60 Minutes takes on De Beers and conflict diamonds

The industry’s image took yet another beating after ”60 Minutes” took on De Beers and the ”conflict diamonds” issue in February.

Industry execs who worked with the show’s producers hoped the story wouldn’t be as negative as last year’s Prime Time Live episode show on ”conflict” gems-noting that producers attended a mine opening in Botswana and interviewed De Beers chairman Nicky Oppenheimer. But the show’s bent was decidedly critical-it even compared diamonds to drugs and equated buying from De Beers to diamond laundering.

The story’s first half covered familiar ground. While the industry expected it to deal with recent changes in De Beers, it was almost exclusively on the company’s history of managing prices, ensuring media coverage for diamonds, and strong-arming Zaire when it bolted the cartel in the 1980s. It mentioned De Beers’ 1995 indictment for price fixing but left the impression it was for gem, rather than industrial, diamonds. It showed a headline that originally read, ”GE, De Beers Indicted on Price Fixing,” but removed the ”GE,” leaving the impression that only De Beers was involved.

After commenting that De Beers is ”illegal” in the U.S.-its largest market-Harvard law professor Deborah Spar added: ”I can’t think of any other commodity for which that’s true-except maybe for drugs.” After showing dealer William Goldberg at a sight, reporter Bob Simon added: ”[Goldberg] has done nothing illegal. But he has in effect laundered the diamonds of De Beers.”

The section on ”conflict diamonds” was even more damning. There were gruesome glimpses inside a Sierra Leone amputee camp and talk of the role diamonds have played in fueling wars in Sierra Leone, Angola, and the Democratic Republic of Congo. Simon said that De Beers now warrants that its diamonds are ”conflict-free” but added that the company hadn’t accounted for the ”conflict” stones left in its safes. When Oppenheimer noted that only 4% of the world’s diamonds was involved, Simon immediately countered, ”Global Witness says the amount of `conflict diamonds’ on the worldwide market is considerably higher than 4%.” (The group’s latest figure is 7%.) And after relaying Oppenheimer’s assertion that diamonds help African economies, Global Witness’s Charmain Gooch said, ”I’d challenge anyone who said that to you to go into an amputee camp in Sierra Leone and say that to the victims of the amputee camp.”