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Note: This document is from the archive of the Africa Policy E-Journal, published
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Africa: Conflict Diamonds, 2
Africa: Conflict Diamonds, 2
Date distributed (ymd): 000714
Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-Wide
Issue Areas: +economy/development+ +security/peace+
Summary Contents:
This posting contains excerpts from the June Global Witness report
on
diamond certification, and references to other sources. A related
posting today contains a press release and a letter from 58 U.S.
organizations calling for the international diamond industry to
develop effective controls to bar commerce in "conflict diamonds,"
and a press release from Global Witness also addressed to the World
Diamond Congress meeting on July 17.
+++++++++++++++++end profile++++++++++++++++++++++++++++++
Additional Sources on Diamonds and Conflict
Documents recently reposted by APIC
Africa: Conflict Diamonds, 1
http://www.africafocus.org/docs00/dia0007a.php>
Angola: Sanctions Updates
http://www.africafocus.org/docs00/ang0003a.php>
Sierra Leone: Diamonds and War
http://www.africafocus.org/docs00/sl0001.php>
Angola: Diamond Trade and War
http://www.africafocus.org/docs98/ang9812.htm
Other Sites
Diamonds.net (http://www.diamonds.net)
Diamond trade industry site, including extensive news and a
"Conflict Diamond Forum"
(http://www.diamonds.net/conflictdiamonds)
Fatal Transactions (http://www.niza.nl/uk/campaigns/diamonds)
Netherlands Institute for Southern Africa, Global Witness,
Medico International and Novib collaborate in this campaign.
Site includes additional links.
Conflict Diamonds
Possibilities for the Identification, Certification and Control
of Diamonds
A Briefing Document by Global Witness. June 2000
Published by Global Witness Ltd, P O Box 6042,
London N19 5WP, United Kingdom
Telephone: + 44 (0)20 7272 6731
Fax: + 44 (0)20 7272 9425
e-mail: [email protected]
http://www.globalwitness.org
[Excepts only below: full text on http://www.globalwitness.org]
This report has been produced by Global Witness. Partial funding
was received from the UN department of the UK Foreign and
Commonwealth Office (FCO), without which the report would not
have been possible. The views expressed within are solely those
of Global Witness. There are many individuals, companies and
countries (too many to list) that kindly cooperated with the
production of this report and we are grateful for their time,
patience and generosity.
Contents
Introduction
1 The Structure of the Diamond Industry
2 Diamond Identification Methodologies
3 Legislative Overview on the Export and Import of Diamonds
4 Technologies and Control Systems in Use in the Diamond
Trade
5 Certification Systems for Other Products
6 Recommendations for a Control System
7 Conclusion
Glossary
References
Recommendations
Summary
In this document Global Witness is outlining recommendations for
a global diamond certification and verification system to be
monitored by an independent diamond verification organisation
and to be backed up by industry self-regulation and government
legislation. This system would need to be implemented and
enforced in any country wishing to export/import/mine or work
diamonds in any way. The basis for this system is outlined in
detail in Section 6 of this report; however a brief summary of
the main points follows:
In order to help end the trade in conflict diamonds, diamond
producing and exporting countries should:
- establish a verifiable system of certification for the
purchase, sale and export of rough diamonds;
- route all diamonds through a government-run Diamond Office;
- establish a licensing system for the extraction of any
diamonds, whether extraction is by a large company or an
alluvial digger;
- establish a system of countercheck paperwork for extraction
licences and applications for export;
- establish a registry of official diamond buyers and exporters;
- criminalise the handling of rough diamonds without an official
licence;
- exclude the holders of government office, the military, and
the police - as well as the close family members of the
aforementioned - from being registered to mine or trade in
diamonds;
- publish publicly, on a monthly basis, diamond production and
export figures.
In order to help end the trade in conflict diamonds, diamond
trading and importing countries should:
- amend importation legislation to insist on the country of
extraction appearing on importation documents, thus closing the
existing loophole regarding a rough diamond's true country of
origin;
- insist on all diamond shipment documentation to be checked
against forwarded documentation
- enforce penalties such as the confiscation and the seizure of
the diamonds if the appropriate paperwork is not or cannot be
provided;
- physically inspect every parcel of rough diamonds entering
their territory;
- ensure that customs has access to an international database
that details the production capacity of diamond countries and
profiles each country's different goods;
- publish publicly, on a monthly basis, all figures for the
import and export of diamonds.
In order to help end the trade in conflict diamonds all diamond
traders, polishers, manufacturers and retailers should:
- help to establish a diamond industry taskforce to coordinate
the various efforts of the diamond industry into concrete
self-regulating measures, including independent verification;
- work with the taskforce to establish a permanent international
diamond committee to oversee the trade's implementation of
control measures and ensure independent product verification and
enforcement of penalties;
- only trade in diamonds with a provable product verification
trail;
- conduct a detailed study of how to ensure an effective product
audit trail beyond the first point of import;
- conduct extensive research on existing marking technologies
that can be applied to both polished and rough stones;
- help to establish a register of legitimate companies and
individuals involved in the diamond trade;
- help to establish a rigorous system of penalties;
- maintain work on the possibilities for the identification of
diamonds.
Recommendations for a Control System
INTRODUCTION
This section, drawing upon the rest of the report, makes a
series of recommendations aimed at developing both a regulatory
framework by governments and a self-regulatory system for the
trade. It should be emphasised that these are recommendations
and are intended to frame the terms of a debate for reform
rather than be a set of finalised instructions. Initial
research, which was not exhaustive, has identified applicable
technology that is either developed, or is being developed.
Global Witness advocates that trade and governments consider the
following existing possibilities. Currently there are systems
that can: calculate and record the individual surface profiles
of rough diamonds; confirm the identity of a parcel of stones
that has been registered using this method; mark rough diamonds
with individual bar codes or other readable inscriptions; mark
cut diamonds with codes, bar codes and logos; identify and
verify the identity of cut or rough diamonds that have been
coded; record and verify the individual optical signature that
a cut diamond exhibits using laser refraction.
A system using elements of these coupled with improved regimes
in exporting countries, and the introduction of relatively
low-technology identification techniques including work on
surface features and profiling of run-of-mine production could
be used as a basis for reform by both governments and trade.
Governments and the trade must finally accept it is their
responsibility to ensure that diamonds are not involved in the
funding of conflict, and take action accordingly. The key point
is that government and industry, whilst having different
responsibilities, do need to work together and produce a
coordinated system that comprises both regulation and
self-regulation. The recommendations are more detailed for
governments than for trade. This reflects work already
undertaken by governments and their national trade bodies,
particularly those that have recently come under severe
criticism. The recommendations for the trade provide a structure
but do not go into the same level of detail because Global
Witness believes a different approach is needed for the trade.
The complexities of developing meaningful self-regulation within
an industry that does not have a coordinating body that can act
as a focal point for all the different parts of the industry
mean that for Global Witness to develop a series of detailed
recommendations at this stage in the process would not be
particularly productive. Instead this section gives some outline
recommendations to give the trade an indication of what are
minimal acceptable standards for controls. An important and
urgent first step would be for the diamond trade to set up an
industry taskforce or reform committee to immediately begin
working on the issue. The taskforce should be representative of
the industry and able to reflect the views of the different
parts of the diamond pipeline (see Recommendations below for
more detail).
This would be an important forum for the trade, enabling the
different parts, traders, polishers, retailers and so on, to
ensure that they are working in concert rather than producing
contradictory initiatives and reforms. It will also ensure that
different sectors of the diamond industry can be fully involved
at every stage in developing a self-regulatory framework. The
taskforce should be small and comprised of representatives of
different sections of the industry that have a real, and perhaps
already proven, interest in reform and controls.
Global Witness would be happy to cooperate with such a
taskforce, and recommends that it seeks cooperation from
government representatives to ensure that the self-regulatory
measures can work in tandem with government regulations.
This taskforce should be a short term one, and part of its
mandate should be to work with governments and NGOs to set up a
permanent International Diamond Committee (the name is a
suggested working title) which would oversee the implementation
of self-regulatory measures developed by the taskforce. It may
seem initially confusing to have two bodies but they would serve
quite distinct functions, the first being a shortlived
initiative to get the reform process moving, the second would be
focused on implementation and regulation (see recommendations
below for more detail). The membership of this committee needs
to be carefully and equally balanced between different parts of
the trade, government importers and producers, labour
representatives and non-governmental organisations.
It is preferable that the industry be fully involved in the
developing of solutions as the alternative scenario would be for
governments to impose a series of stringent measures upon the
trade, which is likely to make implementation of controls far
more difficult.
Global Witness is proposing that governments of diamond
producing and importing countries should play a central role in
setting a regulatory framework within which industry
self-regulation can be a meaningful part of the process of
controls. It is clear that governments and the commercial trade
are looking to address the problem of conflict goods. If this is
to be done effectively, both parties will need to significantly
address the core problems within the trade as a whole. These
include lack of infrastructure, and corruption in some producing
countries, a willingness by some importing countries to accept
the flow of conflict diamonds, lack of transparency within the
commercial trade and the complexities of the movement of rough
and polished diamonds.
Unfortunately, due to the high value and fungibility of these
goods, a system based solely on the trade making unverifiable
declarations of self-regulation, is unlikely to significantly
address these core problems, and may even lead to consumer
cynicism about claims made by the diamond trade. The trade is
well aware of the importance of consumer confidence and has
already begun to look at how to maintain industry integrity and
consumer confidence on issues such as synthetic diamonds and
value enhancing treatments.
If these issues are not properly addressed they pose a serious
threat to all diamond producing countries. It is clearly time
for radical changes within the diamond sector, about how it
operates and about the need for an ethical basis to its
operations linked to greater transparency. Global Witness
believes that a strength of the industry is the importance
placed on trust - there are very few industries where a deal
worth perhaps a million dollars or more can be agreed with a
handshake, and in some countries, the phrase "Mazel U'bracha,"
without the involvement of corporate advisors, lawyers or even
contracts. This is possible because although the diamond trade
is a truly international and far-flung network it is also one in
which the majority of the people one trades with are known
quantities and are in a pattern of repeat business. This will
be an important factor in the reform process.
The HRD stated recently "The diamond sector needs a transparent,
consistent and responsible structure with strong, efficient
self-regulating mechanisms." A key part of such controls will be
the rigour with which they are implemented by the industry. As
British Foreign Secretary, Robin Cook noted in December 1999 "If
the [diamond] industry could do it itself by self-regulation and
by other proposals, that would be very welcome and I think the
more we are seen to be pursuing this earnestly, the more it is
likely they will do so." Indeed while the mystique of the
diamond will doubtless always continue, the mystique of the
diamond companies is an anachronism that has to change.
The key issue at stake within an industry that has to date made
it possible for companies and importing countries to evade their
responsibilities and claim ingeniously, and often incorrectly,
that either they could not identify the origin of their goods,
or that even if they could, and knew them to be from a conflict
area, if they didn't buy them someone else would. True country
of origin, i.e. of extraction, has never been made an important
part of the business. However this has to change, and indeed,
for different reasons already has, as Australian and Canadian
producers have begun to use country of origin as part of their
marketing strategy.
This is not to say that overnight 'Country' is going to become
the fifth 'C' (joining the current four 'Cs' - colour, clarity,
carat and cut), but it does point to a need to be clearer about
product history.
Conclusion
The aim of this report is to try and provide an overview of the
issues involved in conflict diamonds, to outline some of the
technologies that could be applied to diamond controls, to
delineate the scale and complexity of the business and to point
the way forward. This edition was produced as a working document
to be made use of at the technical forum on the issue of
conflict diamonds hosted by the South African Government on the
11th and 12th of May. A final version will be printed and widely
distributed immediately after the conference which will detail
and analyse the results of the forum.
Global Witness urges individual governments, regional groupings
the international community, and equally the trade to take
urgent action. Recent events in Sierra Leone, including the
murder and kidnapping of UN troops and increasing instability
should be a reminder of just how fragile peace is and how easy
the potential to undermine it. To date the UN has still not
tackled the issue of diamond revenue continuing to fund the RUF.
The role of diamond revenue in Angola's continued conflict shows
what a dangerous mistake it is to ignore the funding of rebel
groups.
The issue of conflict diamonds has, since December 1998, come to
the fore on international agendas in just 16 months. By some
measures this is a remarkably short period of time for the issue
to have been understood and the concept established, for
governments to have begun to move, for UN initiatives to have
taken place, and for the trade to have begun to accept that it
is a problem and to address the issue. And credit should go to
many people for this. However when set against the suffering and
devastation caused by conflict, and the impact day by day on the
lives of people in affected countries, this issue is moving far
too slowly. It is now time for all those involved in the
industry to work urgently towards practical and measurable
controls to combat conflict and strengthen legitimate producers
and markets.
This material is being reposted for wider distribution by the
Africa Policy Information Center (APIC). APIC provides
accessible information and analysis in order to promote U.S.
and international policies toward Africa that advance economic,
political and social justice and the full spectrum of human
rights.
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