Will The Conflict Diamond Issue Ever Go Away?

The recent World Diamond Council meeting on conflict diamonds in Milan, Italy, was generally harmonious, except for one brief—but memorable—moment.

Ian Smillie of the nongovernmental organization (NGO) Partnership Africa Canada was reciting the familiar NGO litany of praise, complaints, and not-so-subtle threats, when he brought up the issue of cost.

“For the sake of argument, let us suggest a fee of one half of one percent on the value of all certified parcels moving internationally,” he said. “The taxes on airline tickets are higher. … Consumers will more than understand—if they even notice—why a $5,000 diamond now costs $5 or $10 more.”

To market guru Martin Rapaport, generally a sympathizer, this was NG-Overkill. As some privately cheered—and others winced—Rapaport demanded that the NGOs decide “if you are in or out of the game.” He continued, “If you’d like to stop this dreaming and pie-in-the-sky nonsense, we need to combine our efforts in a focused way.”

Smillie countered that he wasn’t endorsing a tax, simply arguing that the industry needed to pay for its proposals. The dispute eventually was papered over, but the incident dramatizes the frustration that some now have with the NGOs.

On the surface, relations are going swimmingly. The industry’s decision to cooperate with the NGOs has mostly paid off: Since last year, the groups have generally held their fire and refrained from organizing rallies or major “consumer education” campaigns. The WDC even supports the nomination of two NGOs—Global Witness and Partnership Africa Canada—for the Nobel Peace Prize. (See “Diamond Notes,” p. 60.) At one Milan event, the NGOs were toasted by WDC vice president Sean Cohen, and the NGOs toasted back.

But lingering wariness lurks beneath the surface. While the recent Kimberley Process meeting in Ottawa generally was considered a success, with most outstanding issues settled, some felt the NGOs were a fly in the ointment. Most of the arguments are over details that may seem insignificant but which the NGOs view as extremely important, particularly the question of how the system will be monitored.

According to the new provisions, before a country’s diamond apparatus becomes subject to checks, a complaint must be made to the Kimberley Process and approved by the participating countries. The NGOs would prefer an independent body that continually checks compliance.

“Right now, there are a lot of caveats and hurdles to getting a review mission under way,” Smillie says. “If what you want is a Good Housekeeping Seal of Approval, you can’t do that without a Good Housekeeping Institute. Otherwise, it’s really just governments and companies promising to do better, and after 10 years and billions of dollars in conflict diamonds, promises really aren’t enough.”

At the latest Kimberley Process meeting, governments declined to back the NGOs’ call for stricter standards, fearing that frequent review missions would violate their national sovereignty. Some were upset that, in the private session, the NGOs withdrew their objections to the monitoring provisions but the next day found fault with them and threatened to issue a press release denouncing the whole process. Although WDC chairman Eli Izhakoff talked them out of doing so, a recent Amnesty International release did note “concerns that the Kimberley Process will result in empty measures that will … fail to address the problem or restore confidence in the industry.”

Smillie says the NGOs removed their objections because “we didn’t want to hold up the entire agreement. … The NGOs feel this agreement is very important and goes a long way to sorting out the problem. If everyone does what they say they will do, it will be a good system. There’s a lot that the industry and governments can take pride in. We just think this thing can be improved.”

A complex relationship. The relationship between the NGOs and the industry is a complex one. Those who read the NGOs’ sometimes-scathing press releases would be shocked at how chummy they are with industry leaders during their now-regular appearances at trade meetings. Some seem to genuinely enjoy the industry’s mix of flamboyant personalities and lavish events. As Alex Yearsley of Global Witness said at the WDC dinner: “It’s all been so much fun, I don’t want it to end.”

More substantively, the industry and the NGOs agree on most issues. The World Diamond Council has endorsed—and worked hard for—the certification scheme and U.S. legislation; adopted an industrywide “chain of warranties” (see sidebar); and is donating money to restore Sierra Leone’s Bunce Island, in response to NGO calls for charity. The NGOs even were invited to become part of a WDC regulatory panel that would identify people who sell conflict stones.

None of this has come easy—or cheap. In fact, the WDC meeting in Milan was held partly to raise funds. The industry, including companies like Tiffany and Lazare Kaplan, spent more than $2 million last year lobbying for conflict diamond legislation. Twice in Milan, Izhakoff noted the irony of an industry spending money to bring regulation upon itself.

Yet, from the NGOs’ point of view, there are genuine frustrations. The certification program still is not in place, nearly two years after it was first agreed to. Originally, some predicted the scheme would be in place in a matter of months; the current timetable calls for it to be established by the end of this year.

“The NGOs are angry at the car wheels spinning,” said Smillie. They haven’t forgotten that the industry never seriously acted on the issue until Global Witness launched its first educational campaign in 1999, and they believe that maintaining the pressure is the only way to guarantee results. But mostly, they pick on the industry because it listens. It’s unlikely that people in the U.S. government lie awake nights worrying about an NGO press release—but people in the diamond industry do.

So while the NGOs have largely cooled their rhetoric, they aren’t industry cheerleaders either. Partnership Africa Canada recently released a report poking holes in one of the industry’s most treasured talking points—that diamonds lead to prosperity in African nations like Namibia and Botswana (see “Diamond Notes”). But the most controversial moment came in February, when Global Witness mailed some U.S. retailers a Valentine’s Day card adorned with a skull inside a heart and the words “Diamonds For Love, Not War.” The card’s inside message exhorted the trade to remember its vows for “self-regulation.” But, in this age of anthrax threats, the card’s morbid exterior triggered alarms, and Global Witness later admitted it made a mistake. Even so, in Milan, Izhakoff abandoned his standard diplomacy and chided the NGOs for being “naughty.”

“These things are very unhelpful,” Izhakoff said. “The industry is doing everything that’s humanly possible to solve this. We have millions of people dependent on this product, and we don’t want damage that is not repairable.”

What’s next? Nobody knows where the issue goes from here. No one expects the NGOs to “go away.” But if they decide the current system is irrevocably flawed, will they kick up another fuss? And if U.S. legislation isn’t passed, will they lash out at the industry in frustration?

For now the NGOs seem undecided about their next move—although in the end, they, like the industry, have a vested interest in settling the issue. They eventually would like to point to the diamond industry as a model when they approach producers of other commodities—for example, oil or the cell phone component col-tan—about similar certification schemes. (A recent Nightline story on the Congo used language with which jewelers are all too familiar: “Is your cell phone contributing to tragedy in Africa?”)

The NGOs also may be less interested in the issue now that two of the diamond wars—in Sierra Leone and Angola—seem to be cooling down. However, this does not mean the industry no longer has to put the system in place; there is still war in the Democratic Republic of Congo. Also, the system is aimed at conflict prevention—at keeping other countries from being ripped apart by diamonds. “Diamonds will always be a magnet for crooks, and if you don’t find a way to deal with these things, these guys have learned a bad trick, and they’ll be back,” says Smillie. “That’s why the Kimberley Process is so important—to prevent this from happening again.”

And so in Milan, people like De Beers chairman Nicky Oppenheimer called on the industry to “redouble its efforts” to enact the certification scheme and crack down on conflict diamonds—so it can, once and for all, get this potentially damaging issue off its plate.