THE KIMBERLEY PROCESS: PROGRESS, CHALLENGES AND PROJECTIONS SECRET CONFIDENTIAL

Page  2 CONFIDENTIAL CONTENTS - INTRODUCTION - WHAT IS THE KIMBERLEY PROCESS (KP) - WHO ARE THE ROLE-PLAYERS - THREATS TO THE KP - OPPORTUNITIES CREATED BY THE KP - KP LINKS TO OTHER BILATERAL AND MULTILATERAL PROCESSES - THE WAY FORWARD - CONCLUSION

Page  3 CONFIDENTIAL INTRODUCTION Diamonds have always occupied a special place in modern society’s frame of reference: - Film - Books - Love and Romance - Hollywood

Page  4 CONFIDENTIAL INTRODUCTION (CONTD.) This image has been tainted by the illicit trade in rough diamonds by rebel movements in order to fund activities aimed at removing legitimate governments. This has resulted in the reference to such diamonds as " conflict diamonds “or worse still as " blood diamonds ".

Page  5 CONFIDENTIAL INTRODUCTION (CONTD.) In the year 2000, a multilateral process was initiated, on South African soil, to combat this scourge. This was the birth of the Kimberley Process (KP). The KP: - was an African initiated and led process - strengthened from the close cooperation between the AU PSC and the UNSC, endorsed by the UNGA and decisions of the WDC - its main decision making procress is on the basis of consensus - celebrates its 10 anniversary this year, with South Africa as the Chair for 2013.

Page  6 CONFIDENTIAL WHAT IS THE KIMBERLEY PROCESS? - As noted, the KP started when Southern African diamond-producing states met in Kimberley, South Africa, in May 2000, to discuss ways to stop the trade in ‘ conflict diamonds ’. - Ways were sought to ensure that diamond purchases were not financing violence by rebel movements and their allies seeking to undermine legitimate governments. - In December 2000, the UNGA adopted a landmark resolution 55/56 supporting the creation of an international certification scheme for rough diamonds. - By November 2002, negotiations between governments, the international diamond industry and civil society organisations resulted in the Kimberley Process Certification Scheme (KPCS).

Page  7 CONFIDENTIAL WHAT IS THE KIMBERLEY PROCESS? (CONTD.) - The KPCS entered into force in 2003, when participating countries started to implement its rules and minimum compliance requirements for the import and export of rough diamonds. - Diamond experts estimate that “ conflict diamonds “now represent a fraction of one percent of the international trade in diamonds, compared to estimates of up to 15% in the 1990s. - This has been the KP's most remarkable contribution to conflict resolution, this could be measured not in terms of carats, but by the effects on people's lives and livelihood.

Page  8 CONFIDENTIAL WHO ARE THE ROLE-PLAYERS? The KP is a multi-stakeholder process involving: - Governments 54 participants, representing 80 countries, with the EU and its 27 member states counting as a single participant. KP members account for 98% of the global production of rough diamonds. - Industry De Beers BHP Billiton Anglo American Rio Tinto African Diamond Producer’s Association (ADPA) World Diamond Council - Civil Society Partnership-Africa Canada

Page  9 CONFIDENTIAL THREATS - There is an inconclusive debate about the need to change the current definition of conflict diamonds which can impact on the mandate and character of the KP. No consensus was reached on this issue, the current Chair has been mandated to find closure on this matter. - Concerns vis-à-vis human rights violations should be further discussed as again there is no agreement on its inclusion.. - The term “violent armed conflict” is open to ambiguous interpretation and there is no agreement on its inclusion in an expanded definition.

Page  10 CONFIDENTIAL THREATS (CONTD.) - Move to synthetics with resultant job losses in countries as diverse as India, Israel, Botswana and Belgium – in southern Africa alone the diamond industry provides jobs to individuals. - Links to mercenary structures and smuggling syndicates. - A dysfunctional KP will fuel Afro-pessimism - Over-regulation of the diamond industry

Page  11 CONFIDENTIAL OPPORTUNITIES - Capacity must be built for beneficiation - Constructive cooperation between the AU and the UN and between the AU PSC and the UNSC must be nurtured - KP is important as a building block in the broader context of resolving conflicts on the African continent and beyond and must take advantage of the space created for it by the UN and its key organs, mandates and agencies

Page  12 CONFIDENTIAL OPPORTUNITIES (CONTD.) - The issues identified as weaknesses of the KP must be raised in forums With mandates and capacity to ensure genuine solutions ~ Second Committee, UNSC and Human Rights Council - Countries who are part of the KP must fulfil their responsibilities by being more active in the AU and UN - The KP must be aligned with the principles and outcomes of sustainable development - The diamond industry can act as a springboard to expand and diversify African economies

Page  13 CONFIDENTIAL KP LINKS TO OTHER PROCESSES - South Africa/China bilateral relationship (China KP Vice-Chair during 2013) - South Africa’s role as mediator in African conflicts - South Africa/BRICS relationship - South Africa’s foreign policy posture in Africa - The formulation of an AU approach to recent rebel group activity on the continent – Mali, CAR, DRC

Page  14 CONFIDENTIAL THE WAY FORWARD - Need for strong African leadership by increasing the African footprint in KP - Reform / Transformation must be the outcome of a considered process and must not compromise the KP’s initial mandate and founding principles -Mechanisms to ensure compliance must be strengthened in a way which satisfies the requirements of Government, Industry and Civil Society -KP must create more partnerships with civil society structures involved in conflict resolution and peace building

Page  15 CONFIDENTIAL CONCLUSION At the end of 2013 it is our wish to humbly contribute to: - More clean diamonds throughout the value chain - the diamond industry not only surviving but thriving -The global passion for- and positive association with diamonds being sustained -Diamonds will once more be forever but not conflicts associated with them

Page  16 CONFIDENTIAL CONCLUSION (CONTD.) DIAMONDS ARE FOREVER (BUT THE CONFLICTS ASSOCIATED WITH THEM SHOULD NOT BE)