In 1991, this country's first kimberlite pipe, the deep-lying volcanic rock that diamonds are formed in, was discovered in the Northwest Territories, and since then, Canada has become third in world diamond production by value, only after Botswana and Russia.

Kimberlite is one thing Canada has in common with Africa, but diamond production is not. Canada is upheld for its "clean diamonds," while the gems-for-guns trade has fuelled some African civil wars.

Kimberly Process Countries

• Angola
• Armenia
• Australia
• Bangladesh
• Belarus
• Botswana
• Brazil
• Canada
• Central African Republic
• People's Republic of China
• Democratic Republic of the Congo
• Cote d'Ivoire
• Croatia
• European Union states
• Ghana
• Guinea
• Guyana
• India
• Indonesia
• Israel
• Japan
• Republic of Korea
• Lao People's Democratic Republic
• Lebanon
• Lesotho
• Liberia
• Malaysia
• Mauritius
• Namibia
• Norway
• New Zealand
• Russian Federation
• Singapore
• Sierra Leone
• South Africa
• Sri Lanka
• Switzerland
• Tanzania
• Thailand
• Togo
• Ukraine
• United Arab Emirates
• United States of America
• Venezuela
• Vietnam
• Zimbabwe
• Taiwan

Connections between diamond dealers and warlords — as well as Sierra Leone rebels who hacked off thousands of limbs in a conflict funded by illicit diamond trading — spurred the agreement known as the Kimberley Process.

Nearly 50 countries entered into the pact, assuring they would only deal in diamonds from conflict-free sources. It was ratified at a meeting of the diamond-producing states in Kimberley, South Africa.

(Kimberlite was named after Kimberley, because the rock was first discovered in areas around the city.)

Clearing the diamond trade's reputation was especially important to countries where the industry generates great wealth. In Botswana, for example, revenues guarantee all children under the age of 13 go to school for free.

Canada, a leader in the Kimberley Process, has seriously delivered, says Ian Smillie, Partnership Africa Canada spokesperson.

But with the agreement's high maintenance costs, will Canada be able to continue maintaining it, and how is it working in other countries that have even fewer resources?

What is the Kimberley Process?

The international accord that came into effect on Jan. 1, 2003, stops rebel and enemy groups from using diamond sales to finance their military supplies by regulating the trade of diamonds.

It came out of a meeting of diamond dealers and advocacy groups, a two-day event in 2000 that culminated in the UN-backed certification process.

Now, participating countries must exchange diamonds with Kimberley Process nations only and confirm their diamonds haven't been used to fund illegal groups.

A certificate accompanying each diamond guarantees this.

Kimberley Process countries ship diamonds in a well-sealed container with the certificate. Once they arrive at the import nation's border, officials approve or reject shipments and verify that the diamonds haven't been tampered with.

Still, some groups see self-regulation as only the first step. Amnesty International, for example, has suggested a second-party monitoring system is needed to secure the process.

How can Canada guarantee the process?

Besides a number of overseeing bodies that monitor implementation and report on problems, the Kimberley Process is mainly self-regulated by each country.

Canada's Natural Resources Department has $884,000 worth of funding per year to pay for a policing system that makes sure no unethical diamonds cross the country's borders.

The department's minerals and mining division is responsible for enforcing the process. But an internal audit obtained by the Canadian Press found it was nearly impossible to sustain since it came into effect in 2003, and the division predicts an $800,000 deficit this fiscal year.

In past years, funding has been pieced together, including from the Foreign Affairs Department, but never from the country's diamond industries.

"We don't have dedicated funding," said Robert Lomas, Canada's point person on domestic enforcement. "I can't tell you that I have a budget five years out of 'x' dollars for the Kimberley Process."

What will this do to the Canadian diamond industry?

Current revenue from the industry is huge. In 2005, Canadian diamond mines generated $1.7 billion.

As long as Canada can support its Kimberley Process payments, new northern developments are predicted to deal at least 20 per cent of all world diamonds by 2011.

This figure might not be met if Kimberley Process payments aren't made. If Canada were not a part of the agreement, it wouldn't be able to sell its gems to the nearly 50 other countries involved.

What is the difference between Canadian and African diamonds?

In Canada, industries like Ekati Diamond Mine in the Northwest Territories excavate diamonds in official mine settings; workers pull them from the kimberlite deep under the ground.

African diamonds are mostly "alluvial," meaning the gems are washed to the ends of water sources. Alluvial diamonds also tend to be spread farther and wider compared to the ones in Canada, making them accessible to more people — and they're easily mined from gravel and mud in riverbeds.

Price is another distinction, since African diamonds tend to be worth more. However, people there can work days in the hot sun, searching and washing through gravel, to find one small diamond sold for as little as one dollar.

Does Canada really need to engage in the Kimberley Process?

Although Canada's diamonds come from ethical sources, the Kimberley Process guarantees that gems coming into the country from other places are also up to standard.

Moreover, by not being part of the agreement, Canada wouldn't be allowed to sell or to trade diamonds with other countries engaged in the process.

In 2004, the Republic of Congo couldn't prove its diamonds were certifiable, and was removed from the group of ethical countries.

How is the certification working in other countries?

The process seems to be working in Sierra Leone to hinder underground trade. In 2005, that country recorded a diamond export of $141 million, up from only $24 million reported in 2001.

Neighbouring Liberia had its ban lifted on the sale of "blood diamonds" in light of the Kimberley Process implementation. But in 2006 the United Nations Security Council renewed the restrictions when it found the country was dealing in bad diamonds.

In 2004, the Canadian Security Intelligence Service discovered eastern European criminals were able to include illegal stones within laundered crime money.

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