Natural Resources and Violent Conflict - WaterWiki.net

follow the money 191Current capacity limitations exist at the national and internationallevels. Many national regulatory and law enforcement agencies dealpoorly with money laundering and the smuggling of goods that areclearly illicit, such as narcotics. International organizations responsiblefor developing harmonized standards to combat such smuggling, suchas the World Customs Organization and FATF, have tiny secretariatsand limited resources. Regional law enforcement agencies, such asEuropol for cross-border police investigations within the EuropeanUnion and Eurojust for cross-border prosecutions of such crimes,remain in their infancy and, to date, have focused on traditional crimessuch as the smuggling of drugs and people. Existing certificate-of-originmechanisms are also in their infancy and face significant limitationsin enforcement. The example of the Kimberley process is instructive. Acertificate-of-origin system can be undermined by poor enforcementand circumvented by intricate international smuggling networks. Laxgovernment controls in the major diamond-trading and -cutting centersand the opaque, unaccountable nature of the diamond industry havealso been major obstacles in the struggle to root out conflict diamonds.Other than diamonds, most types of natural resources linked to conflictare not the subject of internationally agreed standards. For example,no international rules or agreements presently address the issue ofillegal logging and conflict timber. The UN Forum on Forests, for instance,does not have a specific mandate for such a purpose, although itcould prove a useful forum for international discussion. A certificationsystem might build on existing efforts by the Forest Stewardship Councilto ascertain whether timber is being produced in a sustainable manner.The council effort, initiated in 1993, entails independent audits toverify compliance with a series of requirements. Of particular interestis its chain-of-custody certification, which seeks to trace the lumber orfurniture on consumer store shelves all the way back to the forest wherethe trees were felled. Such a tracking system could determine whethertimber had been produced in conflict situations but would need to bematched against financial transactions to determine whether the assertedfacts contained on certifications are authentic. This form of matchingsystem could also be used to trace diversions of commodities throughmiddlemen participating in the transactions as well as to identify thephysical and financial infrastructure (transportation vehicles, financialinstitutions) used to move the illicit commodities.Some of these gaps might be filled by the creation of an internationallegal framework to cover the sale of natural resources used in conflictor accompanied by serious corruption. Such a framework would focuson establishing common tracking and disclosure mechanisms for theextraction and sale of certain categories of commodities and extend the