An untimely exposure of the KP’s weaknesses

Mbongeni Mguni | Tuesday November 21, 2023 16:37

In his remarks at the Natural Diamonds Summit on Monday, President Mokgweetsi Masisi appeared to break from the version of the speech that his office and government communications would later share.

“We as Botswana and others will protect the Kimberley Process and refuse to be party to its undermining particularly as we engage with our partners globally to ensure enhanced traceability throughout the world,” he said.

The President did not elaborate on his remarks, but the Kimberley Process, better known as the KP has faced an especially difficult two years attempting to deal with the fallout of the Russia/Ukraine conflict.

While the United States has sanctioned Russian rough diamonds since that country invaded Ukraine last February, Moscow’s stones are still flowing through the global diamond industry mainly through India, whose firms cut and polish about 90% of global production.

The US accounts for more than 54% of the market for diamonds, while Russia is the world’s biggest producer of the stones by volume. The situation between the two mega-powers has been replicated in divisions between the KP’s 85 members whenever they have met in the last two years.

When Botswana chaired the KP last year, the watchdog’s plenary held in Gaborone in November ran all through the night until 0500hrs, as delegates clashed over how to express the organisation’s opinion on Russia’s invasion of Ukraine.

In the midnight deadlock in Gaborone, the European Union, Ukraine, Canada, US, United Kingdom and Australia stood on one side against Russia, Belarus, Kyrgyzstan, Armenia, Venezuela and the Central African Republic.

The key differences are over whether to expand the definition of ‘conflict diamonds’ to include Russia’s actions against Ukraine or how to express the KP’s position on the war.

For the US and its allies, securing KP sanction against Russia would represent global-level blockage of Moscow’s stones, as the anti-conflict diamonds’ organisation is backed by the United Nations.

Critics say little meaningful reform has taken place over the years in the KP due to its consensus rule, which means a single holdout can veto decisions supported by the overwhelming majority. This has meant the definition of conflict diamonds continues to be restricted to mean “rough diamonds used by rebels to finance wars against legitimate governments”.

Botswana passed the chairmanship to Zimbabwe this year, but last week in Victoria Falls the now familiar impasse again developed, leading to the Kimberley Process Civil Society Coalition walking out. As at Wednesday, the contentious communique was yet to be released.

“We have been pushing tirelessly to break the links between diamonds and conflict,” the Coalition said in a statement.

“We want to see action, but we can't even agree on simple words.

“This plenary can’t even note the simple fact that it received a letter from Ukraine on the role of diamonds in financing Russia’s war against Ukraine.

“We can no longer observe this sad spectacle that continues to erode responsible diamond governance. “We have no confidence in these discussions and will now leave this meeting.”

Botswana is not only a founding member of the 20-year old KP and the world’s biggest diamond producer by value, but it is also the country most emblematic of the “diamonds for development” principle that successfully fought off the reputational damage of the “blood diamonds” crisis of the 2000s.

The country’s position in global diamonds places its economy at the centre of the new reputational threat to diamonds, as increasingly ethical consumers either boycott the natural stones due to the Russian dilemma, or drift towards the lab grown types whose provenance is easier to establish.

Although Botswana handed the baton to Zimbabwe, the country is set to occupy a central position in the anti-conflict diamonds organisation, after Gaborone was selected to host the inaugural KP Secretariat from January next year.

The duty Botswana carries has been made even harder as the Group of Seven is finalising its own proposals on how to tackle Moscow’s diamonds in the global market. More commonly known as the G7, the group comprises the world’s richest nations, industrialised economies such as the US, United Kingdom and the European Union.

This week, it emerged that the G7’s proposals for Russia could include establishing a single node for certification of all rough diamonds in Antwerp, plans which are being read as not only a vote of no confidence in the KP, but a costly knock for producers. It also represents a swing to Europe at a time when Africa and Botswana specifically is positioning itself as the centre of the global diamond industry.

Outside of Russia, rough diamond production is concentrated in Africa. However, the G7 represents the market for these diamonds, and is thus the mechanism through which value is assigned to the stones. The impasse at the KP is occurring as the G7 is pressing ahead with its own plans, much to the concern of Africa.

Though wracked with divisions, the KP’s proponents believe it retains its central role in fighting conflict diamonds and delivering the collective aspirations of the continent.

Minerals and Energy minister, Lefoko Moagi, told Mmegi that the KP has not only stood the test of time, but is on a path of continual improvement in delivering on the key provenance demands of the industry.

“With any organisation or programme or whatever is put on the table, we believe in continual improvement,” he said in a briefing on Monday.

“Therefore, we believe that the KP will continue to improve for the betterment of our certification process that is very key to the provenance of our diamonds and which is very key to all the other issues pertaining to natural diamonds.”

Moagi added that reforms were necessary to strengthen the organisation.

“We would want that some of the processes at the KP be improved.

“One of those would be things like decision-making.

“Currently as it stands, decision making is through consensus and you would find that sometimes it really puts everyone’s hands behind them because there could be a majority which is really pertinent to the industry, but only one voice will actually then destroy that whole thing for the industry because of the consensus decision making.

“That’s an improvement that we would want to see,” he said.

De Beers’ CEO, Al Cook, said the Zimbabwe meeting had made key progress, despite the issue of the deadlock dominating discussions about the outcomes.

“One thing that came out last week which was really important, was the decision on underpinning and putting structure around Botswana with permanent position in the KP,” he told Mmegi at the briefing.

“That was an achievement that deserves some celebration and recognition.

“It underpins the position of Botswana as the growing hub of the world’s diamond industry.”

Cook added: “I agree that there are ways in which the KP can improve, but we should start by celebrating what it has achieved and the fact that in a polarised world, it still meets for a civilised discussion.”

Like any good organisation, the KP has to be capable of evolving, which it will do, the De Beers CEO said. Last week’s meeting, he said, was a step in the right direction.

“It’s remarkable that over 20 years the KP has so effectively and sustainably addressed the issue of conflict diamonds.

“I think it’s remarkable that in a world as polarised as it is at the moment, we still have a group that gets together like this to have a civilised discussion about how we can ensure that diamonds are developed for the world’s good.

“I think we should celebrate that.”

Masisi’s comments about protecting the KP lend themselves to the fight the organisation’s members, especially founders, have on their hands to ensure the organisation maintains its UN-backed role of cleaning up the industry.

Any diminishing of the KP’s central role would endanger the brand value the country’s diamonds have built over the decades as ethically sourced and used for the social good, and with that would come the inevitable knock on the economy.

As the country most singularly reliant on diamonds, Botswana takes on its Secretariat duties keen to protect an organisation and an industry under threat from multiple challenges.

“The provenance of Botswana’s diamonds is top of mind in our journey of transformation,” Masisi said on Monday.