The gift-giving season is upon us once again, and diamond advertising is moving
into high gear to make up for sluggish sales during 2002. "It's not how it
looks on me that's important," says the woman in a De Beers ad, "it's
what it stands for."
The diamond industry has been scrambling to clean up its image for more than
five years, since the beginning of an NGO campaign against "conflict"
or "blood" diamonds. Rebel movements in Angola, Democratic Republic of
Congo and Sierra Leone have used the proceeds from diamonds to pay for weapons
and fuel their wars. Over the past decade, as many as three million people have
died in these wars. In Sierra Leone, rebels chopped the hands off women and children
in order to frighten civilians away from the alluvial diamond fields. It worked.
For years, billions of dollars in blood diamonds were laundered into the legitimate
diamond trade. No questions were asked, because no questions had ever been asked
in this highly secretive industry. While the industry says the volume of conflict
diamonds may be as low as 2 per cent or 3 per cent of total annual production,
this still represents $200-million to $300-million a year, enough to buy a substantial
supply of cut-rate Kalashnikovs.
There is another problem: As much as 20 per cent of all gem-quality diamonds
are illicit. They are stolen, smuggled, used to launder money or to evade taxes.
This huge trade in illicit diamonds provides the cover under which conflict diamonds
move, and there are many vested interests in leaving it undisturbed.
Since May of 2000, governments, the diamond industry and NGOs, backed by United
Nations Security Council and General Assembly resolutions, have been meeting to
work out an international system of controls for rough diamonds. At a November,
2002, meeting of the Kimberley process -- named for the diamond town in South
Africa where the first meeting was held -- more than 50 governments agreed to
implement a global certification system that will require all diamond shipments
from one country to another to be accompanied by a government-backed certificate
of origin. An auditable chain of warranties will track rough diamonds as they
move from importers to cutting factories, or to points of re-export.
Canada, which now mines about 5 per cent of the world's diamonds, will double
production in the next couple of years. Thus, Canadian producers and the growing
number of people who work in the Canadian diamond industry have a major stake
in ensuring that the new system works. The federal government has drafted diamond
legislation so that Canada will comply with the Kimberley system. The bill passed
third reading in the House of Commons last month and second reading in the Senate.
An industry committee has established a voluntary Canadian diamond code of conduct
for authenticating diamonds as Canadian.
There is only one problem. The Kimberley system, which comes on stream on Jan.
1, contains no provision for regular independent monitoring of national control
mechanisms.
Why would anyone accept, without question, a certificate of authenticity from
the Central African Republic when, for years, it has been exporting triple what
it is capable of producing? Why would anyone trust Belgium? Through the 1990s,
it imported annually anywhere from $500-million to $1-billion (U.S.) worth of
diamonds from five West African countries in excess of what they were capable
of producing.
Governments argue against independent monitoring on grounds of cost, national
sovereignty and commercial confidentiality. Russia, China and Israel are the most
adamant, but most other governments remain silent on the NGO demand for regular
inspection. "The time isn't right," some government delegates say. "Trust
us," say industry leaders, gearing up for Christmas -- and Valentine's Day,
weddings and anniversaries.
The Kimberley process, the new legislation, the voluntary codes of conduct
and industry chains of warranties are all steps in the right direction. They represent
the most fundamental change in the diamond industry in a century. But they are
not enough.
The growing chorus of advertisers who say that the problem is solved and that
diamonds can now be guaranteed are wrong. All Canadian diamonds go to Antwerp
for sorting, and some come back for cutting and polishing. Without credible, independent
inspection, there are no guarantees.
"Love all, trust few" is a slogan sometimes painted on trucks in Sierra
Leone. The issue where diamonds are concerned is not love or trust -- it is verification.
Without it, the diamond industry will never be able to say it is clean.
Ian Smillie, a research co-ordinator with the Ottawa-based Partnership
Africa Canada, was a member of the UN Security Council expert panel on Sierra
Leone looking at diamonds and weapons in 2000.
© 2002 Bell Globemedia Interactive Inc.
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