Campaign Target: Diamonds originating from areas of conflict in Africa

Date Begun: 1998

Campaign Background: For more than a decade, the sale of diamonds from various war-torn countries has been used to finance wars and domestic terrorism in those nations, killing and maiming millions of people. And recently, the sale of these "conflict diamonds" helped finance the September 11, 2001 terrorist attacks in New York City by the terrorist group Al Queda. As the world's largest diamond market, American consumers help pay for these atrocities, accounting for two-thirds of all conflict diamonds bought.

The trend of funding bloodshed through diamond sales began in the early 1990s by insurgents waging a savage war of destruction in the African nation of Angola. In the late 1990s, this strategy of using diamond mining to help fund arms sales was adopted by other rebel groups waging wars in Sierra Leone, Liberia and the Congo. In the past decade, rebels have smuggled over $10 billion in diamonds out of these countries to provide the revenue that fuels these wars.

In some instances, rag-tag gangs have transformed into well-equipped armies by seizing diamond-rich land, driving out or killing the local residents, and then mining and selling the gems to an industry that tended to turn a blind eye to the source. More than two million people have died in these diamond wars. Hundreds of thousands more have been maimed by land mines purchased with diamond revenues.

"Conflict diamonds" or "blood diamonds" are mined in rebel-controlled areas then smuggled out of West African countries and sold to bring in arms to perpetuate this brutal and devastating domestic terrorism. The rebel groups in these conflicts have violated numerous peace agreements and routinely target and terrorize civilian populations. The issue first gained international attention in 1998 after an investigative report by the London-based Global Witness exposed the extent of the problem.

Although these conflicts did not originate with diamond mining, it is largely through the diamond trade that the conflicts are allowed to continue. In neighboring African countries where there is nothing to trade for weapons - such as in Mozambique, wracked by similar political and terrorist conflict - once the Cold War ended and the U.S. and USSR stopped financing the conflict, it simply fizzled out. But Angola, the Congo and Sierra Leone have plenty of diamonds to stoke the fires of war. And, increasingly, diamonds are serving not only as the means for enabling such debilitating conflicts, but are increasingly becoming a central motive. In recent years, for example, former rebel allies Rwanda and Uganda have begun fighting each other for control of the diamond-trading center Kisangani in the eastern Congo.

The United Nations, which has imposed military and financial sanctions upon the rebel forces, continues efforts to bring an end to the trade in diamonds mined in these war-ravaged regions. Largely through the sale of diamonds, these armies have been able to get around international sanctions.

Thanks to conflict diamonds rebel forces have managed to sustain conflicts that have inflicted such a horrendous toll on civilians in Angola and Sierra Leone. In Angola, illicit diamond sales fund UNITA, led by the charismatic and power-hungry Jonas Savimbi, fighting to unseat the elected government and become the country's uncontested leader. Scornful of anything less, Savimbi seems intent upon terrorizing and destroying and the entire country --routinely massacring villagers at random, killing aid workers, laying millions of landmines, and kidnapping children from schools and orphanages to serve as combatants. Approximately one million people have died in the terror campaign and millions more have been displaced. In the Congo, revenue from diamonds has helped to fuel a battle amongst several rebel groups over the region's precious natural resources, plunging a widening area into devastating warfare. In Sierra Leone, diamonds have financed a killing spree dubbed "Operation No Living Thing." The Revolutionary United Front (RUF) rebels in Sierra Leone is known for brutality against civilians, such as the amputating the limbs of victims, including small children, sexual enslavement and gang rape of girls and women, and the kidnapping and forced recruitment of children as soldiers. Amputation and dismemberment was the rebels' way of punishing civilians for voting in Sierra Leone's first election.

On November 1, 2001, the Washington Post ran a detailed investigative report disclosing that bin Laden's al Qaeda network had bought millions of dollars in diamonds over the previous three years from the RUF and re-sold them at a significant profit to diamond dealers in Europe. On September 11, 2001 the terror that U.S. consumers had unknowingly been financing overseas for years, came crashing into living rooms all across the country. Suddenly, the horror that the conflict diamond trade has imposed upon Africa for years hit home in the U.S. The U.S. government and its intelligence agencies, which had been aware of the crisis for years but had been slow to respond, quickly began work on national and international guidelines designed to end the conflict diamond trade.

Ohio Congressman Tony Hall stated that "everyone who works on Africa policy knows full well how the world is failing to stop blood-soaked diamonds from reaching consumers, and the terrible suffering this illegal trade has inflicted on African victims." But, Hall states, "our collective failure-- along with the diamond industry's-- has been to treat those who commit acts of terror differently when the victims are innocent Africans. Any terrorist organization -- including the RUF -- ought to have been targeted long before it claims U.S. victims." The U.S. State Department had already identified the RUF as a terrorist group and knew they were earning hundreds of millions of dollars a year from the diamond blood trade.

Hall, who visited Sierra Leone in 1999, says, we're just starting to learn how international terrorists have siphoned the proceeds from conflict diamonds to fund their vile attacks on Americans. Al Qaeda's interest in the illegal diamond trade, according to the Post account, arose not only from the profits that could be made, but also as a way of evading U.S. and other efforts to trace and freeze its finances. The rebels in Sierra Leone also reportedly sell to gemstone buyers from Hezbollah, a Shiite Muslim organization involved in terrorism.

Since returning from his 1999 African visit, Hall has sponsored six pieces of legislation designed to end the trade in dirty diamonds. Over the course of two years, Congress failed to act upon Hall's first five bills, largely due to opposition within the diamond industry over the proposed regulations. In the Senate, Judd Gregg was a lone voice against U.S. complicity in the blood diamond trade. Now, following the September 11 attack, Hall's sixth bill, the Clean Diamond Trade Act, HR 2722, is expected to be passed by Congress before 2002. This bill marks the first congressional action on this matter.

Hall has urged Congress to "act immediately on legislation to right this wrong before more innocent people -- Africans or Americans -- suffer crimes that are funded in part by the Americans who buy the majority of the world's diamonds."

"The disclosure [of bin Laden's ties to the trade] has changed the picture," says Holly Burkhalter, advocacy director for Physicians for Human Rights, which has led the fight for the proposed U.S. legislation. "Things are moving real fast now."

According to Hall, "crafting a solution [to conflict diamonds] requires navigating through the grey fog of trade law." Any legislation that attempts to impose a blanket ban could be knocked down by international trade rules that prohibit laws in restraint of trade. According to world trade law, humanitarian issues are not legitimate concerns for restricting trade. African countries bordering the conflict areas have become major markets for rebel armies to sell their conflict diamonds, bringing in billions of dollars for those economies. Consequently, these nations have a vested interest in using trade laws to ward off efforts to ban diamond sales from the region. Furthermore, blacklisting diamonds from these war-torn regions may hurt legal, legitimate diamond production in the area, because there are no differences in the composition in conflict diamonds to distinguish them from others. This issue has been the primary stumbling block for efforts to legislate against conflict diamonds.

The U.S. imports roughly 65 percent of the $7 billion worth of gem-quality diamonds that are traded globally each year. In recent years, about 70 percent of the conflict diamonds smuggled out of Africa were sold in the United States. Therefore, ending the conflict diamond trade is largely reliant upon the successful implementation of standards and regulations in the world's largest diamond market --the U.S. It is widely felt that any standards adopted and implemented by the U.S. would serve as an international standard and could be put into place in other nations. Consequently, the reluctance of the U.S. to adopt strict regulations has stymied progress in other countries.

In mid 1990s, the United Nations imposed bans on the funding of the various West African rebel armies, including sales of diamonds mined by those armies. In 1998 and 1999, the UN attempted to tighten these embargoes, declaring a ban on all non-government mined diamonds from Angola, and on all diamonds mined from Sierra Leone. In 2000, it extended its ban to include diamonds sold in Liberia, most of which had been mined by the RUF army in Sierra Leone.

The failed CARAT (Consumer Access to a Responsible Accounting of Trade) Act of 2000, introduced by Congressman Hall would have required that all diamond imports to the US contain information on the original source of the diamonds sold.

Its successor, the Clean Diamond Trade Act, introduced by a bipartisan group of lawmakers, calls for a ban to be imposed on all diamonds from countries not co-operating with an international certification process currently being negotiated by 38 diamond-producing nations. The bill would also impose tough sanctions on nations found to be trading conflict diamonds.

A central sticking point in both the UN and US efforts to shut down the trade in conflict diamonds is the problem of identification. It is virtually impossible to distinguish conflict diamonds apart from other diamonds. "Of literally all the commodities in the world, diamonds are the most difficult to control," states Jakkie Cilliers, executive director of the Pretoria-based Institute for Security Studies which has extensively studied the problem. Currently, the only means of identifying the source of diamonds has been the certificate of origin. But, until recently, except for Angola and Zambia, most African countries did not issue certificates of origin. And when such certification became increasingly necessary for selling diamonds, an illicit trade in certificates grew to meet the demand. In Zambia, a gemstone sales certificate can be bought for about $100.

Approximately 70-80 percent of the world's rough, uncut diamonds are traded through Antwerp, Belgium, where the diamonds are cut and polished. Human rights groups such as Global Witness have alleged that Belgian customs authorities aided in the sale of conflict diamonds by falsifying import records and turning a blind eye to forged certificates. The groups stated that inadequate controls regarding origins of imported diamonds and poor implementation of these controls by Belgian customs authorities were evidence that policymakers in Belgium were more interested in revenue from diamond sales than stemming the flow of blood diamonds. Belgian officials have emphasized that even with certification it is impossible to identify with complete certainty the actual origin of diamonds. Identification methods such as micro-tagging, due to the high cost and volume, are considered unrealistic.

Nevertheless, the diamond industry has taken the public criticisms seriously. The controversy eventually led Belgium to finally implement the United Nations embargo on diamond exports from Angolan UNITA rebels, to improve controls in customs, and to withhold import authorization of gems of undetermined origin. The regulating body of the Antwerp diamond industry, the High Diamond Council has said it will assist African countries in setting up a system of unfalsifiable certificates of origin. The Council has also created a taskforce to consider further measures, and has begun work with UN observers to monitor the impact of its efforts. Meanwhile, Belgian authorities downplay the overall impact of diamonds, saying that they are only one part of a larger picture that includes drug smuggling and other forms of illicit financing.

Today, the diamond industry is playing catch-up. For a decade diamond dealers openly bought from the rebel groups, ignoring their role in overthrowing democratic governments, murdering civilians, and in violating United Nations imposed embargoes on finances and arms. Over the same period, the diamond industry raked in phenomenal earnings, posting a doubling in profits.

When industry has responded to the conflict diamond problem, it has shown that the impact can be powerful. In 1998, Global Witness embarrassed diamond giant De Beers with a report that showed - citing the company's own annual reports - how the cartel had pumped large amounts of money into the coffers of the Angola rebels as the war escalated. A year later, in 1999, after the UN renewed its 1993 ban on UNITA-mined diamonds, De Beers announced it would no longer trade in diamonds mined in areas held by Angolan rebels UNITA. According to Christian Dietrich, editor of Angola's War Economy: The Role of Oil and Diamonds, UNITA controlled nearly 10 percent of global diamond production between 1993 and 1997. "Without diamonds, UNITA will not be able to prosecute its war at the level it does," contends Cilliers of the Institute for Security Studies. De Beers later acknowledged that its single action forced UNITA to offload its gems at a 30 percent cut rate---certainly not enough to stop the war effort, but enough to slow it down. Some diamond experts said De Beers' action came late - after UNITA had exhausted the easy pickings in Angola's shallow alluvial mines and was losing mines to Angolan government forces.

The diamonds spilling out of Angola's war zone had a destabilizing effect on the De Beers, first by increasing the supply of gem-quality stones and then by tarring the reputation of De Beers as a company that trafficked in blood-stained goods. Although the UNITA-mined diamonds threatened to lower global diamond prices, and thereby undermine De Beers financially, De Beers was probably UNITA's best customer. To reduce world supply and maintain high diamond prices, De Beers bought up a sizable amount of UNITA's diamonds. The company notes that it bought the diamonds on the open market without any direct dealings with the rebels.

As public awareness grows about conflict diamonds, the well-polished image of the diamond industry risks becoming stained with the blood of atrocities. Some in the industry fear that unsuccessful attempts to thwart the sale of conflict diamonds could negatively impact the image of the entire industry and steer consumers away from diamond purchases altogether. Some African diamond producers worry that, in order to reassure consumers, many diamond sellers may cease dealing in African diamonds and begin getting more of their diamonds from countries such as Canada. In Congressional testimony over proposed legislation, De Beers stated, "Having spent hundreds of millions of dollars on advertising its product, De Beers is deeply concerned about anything that could damage the image of diamonds as a symbol of love, beauty and purity."

De Beers, the world's largest diamond producer, contends "there is a great danger of throwing the baby out with the bath water." De Beers says consumer confidence could be eroded and, at worst, could lead to a consumer boycott, which they say would ruin the economies of Botswana and Namibia. De Beers warns that such a response, or any significant downturn in the African diamond industry, could devastate economies such as that of Botswana--once the poorest nation in Africa. According to Congressman Hall, "diamonds do tremendous good where governments and the industry work together," supplying much needed foreign-exchange for developing nations to improve the living standards for their populations. Botswana is now the world's largest diamond producer and one of the most stable and prosperous countries in Africa. De Beers and the Botswana government share equal parts ownership in the country's diamond mining operation. The diamond industry there employs nearly a fourth of the country's 1.5 million people and accounts for two-thirds of government income.

To defend the image of the industry and to protect its own extensive interests, after banning UNITA-mined diamonds De Beers reviewed its buying operations in West and Central Africa and subsequently ceased all African buying operations outside its own African mines in South Africa, Namibia, Botswana and Tanzania. In March 2000, De Beers issued a guarantee that none of its diamonds originate in conflict areas but come instead from its own mines or are bought from mines in Russia and Australia.

Human rights groups welcomed De Beers' moves and commended the company for taking steps they said the entire diamond industry should follow. Four months later, in July 2000, led by De Beers the industry announced an extensive plan designed to undermine trade in conflict diamonds. Once the plan is implemented every package of rough diamonds will have to be shipped in a sealed bag and its contents entered into an international database. This will allow a new body, provisionally named the International Diamond Council, to ensure that only diamonds from legitimate sources are traded. Suddenly, industry had gone from turning a blind eye, to acknowledging the problem while insisting that certification was impossible, to establishing a system of fool-proof certification.

The turnaround of De Beers and other diamond companies represents a remarkable triumph for grassroots activists, particularly Global Witness, a small group that works to expose the link between environmental exploitation and human rights abuses. Many measures now being undertaken by the industry were first put forward by Global Witness in December 1998, including the introduction of a global certification system, export controls and the verifiable declaration of a rough diamond's country of extraction. But Global Witness maintains this is just a first step, with the next phase being comprehensive legislation, followed by --and instrumental -- an organization to carry out independent verification of compliance with the new measures.

De Beers hopes that it will become increasingly difficult for illegal traders to sell their wares, thereby diminishing the war chests of rebel forces. But rebel-mined diamonds are still finding their way out of Africa and remain a major source of funding for ongoing conflicts. De Beers as well as industry estimates from Antwerp continue to downplay the extent to which conflict diamonds have infiltrated the market. De Beers has insisted that the percentage of conflict diamonds in the global market has stood at roughly 4 percent, a number De Beers says is likely to remain relatively constant even once industry measures are in place. Global Witness, has said the actual number is probably closer to 8 percent and that, according to its observers in Antwerp, the number could be as high as 10 percent of the $6.8 billion global diamond trade.

About a third of all diamonds imported into the United States are purchased from traders not contracted with De Beers and are not bound by its policies. Many of the conflict diamonds are bought by smaller diamond buyers that compete with De Beers, which holds an international monopoly on diamonds. The ready availability of conflict diamonds, by increasing the supply of diamonds, has helped to lower prices that assists smaller diamond buyers in competing with a giant like De Beers. Many of these buyers are cynical about De Beers' campaign against conflict diamonds, contending that the controversy is serving the monopolistic interests of De Beers. Following its ban on conflict diamonds, De Beers reported an 81% increase in its earnings for the year 2000, bringing in roughly $1.3 billion. These numbers follow on the heels of 1999--a record year for De Beers in which rough diamond sales to the US increased by 56 percent.

De Beers has been mining diamonds for over 100 years, when the company's founder, Cecil Rhodes, realized that the vast abundance of diamonds in southern Africa would make them virtually worthless. By carefully manipulating scarcity, and through clever image marketing, De Beers has become a powerful cartel, maintaining a tight, monopolistic control over the international diamond trade. For the past 60 years, De Beers has controlled roughly 80 percent of the world's diamonds. The cartel now supplies around 65% of the world's rough, uncut diamonds. The company's grip on the diamond market has lessened a bit from near-total dominance at mid-century, but it has continued to keep the prices both aggressive and flexible. Recently, due to increasing diamond production in India, Australia, Russia, and more notably Canada, De Beers share of the industry has begun slipping. Through the years, it has sponged up periodic floods of diamonds from Russia, Australia and, until recently, across parts of war-ravaged Africa where it does not own all the mines. The recent development of Canadian diamond mines is seen as especially threatening to De Beers, though virtually everyone in the diamond industry has a strong interest in maintaining the relative scarcity that De Beers' tight control places upon the supply diamonds. It is therefore not surprising that De Beers has been sold a stake in Canadian operations --contracted to sell 35 percent of the diamonds in Canada's largest diamond mine.

As a hedge against likely changes in the world diamond trade, De Beers is seeking to diversify from strictly diamonds to become a global dealer in the sale of other luxury goods. De Beers faces a major obstacle to its plans, embodied in the anti-trust laws of the United States government. The US government regards De Beers as an illegal monopoly, and the company's senior executives dare not enter the US because of an outstanding antitrust indictment that charges De Beers with price-fixing of industrial diamonds. But for De Beers to be able to successfully pursue its new business plans, it needs to mend fences with the US. Some industry watchers contend that, in addition to helping to polish its own image, De Beers' ban on conflict diamonds is intended to gain improved relations and support with the US lawmakers.

For centuries, diamonds were a symbol of wealth and status, as diamonds were scarce --typically found only far underground where it was difficult to locate and extract them. Today, diamonds, far from being rare, are common, plentiful gems with very little inherent value. The value is artificial, not reflective of their abundance, but rather reflecting the tight control the De Beers cartel has exercised over their availability and pricing. Modern surveying and digging have made diamond mining so easy, that most diamonds--millions--are simply stockpiled in order to maintain the illusion that the stones are rare so that prices remain ridiculously high.

Together with the artificial perception of rarity, what makes diamonds profitable - and energizes the $50-billion-a-year retail diamond jewelry industry - is marketing. In 1938, De Beers hired a New York advertising company to convince millions of couples that diamonds are a reflection of one's love. The song "Diamonds are a Girl's Best Friend," made famous by Marilyn Monroe, was just one example of how De Beers' advertisers crafted a perception of the gem using pop culture. In the 1960's, a similar campaign in Japan created a diamond engagement ring "tradition."

Today, diamonds have grown into an industry that employs over 2.5 million miners, traders, cutters and wholesalers around the world. Many countries, including India, have developed extensive economic interests tied to the diamond market, and they depend upon the public's continued perception of preciousness. Consequently, efforts to steer consumers away from the diamond trade can have economic impacts far beyond the large jewelry chains. Yet for consumers to do nothing is to condemn many Africans to lives of ongoing brutality and terror. The link between diamonds and eternal love is contrived, but the link between diamonds and bloodshed is real.

Go to jewelry stores in your neighborhood and ask three simple questions:
WHERE WAS THIS DIAMOND MINED?
DOES IT CONTRIBUTE TO THE BLOODSHED IN AFRICA?
WHAT ARE YOU DOING TO STOP THIS BLOOD TRADE?

In December 2000, the governments of Britain and Belgium began drawing up legislation to bring before the parliament of the European Union that would make trading in conflict diamonds illegal. The British government has been particularly active on the issue, drafting and negotiating a U.N. resolution that opens the door for international certification of diamonds. The resolution will also make it easier for authorities in EU countries to prosecute dealers trading in conflict diamonds. Responding to the recent industry cooperation in addressing the conflict diamond issue, Peter Hain, the British Foreign Office Minister for Africa, commented, "The diamond industry has been persuaded it has to act. The alternative is a consumer-led boycott."

Finally, on September 11, 2001, Britiain's Guardian newspaper reported that after more than a year of haggling among the diamond industry and EU governments, Britain's efforts to undermine the sale of conflict diamonds resulted in a finalized plan. The proposal contains eight points: the certification of all exports of rough diamonds; credible internal controls for producer and trader states; the use of forgery-resistant certificates and tamper-proof containers; the collection and sharing of production, import and export data; credible law enforcement and criminal penalties for those breaching the ban on blood diamonds; international oversight of the scheme; effective customs procedures; and self-regulation by the industry. When the idea of certification was first raised, the industry was skeptical. But, fearful of a consumer boycott, it seems ready to embrace the scheme.

Responding to the plan, ActionAid, one of the British groups working on the issue of conflict diamonds, noted that the plan represents only the completion of the first step. The group warned that, "self-regulation will not work. We've already seen the diamond industry and governments turn a blind eye since the world was first alerted to the scandal of conflict diamonds back in 1998. The industry only produces scanty statistics on the movement of diamonds and despite agreements to expel members trading in conflict diamonds not one dealer has gone."

Similar concerns were raised after the US House of Representatives finally passed legislation aimed at addressing the problem of conflict diamonds. On November 28, 2001, the House passed HR 2722, the Clean Diamond Trade Act by a vote of 408-6. The House version of the bill is based on language demanded by the Bush Administration with the support of the House leadership and is significantly weaker than what Amnesty International, other non-governmental organizations, and the bill's backers in both the House and the Senate would like.

The Bush Administration demanded and received total control over implementation of this law and will have responsibility for preventing the flow of conflict diamonds into the United States. The law provides exclusions to accommodate rulings by the World Trade Organization regarding whether obstructing the flow of diamonds constitutes an unlawful impediment to free trade. Specifically the bill authorizes the President to prohibit or seize shipments of polished diamonds and jewelry if they attempt to evade the bill's prohibition on conflict diamonds and imposes civil and criminal penalties on violators. The U.S. General Accounting Office will produce a report on the law's effectiveness within three years of its enactment.

Human rights group Amnesty International and many of the other international groups that have lobbied for tough legislation contend that present legislation is not enough. Amnesty International campaigner Salil Tripathi says, "What is required is an independent body with an oversight into the whole trade," and that, "it must be public and transparent."

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http://www.house.gov/tonyhall/diamond.html

details- http://www.civicusassembly.org/pdf/Smillie_E_r.pdf

The militarization of the mineral industries - http://www.moles.org/ProjectUnderground/mil/intro.html

http://www.nytimes.com/library/world/africa/040600africa-diamonds-article2.html

http://www.oneworld.org/globalwitness/reports/Angola/industry.htm

http://www.vivelavie.com/# (click on flash) cool site