Multi-Stakeholder Negotiations in the 21st Century

Traditional diplomacy is confronted with a big 21st century challenge: How to bring civil society and business into the decision making process. To meet this challenge, diplomacy must be democratized.

The only way to achieve that is to adapt to an inclusive, multi-stakeholder negotiating process. Civil society refuses to be held at arm’s-length. Why should it? Its concerns can energize and mobilize public opinion to demand a role in negotiations and, ultimately, all legitimacy springs from it anyway.

“Inclusive, multi-stakeholder negotiation process” is a mouthful by any standard. The relevant question is how it can work in practice. The best example is the case of Blood Diamonds Kimberley Process, started in Kimberley, South Africa, and so-called because of its inaugural meeting place. This negotiation is a leading example of 21st century negotiations and inclusive, multi-stakeholder talks.

Representing a small segment of only 4% of the market, these diamonds could threaten the entire industry. Only with strong leadership could the stakeholders – governments, industry and civil society – build mutual trust among themselves and conclude long-lasting and effective agreements.

The Diamond Age of wars

Diamonds may be forever, but at the turn of the century they were fueling conflict in Africa. Although the United Nations banned exports from Sierra Leone, Angola and Liberia, UN sanctions had seemingly little practical effect. Frustrated with the lack of progress, NGOs representing civil society captured public imagination and mobilized to target corporate culpability in African wars.

The preciousness of diamonds, characterized by the Economist magazine as the world’s most sophisticated illusion, was threatened. The story of conflict diamonds is one of rebels, financed by diamonds, fighting against legitimate governments. The end of that illicit financing came through a rare collection of NGOs, diamond dealers, governments and individuals determined to forge a strong, effective ban on blood diamonds.

In the 1990s, diamond revenues formed the financial backbone of UNITA rebels’ offensives that claimed the lives of more than 500,000 Angolans and displaced another 4,000,000 in the 1990s. At the rebel headquarters in the central highlands of Angola, UNITA leader Jonas Savimbi personally haggled with arms merchants and diamond traders who flew in from Europe.

With an estimated $3 billion in legal diamond sales, Savimbi was able to build up UNITA’s well-supplied army of about 35,000 soldiers. With other diamond-fuelled conflicts that were looming in Sierra Leone, Liberia and the Congo, it was apparent that more was needed than a patchwork of UN Security Council resolutions.

Only a comprehensive international certification scheme for the diamond trade would offer an answer to the problem. It was equally clear, however, that without conflict diamonds capturing the public’s eye and imagination, the political will for such a comprehensive solution would be lacking.

NGOs and industry

A band of campaigners in London set out to change this: Global Witness, an advocacy group founded in 1993 to bring the world’s attention to the link between natural resources and conflict was in the lead.
Eventually, Alex Yearsley of Global Witness built a coalition with Oxfam (US), Amnesty International, World Vision, Partnership Africa Canada and many other NGOs. Together, they mobilized the public against diamonds to cut rebels off from their funding. The NGOs would move with or without the cooperation of business.

Diamond dealers initially resisted. They were worried about the potential for diamond sales to suffer, that they would tarnish their image and thus their value. These factors were constantly on the minds of De Beers’ executives.

As one industry spokesman put it: “Having spent hundreds of millions of dollars on advertising this product, De Beers is deeply concerned about anything that could damage the image of diamonds as a symbol of love, beauty and purity.”

Nicky Oppenheimer, the Chairman of DeBeers, decided to make the case for clean diamonds. At the World Diamond Council in Antwerp in July 2000, De Beers finally achieved what it had been pushing for: a unified business response to the challenge of conflict diamonds.

Diamond dealers worldwide created the World Diamond Council to represent business interests.

Regional leadership, global solution

That left governments, the third part of the triad, to act. As a major diamond-producing country, the stakes for South Africa were especially high. It stood to lose a major source of its prosperity if there were a consumer boycott of diamonds. As the media reports continued to grow in the spring of 2000, such a boycott became a greater and greater possibility. Action was required to prevent it.

South Africa did not see the conflict diamonds issue only as a threat from boycott by consumers of a major industry. The government also saw it as an opportunity for its foreign policy and for its economy.

On the foreign policy front, taking action on the issue of conflict diamonds would help to sharpen South Africa’s profile as the African continent’s preeminent regional power.

The South African Government hence set out to get everybody to embrace two propositions to the rest of the world. First, diamonds are a source of prosperity for African countries overall, and second, the launching of the Kimberley Process would aim to ban conflict diamonds.

Organizing for success, the South African government decided to add civil society to the decision making process in the negotiations. That changed diplomacy. Traditionally, it relied on governments negotiating and dealing separately with business and civil society interests. From now on, they would be at the table.
The South Africans also took the case to the United Nations for global support. Richard Holbrooke, the then U.S. ambassador to the UN, spoke in the debate on the South African resolution. He observed that, for all too long, the international response to the problem of conflict diamonds had been “weak and wholly inadequate.”

“By ignoring the problem or letting those with vested interest in the trade convince us that it wasn’t a problem, we failed, with our highest responsibility, to work to prevent conflicts before they begin.”
The piecemeal approach, placing sanctions on diamonds from individual countries, was insufficient because conflict diamonds are “a global problem” in need of “a global solution.”

Ambassador Holbrooke noted that the Kimberley Process would provide a much needed global answer. Without any ambiguity, the United States threw its weight behind the multi-stakeholder approach of the Kimberley Process.

Bringing everyone on board

The decision to bring civil society into the decision making process was contentious because the NGOs evoked bitterness and fury from governments and industry.

Despite the uncomfortable exchanges, civil society had developed a strong knowledge base. It knew how to get the public involved and created a global public policy network to press its concerns.

In the end the Kimberley Process proved that such a multi-stakeholder forum for disparate actors actually works. They collaborated to define conflict diamonds and built trust in an emerging rough diamond certification process.

The agenda was challenging. It called for a simple system to solve a complex problem and the Kimberley Process Certification Scheme (KPCS) was created.

The success of that scheme would be determined by the wide participation in the process. National laws were needed to verify certificates that implemented international minimum standards. Compliance would come with transparent industry warrants, but without international monitoring. And a deadline was set.
The political agreement on the Kimberley Process Certification Scheme (KPCS) was officially signed in Interlaken, Switzerland in November 2002.

The credibility of the Kimberley Process was especially dependent on successful and timely national implementation in the United States, the largest consumer market for diamonds.

As the U.S. negotiator, I came into the process to “close the deal” as the United States’ Special Negotiator for “Conflict Diamonds.” My task was to help the Kimberley Process “move from a ‘Coalition of the Willing’” to a “Coalition of the Able,” which was to deliver a workable certification scheme to ban illicit diamonds from international trade.

The implications for future multi-stakeholder negotiations when civil society and business are part of the decision making process are several:

• Successful management of stakeholders can build the trust needed for commitment to the outcome.
• Strong leadership in diplomacy, interagency negotiations and legislative/political relations is crucial to overcome the antagonisms inherent in conflicting interests of the stakeholders.
• Drawing on expertise and compartmentalizing difficult issues can lead to agreed solutions in place of intransigent, non-negotiable positions.
• Flexibility to deal with unforeseen obstacles can lead to creative options.

What is clear is that civil society and industry demand to be part of the 21st century, multi-stakeholder negotiating process.