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Easily concealed, immensely valuable and largely untraceable, stones from rebel-held mines have raised billions of dollars on world markets to finance insurgencies in several African countries against the legitimate governments.
The United Nations 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 also referred to as ‘blood diamonds’.
For years these illegal market has allowed rebel leaders to arm and equip their armies in violation of UN weapons and financial sanctions. Rebel armies in Angola, Sierra Leone and the Democratic Republic of the Congo exploited the alluvial diamond fields of these countries in order to finance wars of insurgency. Alluvial diamonds, unlike those mined in the deep kimberlite ‘pipes’ of Botswana, Russia and Canada, are found over vast areas of territory, often only a few inches or feet below the surface of the earth. Alluvial diamonds have proven difficult to manage and to regulate. Because of their high weight-to-value ratio, the ease with which they can be mined, and endemic corruption in the global diamond market, alluvial diamonds became a ready target for rebel armies.
The trade in conflict diamonds began in the early 1990s with Jonas Savimbi’s National Union for the Total Independence of Angola, but was quickly copied by the Revolutionary United Front in Sierra Leone, with assistance from Liberia’s warlord president, Charles Taylor, who is now being tried in The Hague for war crimes and has recently showed up in western newspaper for having allegedly gifted top-model Naomi Campbell with a few illicit stones.
Even if the diamonds industries used to inscribe the commerce of conflict diamonds in an optimistic 4% figure, NGOs involved in the fight against this trade like Partnership Africa Canada stated that as much as 15% of the world’s $10 billion annual rough diamond production fell into the category of conflict diamonds in the late 1990s.
A most important trade sector for South Africa
Today diamonds are mined in about 25 countries but roughly 49% of diamonds originate from central and southern Africa, while significant sources of the mineral have been discovered in Canada, India, Russia, Brazil and Australia. South Africa is the fourth diamond producer country in the world by value.
The story of diamonds in South Africa begins in 1866, when 15-year-old Erasmus Jacobs found a transparent stone on his father’s farm, on the south bank of the Orange River and Kimberley, the present capital of Northern Cape, became ground-zero for the South African diamond industry.
The largest company to operate a diamond mine in South Africa during the diamond rush was the De Beers Company, founded by Cecil Rhodes. The De Beers Empire was started on a farm owned by two Boer War settlers, brothers D. A. and J. N. De Beer. Around 1873 the De Beer brothers sold out to a group of mining syndicates who later merged with Cecil Rhodes’ pumping company to form ‘De Beers Consolidated Mines’.
Today De Beers alone mines about half the world’s annual diamond output. It also controls as much as 80% of global diamond sales through its Central Selling Organization, which purchases and stockpiles diamonds from other suppliers to keep availability low and prices high. De Beers was known to be a major purchaser of conflict diamonds from Angola, Sierra Leone and other African conflict zones.
Through the years, Kimberly lost its relevance in the production of diamonds, but is still the De Beers’ headquarter and the start point of the movement which involved the major diamond companies and was aimed to put an end to the trade of conflict diamonds.
The Kimberley Process Certification Scheme
Since 1998, UN’s Security Council has mounted a determined campaign to halt the trade in conflict diamonds, launching investigations into the illicit trade in uncut diamonds, naming individuals and countries suspected of trafficking in the stones and pressuring the secretive diamond industry to adopt measures to keep the gems out of the international marketplace.
Against a widening debate about the humanitarian and economic impact of comprehensive trade sanctions on civilians and neighboring states, the Council’s diamond campaign was part of an ongoing UN effort to make sanctions more selective, better targeted and more rigorously enforced instruments for the maintenance of international peace and security.
It is extremely difficult to distinguish one uncut diamond from another, making it easy to mix illicit diamonds with legal stones. Moreover, the principal world market for uncut diamonds, Antwerp, is legendary for the laxity of its regulations on the handling of the stones. According to a study on diamonds and conflict in Sierra Leone by Partnership Africa Canada, Antwerp dealers routinely settle multi-million dollar transactions in cash and rarely offer receipts.
Since the South African leading cartel De Beers had successfully resisted boycott pressures from anti-apartheid activists in the 1970s and 1980s, there seemed little reason to believe that the UN would be more successful.
In contrast to previous efforts, however, there was growing consumer awareness of the link between diamonds and African conflicts in the US and Europe, where the overwhelming majority of diamond jewelry is sold. NGOs, including Partnership Africa Canada and Global Witness, had begun to campaign against blood diamonds in industrialized countries. Graphic press reports tying diamonds to the brutal insurgency in Sierra Leone began to appear in fashion magazines, threatening the industry’s expensively nurtured image in its core consumer base.
The industry wanted to avoid backlashes such as those against the fur industry in the 1990s and was more receptive, therefore, to Security Council calls for a global tracking system for uncut diamonds that would identify the origins of the stones, confirm their legal export from the country of origin and establish a paper trail of ownership. Addressing industry leaders at the World Diamond Congress in Antwerp on 18 July 2000, UN Ambassador Robert Fowler emphasized that the Council was eager to avoid damaging the legitimate diamond trade but ‘the diamond industry must take the lead, and be seen to be taking the lead, in demonstrating publicly that its products are conflict-free’.
On the following day the two principal industry associations, the World Federation of Diamond Bourses and the International Diamond Manufacturers Association, adopted a joint proposal to establish a global certification program for uncut diamonds. They declared that ‘the solution to the conflict diamonds problem is a moral imperative above all others’.
In 2002, the UN approved the Kimberley Process Certification Scheme (KPCS) aimed at preventing conflict diamonds from entering the legitimate rough diamond market. Yet major diamond-producing countries remain worried about the impact of the conflict diamond campaign on the legitimate trade.
Former South African Minister of Minerals and Energy Affairs Phumzile Mlambo Ngcuka failed to attend a meeting in London in October 2002 to discuss UK proposals for an international treaty on diamond sales. The reason for her absence, South African UN Ambassador Dumisani Kumalo told the UN commission Africa Recovery in early December the same year, was that ‘the London conference was called to discuss a formal treaty’ on conflict diamonds.
‘If you go the [UN] treaty route you open it up to 189 countries, most of whom have nothing at stake.’ For South Africa, Namibia, Botswana and Angola, he continued, ‘the diamond industry is our lifeline. Many thousands of people are affected. So it is important for us to protect the industry as such’.
How effective the Kimberly regulations have been in keeping conflict diamonds off the fingers of consumers is also a subject of debate. Ambassador Fowler told Africa Recovery that, while no controls can be 100% effective in blocking items as small and as valuable as gems, they would help. The campaign, he asserted, has already hurt the rebels. ‘The traders know we are watching, and those who still buy are demanding a higher risk premium.’
On the other hand, Mr. Jakkie Cilliers, head of the South African Institute of Strategic Studies, told the media that the real issue is arms, not diamonds. ‘If the major powers were serious about ending African conflicts they would halt the trade in arms. But the major powers produce arms, so they go after diamonds instead. They have a conflict of interest.’
Failure or success?
After the implementation of the Kimberley Scheme, the trade of conflict diamonds has swollen to less than 1% of the entire market. ‘Through the worldwide implementation of the Kimberley Process Certification Scheme – said in a statement Ambassador J.D. Bindenagel, Former U.S. Special Negotiator for Conflict Diamonds – we have begun to fulfil the international community’s obligation to those who have suffered in Africa’s wars by banning the trade in conflict diamonds. We have eliminated conflict diamond financing in Sierra Leone and are committed to bring the proceeds from the diamond trade to benefit the people of Sierra Leone, Angola and Liberia as well as all other diamond producing countries such as Botswana to help themselves support economic development of their countries.’
Sierra Leone, which exported less than $2 million worth of diamonds legally in 2000, now exports between $100 and $150 million annually, earning the concomitant tax revenues (PAC Annual Review 2009). There have been similar positive changes in other countries.
But the Kimberley Process is a regulatory system and is not designed to deal with some of the fundamental underlying problems of diamonds that are mined artisanally in large parts of Africa and South America. The peer review system is highly dependent upon the regular participation of a few countries. The two NGO KP members, Partnership Africa Canada and Global Witness, bore the disproportionate expense of financing a civil society team member on each review until 2007, when a Civil Society Fund was created to help alleviate this responsibility. Worse, when confronted with overt examples of obvious and serious non-compliance in Brazil, Guyana, Ghana, Venezuela and elsewhere, the Kimberley Process seemed to have become paralyzed.
In a speech on the opening day of the November 2006 KP Plenary in Botswana, PAC Research Coordinator, Ian Smillie, expressed his severe judgement. ‘We meet at a moment of great importance for the Kimberley Process, the diamond industry, and the people whose lives depend not just on a prosperous diamond industry, but one that cannot be used to threaten peace (…) we have seen more and more examples of how criminals and diamond dealers and smugglers and even governments have been able to bypass, subvert and ignore the KPCS with almost complete impunity.’
Greg Campbell, an award winning journalist and author of Blood Diamonds: Tracing the Deadly Path of the World’s Most Precious Stones, the book who inspired the Oscar nominated movie with Leonardo Di Caprio, gives his qualified opinion in his blog: ‘It’s true that diamonds from Sierra Leone, the subject of my book, no longer need to be avoided. There hasn’t been conflict in the country for nearly a decade. To varying degrees, the same is true in diamond-rich Angola and Democratic Republic of Congo, although the latter has more ill-gotten precious resources than just diamonds to concern consumers.’
But the truth is more complicated. As Campebell points out, ‘none other than the KP itself has used the very term “conflict diamond” to cover up atrocities committed in the mining areas in another African country, the Marange diamond fields in Zimbabwe’. There, civilians have been murdered, assaulted and threatened into mining diamonds for its corrupt military, but ‘diamonds mined by a ruling government, no matter how brutally, don’t fit the KP’s narrow definition of “conflict diamonds,” which specifies that only stones produced on behalf of a rebellion or guerrilla movement in order to fund an overthrow qualify for the term’.
Africa’s blood diamonds producers
Angola. After the blood diamonds financed the rebel forces for years, now the country is trying to implement new regulations for the artisanal diamond production. But the new law does little to improve Angola’s Kimberley Process compliance. It outlines no concrete procedures for tracking artisanal production, and no mechanisms for collating, analyzing or publishing data on artisanal trade and production. Angolan officials say, however, that the government takes its KP responsibilities seriously, and plans to tighten things up during implementation.
Democratic Republic of Congo. Diamonds are present throughout much of the Congo’s conflict zone, both in Orientale province on the border with Uganda, and in the provinces of North and South Kivu. The volume of diamonds that come into rebel possession is likely quite low, but they are, nevertheless, conflict diamonds. While the volume of diamonds falling into rebel hands appears currently to be quite low, there is nothing in the DRC system that would prevent any rebel group from laundering their diamonds into the ‘certified’ KP diamond stream.
Sierra Leone. The country’s mining still needs effective regulations and diamonds are yet to benefit the local population. Even before the economic crisis, the country granted extraordinary concessions to mining companies, with tax agreements that resulted in minuscule government revenues, just 5-6% of the value of mineral exports. A National Advocacy Coalition on Extractives study documents ‘massive problems’ associated with governance: lack of transparency, capacity, monitoring mechanisms in the mining sector, gaps in regulation, and the prevalence of corruption.
Republic of Congo, the only country ever expelled from the Kimberley Process for reasons of serious non-compliance. A KP review team visited the Republic in 2004 and there was little evidence to support the export volumes, and there were no official imports. In fact, diamonds had been flowing with impunity across the river from the Democratic Republic of the Congo, and were no doubt helping to sustain conflicts in both countries. Readmitted in 2007, there is oddly no information available to the public or to KP participants about the Republic of Congo on the KP website.
Zimbabwe. In 2009, Partnership Africa Canada published an investigation of the country’s diamond scene, Zimbabwe, Diamonds and the Wrong Side of History. It described growing evidence of smuggling, the militarization of diamond resources and the killing of at least dozens of unarmed diamond diggers by the police and armed forces. It remains to be seen whether the KP will have the strength and the will required to impose effective measures that will bring Zimbabwe into compliance with KP minimum standards and the observance of basic human rights in its diamond industry.
Guinea. Diamond areas are almost a thousand kilometers from the capital, Conakry, and government control and reporting mechanisms are understaffed and under-equipped. Systems exist, but there are major gaps, and in fact there is virtually no way of tracing artisanally produced diamonds that show up at Conakry for export. In the last four years there has been a rash of false Guinean KP certificates showing up in various countries and very little information has become available about what the new government is doing to improve matters.
Ghana. The diamond mining sector is still reeling from the knock-on effects of temporary Kimberley Process sanctions imposed in 2007 due to the alleged incursion of conflict diamonds from Côte d’Ivoire. In spite of the gloomy situation, however, administrative measures instituted in 2008 to strengthen Ghana’s internal controls in accordance with the Kimberley Process Certification Scheme made substantial progress.
Liberia. Over the past year, Liberia has made significant progress in its internal diamond control systems. Commendably, the government has invited additional civil society members to sit on its Presidential Diamond Task Force which is similar to the Diamond Board recommended by the KP Review Visit which took place in May 2009. However, some foreign exploration companies are actually mining diamonds. The threat posed by this activity is enormous. Government and communities lose revenue, and the practice creates a breeding ground for diamond smuggling, because only mining license holders can approach the KP system for valuation and certification.
Côte d’Ivoire. Officially, this remains the only country where the conflict diamond phenomenon continues to exist. Despite a 2005 UN embargo, illicit Ivoirian diamonds continue to flow into the formal trade. Continued diamond mining by rebel forces was reconfirmed in 2008 by a joint mission of experts from the United Nations and the Kimberley Process. A year later, satellite photographs provided by the expert group shows that diamond mining seems to have had a rapid growth in some areas. Although the value of contraband Ivoirian diamonds is currently estimated at US$25 million annually, it could grow if no measures are taken to remedy the problem.