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Responsible supply chains sine qua non for diamonds, other precious stones

09 april 2018
The Kimberley Process Certification Scheme (KP), which was established by the southern African diamond-producing countries in 2000, came into effect on 1 January 2003 in a bid to eliminate the use of rough diamonds to finance armed conflict.

The scheme, currently under the leadership of the European Union (EU), also aimed at protecting the legitimate diamond industry, upon which many countries depended.  

KP, which was also endorsed by the United Nations’ General Assembly, made a massive contribution during its formative stage to the implementation of then fragile peace agreements in Angola, the Democratic Republic of the Congo, Liberia and Sierra Leone by blocking resources to potential spoilers.  

The scheme members are now said to be responsible for stemming 99.8 percent of the global production of conflict diamonds.


However, some non-governmental organisations (NGOs) are not convinced that KP had made such an astounding progress.

IMPACT, previously known as Partnership Africa Canada (PAC), recently left the KP arguing that it was giving consumers “false confidence” about where their stones come from. 

“There’s no meaningful assurance that a diamond is conflict free,” Joanne Lebert, executive director at IMPACT, was quoted by the Financial Times as saying.
IMPACT, together with other NGOs, had previously called for reforms to reinforce internal controls at national and regional levels to strengthen traceability and minimise illicit trade.
It claimed that the Kimberley Process did not make enough progress on any of the reforms. 

“We have come to the conclusion that the Kimberley Process has lost its will to be an effective mechanism for responsible diamond governance,” Lebert said in December 2017. 

The Human Rights Watch (HRW) also said in 2016 that KP’s long-term credibility and relevance had been undermined by a narrow focus on the activities of anti-government rebel groups and its unwillingness to incorporate human rights protections into its standards and operations. 

 It said although KP had made “important progress” in curtailing the trade in conflict diamonds, it should adopt a broader focus on the full range of human rights abuses connected with diamond production, regardless of whether they are committed by governments, rebel armies, or private actors. 

“HRW has also observed institutional failures by the Kimberley Process in both identifying violations of its standards and holding member states accountable for noncompliance,” it said. 

“There is little independent monitoring of compliance with Kimberley Process rules and few penalties for violations.” 

Supply chains

KP was acknowledged by a multi-stakeholder group that comprised of 50 representatives from industry, civil society and government that met in Paris in April 2013 for its efforts to advance responsible sourcing for rough diamonds.

The stakeholders who met at the Organisation for Economic Cooperation and Development (OECD) to discuss responsible supply chains for precious stones stressed the need for ongoing and continuous improvement in responsible sourcing practices due to evolving risks that the trade in precious stones may be associated with conflict and human rights abuses. 

HRW also studied the supply chains of 13 leading jewellery brands that collectively represent about 10 percent of global jewelry sales.

These 13 companies are estimated to generate over $30 billion in annual revenue, according to HRW.

Globally, about 90 million carats of rough diamonds and 1,600 tonnes of gold are mined for jewellery every year, generating over $300 billion in revenue.

Of the companies researched, Boodles, Bulgari, Cartier, Chopard, Christ, Harry Winston, Pandora, Signet Jewelers, Tanishq, and Tiffany & Co. responded to its request for information while Kalyan, Rolex, and TBZ ignored its inquiries. 

It said in a report released earlier this year that the majority of the companies do not have full traceability for their diamonds and gold. 

“All jewelry companies need to put in place strong human rights safeguards — otherwise, they risk contributing to human rights abuses,” reads part of the recommendations made in the report. 


Despite the short-comings identified by HRW in its report, it was heartening to see that some diamond producers are doing their best to promote transparency using the blockchain technology.

De Beers chief executive Bruce Cleaver recently said they are investing in a new platform that will provide "a single, immutable record that traces a diamond’s individual journey through the value chain".

"This diamond traceability platform is underpinned by blockchain technology, which allows for a highly secure digital register that creates a tamper-proof and permanent record of interactions – in this instance, a diamond’s path through the value chain,” he said.
“In a blockchain, each event or transaction is registered in a database backed by advanced information security technology. 

“This chain maintains a record of the activities that have taken place, the order they occurred in, who they occurred between and what they involved.”

HRW said some of the companies it scrutinised for their report had taken important steps to address human rights risks in the gold and diamond supply chain. 

“For example, Tiffany and Co. can trace all of its newly mined gold back to one mine of origin and conducts regular human rights assessments with the mine,” reads the report.
“Cartier and Chopard have full chain of custody for a portion of their gold supply. Bulgari has conducted visits to mines to check human rights conditions. 

“Pandora has published detailed information about its human rights due diligence efforts, including on noncompliance found during audits of its suppliers and steps it is taking to address them.”

It said Boodles had pledged to develop a comprehensive code of conduct for its gold and diamond suppliers, and to make it public. 

The company had also pledged to report publicly on its human rights due diligence from 2019, and to conduct more rigorous human rights assessments. 

Christ, it said, had also pledged to publish its supplier code of conduct and other information on its human rights due diligence efforts in the coming year. 

“While these are promising signs, we found that most companies still fall short of meeting international standards,” said HRW.

“While some companies are actively working to identify and address human rights risks in their supply chains, others rely simply on the assurances of their suppliers that their gold and diamonds are free of human rights abuses, without rigorously verifying these claims.”
It also advised that the Responsible Jewellery Council should become a true multi-stakeholder body by giving civil society and industry representatives equal decision-making power at all levels and strengthening its standards and auditing practices to set a higher bar for responsible sourcing practices by the industry.

Responsible sourcing of precious stones is of necessity, especially at a time lab-grown diamond producers were telling millennials to avoid natural stones as they were mined unethically.

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


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