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‘I will run my chair in a very transparent, open fashion’ – KP Chairperson

06 march 2017

robert_owen_jones_xx.jpgAustralia’s Robert Owen-Jones took over as this year’s Kimberley Process Chairperson amid tension between the civil society and the United Arab Emirates (UAE), which chaired the diamond watchdog last year.

The civil society coalition boycotted UAE’s leadership accusing it of encouraging the penetration of conflict diamonds into the market.

The coalition also described UAE as the "elephant in the room" and its chairmanship was declared a "red line" while the country’s ethical standards were questioned.

However, the new KP Chair told Rough & Polished’s Mathew Nyaungwa on the sidelines of the African Mining Indaba in Cape Town early February, that his wish was to see the civil society participating again in this year’s meetings.

Declaring that he would run his chair in an “open fashion”, Jones said that issues outside of KP should not affect the business of the diamond watchdog.

He said KP was a consensus-based organisation and no individual’s view was allowed to dominate that of others.

The new KP Chairperson also spoke about the need for a KP permanent secretariat, funding of struggling countries to attend KP meetings ahead of the civil society.

He also expressed his views on price transfer, expanded definition of conflict diamonds and synthetic diamonds among other things.

What will be the key tasks for the Kimberley Process that will be solved during your leadership? 

Maybe I should rephrase the question to say what will be my vision for the year because a chair’s tasks are very much the same whatever you are chairing so the chair of any process is in a sense the one that organises and makes sure you have outcomes at the end of the year. I have chaired many things before, Mathew, I don’t know if you have noticed: in climate change, the World Bank and OECD, G20, lots of stuff! So, the actual tasks and methods that you share is a skill. My vision for the Kimberley Process is two-fold in terms of my chairing. The first is I really want to focus on improving implementation. What the Kimberley Process has managed to do over the last 13 years is really remarkable in terms of almost eliminating conflict diamonds, so it’s good time to see whether there are ways to improve…, so can ‘we improve the security of certificates?’ Can we look at something such as, ‘does block-chain technology provide us with some improvements?’ I am very open but I would like to have that discussion. My other key vision this year is to deliver an effective review of the Kimberley Process, something I am going to chair myself, this is, as you probably know, mandated to happen every so many years and this year is one of those years, so a lot of my effort will go into that. In general I want the Kimberley Process to act in efficient, steady and normal fashion, so I want everyone to feel very comfortable participating in the process. I don’t want anyone to feel as if they are being challenged or that they are not welcome. This is a big open multinational process, I am going to run my chair in a very transparent and open fashion, there are no secret or hidden agendas, there is no Australian agenda, I am trying to promote over and above everything else. I am the chair for everyone.

So, under your leadership we are going to see greater vigilance in curbing illicit diamonds from entering the supply chain?

So, Mathew, you are talking about a comparison. I would say, I will be vigilant and the Process should be vigilant. It’s not my role as the chair to compare myself to previous chairs…I can only talk for my own efforts, so I will take things very seriously and that is the role of the chair and it’s the role of the Process so we obviously have a working group that looks at this and they have my full support to call up on any concerns.

Last year there was a tension between the civil society and the then KP chair Ahmed Bin Sulayem. What do you think should be the role of the civil society going forward?

So, civil society are an…important part of the Kimberley Process together with governments and industry. We have collectively made sure that the trade in blood diamonds has almost disappeared so the civil societies are very important. I certainly hope and expect the civil society to participate in this year’s meetings and I am looking forward to hearing their views about how we can improve the Kimberley Process through their reviews, so of course, they made it quite open that they have issues with some of the participants in the Kimberley Process. My view is that you cannot arrive at an…outcome without being fully engaged, so I want them to come back and participate.

Do you think that KP’s public trust is under threat given the fallout between the civil society and the previous chair?

It’s a hard question to make a judgement about what is public trust. So who are you talking about? Are you talking about the trust of consumers in Belgium or are you talking about the trust of villagers in Liberia? My view is that the trust is reflected by the commitment and seriousness that the participants in the Process take so the government participants and the industry participants give this so much focus and attention. I am very, very impressed by the commitment the people have to the Process. I expect the civil society to continue to understand that we are talking about material certification process…issues inside the mandate of the Process. There are [also] issues that people would like to bring into the Process and these are two very separate things, so as we all know some people have concerns over issues outside of the Process with some participants in the Process, now to me that is business elsewhere rather than the Process. So the Process runs very well, I think [it] is very resilient and robust and I have been very impressed about the quality of the review teams and the quality of the teams going to investigate problems so I think the Process, the actual material certification process, works very, very well and we can have a very high degree of assurance that works well.

The civil society also called for an expanded definition of conflict diamonds to include issues of human rights. What is your take on that?

When we do the review this year, it’s an open review so people can propose whatever they like. It won’t surprise me at all if a number of countries and delegates and even the civil society will propose things like changes to the definition broadening the scope etcetera, and we will have a conversation about that. I want to have a conversation about anything that people raise in terms of, ‘will KP work better or not if we do this?’, ultimately any decisions that we make as Kimberley Process, are decisions by consensus, so you don’t just accept any one point of view, you have to listen to everyone’s point of view and the extent to which we might change or might not change the definition will be an agreement by all of us, equally, so it’s a consensus-based organisation.

As the KP chairperson do you think polished diamonds should be included into the KP mandate?

At the moment the mandate for KP is very fixed and it does focus on rough diamonds and of course as chair I will chair a review process this year that will look at ways we can improve the effectiveness and efficiency of the Kimberley Process. It’s not my role to expand the mandate but everything is open for discussion so if countries or delegates suggested that that’s ‘one thing we should think about’, then I am certainly willing to have the conversation. [However] it’s an interesting question, a very valid point and I know it’s something that some groups like World Diamond Council are giving a lot of thought to and I think it’s very interesting. That is something that we should discuss because the critical thing here is that we must maintain consumer confidence in diamonds and the value of diamonds and it’s such an important thing for Africa. I don’t need to tell you, so many people are employed by this industry and it should be an industry that works not just for the big mining companies like Rio Tinto, De Beers or Alrosa. It has to work for the small producers as well, and alluvial and artisanal producers are also part of the industry so we must make sure that we continue to have a system that allows them to sell their products in a way that the jewellery consumers feel confident so to me that’s what the process is about and people can load in other issues but we must keep the core of the process very, very safe and secure…

Will transfer pricing be high on the agenda during your KP chairmanship?

So, transfer pricing is not core to the mandate of the Kimberley Process, it’s still something that some parties feel very strongly about and clearly the civil society feel strongly about it, but that is not what the Kimberley Process does, so I am very open to discussion around this issue and last year the UAE held a number of special fora on transfer pricing. I personally thought that a lot of the points that were made in the special fora were very good and interesting. The OCD does some very good interesting work in this area, so I am quite open to continue discussion in the form of special fora. So, this is not in the Kimberley Process itself, but a discussion that you will have alongside.

Some people called for revised minimum requirements and independent third-party assessments of compliance. What is your take on that?      

I think the word minimum is not a very helpful word. I know that is the word that we use in a formal technical sense, but what it means is that we have a set requirement of the KP. Now minimum means everyone has to meet that requirement and there is no doubt that according to national circumstances that some countries have higher requirements domestically that everyone else has to meet this requirement, so I think it’s perfectly normal to continually look at the requirements that we ask our participants, so that should be something we should discuss as well, but whether or not we raise it or lower it or make changes to it, is a separate issue. I will certainly think that that’s a natural thing to discuss, but I want to remove the sense that minimum means that it’s not good enough. I think that’s what we currently ask our participants to do and whether we change it then that has to be a consensus outcome by everyone…     
The issue of CAR’s diamonds finding their way into Cameroon was topical last year. What is comment on this?

I will take this question in two parts. Firstly, I congratulate the CAR for working so hard to re-certify some of their regions for export. The review missions to the CAR have been, to my knowledge, very rigorous and I have been impressed at the level of corporation and effort that the CAR government has made and I would like us to continue to see if we can re-certify some of their regions, obvious, diamonds are not just in the CAR, but throughout Africa an enormous generator of income and employment. So if we can recertify the CAR, I think, that will be good, but of course they have to meet the rigorous standards that will be applied. Now some reports that some diamonds in Cameroon maybe sourced from the CAR is obviously something that we will continue to watch very closely. I don’t have the figure in front of me but from the top of my head in 2015, they were 2200 carats of diamonds traded out of Cameroon so it’s a small amount of trade. So, that’s something we should be able to look at quite carefully…

We know the KP mandate is to act as a watchdog of natural rough diamond mining and trading, but we have also seen the proliferation of synthetic diamonds and some of them are being packaged as natural diamonds. Should KP be involved in monitoring man-made diamonds so they are not mixed with natural stones?

Let me make several comments in relation to this. So, firstly, there is nothing wrong with synthetic diamonds. If people want to make artificial diamonds and sell them as artificial diamonds that’s a perfect legitimate thing for companies to do, perfect legitimate business enterprise. There is a legitimate trade in synthetics. As you know, the quality of synthetics continues to improve and indistinguishable from natural diamonds without testing. So, if you have, for example, synthetic diamonds in your watch and it’s sold as that, then that is perfectly OK. What is not OK are several things: 1. If you use synthetics and insert them into a parcel of natural diamonds to try and get a higher price for your synthetic diamonds - because they are not natural and the natural diamonds area has a much higher price point - that is fraud.  That is not something that we could ever support and it does undermine the confidence people have in the diamond chain. I think it’s a fantastic thing that the major bourses in the world are introducing machines that saw through melee for synthetics being put into the trade illegally. I think while people do fear this, it looks as though the evidence is slight about it being a major problem. I suspect, it might happen but it’s a small problem because when you insert them in the supply chain, there has to be some point where you get packages of roughs and then polished, so it switches out of the KP space. But there is a fraud risk there and there is money laundering risk and in essence it’s the same risk that you have with the trade in illicit diamonds that fueled conflict previously, so I intend to have a special forum on synthetics.

We will probably hold that at our first Kimberley [Process] meeting in May. I am still thinking about the nature of the discussion we [will] have, but for diamond producers I think it’s worth thinking about the fact that we have a robust certification process for natural rough diamonds and here we have a product with no certification process that potentially could be a problem. So, you have one place where you certify and one place where you not, so we should have a discussion around that.

Then there is a third issue, which I don’t have a view on as chair, but I will offer a personal view which is: I am undisturbed [by] some of the marketing that some companies have around synthetics that, ‘you can be assured that your synthetic diamond is conflict free because it’s a synthetic diamond’. That is quite a confrontational style of marketing and I am not sure it’s healthy for synthetic diamonds to ultimately sell themselves that way because we are talking about a product that takes an immense amount of energy to produce and it’s so easy for me to imagine people start saying, ‘well you are actually not talking about a sustainable product, what is the greenhouse cost of your synthetic stones, etcetera, etcetera’, but as I said I don’t have a view as chair on that. [However], I think for an industry that is so important for African employment and actually employment in Russia, Australia and other places…to have people target African employment in this fashion is not very health so I think its concern. I don’t think I will have a discussion around that but clearly, it’s not [ethical], well people can debate about the ethics of that sort of marketing.

What is your assessment of Russia’s participation in the Kimberley Process?

Russia is a very strong supporter of the Kimberley Process and I warmly welcome Russia’s involvement. Alrosa, obviously, Russia’s major diamond producer, should be congratulated for the extent of their support to the KP. For me I think this is very heartening, that the president of the World Diamond Council (Andrey Polyakov) is Alrosa’s vice president. He is a fantastic individual and does a terrific job, both for Alrosa and WDC. So, I have been very impressed by the quality of the Russian commitment to the Kimberley Process and the leadership that Russia shows in the sense of Alrosa’s participation. So Alrosa should be congratulated as well and it’s very pleasing to see their ongoing involvement. I think this is a very good signal for Africa that there is so much commitment from producers outside of Africa. Rio Tinto, of course, is also committed to the Kimberley Process as the major producer in Australia and Canada. So, it’s not only just De Beers, these are major producers completely committed to supporting the Kimberley Process and I think that is a fantastic thing.

There were calls last year for a multi-donor trust fund to finance non-governmental organisations within the KP. What is your take on that?

This is a proposal by the UAE and they made it just before the plenary last year, it would be one those things that we consider in a review, so there was no time to consider it appropriately at the plenary in Dubai and countries will have their own views, as chair I will have no view, so I will accept the view of parties whether there should be a trust fund or not. That’s an issue for parties to resolve. Australia, which is separate [from] me, in a sense that there will be an Australian delegation, will voice its view, separately, about that. Things I will look at in terms of that will be natural questions such as if you have a trust fund to support the participation of the civil society, should not have a trust fund, first priority, to support the participation of government representatives from countries that find it very hard to participate in the Kimberley Process? So am naturally sympathetic to some of the west African countries that have not had financial resources to participate and I think the processes that I previously chaired, for example the main committee of the climate change convention, we have a trust fund in that situation for least developed countries and it helps them to come and participate. For me that’s number one priority, we actually don’t have a trust fund in the climate change for the civic society and they seem to have no problems to come. So, it doesn’t mean I am not open to it I am just saying I pose that question about, ‘how you will do it and what is the purpose?’ But we will see, as we shall have an open discussion about this as we go forward, again as chair I am neutral…but part of my role is to ask the operational questions.

A proposal was also made towards the end of last year for KP to have a permanent secretariat. What is your take on that?

We have a secretariat at the moment but it’s more of a voluntary secretariat, so how ‘do you professionalise and make it permanent?’ I think that is a very interesting question and I think that’s one that I will definitely do as part of the review and I will be inviting people to think about that…a lot of multinational institutions have permanent secretariats, they help smooth the transition from one change to the next, they perform…some things that some chairs find hard to do.

Will it be a big secretariat?

I don’t think we need a big secretariat but what is an appropriate size is a good question. It might just be a group of three or four people. The role is clear, it will work like any other secretariat for a multinational institution. We do have big multinational institutions, for example the G20 that don’t have secretariats. I think in this case there is probably a very good case to make.

What is the relationship between the KP and the UN?

So KP was born from recommendations of the UN security council, so there is already a relationship per se, but it’s not a formal organisational relationship, so I think when we think about a secretariat we should think about what is the home of that secretariat and I think that there is a case to be made that its associated with the UN. That’s something that I will explore so these are issues that are really worth thinking about as part of the review.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished


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