Jewelers Go to Washington, ‘Conflict Diamond’ Battle Moves to Congress

Nearly 150 jewelers descended on Capitol Hill in February to drum up support for industry-favored “conflict diamond” legislation. The grass-roots lobbyists, brought to Washington by Jewelers of America, mostly met with congressional staffs, although some powwowed with actual lawmakers including Sen. Jean Carnahan (D-Mo.), Sen. Chuck Hagel (R-Neb.), Sen. Ben Nelson (D-Neb.), Sen. Maria Cantwell (D-Wash.), and Sen. Patty Murray (D-Wash.)

But the JA mission was clouded by word of a competing bill—Rep. Tony Hall’s (D-Ohio) Clean Diamonds Act. Hall’s legislation has been endorsed by some 82 members of Congress, including a dozen Republicans, as well as some 70 nongovernmental organizations (NGOs.)

Hall’s bill and the industry’s are similar in many respects—in fact, sections of Hall’s bill were patterned after the industry’s proposal. Both set a time limit for countries to sign on to the certification system, after which the Customs Service will close the door on any nonconforming country’s diamond imports. Both call on the president to negotiate an international “conflict diamond” treaty, and both set civil and criminal penalties for anyone who knowingly breaks the rules.

Even so, each side throws darts at the other’s approach. Rep. Hall’s spokeswoman, Deborah DeYoung, calls the industry’s draft “hollow,” adding, “When legal experts start reading the fine print, they blanch.” Matthew A. Runci, chairman of both JA and the World Diamond Council’s legislative committee, admits that there were some problems with the first draft but says it’s been tightened up. As for Hall’s bill, Runci calls it “better [than his past legislation] but still not good.”

One sticking point is the issue of diamond jewelry. While both bills require rough certification for countries that export loose stones, Hall also wants jewelry producers to sign on. The industry feels this will mean a long list of new countries that must implement the complex certification rules. The WDC bill says the president can ask diamond jewelry-exporting countries to comply if there’s evidence they’re short-circuiting the system.

The feedback from Capitol Hill was that all sides had to agree on a solution before anything could pass. Any legislation also has to win approval of congressional leaders and the Bush administration. “In the end, it won’t be our bill or the industry’s bill, it will be the Ways and Means Committee chairman’s [bill],” says DeYoung.

Hostile relations. Considering that the two sides agree on almost everything, there is a remarkable amount of ill will between the industry and the Hall-NGO faction.

Relations began to sour last year, following an October meeting with Hall and the WDC. At the meeting, WDC reps indicated (depending on which version of the story one hears) that they would either support Hall’s “Conflict Diamond Elimination Act” or get behind legislation Hall introduced. But when Hall unveiled his “Elimination Act” last November, the industry begged off endorsing it, because their law firm said it was flawed. They asked Hall to wait for the industry’s legislation in January. Hall, however, wanted to get something enacted before former President Clinton left office.

In the end, some in the administration—whose support Hall’s staff also thought it had—agreed the bill was unenforceable. And while the bill quickly died, the hard feelings have not. “Congressman Hall feels he’s worked with the industry before, and they’ve pulled out at the last minute,” says DeYoung. “So now he’s proceeding with his own approach.”

But the WDC has its own beefs. Some have grown wary of Hall’s acid-laced rhetoric—for example, he recently told the Forward newspaper: “I don’t trust the diamond industry at all, they are just playing games and trying to get a lot of conflict diamonds in the country.” Industry executives also fear the NGO consumer campaign, launched in February. While the campaign appears designed to squeeze the industry into supporting Hall’s bill, at least one NGO, Christian humanitarian organization World Vision, says the campaign will continue until something is passed. World Vision is even considering hiring celebrities as spokespeople for their consumer effort. “A lot depends on what happens on the international level,” says the group’s Rory Anderson. “We are all just watching and playing it by ear.”

The night before the jewelers went to lobby, Anna Maria Borg, the State Department’s point person on “conflict diamonds,” spoke at a JA dinner. She noted that while the State Department takes the issue seriously, it wants a solution that does not harm the legitimate industry.

In related news, in March the United Nations Security Council approved sanctions against Liberia, often cited as a “transit point” for illicit rebel-mined gems from Sierra Leone. The Security Council says travel restrictions and an embargo on Liberian diamonds will go into effect in two months unless Liberia drops its support of rebel group RUF.