De Beers Defends ‘Conflict-Free’ Label

A year after De Beers decreed that all its diamonds are “conflict-free,” the company finds itself having to defend that designation.

In the latest attack, the CBS newsmagazine 60 Minutes noted that the “De Beers’ guarantee makes no mention of the diamonds in their vast stockpile, which was built up while De Beers was buying up all those diamonds from Africa’s war zones.”

De Beers spokesman Andrew Lamont counters that De Beers is able to make the guarantee because “our stockpile has been reduced from $4.8 billion to $2.7 billion, and the vast majority of diamonds are from legitimate sources, so the likelihood of it containing conflict stones is small.” He adds that “we have enough people with enough experience looking at diamonds to establish where they came from.”

The De Beers claim also has come under fire from the United Nations. In a just-released report, the U.N. monitoring mechanism on Angola sanctions writes that while “De Beers now guarantees its diamonds are not sourced from conflict zones, the Mechanism found that, while De Beers has closed its African buying offices, [De Beers subsidiary] Diamdel’s offices in Antwerp and Tel Aviv remain open, although they are said to be buying rough diamonds believed to originate in the Russian Federation. No external validation of the De Beers [conflict-free] claim is therefore possible, since diamonds can move through too many routes.”

Lamont would say only that his understanding is that the company has ceased all outside buying. “We’ve got procedures in place at Diamdel to see that diamonds do not emanate from so-called ‘conflict’ zones,” he adds. “I’m very surprised that the U.N. would draw that conclusion. If they have a problem with our process, they know exactly where to reach us.”

In another bombshell in the United Nations report, the panel charged that major sightholders might be knowingly buying “conflict diamonds” from Angolan rebel group UNITA.

The U.N. panel said it has “received information that major dealers, some of them well-known clients of De Beers, are knowingly buying rough diamonds from UNITA, and, in some cases, have been operating buying offices around [Angola’s] border with the Democratic Republic of Congo since the beginning of 2000, buying Angolan diamonds without a certificate of origin.” The panel said the reports “require further validation but are a matter of serious concern, in view of the credibility of the sources.”

Such purchases violate U.N. sanctions and are illegal under both U.S. and international law. De Beers has vowed to terminate any sightholder caught buying “conflict” stones.

Says Lamont: “There is absolutely no basis for the U.N.’s assertion.”