Mr. Speaker, I am pleased to rise today and speak to Bill C-14, an act providing for controls on the export, import or transit across Canada of rough diamonds and for a certification scheme for the export of rough diamonds in order to meet Canada's obligations under the Kimberley Process.
As mentioned in the title of the bill, this enactment would fulfill Canada's undertaking to participate in the Kimberley process, which is an international certification scheme that aims to break the link between armed conflict and the trade in rough diamonds. Generally speaking, the bill states that:
The enactment permits export of rough diamonds to be made only to countries participating in the Kimberley Process. It also requires exported and imported diamonds to be in prescribed, tamper-resistant containers and to be accompanied by a certificate from a participating country attesting that they have been handled in accordance with the Kimberley Process.
I would like to talk a little about what I understand the process to have been so far in leading up to the creation of this act. I understand that Canada has been keenly involved in international efforts to help stop the global trade in conflict diamonds, which have had a devastating impact on peace and human security in several African nations, including Angola, Sierra Leone and the Democratic Republic of Congo.
Unlike the legitimate trade in rough diamonds, which benefits numerous developing countries and developed economies including Canada's, conflict diamonds, or blood diamonds as they are frequently known, originate in areas controlled by rebels and are used to fund military actions that target government. The illicit trade in blood diamonds represents a very small percentage of the world's rough diamond trade.
The Kimberley process was initiated by South Africa in May 2000 to develop an international certification scheme for rough diamonds to prevent blood diamonds from entering legitimate markets. The Kimberley process brought together 48 countries, including Canada, the U.S. and members of the European Community. These participatory countries represent some 98% of the world's diamond trade market.
At the Kimberley process meetings here in Ottawa this past March, participants reached agreement on a proposal for an international certification scheme for rough diamonds. Under the scheme, participating countries will be required to export rough diamonds in tamper-resistant containers and provide a certificate validated by the government of the exporting country confirming that the diamond exports are conflict free. Participating countries will also be prohibited from importing rough diamonds from countries not engaged in the Kimberley process. Canada agreed to the implementation of this scheme by the end of 2002.
As members can see from my comments so far, I certainly can see the need for this legislation in Canada. I recognize that Bill C-14 will make legal the agreement that Canada has reached in the process, but later in my comments I will make suggestions on how the bill can be improved.
One area of concern right at the moment is a very tight timeline for the passage of the bill and, more important, for the implementation of the certification process in Canada by the end of this year. I am concerned that Canada's diamond extraction business may suffer because the government infrastructure needed to inspect and provide the certification needed for exporting our diamonds may not be ready on time. This is a concern and I suspect we will hear more about this from witnesses when the bill is sent to committee.
Canada is developing its diamond industry, and I believe everyone in the House will agree that we do not wish the bill to hamper its development in any way. The Ekati diamond mine in the Northwest Territories, located about 300 kilometres from Yellowknife, is Canada's only operating diamond mine at this time. It employs 650 people and produces three million to four million carats of gem quality rough diamonds each year. This is equivalent to nearly 4% of current world diamond production by weight and 6% by value.
The Diavik mine, located near the Ekati mine, will begin operation in 2003. Two more projects, one in the Northwest Territories and one in Nunavut, could open by 2007. These four mines would provide direct employment for about 1,600 people and could bring total annual production to approximately $1.6 billion.
Canada exports its entire production of diamonds for sorting. Some gem quality diamonds are returned to Canada in support of a small but growing cutting and polishing industry. That is why we in the House must ensure that Bill C-14 will not in any way hamper the development of Canada's growing diamond industry.
As I mentioned earlier, in general at this stage in the process before we have had the opportunity to hear from witnesses in committee, I believe the bill has merit and understand it is needed. I do have concerns that I would like to see addressed.
Time constraints are tight due to the target of this November for all 48 participating nations to commit to national implementation and December 31 for simultaneous implementation worldwide. The process led by South Africa began in the year 2000 and was included on the African agenda at Kananaskis with full Canadian government involvement from the start. If the government has known about this since 2000, I really do have to question why there is a last minute rush.
There appears to be no objection to Bill C-14 from BHP Billiton Diamonds Inc., which operates the Ekati diamond mine in the Northwest Territories. As I mentioned earlier, it employs 650 people and includes offices in Kelowna and Vancouver in British Columbia, in Yellowknife, in Antwerp, Belgium, and in London, England. Other companies expect their mines in the territories to be put into operation, one in 2003 and two more by 2007, which will mean 3,200 plus in indirect jobs. This will be a huge benefit to the Canadian economy if they are allowed to proceed without too much interference by government.
Additional diamond exploration in Alberta, Saskatchewan, Manitoba, Ontario, Quebec, and Newfoundland and Labrador has not to date yielded any economically viable sites. Some cutting and polishing is centred at Yellowknife and in Quebec's Gaspé Peninsula. Training programs, especially for aboriginal workers, are in progress, with resulting jobs skills being among the benefits for northern residents.
All Canadian diamonds are first exported to London and Antwerp for sorting. We also import diamonds from 44 countries, including Israel, India, the U.S., Belgium and the U.K., the top five in terms of the value of our diamond imports. The multiple stages of handling, from initial mining through sorting, polishing and cutting et cetera, are a major reason for the Kimberley process agreement to ship this valuable product in tamper-proof containers with a certificate attached to prevent inclusion of blood diamonds.
I reiterate my previous concern with the bill. With such an expanding and developing diamond industry in Canada, I am concerned that there is not a balance between the obvious need for effective world legislation to stop the trade of blood diamonds and overzealous red tape and bureaucracy which may slow down the export of legitimate diamonds and thereby hurt our developing industry. These are concerns that I would like to see addressed at the committee stage of the examination of the bill.
The weakest link remains initial certification, especially when performed by officials in countries widely reputed to suffer from an epidemic of corruption, notably African countries. No independent international agency will verify or even spot check the certification, but Bill C-14 requires that Canadians ensure the certificate provides accurate information, with company officials and individual directors liable. Given the Bre-X scandal, it is difficult to justify such reliance on international honesty. I guess we have to hope it occurs but it is hard to rely on that.
Prosecutions under Bill C-14 can only be instituted within three years from the time of a complaint. Due to the significant degree of international cooperation which is likely to be involved and the fact that human lives are at risk with the trade in blood diamonds, we suggest that a time limit of up to seven years would not be unreasonable. A company's reputation will already be damaged by the laying of charges, so the best way to minimize such impacts would be to obtain convictions, not have guilty parties get away with their crimes due to delay over paperwork technicalities.
Finally, the bill provides that seized diamonds can only be held with the consent of the owner. An improvement would be to authorize holding such diamonds until the case is resolved as a guarantee that possible fines would get paid.
In conclusion, at this time I would suggest this enactment to control the import and export of rough diamonds, Bill C-14, is on the surface a good bill. I am looking forward to discussion and questions posed in committee by witnesses from the industry. I suspect they may raise concerns similar to my own, and I hope the government will take notice of them and amend the bill accordingly.