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Cut In Boycott Of Dubai Diamond Meeting

31/10/2016 12:36

When I wrote earlier this month about the need for civil society to engage with governments in the Gulf to achieve positive outcomes in human rights, accountability and good governance, I was unaware that dramatic news was about to break.  The Congolese organisation CENADEP, one of 11 civil society Kimberley Process (KP) observers announced on 20 October that it will accept the UAE's invitation to attend the annual KP plenary session in November in Dubai.  CENADEP's action marks a break with Partnership Africa Canada (PAC) which co-ordinates the KP civil society coalition and had led the boycott of the UAE.

CENADEP's action also highlights the tensions that PAC's year-long campaign against the UAE has laid bare.  There is much disquiet behind the apparent united front of the KP's civil society coalition.  PAC is the major funder of the other organisations in the coalition but the principle of 'being paid to stay away' did not sit comfortably with many.  The criticisms of Dubai as a diamond exchange were focused on the trading of diamonds that arrived KP certificated and officially exported by producer countries.  The critics allege that the diamonds arrive systematically undervalued, and that the Dubai bourse process raises the value in a tax free environment.  The UAE response is that undervaluation goes on at source and is therefore a systemic issue. UAE has come up with a set of initiatives, not just to review diamond valuation approaches, but more radically to put much of the KP executive under the auspices of the UN.   Any plan that involves solving problems by invoking the UN needs careful review.  CENADEP has, however, accepted that the UAE's proposals have some merit and there is value in engaging with them.

Also there was disquiet in civil society ranks that they were not being consistent in their engagement with the countries selected to chair the KP.  PAC's strong hostility towards UAE jarred with its amicable approach taken towards past KP chairs, including the Russian Federation, Israel, Angola and the Democratic Republic of Congo.
 
PAC's hostility matters because it leads and funds the 11 member coalition accredited as KP observers.  Also, PAC carries tremendous historical prestige.  Alongside Global Witness, it was responsible for much of the energy that went into establishing the Kimberley Process in 2003.  It originated as a Canadian government entity but is now independent, deriving much of its revenue and purpose from its self-appointed mission to create and nurture civil society organisations in Africa. PAC cements its position by its re-distribution of the funds collected from the developed world including the EU and the US government.  It channels these funds to the other ten, Africa-based members of the coalition.  Underlying the tensions are weaknesses in the Kimberley Process itself and disagreements in the direction the KP should take. 
 
One weakness that CENADEP refers to in its letter to the UAE chair is the lack of a permanent KP secretariat, and contrasts with the Extractive Industries Transparency Initiative (EITI).  The KP could learn lessons from EITI, an initiative that I have followed closely for many years.  Like KP, it is a tripartite initiative that brings together governments, companies and civil society to improve transparency in the legitimate payments that extractive companies make to governments and that governments receive from companies.  EITI has a permanent secretariat in Oslo, funded by supporting companies, governments and the World Bank.

Like KP, EITI was designed to act by consensus and indeed does make decisions that way.  Unlike KP, EITI is not simply an inter-government agreement (having rejected that model early on).  It has an executive board with representatives from government, companies and civil society.  Each in effect has a veto.  The veto threat is hidden in plain sight.  It is always there but never exercised.  Aware of this sleeping crocodile, EITI spends a great deal of time and effort reaching decisions that satisfy all three constituencies.  This is a slow and frustrating process but has allowed EITI to evolve and to expand its scope to include project level reporting and beneficial ownership.  This contrasts with the KP's more rigid skeleton that makes it near-impossible to evolve and or take the difficult decisions.
  
EITI, like KP, has had to manage the challenges of success and re-evaluate its original raison d'être.  EITI has persuaded 51 countries to implement its standard, stretching the secretariat's resources and forcing a pause in recruiting new candidates.  Also, the concept of improved transparency in extractive companies has become mainstream, reflected in laws in the EU, US and elsewhere.  The KP is also facing this challenge as it has largely succeeded in keeping so-called blood diamonds off the market and divorcing the diamond trade from rebel militias. Civil society is pushing KP to broaden its remit (just as they have succeeded in doing with EITI). They would like to see this remit changed to include sanctions against regimes with unattractive human rights records.  Quite how China, the United States and Angola, let alone civil society, would draw the line around what is an unacceptable human rights record remains a mystery.

The UAE's UN idea to house a permanent KP secretariat is a radical, but sketchy and untested solution to frustrations and logjams in its multi-stakeholder operations, but many would see it as a solution to the hidden crocodile of the veto.  Whether the UAE intends it or not, this might be a first step on the road to evolution. It is ironic that so far only one civil society organisation will be in the room to discuss a real chance that the Kimberley process might evolve in a direction that they might have wanted.  This is though the type of engagement that is required if real progress is to be made.

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