set of voluntary measures to combat the frailties of the KP in its current form. If agreement cannot be met, then expect the State department to enter the fray and impose an amended version of the Dodd Frank Act or similar that will include diamonds from “areas of conflict”.

He added
“It is a fair reflection that the worldwide jewellery industry is confused by the current situation and that those with most to gain financially from the release of Marange diamonds have been the most vociferous in their support for Marange KP compliance”.

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Diamonds and Human Rights

Posted on October 5, 2011 | 3 Comments

If diamonds were potatoes we would all have burnt our fingers to a crisp long ago. I confess this article will not read well if you are invested into diamonds purely as a dealer. Diamonds are a human rights issue in their own right and given the rapid decline in the credibility of the Kimberley Process (KPC) in the last 12 months they will undoubtedly continue to be one. Let me explain.

Firstly lets start at source. It has been said many times over the years, small-scale miners make up the overwhelming majority of people employed in the mining sector.

More than a million African artisanal diamond diggers and their families live and work in absolute poverty, outside the formal economy, in countries struggling to recover from the ravages of war. Diamond Development Initiative.

I have witnessed this truth in recent months as I have begun a new phase of my journey in jewellery through establishing in partnership with Fairtrade Africa a cooperative movement amongst artisan miners. A elderly man with a prosthetic limb came up to me on a recent trip to Sierra Leone, shook my hand and asked if I would educate his grandchildren in the way of peace so that war never returned to his country. The historical conflicts in Sierra Leone, Angola, Cote D’viore or currently DR Congo and Zimbabwe are real and continue to have a devastating impact on the lives of the poor, their communities and the infrastructure of those countries. Diamonds as we all know have been a very real driver in prolonging those conflicts. The tragedy of war is the legacy of ruined generations and 10 years of a KPC does not mean everything is now ok.

Historically these conflict stones have enriched us all and not a penny has ever been paid in reparations by the traders who greedily enriched themselves on the backs of these conflicts. This is why certain sections of the diamond industry who now so proudly boast about their founding support for the Kimberley Process face such a moral dilemma. To call for the reinstatement of Zimbabwe diamond exports under the auspices of the KPC is to deny the very founding principles of KPC and is clear hypocrisy. One senior member of the diamond fraternal is on record as saying at the 34th World Diamond Congress in 2010

“Now I would like to ask each and everyone of us to consider whether opposing the legitimisation of Zimbabwe diamond exports benefits the citizens of that country or hurts them. After that, we can also ask ourselves whether we helped or hurt the diamond and jewellery industries the world over and all the people that make a respectable, honest living in it?” Moti Ganz

These very same miners and citizens have been imprisoned, gun shipped off the diamond fields, illegally detained and tortured in secret camps. As a jeweller the question I have to ask myself is; “Do I want such a diamond in my shop?” Obviously the answer to that question is NO.

The Kimberley Process and Zimbabwe.

“Miners, retailers, and consumers have relied on the Kimberley Process to stop blood diamonds from being sold, but with Chairman Yamba’s decision, the KP has betrayed their trust,” said Arvind Ganesan, business and human rights director at Human Rights Watch. “Governments and companies should ignore his decision unless they want to make blood diamonds available to consumers and ruin the credibility of the Kimberley Process as well.” Human Rights Watch

As of the 5th September 2011 the Kimberley Process website has Zimbabwe listed as being in full compliance with the KP.

These blood diamonds as the August BBC Panorama programme aired and Human Rights Watch have shown, continue to be stones that enrich elites, persecute the poor, suppress and censor the voice of truth and systemically abuse human rights. It would seem therefore that there is a clash of values at the very core of the diamond story that manifests itself in the question; ‘What is more important, Human Rights or making money at any price?’ I am the first to admit that these two ideas are not mutually exclusive, yet in the heavily politicised diamond world, agreement is hard come by and confusion abounds.

And it is here that I am critical of The World Diamond Council, the body established to act as the Governance framework for the KPC. Firstly they welcome the legal export of stones from Marange in 2010. Then in less than 6 months cautiously re-welcomes the introduction of exports from Marange, but asks members to apply due diligence on all stones coming from Marange. Yet the fact remains that the human rights abuses in the diamond fields of Zimbabwe have led the KPC into utter confusion and division. The International Diamond Manufacturers Association alongside The Responsible Jewellery Council have all shown a distinct lack of principled leadership in their vacillation over whether Zimbabwe should be included or excluded from KPC. It would appear as if all their press releases were written by lawyers. I have to be honest, given the huge body of evidence of bloody abuses and blood split in the Marange region, it should not be a difficult decision. Zimbabwe out!

We need a Kimberley Process that has international credibility and the tragedy is that Kimberley has become a discredited system and everyone in the industry knows it is not working. Equally this vacuum of strategic leadership means the civil society and campaign groups are rightly becoming more vocal about the veracity of the claims about ethics and conflict being spun by the industry. Here are some of my suggestions on how the KPC can begin to restore it credibility;

1. Need a full time secretariat for KPC that is representative of all stakeholders.

2. It needs to be properly funded by the Diamond Industry.

3. Human rights abuses need to be included in its terms of reference as a reason to be excluded from the process.

4. The KPC monitor (independent of the secretariat) needs to be 100% fully independent and have no  political or financial interests in Diamond Companies.

5. Cutting and Polishing should be included in the process, so that there is a full, accountable and transparent supply chain from mine to retail.

6. Representatives of alluvial diamond diggers should have a permanent seat on the secretariat to ensure the voice of the majority.

7. The process should be directly accountable to the United Nations.

This may well lead to a smaller, leaner, fit for purpose Kimberley Process, but I believe it would mean a process that the international community can have greater faith in. Also it will mean the industry would know which countries it can do business with and those it cannot.

The diamond brand as sold to the consumer is the icon of luxury, aspiration and purity. We talk of flawless perfection being forged in the ancient fires of volcanic activity and we seek to immortalise our commitments of love in this rock of compressed carbon. Yet its public image is like all things in the world of politics not its reality and substance. We have allowed for commercial reasons only the intentional divorce between product and ethics and as such are now paying the price in the slow erosion of the diamond brand. For my part I would have the diamond become the new symbol of the upholding of international human rights and the promotion of peace. It may just be the redemptive angle the diamond industry has been looking for.

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In search of the Jewellers Holy Grail.

Posted on May 10, 2011 | 9 Comments

The advent of certified Fairtrade Fairmined gold this year cannot be underestimated. Despite its critics rightly pointing out that in the early stages FT Gold will be of minimal volumes as to have a negligible impact upon the jewellery trade miss the point. They think in terms of mere commodity value. To the customer, a gold wedding ring is not a commodity, it is a symbol of an emotional expression. The ring tells a story and Fairtrade Gold ‘is the best gold story in the world’.

Alluvial Gold Dust

Now that customers have an alternative in Fairtrade gold it is just a matter of time before the simple truth enshrined in a narrative of transparency and traceability will drive the transformation of the jewellery sector towards a greater alignment between the source of our products and their true ecological values. Over the next few years we will see our industry move away from its moribund ethical mediocrity to rediscover it essential creative vitality as being a true art form, a craft, and a vehicle for the genuine delivery of economic, social and ecological justice.  Yet the journey does not stop with gold, this is where it begins.

Diamonds are a Human Rights Issue

Over the many years I have been a jeweller and activist, I have always recognised that at some point we would as an industry need to deal with the elephant in the room; namely the millions of alluvial diamond diggers who are treated as dirt by the diamond industry. There can be no denying that in the most opulent of luxury industries, the grey suited nameless and shameless elite sit on the backs of the daily exploited millions whose poverty causes them to pound their bodies in scorching heat and denude the environment of all life so they can earn a dollar a day, whilst the traders and the Bourses get richer by the hour. The very people who were so keen to embrace The Kimberley Process when it was launched are the very self same people who welcomed the export of diamonds from The Marange region of Zimbabwe in 2010

The Fields of Kono - diamond digging.

What is conveniently forgotten in the diamond world is that those that make the money are a small minority. Over the years there have been a number of initiative that have been started, all aimed at improving the lot of the small-scale diamond digger. Whether they have been commercial processes or NGO led initiatives, the few attempts to build a model that can successfully address the difficulties in the sector have in truth not been particularly successful. The Peace Diamond Alliance, The Mwadui Community Diamond Project, Diamond Development Initiative and others have had some success. Yet  if we measure success in terms of impact on the sector as a whole, or even producing a product  to commercial availability then these projects failed.

Even our darling friend The Kimberley Process has finally been exposed in the last 12 months, (highlighted by Human Rights Watch), as being powerless to address conflict, murder, manipulation and the exploitation of small-scale diamond miners in the face of the self-serving vested interest of the Zimbabwean elite. Every diamond mined in Zimbabwe will find its way in to a KPC supply chain, whether through legitimate channels or through the black market.  Out maneuvered and out politicked, the Kimberley Process now is powerless to prevent the diamond markets of the world being flooded with stones from The Marange region. Now the Chinese are actively working to introduce cutting and polishing processes that will bypass any export certifications required by Kimberley as Kimberley only covers the export of rough stone.  Therefore Marange stones will become invisible to the global market . Given the complicit support of this flooding of the market with stones soaked in human rights abuses by The Responsible Jewellery Council The International Bourses, Diamond Manufacturers and and others it is plain to many in the industry that the current diamond industry can no longer be trusted to maintain the ethical integrity of the product that jewellers love so much.

We Need Change

What is needed is a root and branch reassessment of the industry.  We need a new vision and story surrounding the diamond that begins to connect the diamond back to its source. A story that links the diamond as a vehicle for poverty alleviation, for delivering real change on the ground for the ordinary digger who currently sees no value placed upon their contribution to the supply chain. It is my belief that a certified fair trade diamond can begin to address some of the glaring deficiencies in the diamond industry.

To begin with it would address full transparency and traceability from mine to retail. I gave an interview to a journalist last week who told me stories of her spending the day in Hatton Garden London with diamond dealers who either refused to disclose source or didn’t know where their stones were from. Depressingly only some of the dealers disclosed that they were compliant with Kimberley. Yet all failed to make the obvious link that if you don’t where your stones come from a statement about Kimberley is worthless. As we all know stones are routinely smuggled from Zimbabwe to South Africa or Mozambique and then exported under KPCS to the international markets.  And this is just one example of many I can think of.

A Rough Diamond

Secondly a fair trade diamond would have a standard associated with it that can be viewed by the public. This would mean that any stone that came from a certified source would instantly be associated with that public standard so everyone can see what value their purchase has made to the community from which the diamond came. This standard would be independently audited by a genuine third party, thereby giving the trade and the consumer the confidence to trust the source and the claims over the product.

Thirdly a fair trade diamond standard would have a transparent component that would force disclosure on everyone who touches the certified supply chain through a third party audit. Given the high levels of financial non-disclosure, smuggling and iniquity in the current value chain, trading standards in diamonds are desperately needed. How is that we have allowed ourselves as an industry to sell such an emotional and aspirational product like a diamond when we have no way of verifying its financial integrity. Clearly the current supply chain does not work and needs to be called out as dysfunctional.

There are now some attempts within the industry to create a track and trace supply chain, examples being what has happened with some Canadian diamonds as well as the more bulk commodity approach adopted by the De Beers[1] Forever Mark. This is broadly good news to those in the industry who are concerned about transparency. The strength of this system is that it will allow mine to market traceability for ethical jewellers and consumers. The weakness is that it once again seals up the value chain in the hands of the corporate companies who have the financial clout to make this kind of system work. It is no way benefits the small scale digger, who once again is being left out of the value chain.

So fourthly what a certified fair trade diamond will achieve is a supply chain that is rooted in community based diamond mining and is not dependent on corporate money to succeed. Fair trade is an economic process specifically designed to benefit the poor and the marginalised. This is vital if we are to truly address the huge financial imbalance that is in the diamond industry and for the first time strike a positive blow for the small digger and feed the growing ethical consumer markets in the east and here in the west.

Economic justice for the poor in the diamond industry is not a naive idea. Yet a fair trade diamond, like its cousin fair trade gold is no pipe dream. It is a narrative and idea is compelling enough to change the consumers’ view of diamonds. It is not rooted in a reactionary campaign, but rather a proactive movement of jewellers and consumers around the world who are looking for fresh innovative ideas that will deliver better value for the poor and marginalised miners of our world.

A fair trade diamond is a simple idea that I believe has the power to change the reality on the ground for the millions of artisanal diamond miners of our world. I see it as the Holy Grail of the ethical and fair trade jewellery movement.

[1] De Beers is 45% owned by Anglo American the transnational mining giant. Given AA’s desire to start an open cast copper and gold mine in Alaska’s Bristol Bay (http://www.bristolbayalliance.com/) is an unintellectual and irrational action on the part of AA. It could be argued that 45%c of every De Beers stone supports this stupidity.

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Posted in Blood Diamonds, Diamonds, Fair Trade Diamond, Fairtrade, Fairtrade Gold, Small-Scale Mining

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