The Fight Over ‘Dirty Diamonds’

 

During the heated discussion of the Pegasus diamond treatment at the Gemological Institute of America symposium in San Diego last year, there was an awkward interruption. A young man who said he was with the State Department stood up and asked what, given all the talk about disclosure, the industry was doing to determine whether diamonds come from war-torn countries in Africa. No one responded, and the discussion quickly returned to Pegasus.

Given the context, the man’s question may have been inappropriate, but the industry can no longer wave aside his concerns. For while Pegasus has barely registered on the consumer media radar screen, the question of whether diamonds are funding vicious African civil wars is presenting the industry with a serious public relations problem—not to mention a moral and humanitarian quandary.

Time magazine, ABC’s World News Tonight, and major newspapers in the United States and England have run stories linking African civil wars with diamonds. The most sensational was a report in the New York Post titled “Dirty Diamonds,” which showed a horrifying picture of a 4-year-old boy with no arms, the victim of amputation by Sierra Leone rebels. De Beers’ U.S. ad agency, J. Walter Thompson, is scrambling to control the damage. It’s mailed out a “fact sheet” to 10,000 jewelers detailing how to cope with negative publicity.

A link exists. How valid is the reported link between African conflict and African diamonds? As painful as it is for the industry to admit, there is a link between diamonds and civil strife in Liberia, Sierra Leone, the Democratic Republic of Congo (formerly Zaire), and Angola. Illicitly mined diamonds have become a major source of funding for these countries’ rebel armies, some of which have violated U.N. cease-fires and are committing wanton atrocities. One U.N. official has even dubbed the conflicts “diamond wars.” State Department spokesman James Rubin says, “If we can get a handle on how diamonds are fueling these rebellions, we can stop some of these terrible conflicts.”

The percentage of the world’s diamonds involved is unknown. De Beers points out that Liberia, Sierra Leone, and Congo have cease-fires and estimates that the Angolan rebel group UNITA sold only $100 million worth of stones this year—about 1.5% of the world’s total diamond supply by value. But British human rights group Global Witness, the industry’s leading critic, claims that “20% of diamond jewelry on sale has been through the hands of combatants.” Global Witness spokesman Alex Yearsley argues that there’s still “conflict on the ground” in all three countries that have cease-fires. De Beers maintains that the 20% figure is inflated, even if those countries are counted. It points out that there’s legitimate mining in those states and notes that 90% of the world’s diamonds still originate from legitimate mining operations, such as those in Botswana, South Africa, Australia, and Canada.

For now, attention is focused on Angola. In 1994, the United Nations brokered a cease-fire in the country’s two-decades-old war. That held until last year, when right-wing rebel group UNITA resumed hostilities, and the United Nations passed sanctions against it. One banned the purchase of all Angolan diamonds that were not accompanied by a government certificate. President Clinton codified this into U.S. law with an executive order.

At the time, a De Beers official said that, given the difficulties in tracing a diamond’s origin, the U.N. ban “would probably not have much effect.” For a while, that seemed to be the case. While De Beers says it complied with the resolutions, “illicit” diamonds still found buyers. The government certificates reportedly were easily forged, and because of corruption, UNITA diamonds often were mixed with “government” ones. De Beers stresses that, even before the sanctions, it never bought diamonds directly from UNITA. Executives have conceded, though, that diamonds they bought on the open market may have originated from UNITA-held territory.

Meanwhile, Global Witness, known for its uncompromising stands and public relations savvy, began researching the connection between diamonds and war. After what spokesman Alex Yearsley describes as an “unsatisfactory” meeting with De Beers, the group recruited other European human-rights organizations to join it in a campaign called “Fatal Transactions.” To initiate the campaign, the groups sent a fake diamond ring to fashion editors and other journalists. A card attached to the ring called the diamond trade “a lethal dinosaur that places profits over people.”

The campaign has had its intended effect; even De Beers people marvel at how well it’s publicized the issue. As the first “Fatal Transactions” press events took place, De Beers announced that, because of the difficulties enforcing the U.N. embargo, it would stop buying all diamonds from Angola—an action that exceeds what the United Nations asked for. “That shows how committed we are to this issue,” says Andrew Lamont, a De Beers spokesman. Robert Fowler, the Canadian ambassador in charge of the U.N. sanctions committee, hailed the company’s action. But Global Witness called it only “a small step in the right direction” and said De Beers “must announce what controls they will put into place to ensure that diamonds originating from all rebel armies across Africa do not enter into the market.”

Pressure continues. For now, that’s where the discussion stands, with De Beers and the industry under fire, and the jewelry industry caught in the middle. Following the New York Post story, many diamond people were bewildered. They were genuinely horrified that their livelihood might be causing a human tragedy and worried about a consumer backlash. “Everyone wants this to end, and we all want to help as much as we can,” says Jeff Fischer of the Diamond Manufacturers and Importers Association, which has held meetings with representatives from the United Nations, the State Department, and Global Witness. “We’re trying to brainstorm solutions to what everyone acknowledges is a complex problem.”

He and others want Global Witness to halt its P.R. campaign. “It’s unfair, counterproductive, and destructive to call the diamond industry uncooperative, when in fact, we are cooperative.” But Yearsley says Fatal Transactions will continue and is looking for an American group to sign on—which would surely stimulate more publicity. “If we see significant improvements, then, yes, we will change our tack,” he says. “We’ve already seen more change in the three weeks since we launched our consumer press campaign than we have in a year of working on this issue, so we definitely want to continue it.” Global Witness also is considering advertising the issue and has asked leading models to participate, a tactic that worked effectively in anti-fur coat campaigns.

Yearsley says that while he’s happy the industry is paying serious attention to the issue, Global Witness is looking for action. “We want a concrete, workable solution,” he says. He believes it may be possible to develop technology that can trace a diamond back to its home mine, though De Beers’ Lamont doubts this is possible. “If it is, we would love to hear about it,” he says.

Are attacks unfair? In a speech to the Commonwealth Business Forum in South Africa, De Beers chairman Nicky Oppenheimer argued that focusing on the Angolan situation draws attention away from diamonds’ positive effects, such as ensuring stable governments in Botswana, Namibia, and South Africa. “Damage to the diamond market will not on its own deprive the warlords of their treasuries,” Oppenheimer says. “But it will kill prosperity and encourage poverty in other well-regulated African countries and in the cutting centers of India and around the world.” Former South African president Nelson Mandela recently endorsed that view, telling reporters that a diamond boycott could cause “the economies of two countries, Namibia and Botswana, [to] collapse.”

Global Witness, however, rejects the charge that its campaign could hurt African economies. “Nicky Oppenheimer’s plan to automate his recovery plants in Botswana will put more Botswanans out of work than we ever could,” Yearsley claims. He adds that the group hasn’t called for a complete boycott of diamonds and argues the campaign will ultimately help the industry. “The issue’s been around long before we got involved with it,” he says. “You can’t stop journalists from reporting on Angola. It wouldn’t take much for the public perception of diamonds to change.”

One puzzling player is the U.S. State Department, which recently called in industry leaders for a briefing. Attendees included the heads of GIA and Jewelers of America. Theodore Sorenson, the famed Kennedy speechwriter, appeared as a representative for Lazare Kaplan. State Department officials were mostly interested in the industry’s opinion, but they had several suggestions—including bathing rough in a chemical solution that could be detected later on and doing research on the origin of rough. Both ideas received a mixed reaction. Receiving more favorable response was a proposal to crack down on the 10 or so diamond companies that are still conducting business in Angola.

Meanwhile, there’s a bill in Congress—introduced by Rep. Tony Hall (D-Ohio)—requiring that all diamonds sold have “a clear and conspicuous statement indicating the country in which the diamond was mined” (see Up Front, JCK, January 2000, p. 27). Most industry groups view this as impractical and don’t give the bill much chance of passing. Hall says he’s open to suggestions, that his legislation “isn’t written in stone.” Even Yearsley thinks Hill’s real goal is simply to “stimulate debate” and get the industry’s attention.

The issue has certainly received industry attention. The question is: Can it be settled before diamonds become a symbol not of love, but of hate?