Global Policy Forum

By Eric Onstad

Diamond giant De Beers called for urgent reforms on Wednesday to stamp out trade in so called "blood diamonds" as the jewellery sector braces for negative publicity from a new Hollywood movie. De Beers Chairman Nicky Oppenheimer backed non-governmental organisations (NGOs), which have slammed a watchdog group ahead of a key meeting next week. The jewellery industry is nervous about the impact of the film "The Blood Diamond", starring Leonardo DiCaprio, which is expected to highlight the twists of Africa's diamond trade. Criticism has mounted recently about the effectiveness of the Kimberley Process, a group of diamond-producing nations that aims to end trade in "blood diamonds" -- blamed for fuelling conflict and instability in many African countries.

Representatives of 46 governments and the European Union gather in Botswana next week for a yearly meeting of the Kimberley Process. "The Kimberley Process is not a perfect construct and it is necessary now to re-double efforts to address its remaining shortcomings and strengthen its provisions," De Beers Chairman Nicky Oppenheimer said in a statement. "The NGOs, who alerted the world to conflict diamonds, are correct to call for urgent action at this plenary." De Beers, 45 percent owned by mining group Anglo American Plc (AAL.L: Quote, Profile, Research), accounts for around half of the world's supply of diamonds and could suffer if consumers heed calls by some interest groups to boycott the gems.

TEPID RESPONSE

A recent report by Partnership Africa Canada (PAC), which has observer status in the Kimberley Process, said while the group has dramatically cut the trade in illicit diamonds, serious weaknesses have not been addressed.

Investigations by NGOs and the United Nations uncovered massive fraud in certifying diamonds in Brazil and Guyana while exposing laundering of conflict diamonds from Ivory Coast as it suffers from a civil war, PAC said. "In each case, the Kimberley Process behaved like a disinterested bystander, its response tepid, late or non-existent," the PAC report said.

In the mid-1990s, conflict diamonds represented as much as 15 percent of the world's total but the Kimberley Process has slashed that to less than 1 percent, it added. "Conflict diamonds do not represent a huge proportion of the world diamond trade today, but they do exist, and without effective controls, they could erupt again in any one of a dozen places," PAC said.

Under the Kimberley Process certification programme, which came into effect in 2003, participating governments agree to issue a certificate to accompany all exports of rough diamonds.

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