Stopping the Brutal Diamond Trade

In the jargon of the diamond trade, they are known as "conflict" or sometimes "blood" gems. No one knows exactly how many of the 860 million diamonds cut and polished every year may fall into the category: perhaps four per cent of total world production, perhaps as much as 10 per cent. But there are plenty of people, like Canada's Ian Smillie, who are acutely aware that the diamonds that are being mined and sold illegally are fuelling ferocious civil wars in African trouble spots from Sierra Leone to Angola. For the past year, Smillie has been in the forefront of a global effort to stamp out the illicit traffic. And last week in Antwerp, the old Flemish city in northern Belgium that has been the world's diamond capital for the past 500 years, Smillie had reason to celebrate. "We've turned the corner," he said, with satisfaction. "What we have witnessed here may be the beginning of the end of something that has brought misery to so many for so long."

Smillie's optimistic remarks were prompted by the outcome of the latest World Diamond Congress, twice-early gathering of the notoriously secretive industry's major traders, cutters and polishers. For four days last week, some 350 delegates from around the planet assembled in Antwerp to engage in often acrimonious debate over how to confront mounting international pressure to tackle the volatile issue of conflict diamonds. "It was a real bun fight," remarked Smillie, who monitored the discussions on behalf of Partnership Africa Canada, a coalition of a hundred non-governmental organizations, (NGOs), which earlier this year published a hard-hitting investigation of the illegal trade. "But at the end of the day," he added, "agreement was reached on a program that will mean major changes in an old industry that has not really experienced much change at all for the last 100 years."

The nine-point plan envisages a global certification system for parcels of uncut and unpolished diamonds that, once in place by the end of the year, will track the precious stones from the moment they leave the mines to the time they arrive at international trading centres. Every package of rough gems will have to be shipped in sealed bags, with the contents of each entered into an international database. To give the procedure teeth, a new body, provisionally entitled the International Diamond Council, will be established to ensure that no diamonds from illegitimate sources are traded. Composed of representatives of producers, manufacturers, traders, governments and international organizations, the proposed policing authority will have the power to automatically expel traders who knowingly violate the system from industry organizations.

Over the longer term, traders in illicit gems may also face criminal charges if governments in producing and importing countries act on the proposals recommended by the Diamond Congress last week. The industry wants host governments to enact legislation encompassing the measures set out in the nine-point program, including criminal penalties for any violations. Government co-operation, in fact, is critical to the success of the industry's plans. To that end, industry and government representatives met last Thursday in London to evaluate the results of the Antwerp gathering, in itself the continuation of a consultative process that began last April in South Africa and will culminate at the end of the year with a ministerial-level conference, also scheduled for South Africa.

For a business that is still largely conducted behind closed doors, often on the basis of nothing more than a nod and handshake between longtime confederates, the pace of change has been nothing short of remarkable. "I've never seen an industry change gears so fast," noted Smillie, formerly executive director of the Canadian University Service Overseas and now a private international aid consultant based in Ottawa. Until quite recently, many in the diamond trade refused to even acknowledge that blood gems were a problem.

But pressure has been brought to bear on the industry, much of it coming from Canada, which did not even have a rough diamond trade until 1998, when the three million-carat-per-year Ekati mine opened 300 km northeast of Yellowknife. Two more promising mines, also in the Northwest Territories, are under development, raising the prospect that Canada will be producing 10 per cent of the world's diamonds by 2010.

It is one reason why there was a significant Canadian presence in Antwerp last week. Robert Fowler, the Canadian ambassador to the United Nations, addressed the gathering, as did the Northwest Territories' resources minister, Joseph Handley. Both warned the assembled delegates that failure to grapple publicly with the issue of conflict diamonds risked invoking a consumer backlash, one that could threaten not only the $9-billion-a-year trade in rough diamonds but, even more chilling, the $90-billion business in the sparkling finished product. "In Canada in the 1970s," warned Fowler, "we watched our fur industry, the business upon which our country was founded, destroyed by a small number of very shrill and very effective animal-rights activists. A vibrant, 400-year-old industry was all but annihilated by an extremely deft manipulation of consumer consciousness. Many do not like this parallel but it is, I will continue to argue, germane to your discussions here."

Canada, of course, was not alone in applying pressure. Fowler was speaking for the United Nations in his capacity as chairman of the Security Council committee on Angola sanctions, which is currently engaged in a program to cut the diamond funding of Jonas Savimbi's Unita rebels in that country. Smillie represented the Canadian contingent of a worldwide NGO coalition marshalled to clamp down on the illicit diamond trade that is fuelling ongoing armed rebellion in six African states.

No matter what the source, the collective pressure clearly had an impact on De Beers, the South African-headquartered mining conglomerate, which controls 70 per of global trade in uncut diamonds. De Beers also purchases 35 per cent of the rough stones mined at Canada's Ekati operation. It is also engaged in a hostile takeover of Windspear Diamond Inc. of Vancouver, which hopes to open a diamond mine south of Ekati. And to assure consumers that their diamonds were mined legally, De Beers will offer written guarantees to that fact.

Some diamond manufacturers are already engaged in even more effective practices. Jamie Ben-Oliel, whose family has been in the trade in Toronto and Vancouver for 25 years, purchased a $200,000 laser last year when he opened a business in Yellowknife to cut and polish gems, many from the new Ekati mine. Every diamond that Ben-Oliel ships from the facility is now burned with the tiny symbol of a polar bear, so small that it can only be seen with a magnifying glass. "We wanted to put it on Canadian diamonds," he said, "so people will know that they are pure." According to Ben-Oliel, the system has "gone down well" with both jewelers and consumers - neither of whom want any connection with conflict diamonds, whose gleam is stained with the blood of thousands.

Maclean's July 31, 2000