Research Paper_1st Draft with Sang's feedback

Clean Diamonds – Kimberley Process -need a better title
Song Hee Lee

Introduction

With the exclusive feature of the jewelry industry, especially in the diamonds trade, consumers can only have vague thoughts of the origin of rough diamond and its distribution channels. After September 2006, Hollywood movie “Blood Diamond” from Warner Brothers released, the movie brought a huge attention to public and the critical subject of “conflict diamond” trade arose automatically. The time of made public awareness puts the whole jewelry industry disturbance because of the prediction of sales decrease during the critical holiday shopping period with negative publicity (Kavilanz, 2006). Consumers became confused good diamonds with “conflict diamonds” and related all of diamond trades to illegal trade in black market.
The public attention sprang to the Kimberley Process, an international certification scheme, aimed to prevent the illegal trade in “conflict diamond” and facilitate the legitimate trade in rough diamonds since 2003. According to Lustgarten, a senior writer of Fortune magazine, the Kimberley Certification Process has attributed to decrease the rate of “conflict diamond” from 4 % to 1 %. It also made a great attempt to systemize the transparent trade in the rough diamond market. In this research, I would like to analyze the Kimberley Process and educate readers to clarify the misconceptions of “conflict diamond”. I don't think this is the main theme of this paper. You want to emphasize the Kimberley Process, right? Why don’t you provide a map to your research paper in this introduction?

Background

The “conflict diamonds” are from in few Central and West Africa where large deposits of rough diamond exist and the area is relevantly easier to mine and smuggle than other areas. For the reason that the illegally traded rough diamonds were financed rebel movements and their allies to operate arms in Africa and killed 75,000 of innocent people during the nine years old civil war in Sierra Leone, illegal rough diamond trade became an international debate after release of the movie “Blood Diamond”. (Clean Diamond, n.d.)
According to the case study of Smillie, “Conflict diamonds” were firstly issued in 1998 by a British NGO and reported to the United Nations Security Council. In 2000, a Canadian NGO published a report on the rough diamond which has been fueled for Sierra Leone’s civil war. Until then, the problems of diamond industry were totally ignored with the market characteristic which is totally exclusive. There are only two narrow channels in distributing rough diamonds to market; one is De Beers which controls more than 80% of gem quality rough diamonds in the world. The other is Antwerp where is the main centre of the world’s diamond trade more than two centuries. De Beers was directly affected by sustained banning campaigns against conflict diamonds and understood the vulnerability in this market. Antwerp serves as an intersection for almost 90% of world’s rough diamonds and contributes a large portion to the Belgian economy. The government of South Africa also takes important role because it has high stakes in diamond industry and called a meeting to discuss the issues.
The meeting was held in Kimberley, South Africa where the first diamond was discovered in 19th century and industry leaders, governments and NGOs were participated. Leaders on the conflict-prevention sides were South Africa, Botswana, Namibia, Canada, and Britain and they indicated that the need of certification system which prove the origin of diamond which is from conflict free – zone. Even though the Belgian customs data started recording the country of origin or provenance of diamond since 1998, the system was largely ineffective with the smuggled diamond changed the its origin (Smillie, 2005).

Kimberley Process and result

Official website of Kimberley Process describes explicitly that the United Nations General Assembly adopted the agenda to create an international certification scheme for rough diamonds and outlined the Kimberley Process Certification Scheme (KPCS) as a regulator among countries, rough diamond entities, and regional economic integration organization. In May 2000, Amnesty International with other NGOs participated in the Kimberley Process and KPCS was finally launched in January 2003.
A Kimberley Process Certificate is prerequisite to ship a rough diamond and all of the participants can trade only with the other participants who meet the minimum requirement which KPCS designated. With nearly 70 governments are involved, participants should work as a group in Monitoring, Statistics, Diamond Experts, Participation Committee and Selection Committee to guarantee the integrity of the certificate and dedicate to stop trading of “conflict diamonds”.
For three years after the establishment of the KPCS,
 What is changed after KPCS?

Critical Issues around KPCS

Still, there are many weak links remain under the monitors of KPCS. Especially several African countries and Brazil are under the extremely weak controls for example diamonds from Angola easily smuggle to the Congolese pipeline and it is almost impossible to detect them. The main reasons of the weak control are capacity, technological shortcomings, and corruption. (Smillie, 2005). Governments are aware of the situation and working on the stronger regulation when diamonds are traded in Belgium along with incentives and penalties to change the informal system of current black market.
Also collecting consistent and comparable statistic data is most concern to the KPCS. Most countries submit data as based on the inconsistent formulae and diverse valuation technique and there are much variable and difficulty to compare with time lags and etc. Before the Statistic, there are also remaining problems of submission of annual reports, follow-up on review visits and effective application of internal controls (Smillie 2005). Still there were tensions in the meeting in 2003 to finalize the text of the KPCS, because almost of the members were disagreed with some part and the process has never proven relevant enough to deal all of the foreseen problems so far.

Conclusion
• Revisit the Introduction
• The value of Diamond

In a conclusion, you need to provide a brief summary about what you have discussed. Then you will provide your own interpretations about what you have thought, what you have learned, or what you forecast something that will happen in the future.

Reference
Kavilanz P.B., September 2006, Jewelers sweat a 'Blood Diamond' holiday,
CNNMoney.com, retrieved September 22, 2007 from http://money.cnn.com/2006/09/11/news/companies/diamondjewelry_movie/index.htm
Lustgarten, A., October 2006, Diamond mines are forever, CNNMoney.com, retrieved
September 22, 2007 from http://money.cnn.com/popups/2006/fortune/blood_diamonds/index.html
Smillie I., October 2005, The Kimberley Process Certification Scheme for Rough
Diamonds, Comparative Case Study 1, Verifor, retrieved September 22, 2007 from http://www.verifor.org/case_studies/KimberleyProcess.pdf
Fancy diamond, n.d., retrieved September 22, 2007 from
http://www.fancydiamonds.net/Info_Center/Articles/_Clean__Diamond_Trade_an
d_the_Kimberley_Process.htm
Kimberley Process, n. d., retrieved September 22, 2007 from
http://www.kimberleyprocess.com/index.php?option=com_content&task=blogcate
gory&id=18&Itemid=35

( Edited by Sang Kim - original submission Monday, 1 October 2007, 11:39 pm )

( Edited by Sang Kim - original submission Tuesday, 2 October 2007, 12:01 pm )