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16October 2019

WDC Newsletter


THE KHARYSKHAL REHABILITATION CENTER:
REBUILDING SHATTERED LIVES IN MIRNY

This article is the third in an ongoing series, which shines a light on grass-roots capacity-building and sustainability programs initiated by WDC members to support communities where diamonds are mined, processed and traded.

“Our children” is what members of staff call their charges at the Kharyskhal Rehabilitation Center in Mirny. Its mission is to restore a semblance of normalcy for young people whose lives have been shattered by domestic abuse, alcoholic parents and deprivation, a problem common to any urban area in the world.

The center was established in the diamond-mining town in 1997. Those were hard time for the Russian Federation, when the dramatic change that swept across the country left many in economic distress. Not all were able to cope, and it was their children who often paid the steepest price.

“In the Yakut language ‘Kharyskhal’ is the word for a protective amulet, and that is what we do,” explains Muza Romanova, the center’s director.  “We avert problems. We teach families how to meet challenges that at first seem insurmountable, and we instill self-confidence in the children. We use the latest solutions, combining preventative, correctional and rehabilitative care.”

The newly constructed Kharyskhal Rehabilitation Center in the diamond-mining city of Mirny, a purpose-built building that was constructed with the support of ALROSA and the government of Yakutia. It opened its doors in September 2018.

With nothing available and an urgent need for the type services that it could provide, the new center was initially set up in a makeshift building and operated there for the next 21 years. “We got used but it was in a constant state of disrepair,” remembers Romanova.

But then circumstance intervened. Mirny was visited by Yegor Borisov, Yakutia’s then governor. Driving around the town and talking to people in the street, he pulled up in front of the old Kharyskhal structure.

“I decided that he needed to see our living and working conditions and went outside to meet him,” Romanova recalls. “The temperature was 40-degree below zero, and I was wearing nothing over my dress. He was uncomfortable talking to me in the cold, so he came in and saw everything. After that, we were told that Kharyskhal would get a new home.”

Enter ALROSA, Mirny’s most important business enterprise. In coordination with the Yakutian government, the diamond company helped build and outfit a $3 million building dedicated to Kharyskhal’s mission. Constructed over an 18-month period, the new center opened its doors in September 2018.

Now able to accommodate more children than before, the two-story building is warm, airy and naturally lit by enormous windows.  With flowers everywhere, its walls are decorated with enormous floor-to-ceiling hand-drawn pictures of Yakutian scenes, and posters designed to stimulate child development. A large kitchen and canteen provide daily meals.

Kharyskhal offers a sanctuary to children from the across the Mirnу district. Their individual stories are often heartbreaking. Frequently […]

16October 2019

WDC Newsletter


ENHANCED VIGILANCE URGED WHEN HANDLING
DIAMONDS FROM THE CENTRAL AFRICAN REPUBLIC

Photo credit: Pierre Holtz for UNICEF on Flickr

As participants in the World Diamond Council (WDC) gathered in Antwerp, Belgium, at the beginning of October for the organization’s Annual General Meeting, the government of the Central African Republic (CAR) announced an overhaul of it nation’s alluvial diamond-mining sector, stating that “it will stand for a bold new and drastic approach where full transparency and proper due diligence protocols, traceability of individual parcel and OECD Due Diligence Guidance will be crucial.” The plan also included a substantial cut in the export tax for rough diamonds.

According to current Kimberley Process Certification Scheme (KPCS) rules, which defines “conflict diamonds” as rough diamonds associated with the financing of rebel groups in conflict with legitimate governments, CAR is the only country today in which such stones are being produced.

In the official communique released after the AGM, the WDC President Stephane Fischler encouraged the CAR government to carry out its program. However, he added, all industry players must still remain on the alert and conduct their own due diligence to ensure that any CAR-sourced rough diamonds they purchase are KP-compliant. He also called on the countries neighboring the CAR and those that are home to trading centers to practice enhanced vigilance, to prevent conflict diamonds from accessing their territories.

In a country long beset by civil conflict, the current round of fighting began in December 2012, when forces of the Seleka faction attacked government forces, eventually overthrowing it in March 2013.

In response to reports that the Seleka had been funded by the sale of alluvial rough diamonds, in May 2013 the Kimberley Process announced it was suspending CAR’s membership in the KPCS, thus making it illegal for all other member countries to permit diamond exports from that country. According to the KP, in 2012, the year before the ban, CAR officially registered 371,917 carats of diamond exports, worth more $62 million.

Faustin Archange Touadera (center), President of the Central African Republic, flanked by Marie-Chantal Kaninda (left), outgoing Executive Director of the World Diamond Council, and Stephane Fischler (right), WDC President, during the 6th Forum of the Africa-Belgium Business Week in Genval, Belgium, in April 2019.

Udi Sheintal, WDC’s  Secretary and General Counsel, the World Diamond Council’s representative on the CAR Monitoring Team.

In June 2016, following the election eight months earlier of President Faustin-Archange Touadera, CAR resumed limited exports of rough diamonds, according to a program developed with the KP, which was supported by the United Nations.

The program dictates that the only diamonds that been mined in “green” compliant zones would be eligible for export with a KP certificate issued by the CAR government. These zones are in areas under secure CAR-government control, and where the KP also has determined that production meets Kimberley Process Certification Scheme (KPSC) operational framework traceability requirements. For this […]

16October 2019

WDC Newsletter


THE 20-YEAR JOURNEY OF THE ARCHITECT
OF THE KIMBERLEY PROCESS CERTIFICATION SCHEME

In November 2018, with little fanfare, the diamond industry representative that had been most associated with the campaign against conflict diamonds for the longest period of time stepped out of the limelight. Mark Van Bockstael, who had served as the chair of the Kimberley Process’ Working Group of Diamond Experts (WGDE) since the body was created, passed the baton to a fellow World Diamond Council officer, Peter Karakchiev.

Mark Van Bockstael, the long-serving WDC official who many consider the architect of the Kimberley Process Certification Scheme.

Over a 20-year span there are unlikely any diamond industry officials who racked up more travel time and hotel nights in some of Africa’s most volatile locations. And it was a journey that happened almost by circumstance. “There was nothing that really prepared me for what was about to happen,” he recalled. “But then there were no real experts at the time or even a road map. We made the rules up as we went along.”

A geologist by training, up until 1999 Van Bockstael would have described himself as an educator, heading up the Institute of Gemology at the HRD, the Antwerp diamond sector’s umbrella organization that was the forerunner of today’s Antwerp World Diamond Centre (AWDC). In June of that year, the city was visited by Robert Fowler, Canada’s Permanent Representative to the United Nations and the chair of the UN Security Council’s UNITA (Angola) Sanctions Committee.

One year earlier the UN Security Council had passed Resolution 1173, imposing sanctions against the Angolan rebel movement UNITA, in response to its refusal to comply with the terms of a peace agreement. Among the measures taken was an embargo on imports of rough diamonds that had not been issued a certificate of origin by the Angolan government.

“Bob Fowler was looking for industry support in enforcing the sanctions regime, and I was brought in as the HRD’s senior gemologist, because it was thought that we may be able to help in providing a technological solution for identifying diamonds from Angola,” Van Bockstael said.

Initially the focus was primarily scientific. There was some promising technology that had been developed by the Royal Canadian Mounted Police, and locally, Van Bockstael roped in experts from universities in Leuven and Ghent.

“After only about three months we realized that there would be no fast solutions,” he said. “We were able to identify markers for some of the Angolan rough, but alluvial goods being mined across the border in the DRC had essentially been washed downstream from the north of Angola, making diamonds from the two countries virtually identical.”

Mark Van Bockstael, holding up a new Angolan certificate of origin, during a meeting in the country’s capital of Luanda in December 1999. To his right is the Angolan Minister of Geology and Mines, Antonio C. Sumbula.

By September Van Bockstael was in the Angolan […]

16October 2019

WDC Newsletter


WDC ANNUAL GENERAL MEETING IN ANTWERP
FOCUSES FIRMLY ON KP PLENARY IN NEW DELHI

ABOVE: Members of the WDC Board of Directors meeting during the Annual General Meeting in Antwerp Belgium, on October 3, 2019.

The membership of the World Diamond Council (WDC) assembled in Antwerp, October 2 and 3, for the organization’s Annual General Meeting. But the focus of the gathering was elsewhere, on New Delhi, India, where the Kimberley Process Plenary Meeting is scheduled to take place November 18-22. It is there that the outcome of the three-year review and reform of the Kimberley Process Certification Scheme (KPCS) will be decided, and, more specifically, a decision will be taken whether to strengthen the scope of the certification scheme itself. 

The AGM was hosted in Belgium by the Antwerp World Diamond Centre (AWDC), which also organized an industry dinner at the Antwerp Diamond Bourse on October 3 to celebrate the WDC.

WDC President Stephane Fischler addressing the industry dinner at the Antwerp Diamond Bourse, which closed out the WDC’s Annual General Meeting on October 3, 2019.

In his report to the AGM, WDC President Stephane Fischler expressed a degree of optimism that progress will be made at the KP Plenary, but he was cautious in predicting a final result. “We have thus far judged our success by the fact that the KP membership agreed to engage the subject of reforming its infrastructure, scope and review mechanisms. That’s not an insignificant achievement in itself, for it implies recognition that there are problems that need to be addressed. Still, at this point in time, I must be honest and point out and I don’t know whether the KP will actually succeed in reforming itself, and in so doing ensure that the KPCS remains relevant,” he stated.

While the KP’s three-year review and reform process has touched on a number of topics, the most sensitive among them has been the proposal to strengthen the definition of  “conflict diamonds” beyond its more narrow scope today, which is limited to rough diamonds associated with the financing the activities of rebel groups against legitimate governments. The WDC and other KP participants have insisted that it be expanded to also cover the types of systemic violence now more likely to be seen in certain diamond-mining areas, including those carried out various security forces, as well as by criminal elements.

Several amendments to the conflict diamonds definition are currently being considered by the KP. The first was tabled by Canada, which was formulated together by WDC and the Civil Society Coalition, both of which have observer status in the organization. Others were proposed by Botswana and Russia.

The WDC is keen that progress be made on other elements of the KP’s review and reform program, which include WDC’s proposal to establish a Permanent Secretariat to better support the work of KP. It was formally adopted by the KP Plenary in Brussels last year, and the […]

16October 2019

WDC Newsletter


MESSAGE FROM THE WDC PRESIDENT

Dear friends,

This third edition of the WDC News Update is being released during the short period of time between the World Diamond Council’s Annual General Meeting, which took place in Antwerp, on October 2 and 3, 2019, and the 2019 Kimberley Process Plenary, which will be held in New Delhi, November 18-22, 2019.

During this critical seven-week period, discussions continue over how consensus may be reached among KP members about reforming the Kimberley Process Certification Scheme (KPCS), and more specifically how its scope may be strengthened so that it covers rough diamonds associated with types of grave and systemic violence prevalent today in certain diamond-mining areas.

As we note in our article covering the AGM, although the gathering took place in Belgium, where it was most hospitably and generously hosted by the Antwerp World Diamond Centre (AWDC), much of our attention was focused on India, and the critical meeting that will be taking place in the country’s capital in just about a month from now. As the end of the KP’s three-year review and reform period approaches, pressure is mounting on the organization to achieve the type of progress that reasonably will be considered satisfactory by all participants. WDC has made its position crystal clear, particularly in respect to the definition of “conflict diamonds,” as it appears in the KP documents, which we believe needs to strengthened so that it better reflects the changes that have taken on ground in the years since the KPCS first was first formulated.

As we also note in our report on the discussions in Antwerp, WDC has already expanded the scope of our System of Warranties (SOW), extending the reach of the KPSC through the whole supply chain.

But that is not the only way that the SOW goes beyond the KPCS’s scope, for its terms of reference also mention international conventions on human and labor rights, Anti-Money Laundering (AML) and anti-corruption. The SOW will be a strong focus of our activity over the coming year, as we roll out a dedicated toolkit to assist in their implementation.

The continuing presence of conflict diamonds in the Central African Republic (CAR) has received a good deal of media attention of late, underscoring the embargo of rough diamond exports from that country with the exception of KPCS-certified goods, which have been sourced from a limited number of “green” zones that meet KP’s operational framework standards. An article in the newsletter sheds light on the situation in the country, and the KP monitoring regime that was put in place, of which WDC is part.

As we approach the 20th anniversary of the creation of the KP, we look back to the early days, and in particular to the absolutely central role played by one WDC representative, Mark Van Bockstael, who until the end of last year served as Chair of the KP’s Working Group of Diamond Experts.

We also continue our series that looks at capacity-building projects initiated by […]

8October 2019

WDC focuses on strengthening scope of Kimberley Process during 2019 Annual General Meeting in Antwerp

WDC focuses on strengthening scope of Kimberley Process
during 2019 Annual General Meeting in Antwerp

OCTOBER 8, 2019

ABOVE: The WDC’s Board of Directors meeting at the start of the 2019 Annual General Meeting in Antwerp, Belgium, on October 2, 2019.

Members of the World Diamond Council (WDC) assembled in Antwerp, Belgium, on October 2 and 3, 2019, for the organization’s Annual General Meeting (AGM). The proceedings were dominated by discussions about the pending conclusion of the Kimberley Process’ review and reform process, and the related call by WDC and others that it includes a strengthening of the scope of the Kimberley Process Certification Scheme (KPCS).

The AGM was hosted in Belgium by the Antwerp World Diamond Centre (AWDC), which also organized an industry dinner at the Antwerp Diamond Bourse on October 3 to celebrate the WDC.

Speaking to the gathering, WDC President Stephane Fischler, expressed the organization’s determination that, when the KP Plenary meets in New Delhi, India, November 18-22,  progress be made in strengthening the definition of  “conflict diamonds,” so that it better addresses the assurance that the trade in rough diamonds cannot be used to fund systemic violence being seen in certain diamond-mining areas today.

WDC President Stephane Fischler (center) addressing the Board of Directors in Antwerp on October 2. He is flanked (from left) by Ronnie VanderLinden, WDC Treasurer; Edward Asscher, WDC Vice President; Marie-Chantal Kaninda, outgoing WDC Executive Director; and Udi Sheintal, WDC Secretary.

Several amendments to the conflict diamonds definition are currently being considered by the KP, including a proposal tabled by Canada, which had been formulated together with WDC and the Civil Society Coalition, and others by Botswana and Russia.

“We are still far from a final agreement, but I believe that there is now a general awareness that a new and strengthened scope will indeed be of benefit to the KP and all its stakeholders,” Mr. Fischler said in his report to the AGM. “These are extremely complex negotiations, where the North-South divide is apparent, and where different historical contexts must be acknowledged, for they shape perceptions and understandings.”

The WDC President stressed that, with the strengthened scope, it is critical the role of the KPCS remains relevant. The KPCS should not be regarded as a sanctions mechanism, he said, but rather as a system that prevents instances of violence and conflict, and in so doing facilitates capacity building in the mining areas, as well as maintains and grows consumer confidence in diamonds.

A key element in the WDC’s program to support the integrity of the diamond value chain is its updated System of Warranties (SOW), whose scope extends beyond that of the KPCS, covering both the rough and polished diamond trade, and directly referencing international conventions on human and labor rights, anti-corruption and anti-money laundering (AML). Delegates to the AGM discussed a toolkit that currently is being developed to assist members of the industry […]

1October 2019

WDC Statement about rough diamond exports from the Central African Republic

Rough diamond exports from the Central African Republic

OCTOBER 1, 2019

In light of recent media reports about the trade in rough diamonds associated with the ongoing civil conflict in the Central African Republic (CAR), the World Diamond Council (WDC) has reiterated its call to members of the industry to practice the utmost caution when considering the purchase of goods that are known to have originated or are suspected to have originated in the CAR.

The WDC emphasizes that the only rough diamonds sourced in the CAR that currently can be purchased legitimately are goods from parcels carrying CAR Kimberley Process (KP) certificates. This means that they have been mined in “green” compliant zones, which are areas under secure CAR-government control, and where the KP also has determined that diamond production meets Kimberley Process Certification Scheme (KPSC) minimum requirements. For this to occur, there can be no evidence of armed rebel group activity in the area.

Furthermore, all KP-certified rough diamonds from the CAR need to have been approved for export by the Kimberley Process’ specially designated CAR Monitoring Team chaired by the United States and including representatives of a number of KP’s Working Groups, as well as representatives of the WDC and civil society.

Speaking last week in Dubai, WDC President Stephane Fischler highlighted the role played by the CAR Monitoring Team, noting that, with due support from the United Nations, it acts as one of a few stabilizing factors in a country that has long suffered the devastation of civil conflict. These continuing efforts are crucial to bringing peace and stability to the region, he said. They mirror the part played by the KP in previously war-torn parts of Africa, where the KPCS was successful in shutting down sources of revenue for rebel forces, allowing the affected countries’ diamond deposits to better meet their potential as generators of economic and social development.

Mr. Fischler called on other KP-member countries to practice enhanced vigilance concerning the import of goods from the CAR. He also urged all members of the trade to strengthen the integrity of the diamond supply chain by proactively implementing the guidelines contained in WDC’s new System of Warranties. These also underscore the need to assess risks in areas beyond the KPCS, including human and labor rights, AML and anti-corruption.

26September 2019

Optimizing the diamond’s potential: a global movement of people using business as a force for good

Optimizing the diamond’s potential: A global movement of people using business as a force for good

SEPTEMBER 26, 2019

Stephane Fischler
WDC President

Next week, on October 2 and 3, representatives of the members of our organization, which are associations and companies from across the diamond and jewelry industries, will gather in Antwerp for the Annual General Meeting of the World Diamond Council (WDC). It is being hosted by the Antwerp World Diamond Centre (AWDC).

The subjects on the agenda of the meeting are of critical importance, relating predominantly to our industry’s push to improve the relevance and efficiency of the Kimberley Process Certification Scheme (KPCS), which is particularly pertinent given that the KP is now in the final months of a review and reform cycle. Another key issue is WDC’s own program to promote increased transparency and supply-chain due diligence from mine to retailer, as it is embodied in our new System of Warranties (SOW). Both these elements are likely to impact the way we all do business over the coming years.

While the discussions in Antwerp will focus on many technical matters, including the scope of the KPCS, its peer review mechanism, a permanent secretariat, a multi-donor fund for organizations and countries with limited capacity, and a SOW toolkit, in essence what we will be focusing on is protecting the integrity of the diamond and the diamond industry, and optimizing their potential to generate sustainable economic and social opportunities, including in the countries where rough diamonds are produced and processed.

But “optimizing their potential” is likely to take a good deal more than simply fine-tuning the KP and the SOW. It will also require a substantial rethink about how we view the future of demand for diamonds and how our value chain allocates the profits that it generates.

For years many of us in the pipeline have regarded our product as a commodity, with its price a factor of its size and other physical characteristics. The fact that rough diamonds were largely sourced in under-developed regions was not considered an element that in any way may enhance their value. On the contrary, it represented a reputational risk that threatened to undermine it.

A strategy based exclusively on risk avoidance is misguided and possibly dangerous. Too often, I still hear industry colleagues stating that “if it ain’t broke, don’t fix it.” Well, let me tell you, preciousness and trust once broken takes a long time to fix. Sometimes they never recover.

A commodity is an anonymous product without a story, while a brand is recognizable product with a story. And a diamond’s story is incredibly compelling. Created through primordial geological processes deep beneath the earth’s surface millions of years ago, each stone is unlike any other – a physical wonder of nature. And a select few are precious products, with the potential to create a better life for all involved, and in particular for the people on whose land they serendipitously were […]