The Kimberley Process (KP) released a report on its review visit to the Russian Federation made last year. According to the report, the visit was conducted on July 27, 2013 to August 3, 2013 and the purpose was to witness, test and verify that the Russian Federation is still in compliance with the minimum standards of the Kimberley Process Certification Scheme (KPCS). This review visit was based on the standard terms of reference for review visits practiced by KP.
The KP team was led by South Africa’s Levy Rapoo, Michael Muirhead and Jacobeth Moloisane (all from the South African Diamond and Precious Metals Regulator). The team members also included Estanislau Buio and Jose C Malanga (Ministry of Geology and Mine of Angola), Tebogo Selaelo (Ministry of Minerals, Energy and Water Resources of Botswana), Marianna Kondas (European Commission) and Mark Van Bockstael (World Diamond Council).
At the start of the review visit in Moscow, the team was met by representatives from the Ministry of Finance, Gokhran of Russia and ALROSA who accompanied the team on a visit to Mirny, a mining town in the Sakha Republic (Yakutia). This was an opportunity for the team to visit the Internatsionalny underground mine and the Nyurba mine in the Nakyn field (open cast mining).
The report says that the team also viewed the Diamond Sorting Centre (DSC) in Mirny, which is the central gathering point of all diamonds for ALROSA and subsidiary companies. A presentation from one of the state controllers from Gokhran allowed the team to follow the diamond-handling route through from mining, sorting and preliminary valuation stages to export to Moscow.
The team also visited the ALROSA United Selling Organisation (USO) and had a detailed walk-through of all diamond handling, sorting and sales departments, the report said.
The team engaged with representatives from all ministries involved in the implementation of the KPCS regarding the legislation pertaining to the governing and administration of diamond movement within the RF. There were also consultations with customs authorities.
The Russian legislation applicable to rough diamond production and trade is a complex body of legal texts, most of which existed prior to the inception of the KPCS; the Russian Federation being a major diamond producer already in preKP times, it enacted various pieces of legislation to ensure that precious metal extraction, production and circulation is carried out under strict state control, the KP team states. Therefore, at the inception of the KPCS, the Russian Federation’s internal control system was already well regulated, and required few modifications.
Almost all of the Russian Federation diamond production is by ALROSA and mined predominantly in the Sakha Republic (Yakutia). The review team visited diamond mining and processing facilities in Mirny and Nakyn field. Production is from kimberlite pipes and smaller alluvial deposits. The mine site visits were to Internatsionalny mine in Mirny (open cast mining has stopped and is now underground mining) and Nyurba mine in Nakyn field (open cast mining). At the underground Internatsionalny mine the team met with relevant mine management and was briefed on the mining operation and methods of ore extraction. After a short safety briefing, the review team descended 1000 m deep to witness the underground mining activities, from technical equipment, maintenance areas to mining excavation areas. The team was informed that the capacity of the mine is 500,000 tons per annum and the lifespan is estimated to be up until the year 2020.
The report says that the team visited both of these mines ore processing plants. Plant 16 in Nakyn field was undergoing maintenance and as such the team was unable to witness the plant in operation and see the final stage of diamond extraction. The team, however, did witness the process in action at Plant 3 in Mirny. Access to the plant is monitored by strict access points and CCTV surveillance. Operations occur in shifts and security searches are mandatory for all employees. As a result of these controls, protection of diamonds is ensured.
The integrity and compliance to the KP requirements was verified through visual inspection by means of field visits to Mirny and Nakyn field mining and recovery facilities, a visit and presentation at the Diamond Sorting Centre in Mirny, as well as during meetings held with Gokhran, the Ministry of Finance and Spicialized Customs Post in Moscow. A visual inspection of the United Selling Organisation allowed the review team to witness and pose questions on the control and monitoring systems in use in the Russian federation.
The Russian Federation recognizes that it is of paramount importance that, given the large production capacity of the Russian Federation, the mining, extraction, movement and trade of rough diamonds are efficiently monitored, the KP review team said, noting that the country has established internal systems of control designed to eliminate the presence of conflict diamonds.
This process is evident throughout their diamond pipeline of producing, exporting and importing rough diamonds within the Russian Federation. They ensure that clients and consumers can be confident that ethical, social and environmental standards have been met in the production of Russian Federation diamonds.
All employees, that the review team met with, are trained and supported to ensure that they work consistently in an ethical, honest and legal manner.
Openness and transparency was noticed in all spheres of the review. Further explanation and supporting documentation were readily made available upon request.
A week of field visits, tours, presentations and walk through of all processes left the review team exhausted but inspired. The diamond supply chain of the Russian Federation can serve as an example to all other KP participants. Based on excellent legislative guidelines, safe and secure mining, processing and sorting facilities coupled with a strong system of controls for regulation, the review team found the Russian Federation to be fully compliant and exceeds the minimum requirements of the Kimberley Process Certification Scheme.
The review team should note that the Russian Federation did not implement the recommendation of the previous review visit on imposing stronger penalties for shipments without a certificate, although the current practice of returning the shipment complies with KPCS minimum requirements. Nevertheless, it would be more dissuasive for importers to face fine, confiscation, or other penalties when attempting an import without a certificate, and confiscation would prevent them from attempting re‐import into another KP Participant.
Taking into full consideration that the trade in conflict diamonds is a matter of international concern, the review team is satisfied that the Russian Federation is playing its part and is doing due diligence through its high standards of business practices.
