India wants stability in rough diamond market

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New Delhi, Nov 3 (UNI) Accepting that global financial crisis will afffect administration of the Kimberley Process, India today called for policies that will restore stability in the internatioal rough diamond market.

The Kimberley Process is a joint initiative by governments, industry and civil society to stem flow of conflict diamonds -- rough diamonds used by rebel movements to finance wars against legitimate governments.

Inaugurating the 6th plenary of the Kimberley Process Certification Scheme here, Minister of State for Commerce Jairam Ramesh said there could be tremendous volatality in prices of rough diamond in the next year or two as indicated by sharp decline of 35-50 per cent in prices by some major primary producers.

The policies to restore stability in the rough trade diamond market, he said, could include suspension of the existing 25 per cent tolerance measure in the price differential between buyer and seller.

The Kimberley Process Certification Scheme (KPCS) imposes extensive requirements on its members to enable them to certify shipments of rough diamonds as 'conflict-free'.

He suggested a permament committee for arbitration and mediation to check human and administrative errors in issue of Kimberley certificates. Sixty thousand such certificates are issued a year.

India, which holds this year's chair, pointed to what the Minister called "a somewhat helpless situation" with Venezuela having suspended itself voluntarily from the Kimberley Process although it continues to produce considerable amounts of rough diamonds.

Mr Jairam Ramesh said the world does not know what happens to these diamonds. He said the senstive Venezuelan situation is under examination but it remains to be seen how the integrity and credibility of the Kimberley process is fully protected and promoted.

On demand by some NGOs to widening scope of Kimberley Process by monitoring worldwide flow of both rough and polished diamonds and also issues of money laundering and smuggling, the Minister said this has not been mandated by United Nations and Security Council.

He said to unilaterally change this mandate would amount to infringing jurisdictions of Finance Ministries, customs authorities, anti-money laundering enforcement agencies, law enforcement agencies and fiscal authorities.

"We would be intervening in the free trade of polished diamonds around the world," he added.

The Minister reiterated India's commitment to working with African producers of rough diamonds to assist them to move up the value chain.

UNI SAA MP HT1845

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