A Single Point Of Failure

Submitted by Ahmed Bin Sulayem, Kimberly Process Chair 2024

The global diamond industry once again finds itself at a crossroads, and while the need to curb conflict diamonds and ensure ethical sourcing remains paramount, the European Union’s proposal for a single diamond control node in Antwerp raises serious concerns about sovereignty and efficiency, while undermining the integrity of the Kimberley Process (KP).

In a statement issued by the Diplomatic Service of the European Union, my comments made during the KP Plenary meeting in my capacity as the KP Chair were described as “regrettable” and that the Kimberley Process had “failed, for a third year in a row, to address the implications of Russia’s war of aggression against Ukraine on the global rough diamond sector.”

As an organization, the KP serves a very specific function – to unite administrations, civil societies, and industry in reducing the flow of conflict diamonds. It has no mandate to endorse political sanctions against sovereign nations. As a process that has proven its purpose and function, particularly by identifying all diamonds at source, the EU should first ask themselves why now they wish to displace an operation they have trusted for a generation with a less effective proposal that is untried, untested, and unrequired. It should also question why its position has isolated itself within the global diamond community, which increasingly sees its proposal as a play for hegemony over the holistic needs of the industry.  

Contrary, the KP’s decentralized solution is overwhelmingly supported by industry members, KP observers, including the World Diamond Council, civil society, and numerous Belgian stakeholders, many of whom are afraid to speak out in fear of reprisal. As the Kimberley Process Chair, I have consistently voiced my concern about this centralized approach. Not only does it disrupt the established KP framework, a decentralized network of 59 nodes, (60 if you include recently onboarded Uzbekistan), that has functioned effectively for over two decades, but worse, undermines the trust and collaboration that has upheld the equitable participation and sovereignty of all member states.

Conversely, the single-node model imposes a Eurocentric lens on the global diamond trade by placing disproportionate burdens on African producers, requiring them to channel their diamonds through Antwerp for verification before accessing G7 markets. This not only adds logistical and financial costs but also undermines the ability of African nations to self-regulate and manage their own natural resources. In other words, the EU’s agenda can only be seen to be self-serving as a way of preserving its relevance in an industry that overwhelmingly rejects supervision and bureaucracy in favour of decentralised collaboration.

Frankly, it is disheartening to see that despite vocal opposition from African nations, including Botswana, Namibia, and Angola, and the concerns raised by the African Diamond Producers Association (ADPA), Europe remains deaf and committed to its single-node concept, setting a troubling precedent reminiscent of its imperial past. Even in terms of practical efficiency, this centralised approach creates a single point of failure, making the system vulnerable to corruption, bottlenecks, and inefficiencies; vulnerabilities for which Antwerp already has a demonstrable track record.

And what logic selects Antwerp? Not consensus. Not its track record.

Belgium, and specifically Antwerp, was long considered the heart of the global diamond trade. However, this glittering reputation is tarnished by a history of corruption, smuggling, and ethical breaches. The Monstrey Case exposed a network of 220 corrupt diamond dealers, of which 107 were charged for large-scale forgery, including fraudulent Kimberley Process certificates and money laundering. Other notable cases include Agim De Bruycker – the long-standing Antwerp Federal Police Commissioner and Head of the Diamond Squad, who was arrested twice and served a custodial sentence for similar charges.

If one were to choose some paradigm of efficiency, Antwerp is hardly a strong candidate, leading to the conclusion that the choice was made at a geopolitical level for the benefit of the few. This isn’t to say that any location is perfect. Any single location is, by its nature the wrong choice. The argument for a decentralized system based on transparency, versus blindly trusting the EU for certification, is just common sense. Even when taking a step back from the diamond industry specifically, the current global political climate, with its shift towards nationalism and self-determination, further underscores the need for a decentralized approach. As former European Central Bank President Mario Draghi aptly stated, the future of competitiveness lies in embracing decentralization and empowering individual nations.

Throughout its twenty-four-year history, the KP has proven its effectiveness in curbing conflict diamonds and promoting ethical sourcing, while its tried and tested processes have the capacity to adapt and improve, ensuring that all nations have the right to self-regulate their natural resources. Additionally, the UAE’s proof-of-concept KP certification platform, which was showcased at the KP Plenary in Dubai, is a testament to the potential for innovation within the existing framework. It demonstrates that technology can be leveraged to enhance transparency and traceability without compromising sovereignty or imposing undue financial and logistical burdens. In this, I look forward to working with the KP family to build a future where all stakeholders, particularly Africa’s producing nations, continue to have a voice and benefit equitably from their natural resources.

Source: Zero Hedge

NOTE: Israel is a major player in the global diamond industry despite having no diamond mines of its own[1][3]. The country ranks among the top five diamond exporters worldwide, with diamonds constituting 23.2% of Israel’s total exports as of 2016[3].

Israel’s Diamond Industry

Israel’s diamond industry focuses primarily on cutting, polishing, and trading diamonds rather than mining[4]. The country imports rough diamonds from various sources, including Russia, Canada, and Botswana[4]. These rough diamonds are then processed in Israel’s advanced diamond polishing factories, which are considered among the most sophisticated in the world[5].

Key Aspects of Israel’s Diamond Production

1. Processing and Export: In 2010, Israel processed 9% of the world’s diamonds by value[3]. As of 2016, this figure had risen to 12% of global production[3].
2. Specialized Workforce: The industry employs around 20,000 people, including highly skilled workers and expert craftsmen[4][5].
3. Technological Innovation: Israel has developed advanced technologies for diamond processing, including lasers for cutting, bruting machines, and computer-aided design systems[5].
4. Focus on Larger Stones: Israeli factories specialize in polishing large and medium-sized diamonds of various shapes and cuts[5].
5. Global Trade Hub: The Israel Diamond Exchange in Ramat Gan serves as a major center for diamond trading, housing the world’s largest diamond trading floor[3][5].

Israel’s success in the diamond industry, despite lacking diamond mines, is attributed to its skilled workforce, technological advancements, and long-standing expertise in diamond processing and trade[4].

Citations:
[1] https://www.presstv.ir/Detail/2024/04/02/722900/The-role-of-the-diamond-industry-in-supporting-Israeli-occupation-and-Palestinian-dispossession-
[2] https://www.middiamonds.com/the-diamond-blog/the-story-of-israels-diamond-industry-is-that-of-the-country/
[3] https://en.wikipedia.org/wiki/Diamond_industry_in_Israel
[4] https://www.linkedin.com/pulse/sparkling-success-why-diamonds-israels-shining-export-andrei-mainea
[5] https://en.israelidiamond.co.il/about-the-israeli-diamond-industry/
[6] https://www.trtworld.com/africa/israel-uses-conflict-diamonds-to-finance-gaza-genocide-18209038
[7] https://rapaport.com/news/israels-diamond-trade-is-stuck-between-two-crises/
[8] https://www.jpost.com/jerusalem-report/israels-diamond-industry-has-a-bloody-history-681903