Whatever Became of Sierra Leone?

Meet Ali. He’s 15 years old and works in the diamond industry.

Ali is a digger in a Sierra Leone diamond field. He’s been one since he was 12. He spends his days shoveling earth along with 100 or so others near a riverbed that, locals say, has already been mined twice. He no longer has what’s called a “supporter,” but when he did, that supporter paid him just two cups of rice a day for his efforts. How big were the cups? he is asked. “Two milk cups full,” he says.

And, believe it or not, Ali doesn’t have it so bad. The sorters who sift through gravel work in the water and are vulnerable to bilharzia—a debilitating disease spread by snails—and have greater exposure to mosquitoes that carry malaria and other diseases.

If this doesn’t make you uneasy enough, in 2005 Sierra Leone legally exported a record $140 million in gems. An equal amount likely left the country illegally. All told, over the last few years, Sierra Leone has exported over $1 billion worth of diamonds, yet the people who work the hardest at finding them are paid a pittance. As one digger says, Sierra Leone is “a rich country filled with poor people.”

But before you boycott Sierra Leone diamonds, think about this: Ali and his fellow diggers do it because they have no choice. And if there’s anything worse than a person working for two cups of rice, it’s taking that rice away from him.

In the late 1990s, Sierra Leone’s gem reserves attracted the world’s attention for the role they played in fueling the country’s civil war. Now the country’s diamond industry is returning to the spotlight again.

A movie called Blood Diamond, starring Leonardo DiCaprio and opening early next year, is set in Sierra Leone at the height of hostilities. VH1 is filming Bling: A Planet Rock, a documentary that follows several rappers on a tour of the country. And Kanye West’s 2005 rap hit “Diamonds From Sierra Leone” recounts the country’s civil war in gruesome detail—and never mentions that hostilities have been over for four years.

With Sierra Leone about to reappear on the diamond industry’s radar screen, I traveled there on a trip arranged by Martin Rapaport, publisher of the famed price list, and found that, even with the country at peace, much about its diamond business remains disturbing—and may not be easy to fix.

On a hot Wednesday morning in the dusty mining town of Tongo Fields, in a dilapidated outdoor public square, Martin Rapaport is holding a “town meeting” with a group of locals, many of whom work as diamond diggers. He begins with a question he asks jewelers at trade shows: “Who knows why people buy diamonds?”

One or two attendees have taken a diamond course sponsored by the United States Agency for International Development, and they mention something about jewelry or technical purposes. But it’s obvious that most people in attendance—who have given their lives to diamonds—have no idea why people in rich countries crave them.

“A diamond is a symbol,” Rapaport says, with the same machine-gun delivery familiar to anyone who’s seen his industry speeches. “It represents the relationship between a man and a woman. It’s a sign of committed love. When a woman in the United States gets a diamond she is very happy. But she isn’t happy she got a diamond. She’s happy that she got a man.”

The audience titters, shifts nervously, and looks at Rapaport as if he’s from another world. Which he is.

Rapaport is on a tour of Sierra Leone to win support for his idea for “Fair Trade Diamonds.” I’m following him as he crisscrosses the country, giving seven speeches in five days, in front of audiences ranging from dirt-poor diggers to tribal chiefs to the country’s vice president to its U.S. ambassador—each time with no loss of passion.

He’s accompanied by an entourage that includes me, three of his sons (he has 10 children), a Denver jeweler, a representative of Fair Trade, a Canadian documentary crew that’s filming the trip for the Discovery Channel, and African-born jeweler to the stars Chris Aire. At every stop he introduces us, and it’s hard not to feel like a prop. But he’s sending a message—people in the United States are paying attention to Sierra Leone, and they are watching what’s going on here, whether you like it or not.

This is Rapaport’s fourth visit to Sierra Leone. The first was in 2000, during the war. Rapaport rode in on a U.N. helicopter sitting on bags of rice. Since the conflict was largely over who controlled the country’s diamond fields, the U.N. wanted him to talk with Foday Sankoh, the head of the rebel group Revolutionary United Front, about agreeing to a cease-fire if RUF could trade in international markets. In the meeting Sankoh was all smiles, and he told Rapaport that he became a rebel because his country’s government was corrupt. “He was right about that,” Rapaport says. “But he also was like a Hitler.”

Indeed. War is never pretty, but RUF took it to new heights of barbarity. It killed indiscriminately and burned villages, and today most of Sierra Leone still looks like a bomb hit it. It used child soldiers, often high on cocaine, who were sometimes forced to kill their own families. Its most notorious intimidation tactic was the amputation of limbs and sometimes other body parts, like ears. The day after he met Sankoh, Rapaport visited an amputee camp. It profoundly affected him, and he printed a picture of dead bodies in his newsletter.

After the war ended in 2002, Rapaport returned, determined to do something that would make a difference. His first idea was to form digger cooperatives that would pay workers a fair wage and basically make him a “supporter.” The USAID-funded Integrated Diamond Management Program organized them, and Rapaport got Global Witness—the nongovernmental organization that’s now a consultant on Blood Diamond—to monitor conditions. In the end, the monitors were happy, and so were the workers, who, by all accounts, worked hard and were paid well.

And it flopped. Rapaport invested $60,000, and just a handful of diamonds—worth $3,000—were found. He pulled the plug.

Now he’s back, with attempt No. 2: Fair Trade Diamonds. His speeches touting the concept sound like Mother Teresa meets Madison Avenue, with a healthy dose of Brooklyn thrown in. He first tells people that since diamonds have a mainly symbolic value, they’re particularly vulnerable to people’s perceptions, which is why the diamond industry is so spooked by Blood Diamond. (People in Sierra Leone know surprisingly little about the movie, which was filmed in South Africa and Mozambique.)

But, Rapaport tells his audiences, you should be scared, too. The war in Sierra Leone is over, and Sierra Leone “blood diamonds” are a thing of the past. Yet most Americans don’t know that. “After they see that movie, what jeweler is going to want Sierra Leone diamonds in their showcase?” he says. “The result will be an effective boycott of West African jewelry.”

Instead, he warns, consumers will buy from producers like Canada and De Beers, who will tout their diamonds as “nonconflict.” And Sierra Leone—which depends on diamonds for 90 percent of its foreign currency earnings—will be devastated.

But there is a better way, Rapaport says: Fair Trade Diamonds. These diamonds would bear the imprimatur of the Bonn, Germany–based Fair Trade Labeling Organizations International (FLO). FLO certifies products that are farmed in developing countries under socially responsible, ecologically friendly conditions, where part of the proceeds benefit the local population. The first and best-known Fair Trade product is Fair Trade Coffee, which currently accounts for 2 percent of the world market; Starbucks and Nestlé both have Fair Trade brands. Fair Trade has since branched out into cocoa, sugar, flowers, rice, even soccer balls. There is also a plan for Fair Trade gemstones.

As Rapaport explains it, to qualify as Fair Trade, a stone would have to be mined under certain conditions: The diggers must be paid decent wages; a “fair” price must be paid for their stones; and 5 percent of the profits have to be reinvested in the community to build schools, roads, and hospitals. These conditions would be strictly monitored by outside experts.

This could cost a bit of money, but Rapaport insists that consumers will pay it. “I know it sounds crazy,” he says, “but if we tell consumers there are diamonds that make the world a better place, there are rich women in California who will pay extra for that.” In fact, he calculates such diamonds could earn a 20 percent premium. As a result, Sierra Leone diamonds will actually be worth more than other diamonds. “If we do this, everyone will make bigger profits,” he says. “You don’t have to be an idealist. You can be interested in Fair Trade Diamonds if you are a greedy pig. There is money on the table here.”

On this the Americans on the trip all agree: With diamonds suffering serious image problems—which may be on the verge of getting worse—Fair Trade Diamonds would likely be a big seller. So the problem is not with demand. It’s with supply, and getting something done in Sierra Leone.

It’s difficult to describe the misery that afflicts Sierra Leone—once one of the most cosmopolitan countries in Africa—after its 11-year civil war. The life expectancy for men is 38. For women, it’s 42. It has one of the highest rates of infant mortality in the world (about 16 percent). It ranks dead last on the U.N. “Human Development Index,” which measures health, education, and overall quality of life.

All the country’s power plants were destroyed in the war, so most of the population lacks electricity. Those that have it depend on erratic generators. There is virtually no plumbing. The roads are a mess. Medical care is almost nonexistent. Malaria is a problem, and so is yellow fever and even polio, eradicated in most of the world 50 years ago. Most of the population wear secondhand clothes from Western countries, with incongruous messages like “I’m a superstar at King elementary school.”

And despite what the industry says, no one knows if its diamond industry can ensure a better future for Sierra Leone. Countries like Botswana have been able to benefit from their diamond reserves because they’re located in one place, which companies can fence off and build a mine around. But alluvial mining, the source of 90 percent of Sierra Leone’s diamonds, is far more scattered, chaotic, and risky. And, in fact, Sierra Leone’s diamond mining areas are among the poorest in the country.

Based on conversations with diggers, dealers, NGOs, and local experts, here is how the diamond industry in Sierra Leone works, circa 2006:

There are an estimated 150,000 alluvial diggers in Sierra Leone. While the structure varies from mine to mine, most are paid by “supporters,” who supply them with tools and pay them dirt-cheap wages—generally cups of rice and about a dollar a day, although the more generous ones sometimes throw in housing or support for the digger’s family. But it also becomes a form of servitude. “The problem,” one digger notes, “is that we rely on other people to finance our activities. And as long as that happens, your fate is in that person’s hands.”

These low wages are not unusual—57 percent of Sierra Leone’s workforce lives on less than a dollar a day. Even in one of the poorest countries in the world, that doesn’t go far. “A lot of times these people go hungry, and their families go hungry too,” says Estelle Levin, a consultant with the Diamond Development Initiative, an industry-NGO coalition examining the issue of alluvial diggers.

The big chance to break out of this cycle is to find diamonds, which are known as “winnings”—a sign of the casino atmosphere in the mines. Generally when a diamond is found—and there are monitors to make sure diggers don’t walk off with them—the digger is generally given a “tip” by the “miner,” the person who organizes and controls the mine site. The stone is then sold by the miner and supporter to a local dealer, who often has an established relationship with the supporter. (Sometimes they are the same person.)

While many different nationalities are active in Sierra Leone, many dealer/supporters are Lebanese or of Lebanese descent, and “the Lebanese,” along with Marakas (French-speaking West Africans), are widely thought to have a stranglehold on the country’s diamond industry. For example, of the seven major diamond exporters in Sierra Leone, six are Lebanese.

When it comes to valuing the stone, people at the bottom of the chain are generally at the dealer’s mercy; most have no idea how much a stone is worth, especially if it’s a valuable one. “I read in your newsletter that yellow diamonds are among the hottest products,” P.M. Kamichande, a tribal chief, noted at one of Rapaport’s forums. “We have been told they are worth nothing.”

What’s puzzling is that there are plenty of diamond dealers in the mining areas, and this, in theory, should drive prices up. But Ian Smillie, of Partnership Africa Canada, notes: “It’s not a free market. There is a lot of collusion. When a big diamond is discovered, word gets around.” One DDI report found that established dealers sometimes thwart outsiders by overpaying when new dealers come in. Once they have left, they go back to underpaying.

Like most diamonds, stones in Sierra Leone pass through several hands before they make it to market, with each “hand” getting a cut. As a result there is a substantial markup between dealer and exporter; one dealer told JCK that he makes an average of 30 percent on the stones he sells—and that might be understating it.

Naturally, even with monitors, many diggers sometimes steal what they find, and a substantial “alternate” economy of illegal gems exists. But according to another DDI report, many dealers can tell if someone has a stolen gem and will offer low prices, resulting in not much benefit.

There is also considerable smuggling; even the son of the minister of mines was recently arrested with pilfered gems. Sometimes this is done to evade the government’s export duties or because the smuggler is involved in shady businesses like money laundering. By all accounts, the situation is better than it was. Official exports today ($140 million) are more than 10 times what they were at the height of the civil war. Still, I was offered diamonds several times by people in Sierra Leone, and they didn’t seem concerned about whether or not I had a dealer’s license or if I would export them legally. At the airport, security personnel searched not only my body but my wallet. It was clear they were not looking for explosives and bombs. They were looking for diamonds.

But while the system is decidedly broken, there is not much agreement about how to fix it. The government doesn’t seem interested in changing the “supporter” system; “the Lebanese” are politically powerful, and there is considerable corruption in the government. (As one experienced observer put it: “These government officials sometimes make several hundred dollars a year. So if someone offers them the equivalent of one year’s salary, what are they going to do?”) In addition, many NGOs don’t want to get involved with the diamond industry. They don’t understand it and are leery of its reputation.

Even people who do understand the diamond industry are wary of moving too fast, too soon. In his speeches, Rapaport mentions a phrase all too familiar to people in relief and development—“the road to hell is paved with good intentions.” For instance, after the war, he says, NGOs and relief workers flew in. They built wells, restored houses, and did a lot of good work. But they also increased the price of rice, so it became less affordable to the common person. Good intentions. Road to hell.

This can be doubly true in Sierra Leone, a country still recovering from its own road to hell. It’s at peace now, but peace can be fragile. Rock the boat too much and it can be shattered. Make things difficult for the wrong people, and they can make things difficult for you.

And into this china shop charges the bull.

In his talks, Rapaport goes out of his way to appear as nonthreatening as possible. “The idea is to not disturb the existing environment,” he says at one stop. “I am not against the Lebanese. I’m not against the supporters. By not fighting with everyone, there is a chance that this might work.” In fact, he argues his plan will enhance the established order. The digger will get more money, but so will the supporters, dealers, and exporters. There will even be a cut for the marketer of the Fair Trade stone—which he stresses, will not necessarily be him. Everyone will win.

But as the week goes on, it’s clear that Rapaport—the man who braved death threats when he defied the Diamond Dealers Club in the 1980s—is not interested in doing anything small or quiet or nonrevolutionary. Halfway through the trip, a digger proposes that there be regular diamond tenders in Sierra Leone, a move that would result in better prices all down the chain but would also—for better or worse—upend the established order. Rapaport seizes on the idea, and he mentions it at every stop.

By the end of the week, it’s not clear where things stand. Rapaport has schmoozed, kibitzed, exhorted, lectured, rabble-roused, and plugged his idea to as many people as possible. And he’s done it with typically Rapaportian drive and energy—at the end of one day, when everyone else in his party is worn out from meetings and driving, Rapaport is schmoozing a local tribal chief, explaining for the umpteenth time how Fair Trade diamonds will make a 20 percent premium.

Yet his idea for Fair Trade Diamonds remains still very much that—an idea. Rapaport has asked the government to try his idea on five fields. He leaves brimming with optimism, but he has no commitments.

Other snags develop. It takes two years to get proper certification from FLO, so the diamonds may have to be called “development diamonds,” with perhaps a stamp from the government of Sierra Leone. And while development diamonds may have potential, the name isn’t as potent or well-known as Fair Trade.

Child labor is another issue. Though technically illegal, many underage children work at the mines. This is not unusual in Sierra Leone, where one sees children selling everything from nuts to cigarettes. In one of Rapaport’s forums, an audience member estimates that 30 percent of mine labor is underage. “But if you ask them, they say they lost their parents during the war. They have no other choice,” he adds. Rapaport agrees: “We can’t have American values judging African situations. Africans have to decide values for Africans.” Yet it’s tough to imagine a Fair Trade product produced by children.

Moreover, some of Rapaport’s remarks seem to go over people’s heads. At one point, he tells an audience of locals that he cares about Sierra Leone in part because both his parents were “graduates” of Auschwitz, the Nazi concentration camp. The audience, it is clear, has never heard of Auschwitz.

Some aren’t even sure that the answer to Sierra Leone’s problems lies in its diamond reserves. As Rapaport found with his digger cooperatives, diamond mining is a gamble. Fair Trade sells mostly products grown on farms, rather than minerals, because minerals eventually run out. Since so many of Sierra Leone’s alluvial diamond areas have already been mined, they could be on their way to depletion; a formal geological survey of the country hasn’t been done in 40 years. That’s why it makes sense, in the most brutal Adam Smithian way, that the diggers are paid such low wages. There are thousands of diggers, and the vast majority find nothing. The supporter has to spread his risk around.

Yet Rapaport soldiers on—and there is something bracing about the sight of this man, graying and in his 50s, wealthy yet traveling in a very poor land, where you sleep under mosquito nets and feel lucky if the toilets flush. In the end, Martin Rapaport may or may not be the best person in the diamond industry to tackle the problems of Sierra Leone. But at least he’s out there, trying.

There are other entities looking at these issues. The Diamond Develpment Initiative, whose members include Rapaport, De Beers, the International Diamond Manufacturers Association, and several NGOs, was founded last year to address the issue of alluvial diggers, not just in Sierra Leone, but in other countries. (There are an estimated 1 million diggers globally.) In addition, the Integrated Diamond Management Program is working with the government on its mining policies and is providing training to diggers, “so they have an idea of the value of what they are taking out of the ground,” says Alisha Eisenstein, a project manager with Management Systems International, which implements IDMP.

Yet despite all this activity, the facts on the ground have not changed appreciably. And for the diamond business, the stakes are enormous. After all the negative press on “conflict diamonds,” the last thing it needs is a news report showing how diamonds are mined by children for subsistence wages.

The industry took a public relations beating in the late ’90s over what was going on in Sierra Leone. When that was settled, many breathed a sigh of relief that they wouldn’t have to worry about that country anymore. But the problems there aren’t over, and the industry may find its work there has just started.

“They are no longer chopping off hands in Sierra Leone,” notes Levin. “Diamonds have gone from being the source of people’s misery to the source of all their hopes. But you have people working hard eight hours a day mining diamonds for just two cups of rice. Now tell me: Is that fair?”

Fair Trade diamonds are not available yet, but for more information on the Diamond Development Initiative, visit Partnership Africa Canada at www.pacweb.org.