The Kimberley Process (KP), set up in 2003, is an effort by governments and the diamond industry to break the link between the diamond trade and the vicious civil wars it fuelled in countries such as Liberia and Sierra Leone.

The process claims to cover 99.8 percent of the world's production of rough diamonds. But cracks have emerged in the scheme, which requires the stones to be sealed in tamper-resistant containers and to have forgery-proof certificates with unique serial numbers when they cross international borders.

Campaigners say the scheme has not succeeded in tackling the violence linked with diamonds in countries like Zimbabwe, where more than 200 people were reportedly killed by the military when it seized control of diamond fields last autumn, and Angola, where thousands of small-scale Congolese miners have been beaten and expelled.

In a report released on Friday, Human Rights Watch said Zimbabwe's armed forces are engaging in the forced labour of children and adults, as well as torturing and beating local villagers on the diamond fields of Marange district in the east of the country.

Ian Smillie, research coordinator at Partnership Africa Canada, who has been dubbed the KP's "grandfather", said the scheme is "always the last to wake up and smell the coffee" when it comes to violations of its code. He has become so disillusioned with it that he wrote to the scheme's 49 members to announce his resignation as the group met in Namibia for its annual meeting this week.

"I thought in 2003 that we had created something significant. In fact we did, but we have let it slip away from us," Smillie said in his farewell letter. "The KP has been confronted by many challenges in the past five years, and it has failed to deal quickly or effectively with most of them."

"When regulators fail to regulate, the systems they were designed to protect collapse," he warned. "Without a genuine wake-up call and the growth of some serious regulatory teeth, it leaves the industry exposed, vulnerable and perhaps, in the end, unworthy of protection."

The World Diamond Council, the leading industry group, said the scheme must be "far more vocal" in its demands for action by governments, including stronger oversight of the diamond trade.

GROWING CONCERN

Under strong pressure to act against Zimbabwe, a KP inspection team is due to visit next week - but the southern African country isn't the only concern.

London-based Global Witness says 100 percent of Venezuela's diamonds are smuggled, Guinea has reported an eyebrow-raising 500 percent increase in diamond production year on year; and Lebanon is exporting more rough diamonds than it imports despite having no local deposits. The advocacy group says there is also significant illicit cross-border movement of precious stones between Sierra Leone and Guinea.

None of those countries have been suspended from the scheme, and while inspection teams have been dispatched and reports commissioned, no action has been taken.

"The clock is running out on Kimberley Process credibility," Global Witness campaigner Annie Dunnebacke said in a statement. "The work it was set up to do is vital - it would be scandalous if uncooperative governments and industry succeeded in hobbling it into ineffectiveness."

In Ivory Coast - which is due to hold elections in November following a bloody rebellion in 2002 that was partly funded by conflict diamonds - production of the stones appears to be increasing, and they continue to be smuggled out to legitimate markets, despite United Nations sanctions.

Campaigners have welcomed a commitment by KP members at this week's meeting to develop a regional task force to address implementation of the scheme in West Africa. They said the trade in conflict diamonds from Ivory Coast is a serious concern.

The scheme's success depends on ensuring it reaches all countries involved in the diamond trade and eliminating any grey areas that can be exploited.

"We urge participant governments to strengthen internal controls and improve monitoring systems in producing countries but also in trading and cutting and polishing centres," Susanne Edmond from Partnership Africa Canada said in a statement after the Namibia meeting.

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