NGO Looks Into Claims of 'Prosperity Diamonds'

By Rob Bates, Senior Editor, and Gary Roskin, G.G., FGA, Senior Editor -- JCK Online, 6/1/2002 2:00:00 AM

The diamond industry has benefited southern Africa, but it could help a lot more, says a new report by Partnership Africa Canada, a Canadian nongovernmental organization.

The new report investigated industry claims that diamond mining brings prosperity to the countries of South Africa, Namibia, and Botswana. It noted that many NGOs "concerned about conflict diamonds … have avoided any talk of a diamond boycott, precisely because they understand that many jobs and even entire national economies are diamond-dependent."

The study found that diamonds had the most benefit for Botswana, where the government has been able to improve the country's infrastructure with its income from diamond mining. But it noted that, despite having the highest gross national product per capita in Africa, 60% of the population there lives on less than $2 a day.

"It's such a capital-intensive industry that there are only 6,000 people [out of the 1.5 million population] directly employed by the diamond industry," says the report's author, Ralph Hazleton. Hazleton says the diamond industry soon will have "new expectations of social corporate responsibility," and he called on the industry to open more jewelry and cutting-and-polishing factories in producing countries, as is being done in Canada.

"In all three countries, the secondary economic spin-off could be more significant," Hazleton says.

The paper did offer some praise for De Beers, noting that by working with the company "the governments of Botswana, Namibia, and South Africa … have managed to garner significant financial benefits during a period in history when the earnings from other commodities—cocoa, palm oil, copper, and many others—have tumbled and disappeared."

"That flies in the face of the whole privatization philosophy," Hazleton says. "Having the government control the industry has actually worked out very well."

De Beers did not reply to a request for comment on the report.