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<title>CANADA TO CHAIR INTERNATIONAL PROCESS FOR CURBING TRADE IN CONFLICT DIAMONDS</title>
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<p><font size="+1"></font><font size="+1"><strong>October 31, 2003 <em>(9:40 a.m. EST)</em> No. 166</strong></font></p>
<p align="CENTER"><font size="+1"><strong>CANADA TO CHAIR INTERNATIONAL PROCESS FOR</strong></font></p>
<p align="CENTER"><font size="+1"><strong>CURBING TRADE IN CONFLICT DIAMONDS</strong></font></p>
<p>Foreign Affairs Minister Bill Graham and Herb Dhaliwal, Minister of Natural Resources, today announced that Canada has
accepted to chair the Kimberley Process (KP), beginning January 1, 2004.</p>
<p>The KP is a South African-led international initiative to curb the global trade in conflict diamonds. Conflict diamonds
originate in areas controlled by rebel groups and are used to fund military action that targets governments. Tim Martin,
director of the Peacebuilding and Human Security Division at the Department of Foreign Affairs and International Trade
(DFAIT), will succeed South Africa's Abbey Chikane as the new chairperson of the Process.</p>
<p>"This chairmanship is an endorsement of the leadership role that Canada has played in developing measures to fight the
global trade in conflict diamonds," said Minister Graham. "We welcome progress by participants in implementing the KP
Certification Scheme and remain committed to ensuring that the system advances human security while protecting the
legitimate diamond trade."</p>
<p>"I am very pleased that the international participants of the Kimberley Process have selected Canada to chair this global
initiative in 2004," said Minister Dhaliwal. "We look forward to working with all participants to ensure the credibility and
momentum of the Process as we move forward."</p>
<p>Both ministers praised the remarkable progress that had been achieved under the stewardship of South Africa.</p>
<p>Canada was selected to assume the new role at a KP plenary session in Sun City, South Africa, taking place from October
29 to 31. At the session, participants reviewed progress on the implementation of the Certification Scheme, including
statistical reporting. They also developed guidelines for a peer review mechanism.</p>
<p>Canada is one of 46 international participants in the KP (see full list in attached backgrounder). DFAIT leads Canada's
involvement in the KP in close consultation with Natural Resources Canada, which is responsible for domestic
implementation of the Certification Scheme.</p>
<p>The KP has brought together governments, representatives of the diamond industry and non-governmental organizations
since May 2000 to curb the trade in conflict diamonds. In March 2002, KP participants agreed to implement an
international certification scheme for rough diamonds to help ensure they would be importing and exporting only
conflict-free diamonds. The Scheme, which includes measures such as exporting rough diamonds in tamper-resistant
containers and providing validation certificates, was officially launched on January 1, 2003.</p>
<p>This year, Canada became the world's third largest producer of diamonds by value, after Botswana and Russia. Canada
exports its entire production of diamonds for sorting. Some gem-quality diamonds are returned to Canada in support of a
growing cutting and polishing industry.</p>
<p>Further information is available at <a href="https://bac-lac.wayback.archive-it.org/web/20070221101652/http://www.nrcan.gc.ca/kimberleyprocess">http://www.nrcan.gc.ca/kimberleyprocess</a> or at the Kimberley Process Office, Natural
Resources Canada, 10A7, 580 Booth Street, </p>
<p>Ottawa, Ontario K1A 0E4 (tel: 613-996-0947; fax: 613-943-2079; </p>
<p>e-mail: <a href="https://bac-lac.wayback.archive-it.org/web/20070221101652/mailto:kpc-cpk-Canada@nrcan.gc.ca">kpc-cpk-Canada@nrcan.gc.ca</a>).</p>
<p>- 30 -</p>
<p>A backgrounder is attached.</p>
<p>For further information, media representatives may contact:</p>
<p>Isabelle Savard</p>
<p>Director of Communications</p>
<p>Office of the Minister of Foreign Affairs</p>
<p>(613) 995-1851</p>
<p>Media Relations Office</p>
<p>Department of Foreign Affairs and International Trade</p>
<p>(613) 995-1874</p>
<p>Alexandra Muir</p>
<p>Office of the Minister of Natural Resources</p>
<p>(613) 947-8246</p>
<p>Ghyslain Charron</p>
<p>Media Relations</p>
<p>Natural Resources Canada</p>
<p>(613) 992-4447</p>
<p>This document is also available on the Department of Foreign Affairs and International Trade's Internet site:
<a href="https://bac-lac.wayback.archive-it.org/web/20070221101652/http://www.dfait-maeci.gc.ca/">http://www.dfait-maeci.gc.ca</a></p>
<p align="CENTER"><strong><font size="+1">Backgrounder</strong></font></p>
<p align="CENTER"><font size="+1"><strong>THE KIMBERLEY PROCESS AND CANADA'S DIAMOND INDUSTRY</strong></font></p>
<p><strong>Introduction</strong></p>
<p>Canada is playing a leadership role in international efforts to end the trade in conflict diamonds, which has had a
devastating impact on peace and human security in several African nations, including Angola, Sierra Leone and the
Democratic Republic of the Congo.</p>
<p>Unlike the legitimate trade in rough diamonds, which benefits several developing and developed economies, including
Canada's, conflict diamonds originate in areas controlled by rebel groups and are used to fund military action that targets
governments. However, the illicit trade in conflict diamonds represents a very small percentage of the world's rough-diamond trade.</p>
<p>Canada has actively promoted efforts at the United Nations and with the G8 countries to curb the illicit trade in conflict
diamonds. Most recently, Canada has assumed a more prominent role in the Kimberley Process (KP) by accepting to chair
the Process beginning in January 2004.</p>
<p><strong>The Kimberley Process</strong></p>
<p>The Kimberley Process was initiated by South Africa in May 2000 to develop an international certification scheme for
rough diamonds to prevent conflict diamonds from entering legitimate markets. Currently chaired by the Government of
South Africa, the Process brings together a broad range of international stakeholders in the diamond trade, including
government officials, industry representatives and non-governmental organizations.</p>
<p>At a KP meeting held in Ottawa in March 2002, participants finalized proposals for an international certification scheme for
rough diamonds. Under the Scheme, participants are required to export rough diamonds in tamper-resistant containers and
provide certificates validating that their diamond exports are conflict-free. Participants are also prohibited from
importing/exporting rough diamonds from/to countries not implementing the Scheme.</p>
<p>KP participants officially launched the Scheme on January 1, 2003. To date, 46 international participants--representing
more than 98 percent of the world's diamond trade market and including Canada, the United States and the European
Community--have been deemed fully compliant (see complete list at end of document).</p>
<p>At the plenary session in Sun City, South Africa (October 29 to 31), KP participants developed guidelines for a peer review
mechanism that will help ensure effective implementation of the Scheme.</p>
<p><strong>Canada and the Kimberley Process</strong></p>
<p>Canada's overarching goal vis-à-vis the KP is to ensure that the Certification Scheme advances human security while
protecting legitimate diamond trade. To this end, Canada is actively implementing the Scheme under the Export and Import
of Rough Diamonds Act, which was passed in December 2002.</p>
<p>The Department of Foreign Affairs and International Trade leads Canada's involvement in the KP in close consultation
with Natural Resources Canada, which is responsible for domestic implementation of the international certification scheme.</p>
<p><strong>Canada's Diamond Industry</strong></p>
<p>Canada's first diamond mine, the Ekati mine, is located in the Northwest Territories, approximately 300 kilometres
northeast of Yellowknife. It employs 650 people and produces three to four million carats of gem-quality rough diamonds
each year. This is equivalent to nearly 4 percent of current world diamond production by weight and 6 percent by value.</p>
<p>The Diavik diamond mine, located near the Ekati mine, began operating in 2003. Three more projects--one in the
Northwest Territories, one in Nunavut and one in Ontario--could open by 2007. These five mines would provide direct
employment for about 2,000 people and could bring the value of total annual production to approximately $2 billion.</p>
<p>This year, Canada became the world's third largest producer of diamonds by value, after Botswana and Russia. Canada
exports its entire production of diamonds for sorting. Some gem-quality diamonds are returned to Canada in support of a
growing cutting and polishing industry.</p>
<p>Participants in the Kimberley Process (as of October 31, 2003):</p>
<p>Angola</p>
<p>Armenia</p>
<p>Australia</p>
<p>Belarus</p>
<p>Botswana</p>
<p>Brazil</p>
<p>Bulgaria</p>
<p>Canada</p>
<p>Central African Republic</p>
<p>China</p>
<p>Congo</p>
<p>Côte d'Ivoire</p>
<p>Croatia</p>
<p>Democratic Republic of the Congo</p>
<p>European Community </p>
<p>Guinea</p>
<p>Guyana</p>
<p>Hungary</p>
<p>India</p>
<p>Israel</p>
<p>Japan</p>
<p>Laos</p>
<p>Lebanon</p>
<p>Lesotho</p>
<p>Malaysia</p>
<p>Mauritius</p>
<p>Namibia</p>
<p>Poland</p>
<p>Romania</p>
<p>Russia</p>
<p>Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu</p>
<p>Sierra Leone</p>
<p>Slovenia</p>
<p>South Africa</p>
<p>South Korea</p>
<p>Sri Lanka</p>
<p>Switzerland</p>
<p>Tanzania</p>
<p>Thailand</p>
<p>Togo</p>
<p>Ukraine</p>
<p>United Arab Emirates</p>
<p>United States of America</p>
<p>Venezuela</p>
<p>Vietnam</p>
<p>Zimbabwe</p>
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