Sunday, 16 January 2011

Kimberly Process: time to get tough

Blood Diamond had everything you’d expect of a Hollywood film. Action, crime, shooting, warlords, dead baddies, incorrigible anti-heroes and a concluding hint of redemption.

The film did more than just entertain. In 143 minutes of screen time, it arguably did more to highlight the issue of conflict diamonds than years of diligent work in the campaign trenches. Suddenly, the impact of illegally traded diamonds became big news. Consumers began to understand that their purchases could potentially be helping prop up nefarious regimes in far-off places. A small but not insignificant minority started entering jewellery stores asking about product provenance and not just price. For an industry that relies entirely on the image of its product, such questions could not be ignored.

To its credit, the diamond industry was not caught entirely on the hop. When the film was released towards the end of 2006, it was on its way to providing a response to consumer concerns. That response came in the form of a multi-stakeholder initiative known as the Kimberley Process. Featured in the closing scene of the film, the process essentially brings players together from across the spectrum – NGOs, governments and industry representatives – to weed conflict diamonds out of the international market.

In many ways, the Kimberly Process represents one of the Corporate Responsibility movement’s greatest successes. In a lengthy feature article in Ethical Corporation, journalist Eric Marx points out some indisputable advances. When the project commenced in 2003, conflict diamonds were estimated to comprise about 4% of all diamond sales. That number is now closer to 0.2%.   

Yet the system has its shortcomings. All multi-stakeholder initiatives do. The most serious is compromise. When the initiative’s inaugural meeting was held in the South African town of Kimberley (hence the name), suspicions between the various sectoral camps were high. In such an atmosphere, multi-party collaboration represented a bold step. To get people on board meant smoothing the edges a little. No mention of ‘human rights’ is made in the definition of conflict diamonds, for example. Nor did (or does) the Kimberly Process have a permanent secretariat, paid staff or independent funding.   

The second big issue is one of teeth. Kimberly, the critics say, doesn’t have any. The Corporate Responsibility world has always been a big fan of voluntary, non-binding initiatives. Similar processes such as the Forest Stewardship Council and Ethical Trading Initiative depend on industry getting on board willingly. “Comfort in numbers”, The Economist newspaper calls it.

So what happens when a signatory doesn’t play game? Usually, they get kicked out. Other than the media fallout, typically there is little in the way of punitive action. In the case of Kimberly, even evicting non-compliant members is tricky. Every decision has to be consensual. So when member state Zimbabwe recently uncovered a huge diamond deposit in Marange and (according to investigations by non-profit group Global Witness) starting smuggling the uncut gemstones out through Mozambique, little could be done. Technically, Zimbabwe could veto its own suspension. The ones who ended up leaving were Ian Smillie and Martin Rapaport, two founding fathers of the initiative.

Cross-sector efforts will always defer to the lowest common denominator. Gradual, incremental change is the best non-mandatory processes can hope for. Kimberly has delivered, sort of. Most importantly, its basic tenets have all been passed into national legislation by member states. The fact that the industry’s biggest player (De Beers) is an active advocate has helped build traction too.

The time has come to toughen up, however. The chain-of-custody certification needs to be made more robust for one. The Responsible Jewellery Council has a draft in place. It needs implementing. So too with the Kimberly Process’ governance framework. With no professional staff or independent budget, its administrative and research capacities are hamstrung. After seven years, the moment has come to professionalise.

Distrust and complacency. Nothing else has done more to destroy cross-sectoral cooperation than these two chestnuts. Unless it moves forward, the Kimberly Process is in danger of falling victim to both. The tag of ‘PRstill hangs around its neck, as it does for many corporate responsibility efforts. That’s not always fair. Industries need time to shift practices. Examples of imperfect behaviour will invariably crop up. This is real life, however, not an academic exercise in management science. Or a fictionalized film, for that matter. One step at a time.

That a secretive industry such as diamonds should have come so far is remarkable. However, just as actors need to search out new roles to avoid being typecast, so too must voluntary initiatives continually improve if they are to maintain credibility. The message for the Kimberly Process? Toughen up. It’s high time for the next step.

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