(NEWZIMBABWE) Kimberly Process on trial over Zimbabwe’s diamonds

Thursday, August 19, 2010

(NEWZIMBABWE) Kimberly Process on trial over Zimbabwe’s diamonds

Kimberly Process on trial over Zimbabwe’s diamonds
by Alex Magaisa
19/08/2010 00:00:00

After taking time-out to deal with the personal tragedy of the death of his mother, Alex Magaisa resumes his weekly column on New Zimbabwe.com this week: I ASK to be excused for the matter appears too simple to warrant a question, but I must confess I’m getting a little confused about matters appertaining to Zimbabwe’s diamonds.

The source of this confusion is the report early this week about a certain network that was hitherto unknown to those of us outside the diamond-trading world, known as the Rapaport Diamond Trading Network (hereafter, the ‘Rapaport Network’).

Now, I know that diamond trading is not a game for lightweights, so I suspect this Rapaport Network punches in the higher division.

The Rapaport Network has reportedly banned its members from trading in Zimbabwe’s diamonds asserting, inter alia, that circumstances surrounding extraction of the diamonds violate human rights.

A few weeks ago, the Kimberly Process had, after protracted discussions and quite some controversy, certified Zimbabwe’s diamonds as tradable on the international market. In other words, the Kimberly Process had agreed that the precious stones could not be classified as ‘blood diamonds’.

Indeed, partners in Zimbabwe’s otherwise shaky coalition government seem to have been united lately on the issue of diamonds, recognising this as an important source of revenue in the absence of international support that they had initially hoped for.

So what is this coming from the Rapaport Network and what are the implications, both on Zimbabwe and the Kimberly Process? And what exactly is the basis of the ban imposed by the Rapaport Network?

For, in effect, the ban by the Rapaport Network effectively by-passes and overlooks the Kimberly Process certification. The reason given, inter alia is that Zimbabwe’s diamonds are associated with human rights violations. But is this not what the Kimberly Process was meant to decide upon?

No, the Rapaport Network says. It asserts that the Kimberly Process does not have the mandate to deny certification for diamonds involved in human rights violations. It adds further that there is no guarantee that diamonds with KP certification are free of human rights violations.

Whither Kimberly?

So, in effect, the Rapaport Network is challenging the effectiveness of the Kimberly Process. It is arguing that the Kimberly Process’ role as the international gatekeeper in international diamond trading is too narrow because it only focuses on whether or not diamonds can be classified as blood diamonds, but that this question does not deal with the wider issues of ‘human rights violations’.

This move brings under scrutiny the need for the Kimberly Process in the first place. If its mandate is too narrow, why go through it in the first place when there are other higher standard setting agencies such as the Rapaport Network which seem to have a greater, if undefined mandate?

It also brings under scrutiny the role of the Rapaport Network – is it really a legitimate standard-setting agency or a cartel of diamond dealers? Is the network really motivated by human rights concerns or economic considerations? If the Rapaport Network believes that the Kimberly Process’ mandate is too limited and does not extend to human rights violations, what are its specific criteria for measuring these ‘human rights violations’?

Natural Justice and Rule of Law

The Kimberly Process has its weaknesses but, at least, it has built some credibility and gained legitimacy over the years and the standards it has set for determining whether or not diamonds are ‘Blood Diamonds’ have some specific content that is clear to all, including the accused. The Rapaport Network’s ‘human rights violations’ standards need to be clearly defined, too, to prevent any vague interpretations and generalisations.

In addition, would it not be fair, as with the Kimberly Process, that those who face the Rapaport’s sanctions for alleged human rights violations be given an opportunity to be heard and defend themselves, if need be? After all, rules of natural justice, which are part of the rule of law that everyone extols, demand that such opportunities, including a fair hearing be provided before the passing of a sanction.
More bans for ‘human rights violations’?

This issue may seem to only affect Zimbabwe but it would be naïve for other countries to think so. The action of the Rapaport Network introduces a new dimension to the regulation of international diamond trading. Not only have the goalposts been moved from the ‘Blood Diamonds’ threshold, they have been repositioned to include a ‘Human Rights Violations’ threshold, albeit as yet ill-defined. Unless, of course, this is a special case that applies only to Zimbabwe, in which case it would betray the double-standards of the Rapaport Network.

One hopes, therefore, that if its intentions are noble, the Rapaport Network will pursue its mission with vigour, and begin to scrutinise all diamond mining activity across the world (including countries like the DRC), even those that like Zimbabwe have received KP certification, to determine whether or not they violate human rights. This would, if carried out, be followed by a similar ban on its members trading in those diamonds should they be found to be tainted by human rights violations.

That would be noble wouldn’t it? For if the focus is simply limited to Zimbabwe alone, that would smack of a partial and targeted approach and critics would be justified in thinking the human violations standard is just a façade.

Kimberly Process on trial

Ultimately, on trial here is the Kimberly Process itself and the legitimacy of barriers to international trade. The Kimberly Process has long represented a standard-setting agency in the area of diamond trading. As a standard-setting agency in the global economy, the Kimberly Process is not alone.

Thus, for example, the Financial Action Task Force (FATF) is the standard-setting agency set up to devise and enforce global standards to prevent money-laundering and terrorist financing. Likewise, the International Organisation of Securities Commissions (IOSCO) sets standards for the regulation of the world’s securities and financial markets.

States become members of these standard-setting bodies voluntarily, although in some cases, they do so reluctantly because they don’t have much choice because if they don’t comply they are blacklisted. Being part of the collective earns them some credibility and legitimacy.

Consequently, the standards and decisions made by such standard-setting agencies are generally well respected. That is why Zimbabwe was desperate for the Kimberly Process certification - it brought the much-needed legitimacy. Being a member enables it to participate in the decision-making processes, helping to level the playing field. That is where the Kimberly Process has gained acceptance, despite certain criticisms.

The question, therefore, is whether bodies like the Rapaport Network, which appears to have superseded the Kimberly Process, setting up this new ‘human rights violations’ standard in addition to the Kimberly Process ‘Blood Diamonds’ provide the similar processes and mechanisms to fairly determine the correctness of its allegations. For even a person caught red-handed committing an offence is entitled to defend himself. That is what the rule of law demands. Otherwise to impose a blanket ban without affording the country such opportunities would seem to run contrary to standards of fair play in international trade.

For its part, the Kimberly Process needs to re-assert itself otherwise its relevance is in the balance. What would be the point of going through the Kimberly Process, when its decisions can be rendered redundant by another party unilaterally imposing new standards?

If the Kimberly Process mandate is too limited as the action by the Rapaport Network suggests, either the Kimberly Process must redefine itself or face an imminent demise. It can no longer claim to be the international gatekeeper in diamond trading, for its role seems to have been superseded by another network.

It would, indeed, be a twist of irony, if the Zimbabwe diamonds were to signal the demise of the very agency that was meant to determine their fate.
Is it Mugabe?

Then again, it may be that all this is irrelevant but that the key target of the Rapaport Network is not the Kimberly Process but the continued rule by President Mugabe and his Zanu PF party which retains the lion’s share of power in Zimbabwe. If it is true that this is intended to be a blow against Mugabe, then one can only bemoan the continued view that Zimbabwe is Mugabe’s alter ego. It is not.

It is important to look at the country beyond the man. If even a fraction of the proceeds from diamond sales could help the ordinary people of Zimbabwe, that would be start. I have been there and I know what even the bare minimum can do. I am not sure how banning diamond sales will help reduce ‘human rights violations’, let alone cripple Mugabe and his party.

Dr Alex T. Magaisa is based at the Kent Law School, University of Kent. E-mail wamagaisa *** yahoo.co.uk

Labels: KIMBERLEY PROCESS, RAPAPORT DIAMOND TRADING NETWORK