A valuer counts diamonds at the government diamond export office in Freetown, Sierra Leone. (Ben Curtis/Associated Press)

It may take thousands of millions of years to transform coal into the glittering diamond so prized today. But in the span of a few years, an international collaboration managed to clean up the blood-soaked industry.

There's no doubt the Kimberley Process forever changed the industry when it officially launched in early 2003.

But its rough diamond certification system – designed to stop the illicit trade of conflict or blood diamonds – is now suffering from cracks in its sparkling veneer.

In June, one of the founders, Canadian Ian Smillie, resigned from the group, saying the process is failing because of a soft approach to violations of the scheme's self-regulated standards.

"A couple of years ago, I would've said that the Kimberley Process got a seven out of 10. It wasn't perfect, but it was pretty good," Smillie told CBC's The Current.

"But in last couple of years, all kinds of problems cropped up and the Kimberley Process seems unable or unwilling to deal with it. I wouldn't give it a passing grade now. And frankly, I think it's getting worse."

His departure was described as the "hardest blow" to the Kimberley Process's reputation and standing since its inception, according to Chaim Even-Zohar, editor of the industry publication Diamond Intelligence Briefs.

Credibility questioned

In the past, Global Witness, a lobby group involved in the process, has sounded alarms over loopholes allowing blood diamonds onto the market, but says the recent situation in Zimbabwe threatens to tarnish the Kimberley's image and make it irrelevant for consumers seeking clean diamonds.

"I think the Kimberley's credibility is really suffering at the moment," said Annie Dunnebacke, a campaigner for the London-based NGO.

In October 2008, Zimbabwe President Robert Mugabe's government sent the military to the Marange diamond fields to violently take control of illicit mining activity, killing 200 miners in the process, according to a Human Rights Watch report.

Two weeks ago, a review team from the Kimberley Process collective was sent to Zimbabwe to assess the situation. But Smillie said even securing that small measure felt "like pulling wisdom teeth" and took eight months of "bitter internal wrangling."

Miners dig for diamonds in Marange, Zimbabwe, in this 2006 photo. (Tsvangirai Mukwazhi/Associated Press)

The collective also sought to put out a statement condemning the violence in Zimbabwe. That too proved difficult and instead a statement of concern was released, says Smillie.

"If the Kimberley Process can't suspend a participant in those conditions, then really what are we doing? What is it even there for?" asks Dunnebacke.

Part of the inherent problem lies in the structure of the organization. The scheme is voluntary and based on consensus being reached among all participant countries, allowing political and commercial ties to easily come into play.

In the case of Zimbabwe, Smillie says South Africa sought to protect the Mugabe government by stalling measures against the country.

The annual rotating leadership also currently has Namibia at the helm, raising questions about whether regional politics are causing a softening position.

"It's very unlikely that any south African country will agree to suspend another," said Dunnebacke.

Optimism in the rough

Political agendas have also waylaid attempts to take a tougher stand against Venezuelan President Hugo Chavez.

The South American country – a significant though not large producer of diamonds – stopped reporting diamond production and exports in 2005. A Partnership Africa Canada (PAC) report the following year found that 100 per cent of diamonds were being smuggled out of the country.

Two years later, in 2008, Kimberley Process delegates visited the country. But in the end, Venezuela suspended itself from the scheme as it promised to reorganize its diamond sector. Another team sent by PAC in May found diamonds still being mined and the government had continued to license diamond co-operatives, while stalls openly sold the gems in the border towns near Guyana and Brazil.

There's no question for Smillie: Venezuela should have been suspended to send a strong message to other member countries.

Even though Eli Izhakoff, chair of the New York-based World Diamond Council, agrees with Smillie's criticisms of the Kimberley Process, he remains optimistic.

"It's not the best system. It's not working 100 per cent, but it's a process. We came a long way," says Izhakoff.

He adds that while reaching consensus can be a long, frustrating exercise, it is usually achieved at the end of the day through peer pressure.

Shining a spotlight

Smillie's interest in the diamond trade began when he taught high school in a diamond-producing part of Sierra Leone through a non-profit organization in the 1960s.

Soon after, he became part of a group that met to discuss the brutal civil wars breaking out in Africa in the 1990s. Eventually, they decided to take aim at the diamonds rebel groups were using to fuel their battles and Smillie became one of the founding fathers of the Kimberley Process.

Today, 75 countries are members of the Kimberley Process, named after a famous prospecting city in South Africa.

To be a member, each country must comply with the Kimberley Process's minimum standards, which essentially bar it from exporting and importing rough diamonds without Kimberley certification.

The United Nations and Kimberley Process estimate conflict diamonds now constitute less than 0.1 per cent of the world's production, a remarkable feat for the voluntary program.

And they say the only existing country where rebel forces are controlling diamond production is Cote d'Ivoire. Dunnebacke of Global Witness, however, says Zimbabwe should be added to that list. Smillie stresses that the diamond-certification scheme has succeeded. Shining the international spotlight on blood-drenched diamonds alone helped reduce the violent wars they fuelled.

He cites the example of Sierra Leone, a West African country where rebel groups once hacked off limbs in a conflict funded by diamonds. In the last three or four years, diamond exports there have been worth between $120 million to $150 million.

"It's driven a lot of those illegal diamonds to the surface. People are now obeying the law. But it also means that governments are getting tax revenue from the diamonds and so the diamonds are not only not fuelling war, they're also helping to pay for development," said Smillie.

But he says his experiences as of late with the Kimberley Process feels like "for every step forward, it's been two steps backward."

With files from The Current