On November 5th, the world’s conflict diamond monitoring group announced the controversial decision not to suspend Zimbabwe following allegations of human rights abuses, diamond smuggling, and corruption. Although Zimbabwe is responsible for a relatively small portion of the world’s diamond trade, this was an important test of the global effort to monitor the diamond trade — a test that many would argue the international community failed.

The Kimberley Process certification scheme tracks diamonds from the mine to the store by issuing certificates indicating the stones are conflict-free. The process relies on self-regulation by the member nations’ governments. Though an admirable ideal, the Kimberley Process has already shown that it is unreliable in practice. The conflict diamond trade declined in Sierra Leone and Angola following the ends of both countries’ civil wars, but the Kimberley Process acknowledges continued smuggling in both countries, which Human Rights Watch calls “rampant.” The Democratic Republic of Congo has been plagued by conflict diamond problems exacerbated by rising instability, despite the D.R.C.’s Kimberley Process membership.
These ongoing problems show that while the Kimberley Process has been a good first step, a stronger independent body composed of both exporters and importing firms is needed to regulate both sides of the diamond trade. If enforcement is reliable enough, the profits from the legal trade should be the only incentive needed to ensure participation.

In 2007, a Kimberley Process team was sent to Zimbabwe to review allegations of smuggling, illegal mining, and human rights abuses by the military supervising the mining. The team publicly reported that Zimbabwe was in compliance with the Kimberley Process’s minimum standards. However, a confidential report from the Kimberley team, as well as accounts from Human Rights Watch and other humanitarian organizations, paint a different picture. Miners interviewed by the team said the military attempted to cover up corruption and committed violent acts against workers, including children. The Kimberley Process team’s confidential report also expressed concern over serious discrepancies in Zimbabwe’s statistical data on diamond production. Because many firms will not buy conflict diamonds directly from their country of origin, the diamonds are often smuggled into, and sold by, secondary countries. Conflict diamonds from other countries such as the Congo could easily be mixed in with Zimbabwean diamonds and certified as legal. Although Zimbabwe’s share of the global diamond market is small, the threat to the legitimacy of the Kimberley Process, and therefore to the entire diamond trade, is real.

Obtaining Kimberley Process certificates is the only way to legally trade in diamonds, so there should be a powerful incentive to comply with the process’s requirements. However, there are many opportunities for both importing and exporting nations to evade the rules. Governments looking for extra revenues through increased diamond sales would not find it difficult to pass off smuggled diamonds as legitimate — the governments control the certification process. While companies importing diamonds are legally obligated to purchase only certified, conflict-free stones, Global Witness reports that many firms are known to work around the process.

When corruption and smuggling are suspected, the Kimberley Process requires a consensus of the 75 represented countries to act, making it less likely that abuses will be addressed. Despite a Kimberley Process report stating Zimbabwe did not seem to be complying with the minimum standards for membership, Zimbabwe was allowed to remain a member, provided it adhered to a work plan created by the country itself. Instead of encouraging compliance, this sends the message that abuses will be tolerated.

Under the current system, it is also very difficult to target firms that import diamonds without certificates. The system calls for action by the country, but one cannot reasonably blame a government for one firm’s corruption. The World Diamond Council, the industry’s representative, also cannot be held at fault. The Kimberley Process has few tools to deal with corruption among diamond importers beyond asking governments to implement stricter industry regulations.

This flaw also means that the Kimberley Process currently has almost no way to stop the flow of conflict diamonds from rebel groups. Limiting the rebels’ opportunities to sell the diamonds deters them from creating conflict diamonds. One way to achieve this would be to require diamond-importing firms, as well as the nations that host them, to join the Kimberley Process and trade legal, certified diamonds.

The Kimberley Process would be more powerful and more reliable if it were not self-regulated but run instead by an independent regulatory group needing only a majority to act. Under this system, nations and importing firms would be far more likely to incur effective penalties, such as suspension from the Kimberley Process, if they failed to prevent the proliferation of conflict diamonds. An independent regulatory agency would also encourage more accurate record-keeping, making it more difficult to introduce smuggled diamonds into the legal market and harder for importers to knowingly purchase tainted diamonds. Because the Kimberley Process is the sole way to legally trade diamonds, a reintroduction process for suspended countries would be essential. This tool would ensure that these countries would not simply sell their diamonds to less exacting importers and enter the illegal diamond trade.

Although difficult, obtaining diamond producers’ participation in an organization capable of penalizing them is essential. If diamond traders concluded that the only profitable path was compliance, the legal diamond industry would free itself from the taint of conflict diamonds. An end to these concerns would increase consumers’ demand and increase profits for both importers and exporters. These benefits would reinforce commitment to keeping conflict diamonds out of the legal trade.

The inevitable question is where the responsibility for this independent regulator will fall. The United States is certainly in a position to exercise leadership by showing its commitment to stricter regulations. Yet the credibility of the Kimberley Process would be jeopardized if one nation, particularly one with such a significant share of the imports, took charge. The US cannot monitor the entire diamond trade; this is not one nation’s responsibility. The World Trade Organization is a logical candidate for this role. Its status as the accepted authority on global trade and experience monitoring trade issues would benefit a Kimberley Process group. Both governments and industry members could still be involved through an already-existing organization.

Although the conflict diamond trade may never be entirely eradicated, we should not dismiss the potential for improvement. As a more powerful regulatory agency, the Kimberley Process could harness its strengths to change the incentive structure for trading in diamonds, creating a lasting decline in conflict diamonds, greater revenues for diamond-exporting nations, and an end to the human rights abuses tied to the “blood diamonds.”