Shabangu: Diamond industry must be democratised

Speech by the minister of mineral resources Susan Shabangu at the Kimberly Process Certification Scheme Plenary Meeting held in Johannesburg, South Africa, form the 19th to 22nd of November 2013. 

 Kimberley Process Chairperson, His Excellency Ambassador Welile Nhlapo

Honourable Minister Francisco Queiros from the Republic of Angola

Honourable Minister Djono-Ahaba from the Central African Republic

Honourable Minister Jean-Claude Brou from Cote d’Ivoire

Honourable Minister Walter Chidakwa from the Republic of Zimbabwe

Honourable Vice Minister Wei Chuanzhon from the People’s Republic of China; and

Honourable Deputy Minister Stephen Dorbor from the Republic of Liberia

Deputy Chair of the KP, the People’s Republic of China

Delegations from Participant Governments

Observers from the Association of African Diamond Producing Countries

The Delegation of the World Diamond Council

Members of the KP Civil Society Coalition

Representatives of the Diamond Development Initiative

Members of the Diplomatic Corps

Members of the media

Distinguished Guests

Ladies and gentlemen

I’d like to take this opportunity to welcome you all to our beautiful and friendly city of Johannesburg, situated in the Gauteng Province, which means “City of Gold”. It is in this part of the country where the Gold-rush started in the 18th Century, which has contributed towards shaping the economic growth of our country.

Ladies and gentlemen, you will vividly recall that 10 years ago, we were at the verge of collapsing into an abyss as deep as the Kimberley hole itself but we collectively chose a constructive and inclusive path of reaffirming the significance of the diamond industry in our respective countries. Ten (10) years later, we again congregate, looking back at the job well done and looking forward at the important work we still have to do. The diamond industry has been on a rollercoaster ride since the global financial crisis, and the years between 2009 through to 2012 have presented a challenging period for all participants across the diamond value chain.

This year’s Plenary meeting holds more significance than ever, as the work of the Ad Hoc Committee on Reform will set the tone on how the Kimberley Process Certification Scheme (KPCS) ensues going forward. There has been robust engagement amongst ourselves over the past few years on these reforms, which made us introspect rather deeply about our founding objectives and the extent to which we have lived up to the this promise. The most significant observation during this time is that the Kimberley Process is indeed an inclusive process that does not ignore the voices of the smaller and emerging participants in its deliberations of such important matters. This further confirmed the robust founding statues of the KP, which are premised on an arduous consensus-building process that is enshrined in our democratic principles.

The argument still stands, that the KPCS cannot be seen to be duplicating the works of other organisations, especially those that complement the KPCS, namely the System of Warranties developed by the World Diamond Council (WDC) to extend the Kimberley Process conflict-free assurance to polished diamonds, and to provide a means by which consumers can be assured that their diamonds are from conflict-free sources.

The Council for Responsible Jewellery Practices is another institution, founded in May 2005 with Members from the diamond and gold jewellery supply chain, from mine to retail. The Council is committed to promoting responsible business practices in a transparent and accountable manner throughout the industry from mine to retail.

Those are just two of many organisations that have an oversight responsibility over the industry, notwithstanding sovereign responsibility of each member country to develop and invoke the appropriate legislative framework to regulate the mining sector, including diamond-mining and trade. The former British Prime Minister, Winston Churchill said it best when he stated: “If you have ten thousand regulations you destroy all respect for the law”.

I must commend the United States of America and the Republic of Angola on their efforts to ensure that the Washington Declaration finds meaning and relevance in matters surrounding small-scale mining. Artisanal small-scale mining poses challenges for any country and could stem from difficulties in achieving regulatory oversight of a large number of small operations, including concerns such as security of land tenure for artisanal miners, to enforcement of environmental and safety standards, and chief amongst them, access to start-up capital.

The Bain Report of 2013 affirms that the industry presently has sufficient diamond reserves to sustain production for 18 years, with 70% of those reserves found in Africa and Russia respectively. The question then becomes: how do we ensure that Africa and the entire diamond industry benefits from the abundance of this resource?

The June 2013 seminar on the Washington Declaration afforded participants a platform to share their practices and challenges within artisanal and small-scale mining, after all it is through such dialogue that we are able to develop common policies geared towards creating a better environment to all citizens alike. For Africa’s minerals sector to be knowledge-based and vibrant, it is vital to learn and study best practice of peer jurisdictions, and to develop partnership mechanisms that benefit both parties. This is significant, as it marks an important departure from the well-entrenched historical practice of some parties benefiting exclusively at the expense of others. This model of partnership has already demonstrated that it is not sustainable and must be abandoned with immediate effect.

In our efforts to improve on the quality of life within the sector, especially in African producing countries, KP should endeavour to build relations and work jointly with the African Union, which has developed and adopted the “African Mining Vision”. Its key objective is to achieve a “transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development”

The vision is inscribed upon shared value principles comprising, inter alia:

  • A knowledge-driven African mining sector that catalyses and contributes to the broad-based growth and development of, and is fully integrated into, a single African market through:

o   Downstream linkages into mineral beneficiation and manufacturing,

o   Up-stream linkages into mining capital goods,

o   Side-stream linkages into mining capital goods, consumables and services industries,

o   Side-stream linkages into infrastructure (power, logistics, communications and water) as well as skills and technology development ; and

o   Mutually beneficial partnerships between the state, private sector, civil society, local communities and other stakeholders.

The African Diamond Producers’ Association is created within the context of the African Mining Vision, with specific focus on diamonds. This Association has an important role to contribute to the orderly, value-creating development of diamonds on the African continent. It is important for such formations as the Kimberley Process to recognise and work closely with this formidable African Association that seeks to determine the fate of diamond development in the African Continent to benefit the people of the continent and to develop mutually beneficial partnerships with foreign investors.

History has shown us that when countries engage in a collaborative effort for a common good, sustainability is well within reach. As we sketch the way forward, let us bear in mind the following: that “Sometimes when you innovate, you may make mistakes. It is best to admit them quickly, and get on with improving your other innovations (Steve Jobs)

As South Africa, we support the candidacy of Angola as the Vice Chair for 2014, and therefore the KP Chair for 2015.

I’d like to encourage participants to be vigilant in their discussions, which are going to ensue during this plenary session and to take stock of the journey travelled for the past ten years. The KPCS family needs to identify shortcomings encountered and come-up with mechanisms, which will sharpen our organisation’s efficacy as part of the preparation for the next decade to be characterised by the strengthening of the diamond industry and economies of the participating countries, in order to ensure maximum benefits from this glittering stone.

I thank you

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