My note here starts with: “My Lords”. I am also addressing the public, but I am glad that the Deputy Chairman of Committees is also present, so the term applies most appropriately.
During the 1990s, the trade in conflict diamonds was a significant cause of instability, particularly in Africa. The Kimberley Process Certification Scheme is an important tool for reducing conflict, in Africa and elsewhere. Great strides have been made since its inception in 2002, and today more than 99% of the global supply chain of rough diamonds is certified as conflict-free.
From the beginning of the Kimberley process, the United Kingdom has been represented by the European Union. Together with our European partners and other participants, the UK has been active in our support of the Kimberley process and its principles: to increase transparency, to ensure trade is limited to Kimberley process participants, and, importantly, to apply effective controls.
The Kimberley process is not a treaty and has no basis in international law. Instead, it is simply a grouping of interested states—the “participants”—that have decided to enact domestically a uniform process for verifying the trade in rough diamonds at their borders. They then made the political decision to permit the trade in rough diamonds only with similarly minded states to establish the Kimberley process. The legal effects of the Kimberley process come from domestic legislation, hence this legislation is essential if we are to continue to participate in the process after we leave the European Union—as we intend to do.
As noble Lords will be aware, until 29 March 2019, the UK remains a full EU member state, subject to all the rights and obligations of membership. Those include trade arrangements that fall within the EU’s common commercial policy, including the Kimberley process. Under the terms of the withdrawal agreement, we have agreed with the EU that it will notify international partners that the UK is to be treated as a member state during the implementation period. This would mean that the UK would continue to participate, represented by the EU, and the UK trade in Kimberley process-compliant rough diamonds would continue. In the event that we are unable to enter into an implementation period, our participation through the EU would end and UK trade would be frozen until our application for participation was approved by other participants in the Kimberley process.
In either case, the legislation would ensure that we continue to comply with the requirements of the Kimberley process. It would secure our borders, prevent any non-compliant rough diamonds from entering the UK supply chain and send a strong message to would-be smugglers that the United Kingdom is not a recipient of conflict diamonds. It would also reassure the Kimberley process body of the UK’s commitment to the scheme, ahead of our application for independent participation. The instrument does not undermine the wider EU withdrawal negotiations, nor does it assume no deal. Instead it lays the groundwork for our future relationship with, and independent participation in, the Kimberley process. Essentially, it enables business as usual.
This matters because maintaining our relationship with the Kimberley process is an intrinsic element of our international commitments to conflict prevention. It is also pivotal in how we support UK business to operate responsibly in post-conflict and other difficult environments. The Kimberley process is not perfect, but as an independent participant, the UK will maintain our commitment to the ongoing reform process and continue to be an active and collaborative partner.
Some noble Lords have noted that a significant portion of UK trade in rough diamonds could fall away once we have left the EU. The reality is that, given the structure of the UK rough diamond market, trade statistics can be misleading. UK exports in rough diamonds outside the EU were valued at £67 million in 2017. We expect this to continue at around this level once we have left the EU.
The Government Diamond Office implements the Kimberley process in the UK, and is working closely with Border Force to ensure we meet the minimum standards set by the process. We are a well-respected participant in the Kimberley process as an EU member state and can expect to remain so as an independent participant. We have already informed the EU of our intention to initiate our application. Demonstrating that we have appropriate legislation in place is a fundamental part of that application process. That is the purpose of this instrument. Once passed, it will apply even if we are not a participant immediately at the point that the UK leaves the European Union, or after any implementation period.
Last week, this instrument was considered and approved by the other place—introduced by my right honourable friend the Minister of State for Europe and the Americas, Sir Alan Duncan—and has been approved. I welcome this opportunity to hear the views of the noble Lord on this draft order. I beg to move.