The environmental toll of diamond mining has long been discussed in the fine jewelry industry, and the biggest players are finding ways of lessening its impact, either through carbon offsetting programs or more traceable supply chains. The focus for many commentators on the industry has shifted toward how outdated the rules and laws around diamonds are. It’s no revelation that the fashion world is plagued by social issues like a lack of workers’ rights and unsafe working conditions. But rather than effectively governing the diamond world, its current regulations may allow human rights abuses to go unnoticed, allowing profits to be funneled back into the companies committing them.
Diamonds aren’t exactly at the top of the political agenda. However, giving an undeserved green light to subsectors of luxury is an age-old problem, and one that we can no longer ignore, particularly considering the widespread belief among the upper crust that money puts companies (and people) above being questioned.
Understanding the diamond industry first requires understanding the Kimberley Process and how it works, or at least how it used to work. Its origins lie in the Angolan Civil War, which was said to have been financed through the sale of blood diamonds. The Fowler report, a U.N. report detailing how industry participants and governments violated both sanctions and the Lusaka Protocol (a treaty that attempted to disarm the Angolan political party UNITA and end the war), found that diamonds were used to barter for weapons and allowed UNITA to continue fighting. The Fowler Report even detailed that “an important direct source of diamonds for UNITA is the exploitation by its own people or by people requisitioned for this purpose of mines or mining areas located within territory controlled by UNITA.” After the revelation that Angolans were forced to work in mines to continue the war in their own country, change became an international priority. And so, within a few years, the Kimberley Process was created.
As defined by the Kimberley Process Civil Society Coalition, the Kimberley Process is an “international mechanism intended to prevent the flow of conflict diamonds onto the global market through the implementation of an import/export certification scheme applicable to rough diamonds.” Simply put, this is a framework mandated by the U.N. and the World Trade Organization, created in 2003 in response to recommendations set out in the Fowler Report. Its purpose is to police the trade of diamonds, with the aim of preventing the trade of blood diamonds (diamonds used to fund war).
The Kimberley Process members meet annually, along with all 82 participating member states who are certified by the process. “Kimberley Process-certified” diamonds account for about 99.8% of rough diamonds on the open market. The purpose of the members’ meetings is to ensure that the process continues to satisfy its minimum requirements, which “establish national legislation, institutions, and import/export controls.” Member states must also commit to being transparent and to exchange statistical data. This data is given in the form of an annual report, which is published by the Kimberley Process, detailing the value of diamond imports and exports for a particular member state, down to the cent. Participants must also commit to trading diamonds only with other member states, providing certification with each shipment and showing that the diamonds are conflict-free.
The process is not purely lip service, but really it is all about risk mitigation. If a nation can prove, or at least say, that it is satisfying certain points, it can be Kimberley Process compliant. Though the Kimberley Process claims that implementation of its certification scheme “is monitored through annual reports, review visits, regular exchanges of data and statistical analysis,” there doesn’t seem to be much clear indication of how close the monitoring is. In fact, the official site states, “All Kimberley Process participants must make the following statement on all invoices: ‘The diamonds herein invoiced have been purchased from legitimate sources not involved in funding conflict and in compliance with United Nations resolutions. The seller hereby guarantees that these diamonds are conflict free, based on personal knowledge and/or written guarantees provided by the supplier of these diamonds.’” The question arises as to how far such declarations can be trusted in countries where bribery and political extortion are fair game.
The World Wide Fund for Nature carried out a report about transparency in the watch and jewelry sector. This detailed that the Kimberley Process certificate does not apply per stone but rather per batch of stones. This means that batches aren’t meticulously tracked. When it comes to finished pieces of jewelry or watches with numerous diamonds included in the design, there’s no telling if the diamonds are conflict diamonds or not, because the requirements of the Kimberley Process mean all we have to rely on is the word of the trader.
Jewelers are becoming more concerned with the origin of their stones, and with good reason. U.S.-based ethical jewelry brand Do Amore’s founder, Krish Himmatramka, said his customers have become much more invested in ethical trade. “Ethical diamonds” is an umbrella term, including diamonds that ensure safe working conditions with appropriate health and safety measures, workers’ rights and no child labor, as well as conflict-free diamonds. Just because a diamond isn’t funding war doesn’t mean it’s not causing any damage, and this is why ethical jewelers are not satisfied with the scope of the Kimberley Process.
The issue is made worse when you understand that the parties involved are aware that this is a limitation but haven’t made much progress in combating it. In 2018, Julie Bishop, Australia’s foreign minister, introduced a draft resolution at the U.N. General Assembly titled “The Role of Diamonds in Fueling Conflict.” Bishop noted that those involved in trading diamonds should “seek a diamond market free from human rights abuses and forced labor.”
“The Kimberley Process rules have not changed with the times. Instead of focusing on realities in these conflicted communities, Kimberley Process rules have instead shifted to what they can get away with in order to keep selling and keep customer confidence high,” explained Himmatramka. For example, Angola has been Kimberley Process certified since 2003, yet its government remains implicated in significant human rights abuses. After the right boxes have been ticked, no further questions are asked. There have been multiple video leaks of private security personnel at diamond mines beating miners. In 2011, Angolan author Rafael Marques de Morais published a book titled “Blood Diamonds: Torture and Corruption in Angola.” It documented more than 500 cases of torture and 100 killings carried out in two provinces over 18 months by the Angolan army and private security firms. He was later given a jail sentence. Similar stories can be heard across the Democratic Republic of Congo, Venezuela, Brazil, Tanzania and Zimbabwe. Too much confidence is put in goodwill and not enough on effective crackdowns.
Even the World Diamond Council (WDC), which represents the industry in the Kimberley Process, has said that the definition of “conflict diamonds” has changed and so should be adjusted in matters pertaining to it. The WDC has consistently argued that the definition of “conflict diamonds” used by the Kimberley Process should be expanded and has said that “there continued to be issued credible reports about violent acts being carried out by state and private security. The problem is that goods mined under such circumstances fail to meet the KP’s definition of ‘conflict diamonds.’”
The WDC has also said that “there currently is a generally positive feeling that progress can be made.” This followed the 2021 implementation of Frame 7, a framework defining the requirements for sourcing rough diamonds that mentions the protection of human rights.
And then there is Russia, which controls about 30% of the world’s diamonds. Diamonds are one of Russia’s biggest exports: U.S. Treasury data placed their value in 2021 at over $4.5 billion.
Alrosa, the country’s leading diamond-mining company, is one-third owned by the Russian government, which is a huge problem given that Russia is at war with another Kimberley Process member state. The Kimberley Process Civil Society Coalition has said that “the certification scheme continues to apply 20-year-old conflict resolution strategies to today’s global conflicts.”
The question that hasn’t been answered is: Are diamonds from Russia conflict diamonds? The industry seems to shy away from applying labels.
Alrosa is a state-owned enterprise. A 2022 press statement published by U.S. Secretary of State Antony Blinken confirmed that the profits of Alrosa were being used to finance the Russian government’s war. In March 2022, the U.S. government officially banned imports of nonindustrial diamonds (the diamonds used for jewelry), vodka and caviar, among other items.
There is, however, another problem. A lack of traceability means that the origins of just about any diamond are questionable. It’s an open trade fact that rough diamond shipments are often not accompanied with paperwork, or if they are, their origin on the paperwork changes once they are cut and polished. A diamond mined in Russia would have traditionally been sent to India to be polished and cut, like 90% of diamonds mined worldwide. Once this diamond has been puffed and preened, it’s likely to be recorded as an Indian-origin diamond. Unsuspecting buyers wouldn’t even know that they had unintentionally bought a blood diamond.
So where does that leave us? The easy answer would be to simply not buy diamonds. And it’s not an unfair point to make. In fact, young people are turning toward lab-grown alternatives like lab diamonds and moissanite just to be sure. Yet it’s important to note that lab-grown gemstones aren’t inherently good. Even artificial processes require some mining, usually for graphite and metals used in the production of the stones, which have negative consequences for the environment and surrounding communities not unlike those caused by mining for natural diamonds.
A report by the Natural Diamond Council, an industry resource, confirms that the industry is aware that the scope of the Kimberley Process certification scheme (KPCS) needs to be extended to ensure human rights are included. Many follow other frameworks or incorporate their own standards alongside the KPCS to ensure ethically sound diamonds. The Dodd-Frank Act in the United States rules that “any single company assumes its own direct ethical responsibility without transferring this issue to international organizations.” Essentially, companies are wholly responsible for ensuring they are satisfying any required ethical considerations; even those beyond the KPCS.
This makes blockchain diamonds — mined from responsible countries such as Botswana, Canada, Namibia and South Africa — the most ethical way to purchase a natural stone. And this is why Do Amore, besides just using the KPCS, offers only diamonds that have blockchain ledgers proving origin through a true ledger instead of relying on a third party, which precludes diamonds being effectively laundered, from Russia through India for example.
Blockchain has been a buzzword in recent years, particularly as traceability is becoming increasingly important.
“Enforcement and compliance aspects of the Kimberley Process [poses a challenge], which can lead to concerns about the legitimacy of some KP certificates,” explained Rafael Papismedov, co-founder and managing partner at HB Antwerp, which offers a comprehensive digital trail across the entire value chain. While Kimberley Process-compliant member states need only state on their invoices that they satisfy the criteria, with a blockchain, there’s no hiding.
“Each diamond that enters our Mineral Infrastructure is assigned a digital twin, a detailed digital replica that records all the stone’s visuals, measurements, scans, and modifications. This forms a comprehensive digital counterpart that complements the physical diamond,” Papismedov explained. “By prioritizing transparency and traceability over blind trust, we can increase accountability.” Imagine that every diamond has a complete copy existing online. This log includes exactly where it came from and where it was polished and cut, as well as its previous owners.
HB Antwerp is one of many blockchains, and the technology looks likely to have a greater effect in the future, with industry leader DeBeers, which was named in the original Fowler Report, backing its own blockchain, Tracr. With the Kimberley Process falling short, innovations from brands like these are the only reliable solution until further changes are made. The WDC explained that “the brands are part of the supply chain and need to be doing their own due diligence, which includes monitoring their suppliers.” Ultimately brands are responsible for knowing where their diamonds come from, leading many to put in force other due diligence systems.
“[In reality] the Kimberley Process Certification Scheme serves as the foundation of a layered system that has been developed over the past two decades to protect the integrity of the diamond supply chain. Its shortcomings are compensated for by the layers placed above it, all being additional due diligence systems” the WDC explained. Leading fine jewelry brand Chopard, while following the Kimberley Process principles, also follows the World Diamond Council’s System of Warranties (SoW). This was developed in 2002 to address points where the Kimberley Process falls short. “While the KPCS is limited to the trade in rough diamonds and is applied only when a diamond crosses a national or regional border, the SoW also covers transactions of polished diamonds and jewelry set with diamonds,” the WDC added.
The majority of notable jewelry brands rely on the Responsible Jewellery Council’s code of practices to support their claims of a responsible supply chain. This also covers areas that the Kimberley Process fails to address, with rulings on child and forced labor, workers’ rights and health and safety. DeBeers took an extra step and implemented its Best Practice Principles, which are, in their own words, “the strictest set of standards that the industry had ever seen.” The one area where this set of standards may be superior to the Kimberley Process certification is that it undergoes independent audits, which puts an end to the culture of blind trust and subsequent corruption that guides the Kimberley Process.
The question still remains: Where do we go from here? The stakes are too high for the industry to continue operating as it always has. Even sophisticated innovations like blockchains rely on the integrity of partners. “The effectiveness of this technology is contingent on the accuracy and integrity of the data entered, raising questions about responsibility and accountability for the information uploaded,” explained Papismedov. Perhaps, he adds, it is time for the industry and its regulations to reflect this new age of conflict and trust.
Sign up to our mailing list to receive our stories in your inbox.