Conflict Diamond Issue Will Go On—Even Without Conflicts

There's peace in the three African countries torn apart by conflict diamonds … but the issue isn't likely to go away.

In August, the warring parties in the Democratic Republic of Congo agreed to a cease-fire. This follows truces in Sierra Leone and Angola, the two other countries with diamond-fueled rebellions.

Even so, the industry will remain under pressure to enact rough controls.

"Although the conflicts seem to have subsided, the Kimberley Process [the inter-governmental group that's fashioning the rough diamond certification system] should still go forward," said J.P. Bindenagel, the State Department's newly appointed special negotiator for conflict diamonds, at a recent Diamond Dealers Club luncheon. "Rough controls are important not just for stopping insurrections now, but to make sure diamonds are not used to reignite insurrections in the future."

Matt Runci, executive director of the World Diamond Council, agrees. "As long as these countries remain politically unstable and economically unbalanced, they remain prime targets for economically driven insurrections," he says. "So the need remains. It's just more future oriented than present oriented."

Runci's concern is that, with the conflicts over, Washington will lose interest. "On the surface, this could momentarily make it more difficult for us to convince the various government agencies that we have to go forward," he says. "But I think Washington has heard the industry's plea and takes it seriously."

Media spotlight. The main benefit for the industry might be in the realm of public relations. With no ongoing conflicts, newscasts no longer can associate diamonds with wartime atrocities like slave labor and forced amputations.

But some have made another, possibly more damaging association—between diamonds and terrorism.

While there is little hard evidence of a link between diamonds and Osama bin Laden's minions, the idea continues to draw attention. Recently, Italian authorities arrested Sanjivan Ruprah, described as a "millionaire diamond smuggler" who allegedly sold weapons to al Qaeda.

One government source says the United States takes the idea very seriously.

"We don't have anything we can take to the bank yet, but a link between diamonds and terrorism is certainly likely and feasible," he says. "If you read the literature on al Qaeda, they are always described as having a mobile and flexible financial system. Diamonds and gold are easy to hide and don't take up a lot of space. They're probably a better investment than the stock market right now."