Canada helps fight conflict diamond trade

Companies will require government certificates to export diamonds to Canada, under new legislation in place to control the import, export and transit of rough diamonds.

Bill C-14 was given royal assent in mid-December 2002, and the new regulations will take effect Jan. 1, 2003. Certificates can be obtained from Natural Resources Canada.

The regulations enable Canada to meet its obligations under the Kimberley Process certification scheme, which brings together 34 participants, including Canada, the U.S. and Europe, representing more than 98% of the world’s diamond trade market.

Under the scheme, participating countries must export rough diamonds in tamper-resistant containers and provide a certificate, validated by the government of the export country, confirming that the diamonds are “conflict-free.” They must also collect and maintain relevant production, import and export data, and trade only with other participants.

Started by representatives of South Africa, the Kimberley Process is aimed at curbing the trade in “conflict diamonds,” which originate in areas controlled by rebel groups and are used to fund military action that target governments. Trade in conflict diamonds has occurred in Angola, Sierra Leone and the Democratic Republic of Congo, among other African countries.

“Putting the Kimberley Process certification scheme in place will protect the legitimate diamond industry and help to eliminate trade in conflict diamonds,” says Herbert Dhaliwal, federal minister of Natural Resources.

Canadian stakeholders that may be affected by the new legislation include diamond mining and exploration companies; tool, equipment and machinery manufacturers; companies that cut and polish diamonds; and jewellers.

Canada’s only operating diamond mine, Ekati, is in the Northwest Territories, about 300 km northeast of Yellowknife. It employs 650 people and produces 3-4 million carats of gem-quality rough diamonds each year. This is equivalent to nearly 5% of world diamond production by weight and 6% by value.