CONFLICT DIAMONDS

Diamonds are one of nature’s most beautiful creations and have long been associated with love, commitment and future dreams. Yet, history shows, that diamonds have also represented one of the saddest sides of humanity …. that of funding war and promoting human suffering.

It is important for you, the consumer, to understand what the difference between a conflict and conflict-free diamond is and how to tell the difference. To rid the world of conflict diamonds, everyone must play a part, from the diamond sightholders, to the diamond grading labs, to the craftsmen who cut and polish the diamonds to the retailers who sell them, to the consumers, who buy the diamonds and, hence, create the demand for diamonds to be mined. It is everyone’s responsibility to eliminate conflict diamonds, and it begins with understanding how they came to be, beyond what you have learned from Leonardo DeCaprio in the movie Blood Diamonds.

In order to fully understand what conflict diamonds are, and to see how you can make a difference, a little of your time and a bit of a history lesson is needed. This truly is one instance where the phrase “buyer beware” rings true.

What Are Conflict-Free Diamonds?

Diamonds are considered to be conflict-free if they are mined and produced under ethical conditions and none of the diamonds’ profits are used for the funding of war.

What Are Conflict Diamonds?

Diamonds are classified as conflict diamonds when the profits from the diamond industry are used in funding war or conflicts, most notably, wars in Angola, Sierra Leone, the Democratic Republic of the Congo and in Liberia where diamond profits have funded conflicts in other countries. The United Nations (UN) defines conflict diamonds as "...diamonds that originate from areas controlled by forces or factions opposed to legitimate and internationally recognized governments, and are used to fund military action in opposition to those governments, or in contravention of the decisions of the Security Council." These diamonds are sometimes referred to as "blood diamonds."

Another element linked to conflict diamonds, though less publicized, is that they are produced under unfair labor practices. These unethical practices include utilization of child labor, failure to provide proper safety equipment, and refusal to pay fair wages. Although unfair labor practices are most common in war torn countries, it should be mentioned, that unfair labor practices do exist in non-warring countries that are allowed to legally sell diamonds on the global market, as well.

Conflict Diamonds …. A Little Background

The civil wars in Sierra Leone in the late 1990s brought ‘conflict diamonds’ into the world’s collective eye when 50,000 people died and another 500,000 people died in Angola.

Government and rebel soldiers, alike, were complicit in the atrocities that terrorized the peoples of these countries. The diamond profits played a major role in securing funds to provide these combatants with food, clothing, transportation, and most significantly, weapons. Buyers weren’t particularly hard to find and the rebel groups, such as, the RUF in Sierra Leone and UNITA in Angola obtained approximately $200 million per year from these sales.

Diamonds became a central issue for a number of reasons.

1. Rough diamonds (which are then cut & polished) represent an $8 billion dollar annual market.

2. Trading centers where these diamonds end up, such as Antwerp, Tel Aviv, and London, along with themajor consumer markets like the United States have relatively scarce supplies.

3. Diamonds in Sierra Leone are of very high quality (as opposed to industrial diamonds, which cannot be used for jewelry) and they are alluvial (found on the earth’s surface, usually in river beds, and are accessible to anyone with a few basic hand tools and skills). And because the governments acted essentially as organized crime syndicates, these resources quickly became the property of whoever had the monopoly on violence at the time.

Specifically, in 1998 when a small, London-based non-governmental organization (NGO) named Global Witness released their report titled A Rough Trade ‘conflict diamonds’ entered the spotlight. The report fully exposed the way Angolan rebels were smuggling diamonds into the international markets where revenues generated during this wartime economy were in excess of $250 million/year. De Beers, the South African diamond cartel, was implicated in the report. And at this point in time, De Beers was marketing approximately 80% of the world’s rough diamonds. A tremendous amount of pressure was placed on the diamond industry as a result of the report. The industry wanted to avoid the negative publicity associated with another luxury item, namely, fur coats.

At the same time, the report led the UN Security Council to impose sanctions (known as Resolution 1173) upon any diamonds being exported from Angola. Unfortunately, the sanctions did little to stop the flow of these diamonds, as the details of “sanction busting” became evident in the UN’s Fowler Report S/2000/203. The death of rebel leader Jonas Savimbi in February 2002, did however, lead to a lasting peace agreement between the government forces and the UNITA. With relative peace in the country, the Security Council lifted all sanctions in 2002 under Resolution 1448.

Partnership Africa Canada, was another NGO that played a significant role in bringing the issue of ‘conflict diamonds’ to the forefront. This organization works on issues involving human rights and security, and released a report in 2000 titled the Heart of the Matter that exposed the brutal diamond economy of Sierra Leone. Once again, the UN Security Council took action and banned the import of rough diamonds from Sierra Leone (Resolution 1306). As was the case before, these sanctions seemed to have done little, although fighting did cease in 2001. As of 2003, Sierra Leone is home to thousands of UN peacekeepers, the largest such force in the world. The other NGO’s that have been able to affect policy, includes Oxfam America, Global Policy Forum, and Amnesty International. And, organizations such as the International Crisis Group have issued lengthy reports on countries at war, including Angola and Sierra Leone.

Measures to Help Eliminate Conflict Diamonds:

The Next Generation of Diamond Certification

For years now, the Diamond Trading Company (DTC), the sales and marketing arm of the De Beers Group, has been a leader in corporate accountability. In the early 2000’s the DTC instituted a code of conduct called ‘Diamond Best Practice Principles’ that formalized the commitment to ethics and honestly – for both the company and its customers. The end result: a new chain of diamond defenses that addresses every concern about diamonds that the public has—from safe sourcing to product integrity. Until now, this chain of defense stopped short of the diamond lab.

GCAL is not casting stones at our competitors here, just stating facts. While every major diamond lab practices diamond defense, they do so only from a gemological standpoint. In support of De Beers’ efforts to assure product integrity, most labs refuse to issue diamond reports for treated diamonds and reserve these pedigrees exclusively for all-natural diamonds. Until now, however, no lab was willing to vouch for a diamond’s political integrity. With Source Veritas™, GCAL became the world’s first lab to issue a diamond certificate that gives assurance of safe, legitimate sourcing, as well as distribution, of diamonds.

The Source Veritas™ Diamond Certificate: A Giant Step in Consumer Confidence

Would you want to buy a diamond that you knew had been cut from rough and sold by terrorists?
Of course not.

Unfortunately, back in the 1990s, as previously mentioned, many diamonds came from dangerous places where income from mining them financed arms smuggling and insurgency. These diamonds were known as ‘conflict diamonds’ and trade in them was condemned by human rights groups like Amnesty International and Global Witness. In response, the De Beers Group promised to support all UN resolutions against the traffic in blood diamonds and said it would only buy diamonds that were properly certified as to origin. It was only a matter of time before retailers and consumers would want the same independent assurances of safe sourcing. GCAL offers this assurance with its Source Veritas™ Certificate — the final link in the chain of diamond defense from mine to market.

Source Veritas™ is the most comprehensive diamond certificate ever offered. Besides the traditional measurement and grading components, Source Veritas™ breaks new ground in diamond documentation. How? It serves as both a clean bill of health and a safe conduct pass for diamonds from DTC sightholders pledged to comply with two codes of conduct to fight conflict diamonds: 1) The Kimberly Process and 2) De Beers’ Diamond Best Practice Principles.

For millennia, diamonds have been the world’s most coveted form of concentrated wealth. Besides being small, they’re easy to conceal, carry and convert into cash. No wonder they became the preferred high-value tangible asset among murderous rebel bands operating in diamond-rich Angola and Sierra Leone a decade ago. Eventually, these rebel groups were defeated or chased out of diamond-mining areas. But the world was determined to prevent any future trafficking in conflict diamonds. Leadership in what might be called counter-diamond terrorism started with the De Beers Group. In 1998, it began to insist on clean bills of health for all diamonds it bought. That meant diamonds had to be documented as being from legitimate sources. This action plugged just one of many leaks for conflict diamonds into the global market. The De Beers group, as well as the United Nations, wanted other channels of contraband closed.

This quest resulted in two initiatives.

Initiative One: The Kimberly Process

In May 2000, in the South African town of Kimberley, the world’s most famous diamond producer convened a conference to draft an agreement among nations to curtail the flow of conflict diamonds. This initiative, known as the Kimberly Process, developed strict import-export controls on rough diamonds. Roughs were to be sealed and certified by government-approved export agencies that they did not originate in rebel-held areas or had passed through rebel hands. After unanimous UN ratification on December 1, 2000, implementation was set for New Year’s Day 2003.

The purpose was to implement standardization of certification among diamond exporting countries, thereby creating common language, transparency, auditing and monitoring of diamond exportation. Dedicated to eradicating the trade in conflict diamonds, the diamond industry worked closely with the United Nations, governments and non-governmental organizations (NGOs) such as Global Witness and Partnership Africa Canada to create the Kimberley Process Certification System. The diamond industry also adopted a voluntary System of Warranties to assure consumers that their diamonds are from sources free of conflict.

While diamonds have been used to fund conflict, the problem is not the diamonds themselves but the rebels who exploit diamonds along with other natural resources to further their illicit goals. The vast majority of diamonds come from countries at peace, and these countries have been able to invest the revenue from diamonds into the development of infrastructure, schools and hospitals for the good of the communities in which diamonds are found. These countries include Australia, Botswana, Canada, Namibia, Russia, South Africa and Tanzania.

Today, more than 99% of the world's diamonds are from conflict free sources and are officially traded under the UN mandated Kimberley Process. The diamond industry continues to work with governments, NGOs and the UN to strengthen the Kimberley Process and the System of Warranties.

Because the Kimberley Process is a self-regulating program, additional controls are necessary to truly ensure that the blood diamond trade is halted -- or at least minimized.

Initiative Two: Diamond Best Practice Principles

Controls on rough diamonds addressed half of the problem posed by conflict diamonds. Controls were needed also on polished diamonds. The Diamond Trading Company codified these controls into a set of Diamond Best Practice Principles. Every DTC sightholder is bound to abide by strictly-enforced ‘clean goods’ buying and selling practices. Any violation can result in the loss of the coveted DTC customer status.

Additionally, in May 2000 the U.S. government signed the Clean Diamond Trade Act, which enables the U.S to implement the procedures developed by more than 50 countries to exclude rough conflict diamonds from international trade, while promoting legitimate trade. The Clean Diamond Trade Act is aimed at protecting the legitimate diamond industry.

Hopefully, you now understand the importance of asking your retailer the right questions before purchasing a diamond to be sure it is a conflict-free diamond. Unfortunately, the phrase ‘A rose is a rose is rose’ from the 1913 poem Sacred Emily by Gertrude Stein, which is often interpreted as "things are what they are" does not apply to diamonds …..

How Can a Conflict Diamond Be Distinguished From a Legitimate Diamond?

By a well-structured 'Certificate of Origin' like GCAL’s Source Veritas™ Certificate. It is an effective way of ensuring that the diamond you purchase is a legitimate diamond -- that is, a diamond from government-controlled areas.

How Can Consumers Help Stop Conflict Diamond Trade?

Retailers cannot guarantee that the diamond you purchase is not a conflict diamond. As a consumer, you have the power to change that by demanding details about the diamonds you buy. Demanding proof that a diamond is conflict-free sends a powerful message to the world that you will not support an industry or nation that helps fund terror groups. Demand a GCAL certificate with Source Veritas™ to ensure your diamond is conflict-free.