The associations believe that, despite some progress, much work remains and U.S. companies face legal restrictions on dealing with diamonds from Marange, Zimbabwe
(NEW YORK) – Jewelers of America (JA) and the Diamond Manufacturers & Importers Association of America (DMIA) – national trade associations whose combined membership represents fine jewelry retailers, diamond traders and manufacturers in the U.S. – are encouraged that steps were taken to preserve the Kimberley Process Certification Scheme (KPCS) during the recent KP Plenary, but continue to have specific concerns related to the KP’s decision to allow the export of goods from the Marange region of Zimbabwe.
JA and the DMIA believe the KP was at risk of collapse if it did not resolve the impasse around the exportation of Marange goods, but the associations remain very concerned about alleged human rights abuses in the region.
The agreement on Marange will keep important controls in place that protect the global industry while establishing conditions for approval of further exports, thereby clearing the way for the KP to undertake institutional reforms that will better enable it to discharge its mission in the future. However, it presents a unique challenge for U.S. companies and those who do business with them, as well as the U.S.-based offices of foreign companies. This is due to the fact that the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) has legal sanctions on Zimbabwean entities including the Zimbabwe Mining Development Corporation (ZMDC) and individuals, such as Grace Mugabe, who are connected to diamond mining in the region. Specifically, ZMDC owns at least 50% of Mbada, Marange Resources and Anjin, while Mugabe is a shareholder in Mbada.
As a result, JA and the DMIA advise their respective membership to exercise appropriate due diligence with business partners, including taking additional precautionary measures for inventory protection in order to ensure compliance with U.S. law and maintain consumer confidence in diamonds. Specifically, JA and DMIA members should continue to ask their suppliers to provide additional written reassurances, beyond the World Diamond Council’s System of Warranties statement, that the diamonds they supply have not been obtained in violation of applicable national laws and/or sanctions and have not originated from Marange, Zimbabwe.
JA and the DMIA have also been working with other industry stakeholders to ensure the U.S. industry is prepared to deal with issues that may arise if the KP proves unable to address them. The goal is to develop a more systematic approach for protecting the U.S. diamond and jewelry industry in order to shore up areas that remain beyond the scope of the KP.
JA and the DMIA are encouraged by the appointment of the U.S. government as KP Chair effective January 2012. The associations offer their full support to help the KP make further progress toward reforms that include: better internal controls to monitor KP Participants, the expansion of the KP mandate to include the prohibition of any form of human rights violations in connection with diamond mining, the establishment of a permanent Secretariat and an arbitration and conciliation dispute system.
The KP remains the foundation for the exclusion of conflict diamonds from the worldwide marketplace. JA and the DMIA will continue to push for improvements that will strengthen the diamond and jewelry supply chain and protect consumer confidence.
Jewelers of America (JA) is the national trade association for businesses serving the fine jewelry retail marketplace, with the primary purpose of improving consumer confidence in the jewelry industry. Visit www.jewelers.org for more information.