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RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSA #3836/01 3051510
ZNR UUUUU ZZH
R 011510Z NOV 07
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 2518
INFO RUCPDC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0688
RUEHRL/AMEMBASSY BERLIN 0560
RUEHBS/AMEMBASSY BRUSSELS 1247
RUEHBY/AMEMBASSY CANBERRA 0567
RUEHOS/AMCONSUL LAGOS 1193
RUEHUJA/AMEMBASSY ABUJA 1113
RUEHLO/AMEMBASSY LONDON 1349
RUEHMO/AMEMBASSY MOSCOW 0693
RUEHOT/AMEMBASSY OTTAWA 0521
RUEHFR/AMEMBASSY PARIS 1208

UNCLAS SECTION 01 OF 02 PRETORIA 003836 
 
SIPDIS 
 
SIPDIS 
 
STATE PLEASE PASS USAID 
STATE PLEASE PASS USGS 
DEPT FOR AF/S, EEB/ESC SUE SAARNIO 
DOE FOR SPERL AND PERSON 
 
E.O. 12958: N/A 
TAGS: EMIN ENRG ETRD SENV EINV SF
SUBJECT: KIMBERLEY PROCESS - STATUS QUO OR MORE? 
 
¶1. SUMMARY: The Diamonds - Source to Use 2007 Colloquium in 
Johannesburg offered heated discussion on whether to expand the 
Kimberley Process from its successful efforts combating conflict 
diamonds to include mitigation of illicit diamonds, artisanal 
mining, and lack of transparency.  World Federation of Diamond 
Bourses President Ernest Blom made a persuasive case that the 
voluntary Kimberley Process should continue doing what it does well 
and let other entities address broader and more difficult issues. 
Minerals-Energy Officer and Specialist attended the Diamond 
Colloquium on October 25-26.  Septel will report on the balance of 
diamond issues raised.  End Summary. 
 
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Success Story Against Conflict Diamonds 
--------------------------------------- 
 
¶2.  World Federation of Diamond Bourses President Ernest Blom lauded 
the success of the Kimberley Process in the second day opening 
speech, noting that its 47 members (including the EU, so 
representing 73 countries in total) represent 99.8 percent of global 
trade in diamonds.  Blom said only 0.2 percent of diamonds were 
currently not accounted for, compared to 4 percent in 2000 when the 
Kimberley Process was launched.  He stated that the only significant 
non-Kimberley producer is the Ivory Coast.  Blom cited recent 
achievements of gaining Turkey as the 47th member and earlier 
admitting Liberia after the lifting of UN sanctions.  He noted that 
the movie "Blood Diamonds" was factual as of 1999, but the Kimberley 
Process had dramatically ameliorated the situation as of 2007.  Blom 
explained that the World Diamond Council (WDC) did an extensive 
campaign to publicize the benefits of diamonds to Africa in response 
to the movie.  He lamented that the movie refused to do a disclaimer 
to this effect.  Blom took note of the WDC country review of 
Zimbabwe and asserted that allegations of smuggling of its diamonds 
via South Africa were untrue. 
 
¶3.  Blom criticized NGO's for "refusing to admit the success of the 
Kimberley Process", emphasizing that no other product in the world 
has been so self-regulated.  In a separate meeting with 
Minerals/Energy Officer and Specialist in his Johannesburg CBD 
"Jewelry City" offices, Blom repeated that the Kimberley Process has 
not been given adequate credit for its accomplishments.  He 
emphasized the need to keep the process in place against potential 
for future conflict.  Blom also described the detailed "chain of 
warranties" or "know your client" system applied to processed 
diamonds which militated against illicit diamonds. 
 
¶4.  De Beers Managing Director Faried Sallie told Minerals/Energy 
Officer and Specialist in a separate meeting that the Kimberley 
Process had been a highly effective mechanism.  He stated that all 
diamonds purchased and sold by De Beers are 100 percent 
conflict-free.  South African Diamond and Precious Metals Regulator 
CEO Louis Selekane, who works with SA Customs to provide Kimberley 
certification, also described the process as successful both in 
Qcertification, also described the process as successful both in 
South Africa and globally. 
 
------------- 
Role of NGO's 
------------- 
 
¶5.  At the Diamond Colloquium, South Africa Institute of 
International Affairs official Tim Hughes argued on behalf of the 
importance of NGO's in the Kimberley Process.  He emphasized the 
value of trilateral collaboration with industry and governments, 
noting that without NGO's, there would not have been a Kimberley 
Process. 
 
--------------------------------------------- ----- 
What About Illicit Diamonds and Artisanal Diggers? 
--------------------------------------------- ----- 
 
¶6.  Hughes called for the Kimberley Process to expand its efforts to 
more broadly combat illicit diamonds and to address the social 
problems of artisanal diggers.  He admitted that many stakeholders 
would argue against "mission creep", but he argued for the need for 
industry, governments, and NGO's to tackle this challenge that 
 
PRETORIA 00003836  002 OF 002 
 
 
contributed to smuggling and conflict.  Hughes commended the De 
Beers-led public-private partnership Diamond Development Initiative, 
launched in Accra in 2005, as targeting financing and underlying 
conditions of artisanal miners.  He asserted that alluvial diamond 
artisan diggers were one million strong and struggled to survive on 
less than one dollar per day.  Finally, Hughes called for the 
Kimberley Process to have more "teeth", lauding the recent booting 
out of Venezuela for non-compliance. 
 
¶7.  Southern Africa Resource Watch official Claude Kabemba also 
called for expansion of the Kimberley Process mandate to more 
broadly target illicit diamonds.  He also noted that other minerals, 
such as gold, have financed conflict in Angola, DRC, and elsewhere. 
Kabemba stated that because Kimberley is voluntary and reliant on 
government buy-in, the initiative is weakened by countries like DRC 
and Angola, which either do not control their borders and commerce 
or do not choose to control their resources.  He asserted that the 
Kimberley Process deals only with symptoms, but does not address 
governance and transparency. 
 
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Comment - If It Ain't Broke Don't Fix It 
---------------------------------------- 
 
¶8.  The Diamond Colloquium provided a forum for NGO's to seek to 
stretch the envelope on the Kimberley Process mandate, but World 
Federation of Diamond Bourses President Ernest Blom made an 
effective case that the voluntary Kimberley Process should continue 
doing what it does well and let other entities address broader and 
more difficult issues.  His view carried the day at the conference. 
Moreover, new conflicts unfortunately can always ignite in diamond 
producers, especially in Africa, and the world community should keep 
this useful tool 
tee-ed up and ready for future use. 
 
BOST