Kosher But Smelly, or the Case of the Frog That Jumps Through Loopholes

Here is the short version: The decision by Kimberley Process Chairman Mathieu Yamba to authorize full exports from Marange is legal. The problem is that when drafted, KP did not take into account a host of situations. The irony is that while many claimed that the diamond industry was cynical and shifty, it was in fact simply naïve.

As first reported by IDEX Online's Vinod Kuriyan, Yamba issued an executive order that allowed full exports of the Mbada and Canadile production, including most of the stockpiles. He also decided that if the Working Group on Monitoring fails to reach a consensus on the draft Administrative Decision at the Intercessional meeting this June, exports should continue until the decision is passed.

Almost immediately after the letter was sent, Australia, the U.S., Canada, Israel and many more sent him letters protesting the decision. The problem with the decision, is that it completely undermines KP because not only that many countries don't know what to do now, consumers will not know how much to believe us in the future.

Here is an example: For many months a large shipment of Marange rough diamonds are being held at Dubai's free zone. The shipment has not officially entered the Emirate even though the Monitor to Zimbabwe has approved the export (another loophole: Zimbabwe can summon the Monitor at will). The shipment is being held until a decision is made about its legal status. After Yamba's decision, it seems that the buyers want to take the issue to court. In such a scenario, the court is likely to rule in favor of the buyers.

Analyst Chaim Even-Zohar wrote this week that if KP was a country, impeachment proceedings would be demanded by the "citizens of KP." I agree, but KP rules don't have a procedure for kicking out a rogue Chair – yet another loophole that needs to be closed.

Politicians have hijacked KP. What to them is inner-African politics, for the diamond industry "is about being able to conduct business in a proper way," Chaim wrote. If the industry is confused, imagine what a consumer might think. The bottom line is that the need for consensus, while often slowing down decisions, protects KP from itself. Yamba's call to circumvent it was not wise at all and goes contrary to the KP spirit.

There is a way out of this. In the short term, a number of proceedings that get around this decision are being considered (one of them is a brilliant solution that several members are already supporting). In the long term, there is a need to tighten the wording of KP's charter, rules and decisions, though I doubt that will happen.

The porous borders of the Democratic Republic of Congo allow for hundreds of thousands if not millions of carats to be smuggled out annually, putting the country on the NGOs to-do list. Yamba is making matters even worse for the diamond industry and the honorable thing for Yamba to do is to step down.

According to Jewish tradition, frogs are not kosher. Who would have thought that a DRC politician could force us all to swallow one?

Have a peaceful weekend.