Deal reached on conflict diamond trade

In a landmark effort to squelch the trade in diamonds used to fund civil wars in Africa, representatives of the diamond industry, human rights groups and more than 30 governments agreed Thursday that all shipments of rough stones must contain certificates of origin, the Associated Press (AP) reported.

The agreement, reached in Gabarone, Botswana, after 20 months of contentious talks, would set up a global system to track diamonds as they are shipped from their source countries into the hands of middlemen and on to the firms that process them into polished gems, the AP reported. The United Nations is expected as early as next month to ratify the agreement and put it into effect as the first comprehensive attempt to weed out “conflict diamonds” from the vast majority of stones that are mined and traded legitimately.

The decision in Gabarone on this emotional issue came a day after the U.S. House of Representatives approved a bill that gives the president authority to sanction countries that refuse to adopt a tracking system for diamonds. Because the United States imports almost two-thirds of all polished diamonds, the House vote gives added impetus to the international agreement.

“This is definitely a very, very important step forward,” Juri Steverlink of the Diamond High Council in Antwerp, a representative body for the Belgian diamond industry, told the AP.

Although certificates of origin have already been used in a few diamond-producing countries in Africa, Steverlink said traders have still been able to sell conflict diamonds by smuggling them into neighboring nations. “With this new system, we will also be able to close these loopholes,” he told the AP from his office in Antwerp.

The worldwide production of rough diamonds was worth $7.5 billion in 2000, much of it from Botswana, South Africa, Canada and Russia.

Of that total, 3% were conflict diamonds, originating in Sierra Leone, Angola and Congo, said Andy Bone of The Diamond Trading Co., a marketing arm for De Beers-the world’s largest producer and marketer of uncut diamonds.

The use of unforgeable certificates for each shipment of rough diamonds would “more or less harmonize” the trade around the world, Bone told the AP.

After a shipment of diamonds reaches its initial destination, re-export certificates would be issued for each subsequent movement of the stones until they were cut into finished jewels.

In addition, diamond producers and traders have agreed to regulate themselves. Each sale of diamonds will be accompanied by a warranty on the invoice stating that the stones don’t come from an area where rebel forces are using them to finance a military campaign against a legitimate government.

“The industry fought very hard against that, initially,” Alex Yearsley, a campaigner with the London-based human rights group Global Witness, told the AP.

The Kimberley Process of talks on conflict diamonds began in May 2000, and it led to an unlikely coalition of diamond traders and marketers, human rights activists, and officials of countries that produce and import diamonds.

Businesses came to realize that it was in their own interest to exercise some self-regulation, if only to forestall a possible publicity campaign against them for doing too little to solve the problem of conflict diamonds, Yearsley said.

Global Witness, one of many rights groups participating in the talks, was optimistic that the resulting agreement would reduce the illegal trade. “It will certainly snuff out the big stuff,” Yearsley told the AP from a hotel in Gaborone. The UNITA rebel group in Angola, for example, sold $3.7 billion of uncut diamonds in Antwerp, Belgium, during 1992-1998. It would be “exceedingly hard” for UNITA do that under the new agreement, he said.

However, Yearsley noted that the agreement is weakened by a lack of adequate measures to monitor and verify compliance, the AP reported.

Bone of The Diamond Trading Co. was hopeful that the system of certificates and warranties would deprive traders in conflict diamonds of bank loans as well as markets, the AP reported. From now on, he said, they would have to carry bags of cash to conduct a withering business.