`Conflict diamonds' could lose sparkle: an international tracking and certification plan should significantly decrease the trade in `conflict diamonds' used by rebel movements to finance armed conflicts

Insight on the News, Feb 4, 2003 by Sheila R. Cherry

The Bush administration as well as human-rights activists on Capitol Hill and the jewelry industry are encouraging an international diamond-tracking scheme called the Kimberley Process. It would keep out of jewelry showcases in the United States so-called "conflict diamonds" that illicitly are mined and smuggled from war-torn nations in Africa. In one of his first actions of the 108th Congress, House Ways and Means Committee Chairman Bill Thomas (R-Calif.) announced that he would reintroduce legislation to implement the Kimberley Process. In 2001, it passed the GOP-controlled House but was blocked in the Democrat-controlled Senate.

Conflict diamonds, according to the United Nations, are uncut stones traded by rebel movements or their allies to finance armed conflict against central governments. In 2000, ministers from several African countries met in Kimberley, South Africa, where they agreed to take collective action to stop the flow of the smuggled diamonds, an industry Website reports. Less than 4 percent of global diamond production has a conflict origin, the report notes, and a Kimberley certification is intended to protect the legitimate diamond trade on which some developing countries depend for their economic and social development.

The certification process, since endorsed by the United Nations, requires documentation of any shipment of rough diamonds to provide a paper trail from the mine to the retailer.

In a written statement Thomas states that the Bush administration has negotiated a global framework to discourage the trade in conflict diamonds and calls upon Congress to endorse this. Thomas calls the illicit trade "a serious problem in urgent need of a solution." The solution was at hand in the form of the Clean Diamond Trade Act (HR 2722), introduced in the House by Rep. Amo Houghton (R-N.Y.) in August 2001. It would have authorized the president to "prohibit imports of rough diamonds [with specified exceptions] into the United States from any country that does not take certain measures to stop trade in conflict diamonds as long as such prohibition is necessary to protect the essential security interests of the United States (or pursuant to U.N. Security Council resolutions on conflict diamonds), and is consistent with U.S. foreign-policy interests, including its international obligations."

The measure gained 112 cosponsors, Ways and Means Committee spokeswoman Christin Tinsworth tells INSIGHT, and was passed overwhelmingly on a bipartisan vote of 408-6. But it languished in the Senate after being placed on the calendar in November 2001.

On Jan. 9, Thomas led a congressional delegation on a 10-day fact-finding trip through sub-Saharan Africa to explore how U.S. trade and economic legislation have affected the region. Having taken a close look, the chairman said: "I intend to work with the administration and the diamond industry on a bipartisan basis to enact legislation as soon as possible that meets the Kimberley Process goals, is administrable and complies with our World Trade Organization obligations."

While some jewelers say conflict diamonds are not something that customers have made a major issue, the industry nevertheless is taking pre-emptive steps to avoid the taint of conflict trade and regards the matter as very serious. Donald McCutchen, president of McCutchen Jewelers of Rockville, Md., tells INSIGHT the jewelry industry long has backed the concept. "They are trying to keep their noses clean so that no one can point at them as supporting terrorism," he says.

McCutchen compares the documentation process to registered mail, where the origins and destinations of parcels of diamonds are certified as they are passed along through the trade. Under the certification scheme, according to an industry description, "a Kimberley Process certificate accompanies each shipment of rough diamonds when exported between participating companies" and follows it all the way to the retail buyer. The certificate validates the parcel's compliance, and a confirmation receipt is sent to the relevant exporting authority. Process participants agree to keep documentation on file for a period of no less than three years.

Otherwise, the terrorists and rebels have very little in the way of impediments to funneling diamonds out of the fields to buy arms and ammunition. "There was always somebody to buy it, and then somebody who would buy it from them, and so on and so forth," McCutchen explains. "Now, if the stones don't have a pedigree, legitimate jewelers like me are just not going to take them. If the stones cannot be certified as being conflict-free as validated by the Kimberley Process, we're just not interested in selling them."

McCutchen says, "You can call that morality, but you can also call it practical business sense. Because the first time someone either is accused of or legitimately caught moving so-called conflict stones or blood diamonds--whatever expression you want to apply to them--you might as well kiss your business goodbye."