Conflict diamonds are forever? : the role of transparency in the effectiveness of the Kimberley Process Certification Scheme

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Conflict Diamonds Are Forever?

The Role of Transparency in the Effectiveness

of the Kimberley Process Certification Scheme

Judith van der Zweerde

Supervisor: Dr. L.W. Fransen

Second Reader: Dr. J. Fleischer

27

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of June 2014

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List of Abbreviations

DRC Democratic Republic of Congo

EITI Extractive Industries Transparency Initiative

EU European Union

GW Global Witness

ICGLR International Conference on the Great Lakes Region

KP Kimberley Process

KPCS Kimberley Process Certification Scheme NGO Non-Governmental Organisation

PAC Partnership Africa Canada PWYP Publish What You Pay RUF Revolutionary United Front SoW System of Warranties

TPPR Transnational Public-Private Regime

UN United Nations

UNITA União Nacional para a Independência Total de Angola ZELA Zimbabwe Environmental Law Association

Cover photo: Alluvial diamond mining at Kenema, Sierra Leone. Credit: Bavaria-Verlag.

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Introduction

In a world where issues are increasingly global and often transgress territorial borders, it becomes ever more difficult to adopt a state-centred approach to the governance of these concerns. A new form of governance might be better equipped to address certain challenges, namely transnational governance. Transnational governance consists of networks between international, national, and non-state actors (Take, 2012: 220). This creates interconnections across different levels, opening up new possibilities of cooperation in addressing global phenomena. One set of issues that is well suited for such an approach is the field of sustainability. This field includes a wide range of problems, such as climate change,

environmental degradation, decreasing biodiversity, and the extraction of natural resources. The present research deals with the latter of these, by focusing on the relationship between diamonds and conflict-related violence. It aims to unravel the role of transparency in determining the effectiveness of the Kimberley Process Certification Scheme (KPCS) as a transnational governance initiative. To achieve this, this thesis is structured as follows. The first chapter introduces the position of this research in relation to existing literature and explains the methodological approach. Then, the second and third chapter provide the necessary background information on the diamond sector, conflict diamonds, and the KPCS. Chapter four discusses relevant theories of transparency, resulting in a theoretical framework that guides the analysis. After analysing the KPCS Core Document and the empirical reality of the KPCS in, respectively, chapter five and six, chapter seven provides conclusions and answers the research question. The final chapter discusses lessons and limitations that arise from this research. At the end, this research will have answered the following research question:

How does the focus on transparency influence the effectiveness of the Kimberley Process Certification Scheme?

Answering this question is theoretically relevant because the importance of transparency in transnational governance is widely discussed. Transparency has become a key characteristic of many different initiatives dealing with natural resource extraction and its consequences. Applying theories concerning the relationship between transparency and effectiveness to the case of the KPCS may provide new, valuable insights on this importance. Examining the possible shortcomings of the KPCS and the way it addresses these challenges may shed light on misconceptions that exist on the positive effects of the focus on transparency. Gaining more insight into the consequences of a focus on transparency could then add to the

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5 knowledge about the effectiveness of transnational governance initiatives and in this way inform future initiatives to make different choices. Combining theories of transparency with empirical information on the KPCS offers an opportunity to link theory to practice and assess practical implications for new initiatives within the field of natural resource extraction.

The societal relevance of this research mainly depends on its ability to assess the lessons that new initiatives can draw from the problems of the KPCS, since this may allow new initiatives to avoid making similar mistakes in its institutional design or practice. In that way, this research could improve the capability of new initiatives to address problems regarding the link between natural resources and conflict. Conflict minerals are widely discussed both in academic circles and in public discourse. The Democratic Republic of Congo is probably the most well known case, since many NGOs have asked attention for the situation there and several documentaries and films have brought the issue to the attention of a broader public. Around two million people around the world, mostly in developing countries, are involved in the diamond industry (World Diamond Council, 2008: 12). For the economic development of a number of countries, diamonds are of vital importance and, given good governance and the rule of law, diamonds are a potential source of revenue for the building of infrastructure and social services (ibid.). To ensure that the diamond industry leads to

sustainable development in these countries, it is of vital importance that the illicit trade in diamonds is stopped as much as possible.

Furthermore, conflict-related diamond trade relates to many other issues that concern academics and the public, such as environmental degradation, human rights, and security. These topics concern the international community and influence conditions in other parts of the world. Many people around the world are committed to the well-being of others and engage in the field of international development. Creating sustainable development from natural resource richness would greatly improve living conditions and future prospects for inhabitants of these countries. This could be a goal in itself. Research in this subject field thus has the potential to not only contribute to the work of NGOs, governments, development agencies and others, but also to influence the local environment and communities.

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1. Research Framework

This chapter discusses the structure and methodology of the research. First, it briefly reviews the literature, explains the academic framework that it is set in and indicates which gap it aims to fill. Then, it introduces the research questions, case selection, and methods of data

gathering and research. Finally, it discusses the challenges of validity and reliability that the research faces.

1.1 Transparency and voluntary programs in the literature

For many years, the international community has been committed to addressing the

relationship between extraction of natural resources and conflict. However, there have been insufficient results on breaking this link between minerals and violence, as becomes clear from the ongoing call by NGOs for international standards and institutional enforcement mechanisms. At the beginning of March 2014, the European Commission presented its proposed bill on the responsible import of minerals from conflict regions.1 For years,

European non-governmental organisations (NGOs) have been emphasizing the importance of governments and companies taking responsibility to break the link between resource

extraction and the financing of armed violence. These organisations believe the proposed bill misses a great opportunity by proposing a voluntary mechanism whereby importers of these minerals can decide for themselves whether they want to participate in making their supply chains transparent or not. NGO representatives fear that this proposal will ‘lower international standards and start a race to the bottom’ and state that it is ‘absolutely critical that the EU enforces existing international standards’.2

This message shows that the goal is a transparent supply chain, but that a voluntary mechanism is viewed as insufficient in achieving this. It also indicates that there is still a lot of room for improvement in the regulation and

management of extractive mining and export of natural resources.

Many international initiatives are still starting up in this issue area, often focusing on the challenges faced by fragile states (Brown, 2013: 5). Among these initiatives, transparency is an increasingly common approach to regulation (Hale, 2008). Instead of specifying

regulations and punishing those who breach them, the transparency approach simply requires actors to disclose information about the governance question at hand (Hale and Held, 2011: 11). Transparency is a central concept in many initiatives, such as the Extractive Industries

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http://somo.nl/news-en/proposed-eu-law-will-not-keep-conflict-resources-out-of-europe-campaigners-warn?set_language=en (last reviewed: 13-03-2014 at 14:21).

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7 Transparency Initiative (EITI), campaigning groups such as Publish What You Pay (PWYP) and domestic legislation such as the 2012 Dodd-Frank Act in the United States, which

requires US companies to disclose their overseas payments (Brown, 2013: 5). This first set of initiatives bases itself on the idea that transparency is of essential importance in ensuring responsible and sustainable management of natural resources.

Another collection of initiatives has attempted to remove conflict or illegal resources from international trade, such as the Kimberley Process on the export of rough diamonds and EU and US legislation on the traceability of conflict minerals (Brown, 2013: 5). Transparency plays a central role in these initiatives as well, since in order to be able to know which

resources are from conflict areas and which are not, one needs information on the origin of the resources. This means that the production, export, and import of diamonds have to be

transparent.

A third set of new principles and guidelines aimed at encouraging market actors to take responsibility has been established, such as the Equator Principles, the Principles on Responsible Agricultural Investment, and the Voluntary Principles on Security and Human Rights, which are aimed at extractive companies working in fragile states (Brown, 2013: 5). While the examples above do not exhaust all the initiatives in this area, they show that the field of natural resources governance within the global politics of sustainability is rich and quite diverse.

In relation to these other initiatives, the Kimberley Process stands out in several ways. It was the first transnational business governance initiative. It began with a multi-stakeholder negotiation that covered the entire diamond industry and all the major players (Haufler, 2012: 12). The Kimberley Process (KP) differs from other forms of international governance such as UN treaties because it involves both private and public actors, making it a ‘Transnational Public-Private Regime (TPPR). TPPR’s do not rely on hierarchical public governance, nor do they centre on private actors and market mechanisms (Fransen, 2013: 4). This makes them different from intergovernmental regimes like United Nations treaties and transnational private governance such as Fairtrade International. The KPCS is not a legally binding treaty between sovereign states, but a set of politically binding minimum common standards, enacted by states through their own national legislation (Wright, 2004: 699). The creation of the KPCS was the first time that governments, industry, and civil society negotiated an international agreement as equal partners and based on consensus (Wright, 2004: 702). The aim of the KPCS is to address the problem of illicit financing of violent conflict by

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8 no money is made through the sale of these ‘conflict diamonds’ was seen as an important contribution to ending the long-running conflicts in parts of Africa, since the sale of natural resources is often an important way of financing soldiers and weapons.

As discussed above, transparency plays an important role in many natural resource governance initiatives. In political theory, however, transparency is not seen as a panacea for all. Weil et al. define ‘targeted transparency’ as a policy where ‘government compels

companies or agencies to disclose information in standardized formats to reduce specific risks, to ameliorate externalities arising from a failure of consumers or producers to fully consider social costs associated with a product, or to improve provision of public goods and services (Weil et al., 2013: 1410). Such policies are more light-handed than conventional regulation, relying on the power of information rather than on enforcement of rules and standards or financial inducements’ (ibid.). At first glance, this already shows a possible weakness of this type of policy. It is much more ‘soft law’ than ‘hard law’ and depends on the willingness of companies to cooperate. With initiatives such as the KP, the fact that

participating governments are not always as cooperative as the KPCS might want them to be further weakens the policy. The effectiveness does depend on the willingness and ability of participating governments to install national legislation and control mechanisms.

In addition to the KPCS, and sometimes inspired by it, other initiatives in the field of sustainable natural resource governance have mushroomed. Each subsequent initiative both built upon and differed from its predecessors, but all entailed some form of information disclosure such as certification, reporting, or auditing (Haufler, 2012: 12). While some of these initiatives have been individually influential, Brown emphasises an important problem present in most of them: they tend to conflate the means with the ends (Brown, 2013: 5). In his opinion, transparency should not be a goal in itself, but rather a means to achieve increased accountability of government (ibid.). Brown claims that too often the inputs

(transparency, guidelines, policies) are pursued, forgetting about the ultimate outcomes of the process, such as accountability, equity, and reduced violence: ‘too often they fail to grasp whether the rules, institutions, norms and traditions that govern how resources are managed are fair, accountable, transparent and able to resolve disputes’ (ibid.). Brown argues that in trying to improve natural resource management, we should look beyond the ‘means’ and concentrate on the ‘ends’ (Brown, 2013: 7). This means looking at accountability, equal distribution of revenues and public participation in decision-making instead of focusing on transparency of payments and supply-chain management of conflict diamonds. While this sounds quite straightforward, many natural resource initiatives fail to address these issues

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9 sufficiently. Whether this is true for the Kimberley Process and what that means for its

effectiveness, is the topic of this research.

The discussion above of the literature on transnational natural governance initiatives, transparency, and the KPCS suggests that many different aspects play a role in determining the success of a particular natural resource governance initiative. There is a lot of literature available about the innovativeness of the KPCS at the time of implementation, different types of natural resource governance, and the role of transparency in these governance initiatives. However, since being launched as an innovative new governance initiative, the KPCS has received a substantial amount of criticism about the challenges it faces. What is still unclear from this literature is whether the focus on transparency has played a role in the challenges that the KP faced and in determining its effectiveness. The next section discusses the way in which this research aims to fill this gap in the literature.

1.2 Research question and sub-questions

In order to attempt to fill the gap in the academic literature indicated in the previous section, this research aims to address the question as to what extent the focus on transparency in the Kimberley Process Certification Scheme influences its effectiveness. Given the challenges faced by the KPCS according to criticism throughout the years, it is important to assess what the possible causes of the challenges might have been. Therefore, this research analyses the institutional design of the KPCS as well as its performance in practice. Informed by political theories of transparency, accountability, and legitimacy, it assesses whether the KPCS fulfils the conditions of these three concepts in relation to effectiveness of governance. The research question that will guide the research is: how does the focus on transparency influence the effectiveness of the Kimberley Process Certification Scheme? The empirical analysis of the KPCS’s institutional design is divided into three main sections by using the following sub-questions.

1) To what extent is transparency the main focus of the KPCS Certification Standards? 2) What does this mean for the KPCS’s accountability and legitimacy?

3) Does the KPCS meet the conditions for effective transparency policy?

The answers to these questions will inform the reader of the effectiveness of the KPCS on paper. However, this does not yet tell us more about the actual effectiveness of it in achieving its goal of cleaning the legitimate trade of diamonds from contamination by conflict

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10 KPCS on these conditions for effectiveness in practice. The findings in these chapters

together will answer the research question in the conclusion.

1.3 A single case study design

This research aims to say something about the effectiveness of the KPCS. Since it entails the detailed and intensive analysis of the KP as a single case, the research design is a single case study (Bryman, 2008: 52). The relevant population is all natural resource governance

initiatives. From this population, the unit of analysis will be all natural resource governance initiatives that are engaged in governance on extractive mining. The sample is the Kimberley Process Certification Scheme. The discussion section will discuss whether other initiatives, such as the Extractive Industries Transparency Initiative (EITI) and the International Conference on the Great Lake Region (ICGLR), have learned important lessons from the experience of the KPCS. However, these initiatives do not constitute an actual case since they are not used for the empirical research. Given that this study is based on a single case, the degree to which the conclusions can be generalized is limited. However, the use of broader theories to inform the research makes it possible to compare the outcome with different initiatives within the field of natural resource governance to assess whether similar challenges occur. The value of this research thus lies in its thoroughly descriptive and evaluative nature and the extent to which other initiatives may adopt something from this, not in its

generalizability.

1.4 Data gathering and method of analysis

This thesis derives from qualitative research. The main research methods are content analysis and conducting interviews. The content analysis uses policy documents and other relevant publications from both the KPCS and NGOs that are involved with the KPCS as ‘observers’. Global Witness (GW) and Partnership Africa Canada (PAC) are the most prominent NGO observers and have published several reports on the KPCS. Therefore, the main data consists of policy documents and certification standards available online. The content analysis will focus on the way in which transparency is a central concept in these documents. The ways in which the KPCS has formulated its standards are discussed in comparison to existing theories on the relationship between transparency, accountability, legitimacy, and effectiveness. This constitutes the first chapter of the empirical analysis. In order to compare the KPCS on paper with the performance of the KPCS, a second empirical chapter analyses the KPCS in practice. Both these sections are informed by content analysis as well as interview data, in order to

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11 increase the validity of the research. Further, existing academic literature will inform the theoretical perspective and explain what the relevance of the concepts of transparency, accountability, and legitimacy is for natural resource governance initiatives. Then, a framework of analysis and indicators are introduced to guide the analysis.

Since the focus of this research is descriptive-evaluative, interviews are beneficial to the depth of the research. Interview data will shed light on the topic of the challenges of the KPCS and will be used to triangulate data gathered from the content analysis. Since NGOs played an important role in the creation of the KPCS and are expected play an important role in assuring accountability and legitimacy as well, interviews with representatives of these organizations should provide valuable information. In any case, conducting interviews makes the research more robust because of the use of different methods. Interesting respondents on this topic would be participants in the design of the KPCS or representatives of the NGOs that were involved in the criticism of the program, such as Global Witness and Partnership Africa Canada. Additionally, interviews with experts on the subject could be a second route to gaining more insight into the topic. These could be representatives from NGOs that are also involved in the subject of conflict diamonds and have extensive knowledge of the KPCS, even though they are not personally or as an organization involved in the program. A list of

respondents is available in the appendix to this thesis.

1.5 Challenges of validity and reliability

Given the chosen methods within qualitative research, there are possible challenges of validity and reliability. Even though they affect quantitative research more clearly, validity and

reliability can still be important measures to assess the quality of one’s research design in qualitative research. LeCompte and Goetz have translated these measures to qualitative research designs, resulting in four different assessments that are applicable to qualitative research (Bryman, 2012: 376).

The first measure is internal reliability, which refers to whether members of the research team would agree about what they see and hear, creating inter-observer consistency (Bryman, 2012: 376). Possibly peer-review and the feedback of the instructor could play a role here, but since a master thesis is an individual piece of research, internal reliability in this sense is difficult to accomplish. This problem is addressed in a way, since the observations will consist of document analysis mostly, which in comparison to ethnographic observation or interviewing is less subjective and less dependent on the role of the observer. It will remain

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12 important to be very explicit in the analysis, and not make hidden assumptions that might be subjective.

The second measure is internal validity, which assesses whether the researcher’s observations match well with the theoretical ideas they develop (Bryman, 2012: 376). This will be addressed since the observations and analysis will be discussed in relation to existing theory of transparency and voluntary programs. It is important to keep this in mind during the data collection and analysis, so that the concepts that are being studied still relate to the theories that are used.

External validity is the third measure and refers to the degree to which findings can be generalized across social settings (Bryman, 2012: 376). This is often a problem in qualitative research since it tends to use case studies and small samples. In this research, too, it will be difficult to generalize to different countries, issue fields, or types of governance. However, while generalization is not the main aim of this research, certain lessons that are important for new initiatives in the governance on natural resources, may also apply to initiatives in

different issue areas.

The fourth measure is external reliability, or the degree to which a study can be replicated (Bryman, 2012: 376). Since the subject under study in qualitative research is often a social setting, this is difficult to accomplish. It is also essential that in replicating a study the researcher takes on the same role as the original researcher (ibid.). This measure is less

difficult to accomplish for this thesis, since it consists mostly of document analysis. This would be more challenging for studies that depend solely on interviews or ethnographic observation, where there is actual contact with the object of study.

In general, being explicit about assumptions that are made in the analysis, clearly stating where the used data comes from and explaining why this is relevant to analyze for this research question, will best address the challenges of validity and reliability.

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2. The Diamond Sector and ‘Conflict Diamonds’

The aim of this chapter is to give a brief overview of the context that this research is set in. The first section gives some background information on the structure of the diamond sector in general. The second section introduces the concept of ‘conflict diamonds’ and illustrates the issue with a few exemplary cases in which the possible consequences of conflict diamonds are evident. The third section elaborates on the initiatives to curb illegal diamond trade fostering conflict that preceded and helped to establish the KPCS.

2.1 The diamond sector

To be able to grasp the issue of conflict diamonds and the role of the KPCS in addressing this, we need to understand the characteristics and structure of the diamond sector. The structure and characteristics of the diamond sector potentially played a role in the creation of the

KPCS, which is why a brief examination of this sector contributes to the research at this point. In recent years, the position of diamond-trading company De Beers has diminished

significantly. However, the next section describes its position at the time of the creation process of the KPCS, since this is where the structure of the diamond sector had an important influence. Therefore, changes in the structure of the diamond sector since then are irrelevant at this stage of the research.

The diamond sector begins at the extraction point of rough diamonds from mines. These diamonds are found mostly in Africa, Australia, and the [former] Soviet Union and they are not notably rare (Bernstein, 1992: 117). Sixty-five percent of the world’s natural diamond production takes place in Africa, which amounted to around 8.4 billion US dollar in 2006 (Hughes, 2006: 115). The global diamond sector differs significantly from other

industries (Kantz, 2007:4), mostly because for over a century it was organized into one of the most successful cartels in history (Haufler, 2010: 405). Until the end of the 1990s, diamond-trading company De Beers dominated the industry by creating a cartel that at one time controlled up to 80 per cent of the rough diamond market (Kantz, 2007: 4). This meant that De Beers had an extremely strong position in the diamond sector. They controlled both the supply and distribution of rough diamonds by manipulating production at their own mining sites and buying up mines and mining companies elsewhere, as well as negotiating long-term supply contracts with producers, maintaining a stockpile of rough diamonds and releasing it to the market to stabilize supply (Haufler, 2010: 405). Stabilizing supply played an important role in keeping the price of diamonds high, as its perceived scarcity is a vital part of its

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14 reputation as something precious and valuable. Since De Beers largely controls the diamond industries of Botswana, Namibia, and South Africa through partnerships with each country’s government, it has established a very powerful position in southern Africa (Kantz, 2007: 5). Small firms or individual traders made up the rest of the diamond market, but had

substantially less influence.

To sum up, De Beers monopolized the supply and distribution of rough diamonds in a highly structured and tightly knit set of contractual relationships (Haufler, 2010: 406). De Beers cooperated with all the major suppliers to maintain the value of diamonds, which depended so much on the perception of scarcity (ibid.). However, in the 1990s, their monopoly began to weaken. This coincided with an increased attention for issues related to mineral extraction, especially conflict diamonds in Africa. The next section will elaborate further on what the term ‘conflict diamond’ actually entails.

2.2 The concept of conflict diamonds

The issue of conflict diamonds (sometimes also referred to as ‘blood diamonds’) and of possible ways to deal with it has become a major topic in international politics since the end of the 1990s (Grant and Taylor, 2004: 385). ’The term ‘conflict diamond’ is used to indicate rough diamonds that have been sold by parties in civil wars in order to finance their military activities (Kantz, 2011: 302). The KPCS uses the UN definition of a conflict diamond, which reads ‘diamonds that originate from areas controlled by forces or factions opposed to

legitimate and internationally recognized governments, and are used to fund military action in opposition to those governments, or in contravention of the decisions of the Security Council’ (Haufler, 2012: 12). Diamonds have provided funding in this way for several violent conflicts in Africa, which have led to the death and displacement of millions of people (GW, 2005: 6). The consequences of this trade are visible in for example Angola, The Democratic Republic of Congo and Sierra Leone. Here, rebel armies, warlords, unscrupulous diamond traders, and terrorists have used diamonds to fund armed conflict and to purchase arms (GW, 2005: 6). Because of their small size and high value, diamonds are easy to hide, will hold their value, and be virtually untraceable (Grant and Taylor, 2004: 388). Diamonds are easy to transport, they do not set off metal detectors in airports, and when necessary diamonds can easily be converted into cash (GW, 2005: 6). Combined with the fact that diamonds are relatively easy to obtain from alluvial mining areas, this makes exploiting them very attractive to warring parties, strengthened by a severe lack of regulation (Grant and Taylor, 2004: 388). This is illustrated by the following examples of conflicts being fuelled by diamond trade. While these

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15 examples are certainly not the only cases of conflict diamonds entering the diamond trade, they are chosen because they are well-known cases of violence funded by diamonds. More importantly, they were part of the NGO campaigning that eventually led to the creation of the KPCS.

Sierra Leone

In 1991, a civil war erupted in Sierra Leone, killing and displacing millions of people. The Revolutionary United Front (RUF), a rebel force, accused the government of mismanagement of diamond and mineral resources and called it corrupt.3 However, while the RUF may have had respectable aims at the beginning, they themselves were corrupted and were seen by others as a way to get to the diamonds and profit from them.4 Government mismanagement, corruption, and overall bad resource governance provided fertile conditions and initial support for this rebellion (Grant and Taylor, 2004: 387). Control over the diamond mines was a major prize for civil war combatants and, during this time, some 300 to 450 million US dollar in diamond revenues were taken out of Sierra Leone (Grant and Taylor, 2004: 387). Over 90 percent of these revenues bypassed government financial systems and exited through illicit channels in nearby and neighbouring countries such as Liberia, Guinea, and Côte D’Ivoire (Hirsch in Grant and Taylor, 2004: 387). The rebels used the revenues from this diamond trade to finance the conflict, mostly to provide funding for arms. This means that Sierra Leonean diamonds led to conflict, instead of the economic development that would be possible from legitimate trade.

Angola

Diamonds also played a role in funding the war in Angola during much of the 1990s (Grant and Taylor, 2004: 387). Between 1992 and 1997, UNITA (União Nacional para a

Independência Total de Angola) accumulated 3.7 billion US dollars in diamond revenues, funding their military campaign keeping Angola from reaching peace for as long as the leader of the rebel group, Jonas Savimbi, was alive (Grant and Taylor, 2004: 387). While NGO Global Witness was researching abuse of oil revenues by the government of Angola, they discovered that UNITA was using its control of Angola’s diamond areas to trade diamonds for arms and other supplies necessary to fund the civil war against the government (Hughes, 2006: 116). Since rebel groups were able to take full control of the mines, diamonds were a

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http://www.globalissues.org/article/88/sierra-leone (last reviewed 01-05-2014 at 12:22)

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16 much easier commodity to use for funding then oil for example, because the points of

extraction of oil are much more dispersed.

The Democratic Republic of Congo

The civil war in the Democratic Republic of Congo (DRC) started in 1996. The war cost millions of people’s lives and rape and torture were widespread (Frieden, Lake, and Schultz, 2013: 219). The rebels forcibly recruited thousands of children, while the intervention of neighbouring states fuelled the conflict (ibid.). The war has officially ended, but has continued to simmer to this day (Frieden, Lake, and Schultz, 2013: 220). As in Angola and Sierra Leone, in the DRC diamonds mined in rebel-controlled areas were easily smuggled out of the country (Fatal Transactions, 2004: 4). Often, the rebel forces used the revenues of these trades to fund further conflict.

The three examples discussed above show the role that diamonds can play in violent conflicts and civil war. The KPCS was established, for a great part at least, to deal with these kinds of issues. However, whether diamond fuelled conflict has in fact diminished due to the KPCS remains to be seen. Before discussing the effectiveness of the KPCS, a brief

introduction into the initiatives preceding the KPCS will provide some perspective on the topic.

2.3 Gaining momentum: NGO campaigns and the UN resolution

Of course, there are many other examples of horrific behaviour around the world and not all of these occurrences get their own recognizable named concept. The introduction and prevalence of the idea of ‘conflict diamonds’ was in large part due to highly effective campaigns by NGOs and advocacy organizations targeting consumer sentiment by re-labelling them ‘blood diamonds’ (Haufler, 2012: 12). This campaign can be summarized as the ‘coordinated efforts that aim to end the sale of diamonds that originate from areas under the control of forces that are in opposition to elected and internationally recognized

governments, or are in any way connected to those groups’ (GW, 2000: 1). An important distinction in this definition is the emphasis on groups that are in opposition to the

government. This means that when governments are engaged in violent conflict, the diamonds they trade are not regarded as ‘blood diamonds’ or ‘conflict diamonds’, since they are not a rebel party. This distinction will return in the analysis of the KPCS.

The international community began to address the trade in conflict diamonds at the end of the 1990s, in the light of the civil wars of Angola and Sierra Leone (Hale and Held,

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17 2011: 302). The cruelty of rebel practices including the use of child soldiers and rape as a weapon of war, for example in Sierra Leone, generated extensive attention by the media and spurred activism on behalf of the victims of these conflicts (Haufler, 2010: 406). This resulted in increased attention from the United Nations for this issue, leading to peacekeeping

missions and to sanctions on countries suffering conflict in Africa (ibid.). Due to initial criticism that these sanctions were not targeting governments or rebel forces, so-called ‘smart-sanctions’ were implemented that targeted high-value commodities, including sanctions by the United Nations Security Council against diamonds from Angola and Sierra Leone (Haufler, 2010: 406). This can be seen as the first attempt of targeting the illicit trade of diamonds as a means of ending violent conflict. However, neither broad nor ‘smart’ sanctions were successful in achieving this aim, partly because of the widespread breaches of sanctions documented in high-profile reports from the UN itself (Haufler, 2010: 407). This failure made it clear that something else needed to be done, and the ones taking up this task were NGOs.

In 1998 and 1999, two non-governmental organizations drew attention to the fact that companies and business were facilitating conflict. Global Witness wrote a report about the involvement of oil companies and banks in the conflict in Angola (Grant and Taylor, 2004: 389), and Ian Smillie of the Partnership Africa Canada linked diamonds to bloodshed in Sierra Leone (Haufler, 2010: 407). These campaigns together framed the issue in terms of ‘conflict diamonds’ and merged into a larger transnational campaign that also drew the attention of consumers and policymakers (ibid.). De Beers was the main target of Global Witness, as they considered it ‘the giant’ of the diamond industry and wanted to expose its illegal purchases of Angolan diamonds at a time when rebels had a monopoly on the bulk of Angola’s diamond exports (Grant and Taylor, 2004: 389). It was highly unlikely that De Beers was not sourcing their diamonds from these rebel-controlled mines.

The transnational campaign against conflict diamonds was strengthened by the fact that it coincided with a growing interest and attention in environmental and social issues, and a so-called ‘corporate accountability movement’ (Haufler, 2010: 407). An important process in the 1990s was the rise of transnational activism in general, accompanying economic globalization (ibid.). This made it an easier climate for the campaign against conflict diamonds to gain momentum by linking its aims with more general views of justice and environmental issues. The way in which the issue of conflict diamonds was quickly becoming an international issue and the way in which the topic was raised contributed to the speed with which NGOs, corporations, and governments came together to try to resolve this growing major human security concern (Grant and Taylor, 2004: 385-386). Because of Global

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18 Witness’s discovery that diamonds funded many of Angola’s rebel activities the United Nations Security Council adopted Resolution 1173, which sought to prohibit the direct or indirect export of unofficial diamonds from Angola (Grant and Taylor, 2004: 389). This, it was believed, would make sure that no diamonds were sold that benefitted UNITA, since they would not be accompanied by an official certificate of origin (ibid.). In practice, however, it proved impossible to prevent illegal diamonds from being traded, facilitated by corrupt practices in neighbouring countries and inconsistent use of the certification (ibid). The United Nations Security Council Resolution can therefore not be seen as a success in curbing the trade in illicit diamonds. Interestingly enough, this certification principle is also an important part of the initiative that was born out of the failure of the UN sanctions (Haufler, 2012: 13). This suggests that the focus on transparency of origin was not regarded as part of the failure.

In 2000, Global Witness and the campaign by Fatal Transactions against conflict diamonds were strengthened by the publication of a Partnership Africa Canada report that demonstrated the way in which the war in Sierra Leone had become a cover-up to engage in illegal profit-making schemes around diamonds (Grant and Taylor, 2004: 392). This report, combined with previous campaigns by NGOs and civil society pressure, as well as hearings in the US Congress, led to what became known as the Kimberley Process (ibid.). Other countries in the region, such as Guinea and Cote D’Ivoire, also tried to impose their own national certification schemes. However, it was apparent to a number of countries that national certification schemes would only form a thin patchwork and would be insufficient to tackle conflict diamonds (Wright, 2004: 698). It was generally agreed upon that a global certification scheme was needed. This, at the time, revolutionary program will be discussed in the next chapter.

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3. The Kimberley Process Certification Scheme

The previous chapter ended at the point where the first steps were about to be set towards the establishment of the KPCS. The first section of the present chapter will provide the reader with the history of the creation of the KPCS. The second section will explain its structure, institutional design, and main objectives. The final section discusses the different stakeholders within the KPCS.

3.1 The history of the KPCS

The Kimberley Process began in May 2000 as a series of meetings among 38 governments, several NGOs, and representatives from the diamond sector to solve the problem of conflict diamonds. The goal was to create a system of regulations and safeguards that would prevent the trade in conflict diamonds (Grant and Taylor, 2004: 387). The process’s name comes from the location where the meetings took place: Kimberley, a central place in South Africa’s diamond mining industry. ‘Eventually, more than 70 governments joined to create the Kimberley Process Certification Scheme , which began in 2003, to regulate the international trade in rough diamonds’ (PAC, 2006: 1). The process quickly gained momentum, mostly due to early support from the United Nations and the participation of diamond industry giants, such as De Beers and the World Diamond Council (Grant and Taylor, 2004: 387). As discussed earlier, De Beers was a very important player in the diamond sector at that time, and KPCS would have been unimaginable without its participation. The creation of the KPCS was propelled forward by the intersection of multiple global norms, such as norms of

corporate social responsibility and humanitarian intervention, with a hierarchical industry structure and strong market incentives (Haufler, 2010: 407). These characteristics have contributed to the speed and relative ease with which the KPCS was created and implemented to curb the illicit trade in conflict diamonds.

3.2 Structure, institutional design, and objectives

The Kimberley Process is an industry-based certification scheme that depends on rules on export and imports that member states implement through their domestic legislation and that is designed to track rough diamonds (Haufler, 2010: 404). The goal of this tracking is to prevent diamonds from conflict zones from entering legitimate world markets (ibid.). The private sector had a key role in designing and implementing the rules, which is often the case with such global voluntary regulatory systems (ibid.) At the same time, the process also

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20 included extensive negotiation and collaboration with other stakeholders (Haufler, 2010: 404.). ‘The KPCS also requires the governments to provide reliable production statistics so as to be able to detect smuggling and laundering. Enacting more transparency in the trade was one of the thorniest issues during the negotiations as many countries considered their statistics a state secret, and the diamond industry was initially very reluctant to provide data on their commercial secrets’ (Hale and Held, 2011: 304). This concept of transparency plays a very central role to the KPCS, and is an increasingly common approach to regulation (Hale 2008). The KPCS puts this into practice in the following way.

The core of the KPCS consists of its two principles. First, each participant must agree that no export or import of rough diamonds takes place without an accompanying Kimberley Process certificate (Wright, 2004: 699). This certificate is issued by the exporting government and signifies that the goods have been handled in accordance with the KPCS minimum

requirements (ibid.). ‘The certification is a clear and public symbol of a positive reputation, to be highlighted to consumers, activists, and public officials’ (Haufler, 2010: 411). Second, the participants agree not to trade in rough diamonds with non-participants (ibid.). These two measures together should then ensure that no conflict diamonds enter the legal diamond trade. Chapter five provides a more elaborate account of the rules, in the analysis of the Core

Document of the KPCS.

3.3 Stakeholders and responsibilities

Because the KPCS is a transnational public-private regime, many different actors play a role in the functioning of the regime. An important characteristic of the KPCS is that in its

standards, ‘participants’ are governments of countries. One exception is the European Union, which is represented by the European Commission. Once these participants enter the KPCS, they are responsible for ensuring compliance with the minimum standards formulated by it. These standards describe the way in which each member is supposed to handle the import and export of rough diamonds into and from its territory, and the internal controls that need to be in place to ensure that no illegal sales enter the domestic trading and processing (Wright, 2004: 699). In addition, participants are expected to achieve various levels of transparency, monitoring, and co-operation between members (ibid.). Participants’ motivations for entering the KPCS mostly reflect national interests.

The diamond industry is the second important actor of the KPCS. Their main

motivation to develop a global certification system was the possible harm conflict diamonds could do to the image of diamonds (Haufler, 2012: 13). This could result in negative

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21 consumer response and a decline in sales. The KPCS Core Document states that a parallel and complementary system of self-regulation is adopted by the industry worldwide, which

consists of four elements: a code of practice, a system of warranties, the maintaining of records of purchases and sales, and the use of independent auditors to control these first three elements (Wright, 2004: 700-701). It is important to note that this system of business self-regulation is voluntary and is a separate track from the implementation of national legislation by the participant governments. It is an industry initiative and it runs parallel to the KPCS, without being an actual part of it. So while the diamond industry is an actor within the KPCS, their system of warranties (SoW) exists outside of the KP.

The third actor that played an important role during the negotiation process is civil society. Mainly represented by Global Witness and Partnership Africa Canada in the beginning, civil society found itself potentially redundant once the agreement was adopted (Wright, 2004: 701). The leading NGOs involved in the KPCS decided to focus their attention on helping to develop greater monitoring and transparency of and within the KPCS and at the same time maintain pressure on the industry to fulfil the requirements of the voluntary

program (ibid.). This resulted in an observer status for civil society within the KPCS. Thus, it is important to consider that the KPCS is a combination of rules and regulations for participating governments and a voluntary program for industries. The consequences of the structure discussed in this section will be analysed in the empirical chapter, with regard to theories on transparency, accountability, and legitimacy. These theories will first be introduced in the next chapter.

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4. Theoretical Approach to Transparency, Accountability, and Legitimacy

This chapter explains the theoretical framework this research is set in. It first discusses the concepts of transparency, accountability, and legitimacy. Then, it addresses the conditions for accountability and legitimacy in this context. The chapter concludes by formulating the framework for analysis of the KPCS’s effectiveness.

4.1 Transparency

Transparency can be roughly defined as the disclosure of information, which means being open and honest about a certain process that is being regulated. The focus on transparency builds upon the earlier right-to-know movements, originating in the US and other advanced industrialized democracies, but now spreading around the globe to other nations and

transnational institutions (Mol, 2010: 132). Transparency is a powerful tool in two ways. First, it gives third parties access to the business of a certain company or government department, which makes it a lot easier to keep track of their behaviour and hold them accountable in case of any breeches of agreements. Second, when a business or government agrees to be transparent, this means they are explicitly committing themselves to cooperate in addressing a certain issue.

The role that transparency plays in governance depends on the type of transparency that applies. Mitchell distinguishes two different types of transparency, namely ‘transparency for governance’ and ‘transparency of governance’ (2011: 1888). The first focuses on policies designed to induce more socially desirable behaviour rather than on policies designed to improve the accountability of governance institutions, which is the focus of the latter (ibid.).Transparency for governance can consist of either disclosure- or education-based transparency (ibid.). Disclosure-based transparency means providing some interested public with information about a targeted actor’s behaviour with the intention that the response of that public will prompt new behaviours from the targeted actor (Mitchell, 2011: 1883). Education-based transparency, by contrast, operates by providing targeted actors with information about their own behaviour with the intention that this information will prompt those actors to adopt new behaviours (ibid.). Within the KPCS, disclosure-based transparency is of central

importance, since the aim is not to directly change the targeted actors’ behaviour. The targeted actors are not necessarily the same as the participants. Targeted actors are often companies operating within and across the borders of participant countries, such as De Beers. The KPCS depends on disclosure-based transparency, because it asks companies to provide

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23 information about their behaviour to the ‘public’, which in the case of the KPCS consists of other participant countries, industry, and observers from civil society.

Mitchell (2011) addresses the varying conditions under which transparency-based policies can enhance governance effectiveness, and whether the perceived accountability and legitimacy of such policies have a prominent role to play in determining their effectiveness. He shows that, under certain conditions, a logic of appropriateness grounded in widely accepted notions of legitimacy and accountability, can drive improved performance. Yet, the conditions under which this may occur remain crucial to elaborate, to avoid making a too-quick link between legitimacy and effectiveness of transparency-based policies (Biermann and Gupta, 2011: 1861). A focus on transparency in governance initiatives is effective only when the initiatives meet certain conditions of accountability and legitimacy. Margulis and Porter have stated that transparency is promoted as a solution to a wide range of problems, including issues in the extractive industries, but that this reliance on transparency is seriously problematic (2013: 73). They state that this focus advocates a reliance on a process of

information dissemination, which obscures the deficiencies of that process itself, such as the significance of material and political practices that operate independently of the information dissemination process (ibid). Transparency can in this way help to produce and legitimise bad practices (ibid.). Having a strong focus on transparency without devoting enough attention to the process, can thus be an obstacle to ending the illicit trade in conflict diamonds.

As discussed in the research framework of this paper, Brown emphasises that to achieve government that is more accountable, transparency should not be a goal in itself. Brown argues that in trying to improve natural resource management, we should look beyond the ‘means’ and concentrate on the ends (Brown, 2013: 7). The means, then, are transparency of payments and supply-chain management of conflict minerals, while the ends are

accountability, equitable distribution of revenues, and public participation in decision-making, (ibid.). Therefore, accountability is the second important concept discussed in this research.

4.2 Accountability

Both accountability and legitimacy are concepts that are often ill defined, and sometimes used interchangeably in academic research and policy debates (Biermann and Gupta, 2011: 1857). In order to avoid this conceptual confusion, the following conceptualizations structure this research. Accountability refers to the willingness to accept responsibility, to account for one’s actions (ibid.). Biermann and Gupta identify four elements of accountability: 1) a normative

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24 linking those who are held accountable to those who have the right to hold to account; 3) a

decision element, a judgment of those actors who may hold other actors accountable about

whether the expected standard of behaviour has been met; and 4) a behavioural element, that allows the governing actor to sanction deviant behaviour of those held accountable. All these elements need to be present in a sufficient degree to make any accountability relationship meaningful (Biermann and Gupta, 2011: 1857). An important condition for these elements to work as an evaluator of accountability is the availability of information about whether the institution is meetings the standards. Only actors that are informed about the decision-making process are able to voice their concerns and exert their monitoring function (Take, 2012: 225). This means that a degree of transparency is essential to any form of accountability (Buchanan and Keohane, 2006: 426), which runs through all four elements. These four distinguished elements guide the assessment of the accountability of the KPCS in this research.

4.3 Legitimacy

The final concept that needs more explanation is legitimacy. Legitimacy can derive from different characteristics of a governance initiative. According to Scholte, the multi-stakeholder Kimberley Process owes its legitimacy largely to the morally right cause of suppressing trade in so-called ‘conflict diamonds’ (2011: 116). In addition, Bernstein (2005) states that legitimacy consists of two core elements, namely the acceptance and the

justification of authority. Here, acceptance relates to the way in which rules and institutions are accepted by a community as being authoritative, while justification relates to the reasons that justify the authority of certain rules or institutions (ibid.). Here a distinction of two types of legitimacy, originally developed by Scharpf is useful: input and output legitimacy: ‘input legitimacy refers to the procedural characteristics of a rule-setting process, while output legitimacy refers to acceptance of the rules because of their (perceived) ability to solve problems’ (Biermann and Gupta, 2011: 1858). Input legitimacy occurs at the implementation of a particular initiative while output legitimacy is determined by whether the initiative

achieves something. ‘Transnational and private governance arrangements in particular depend on the voluntary cooperation of rule-addressees to be effective and therefore must generate legitimacy from within in order to enforce their rules’ (Take, 2012: 220). However, the

capacity of governance initiatives to enforce rules and solve problems in an effective way also depends on their acceptance as legitimate actors in the view of their stakeholders (Take, 2012: 221). This indicates that input and output legitimacy are intrinsically linked in determining the effectiveness of governance arrangements. It is clear that this distinction is of vital importance

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25 in assessing the legitimacy of the KPCS, since while its input legitimacy might be very high, the output legitimacy depends on whether the certification actually achieves its goal.

A focus on output legitimacy – that governance mechanisms are accepted as legitimate as long as they are perceived to be fulfilling the policy goals that they were created for, regardless of the quality and inclusiveness of decision-making– raises two issues. How to measure input and output legitimacy is discussed in section 4.5 of this chapter, which introduces the chosen framework for the analysis of the effectiveness of the KPCS.

4.4 Conditions for accountability and legitimacy

Key debates on transparency in political science surround the potential for transparency to improve the legitimacy and accountability of global governance (Auld and Gulbrandsen, 2010: 97). They bring to light an ‘oft noted legitimacy trade-off’, namely that more

transparency and increased participation stimulates buy-in and support, but at the same time slows down the decision-making process and can potentially hinder timely action on policy problems (Auld and Gulbrandsen, 2010: 98). An important component of transparency for certification programs such as the KPCS is outcome transparency. This means that the focal actors are those being regulated, so, in this case, countries that are certified through the KPCS. Information about their activities disclosed to the public and stakeholders can enhance

accountability and legitimacy (Auld and Gulbrandsen, 2010: 100). Accountability will increase because NGOs report on whether companies are accounting for their practices and performance. So ‘if a significant amount of information about a given practice is publicly available, then that practice becomes potentially accountable to a broad set of actors and values, at least in that it is subject to their criticism’ (Meidinger, 2006: 82). If that auditing and monitoring convinces relevant audiences that assessments are credible, this can improve the legitimacy of the system of monitoring practices (Auld and Gulbrandsen, 2010: 101). Furthermore, because this system increases information about the practices of certified companies, outcome transparency can influence behavior and may facilitate relevant improvements (ibid.). Herein lies the potential of outcome transparency in increasing

effectiveness. This does depend on whether these auditing and monitoring bodies are present and functioning.

Haufler analyzes the KPCS by using ‘club theory’, as proposed by Potoski and

Prakash as a new framework to studying voluntary programs (2009: Preface). A club provides members of that club with shared, group benefits that are not available to non-members (ibid.). Voluntary programs resemble clubs, because they offer a benefit that firms receive

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26 from their stakeholders, while that benefit is not available to firms outside the program, so that clubs can require firms to incur the costs of taking progressive action (Potoski and

Prakash, 2009: Preface). However, once members have joined the club there is an incentive to free ride and benefit from the club’s brand without paying the costs of adhering to its rules. Therefore, clubs need mechanisms to monitor and enforce club rules in order to be effective (ibid.). Whether these are present in the functioning of the KPCS is discussed in the next chapter.

Transparency is another important element of accountability relationships, and the transparency of governance processes and outcomes is often assumed as a precondition for more accountable and legitimate governance (Biermann and Gupta, 2011: 1858).

Transparency is widely assumed critically important to the search for more accountable and legitimate earth system governance (ibid.). This assumes a significant role for NGOs as ‘watchdogs’ in the KP. However, since the main contributing NGO Global Witness has left the program, it is questionable whether the KPCS can still derive legitimacy from this institutional element of the program. Whether sufficient control mechanisms and legal systems are in place to ensure a positive relationship between transparency, accountability, and legitimacy in the KP is discussed in the analysis chapter that follows, chapter 5.

4.5 Framework of analysis of the KPCS’s effectiveness

The discussion above has brought to light various dimensions of the relationship between transparency, accountability, and legitimacy. From this, an inquisitive framework is deduced in which the analytical choices made for this research become clear. First, in the empirical analysis, the degree to which transparency is a central focus of the KPCS is informed by the mentioning of disclosure-based policies in its certification standards. Second, to assess the accountability of the KPCS, the four elements introduced by Biermann and Gupta are used: normative, relational, decision and behavioural. Third, the legitimacy of the KPCS is assessed by searching for indicators of input and output legitimacy. After this analysis of the KPCS standard, the next chapter will scrutinise the performance of the KPCS in practice. This will bring to light whether the conditions for an effective transparency-based policy as presumed by the theoretical discussion are in fact met by the KPCS and if it is therefore effective.

Effectiveness

Since this research aims to say something about the effectiveness of the KPCS, we need an operationalisation of effectiveness as a concept. As discussed earlier, the goal of the KPCS is

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27 to ‘influence the course of war and peace through a multi-stakeholder approach that attempts to harness the power of the private sector’ (Haufler, 2010: 404). In practice, this means to track rough diamonds and prevent those from conflict zones from entering legitimate world markets (ibid.). Intuitively then, effectiveness would be determined by whether the KPCS has in fact achieved a conflict-free legitimate diamond trade. However, as Hale and Held suggest, we can assess the effectiveness of a given mechanism more pertinently by considering how the governance outcome differs from the likely outcomes of having no governance, or from potentially feasible alternatives (2011: 24). In that way, the mechanism is not just compared to some hypothetical ideal of a conflict-free world. However, it is methodologically difficult to gain empirical information on this counterfactual situation, since truly comparable

examples are few (Hale and Held, 2011: 25). Therefore, ‘thoughtful, context-rich, and

theoretically guided analysis is typically the best way to assess effectiveness’ (ibid.). With this in mind, the present research is based on the following theoretical framework.

Transparency

Different dimensions of transparency have been discussed so far. Given the importance of disclosure-based transparency for the KPCS, the mentioning of disclosure of information is seen as an indicator of a focus on transparency. The degree of transparency improves when relevant information is available to stakeholders, debates about standards and decisions are publicly available and it is clear who makes the decisions (Take, 2012: 225). Further, the analysis aims to discover whether transparency is seen as a means or as an end within the KPCS. As we have seen in the theoretical discussion of the relationship between transparency and effectiveness, what both indicators mean for the effectiveness of the KPCS, depends on the degree of accountability and legitimacy. Therefore, the indicators of transparency are a) the mentioning of information-disclosure, b) the availability of information to stakeholders and c) whether transparency is seen as a means or an end.

Accountability

As discussed earlier in this chapter, the accountability of the KPCS depends on the presence of the following four elements:

1) A normative element, a standard of behaviour defined with sufficient precision 2) A relational element , linking those who are held accountable to those who have the

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28 3) A decision element, a judgment of those actors who may hold other actors accountable

about whether the expected standard of behaviour has been met

4) A behavioural element, that allows the governing actor to sanction deviant behaviour of those held accountable.

The analysis searches for these elements in both the Core Document as well as in the empirical data on the performance of the KPCS in practice. In order to safeguard

accountability, the KPCS needs monitoring and control mechanisms that compel actors to inform, explain, and justify their behaviour and thus add to their accountability (Take, 2012: 225). To fulfil their functions, these mechanisms should be clearly structured, adopted to specific circumstances, and provided with the necessary resources (ibid). Another important condition is that an independent authority carries out the detection of breaches and that affected actors cannot influence this process (ibid.). In addition, there should be

institutionalised procedures of sanctioning in case of non-compliance such as loss of reputation or exclusion from the organization (Take, 2012: 226). The different indicators of accountability chosen for this research are summarised in the following table (figure 1).

Monitoring and control Sanctioning

Low Internal self-control of the

organization and rule-addressees; first party monitoring; no onsite-inspections

Complaint procedures applying only to rule-addressees; available only to members; governance abstains from sanctions

Middle Internal control; second party

monitoring including announced onsite-inspections; restricted by lack of resources

Complaint procedures only for rule-addressees; access to procedures not open to external stakeholders; independent dispute settlement body available but no capacity for punishment; weak willingness to apply sanctions

High External control; third party

monitoring of rule-addressees including onsite-inspections; adequate resources for execution; no influence affected actors

Detailed complaint procedures open to all stakeholders; independent dispute settlement body; possibility, willingness and capacity for substantial

punishments (i.e. loss of reputation, exclusion) Figure 1: indicators of accountability

Legitimacy

As discussed, both input and output legitimacy play an important role in the analysis of the effectiveness of the KPCS. This section explains which indicators the analysis uses to measure these different dimensions of legitimacy. First, the input dimension deals with the questions who makes the decisions and who is represented in the decision-making process

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29 (Take, 2012: 223). The degree of input legitimacy depends on the representativeness of

stakeholders in the decision-making process, the level of political equality, and the degree of consensus-orientation (Take, 2012: 224). These three indicators can be achieved to a high, middle, or a low degree, as summarized in the following table (figure 2).

Representativeness Political equality Consensus orientation Low

Several stakeholders excluded

Different stakeholders endowed with graduated participation rights

Principle of unanimous vote only in certain bodies of organization

Middle

Informal participation rights for all stakeholders

Rights are equal but no resources for poor stakeholders available

Consensus-orientation covering only the organizational level

High

Formal participation rights for all stakeholders

All stakeholders equal participation rights; financial support for stakeholders with weak resources

Multi-level adherence to the principle of unanimous vote

Figure 2: indicators of input legitimacy

The second type of legitimacy relevant for the framework is output legitimacy. Output

legitimacy is the degree to which a governance initiative succeeds in generating acceptance by stakeholders and thus motivates them to follow the rules (Take, 2012: 229). Similar to input legitimacy, output legitimacy is also measured on a scale. Whether a high, middle, or low degree is achieved depends on the amount of positive statements by stakeholders, the number of actors that submit voluntarily to the rules, and whether measures of rule-implementation are taken (ibid.). This means that no proof of output legitimacy exists in the KPCS Core Document, as it is something that only appears empirically.

Now that a clear set of indicators is available, the empirical analysis can follow. These indicators were used to structure both the document analysis and the interviews that inform this research. They will also shape the structure of the report of this analysis, which follows in the next two chapters. Chapter 5 discusses the analysis of the KPCS Core Document, while chapter 6 will do the same for the KPCS in practice.

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5. The KPCS on paper: the Core Document

This chapter uses the framework from the previous chapter to analyse the transparency, accountability, and legitimacy of the KPCS on paper. As discussed, effectiveness partially depends on the accountability and legitimacy of a particular governance initiative.

Transparency can increase the accountability and legitimacy and for that reason plays an important role in the KPCS. The role of these concepts in the KPCS Core Document is what this chapter discusses. To do so, the sub-questions as introduced in the research framework are addressed: 1) to what extent is the focus on transparency in the KPCS Certification Standards; 2) what does this mean for the KPCS’s accountability and legitimacy; and 3) does the KPCS meet the conditions for effective transparency-based policy?

5.1 Transparency

This section reports on the three indicators of transparency from the framework: the mentioning of disclosure of information (a), the degree to which relevant information is available to stakeholders (b), and whether transparency is seen as a means or an end (c).

a) Mentioning of information-disclosure

The content and standards of the KPCS are formulated in the ‘Kimberley Process

Certification Scheme Core Document’, which was the final outcome of the negotiations.5

This document summarises what the different actors at the negotiation table agreed on. It consists of both rules and regulations, and expectations and recommendations for implementation. There are two basic requirements inspired by the belief in transparency. First, the document states that participants in the KPCS must ensure that a certificate stating the origin of the diamonds accompanies each container of rough diamonds. The origin of the diamond must indicate that the diamond is from a legitimate mining area and that its extraction and or has not contributed to violence by rebel groups. If they have, the diamonds are not to be certified and cannot be exported. Second, the participants must comply with the disclosure-standards in the document. This includes providing information to the other participants about the

authorities that are responsible for implementation of the certification scheme and its relevant laws, regulations, rules, procedures, and practices (KPCS Core Document, 2002: 8). In addition, participants should make available ‘reliable and comparable data on the production and the international trade in rough diamonds [as] an essential tool for the effective

Conflict diamonds are forever? : the role of transparency in the effectiveness of the Kimberley Process Certification Scheme