"Blood" Diamonds

Date July 17-19, 2000

At the biannual World Diamond Congress, in response to pressure from human rights groups, delegates expressed deep concern about the Sierra Leone civil war and the trafficking in diamonds from Sierra Leone to Liberia.

Locale Antwerp, Belgium

Key Figures

• Eli Izhakoff (fl. late twentieth century), chairman of the World Diamond Council
• Nicky Oppenheimer (b. 1945), chairman of De Beers diamond mining company
• Thabo Mbeki (b. 1942), president of South Africa beginning in 1999

Summary of Event

Throughout the 1990’s, western Africa was torn by a series of bloody conflicts between national governments and various rebel factions, all sharing a crucial nexus regarding the control of natural resources. Diamonds were the motivation for rebellion as well as being the most important source of financing for rebel forces. Sierra Leone, Angola, Liberia, the Democratic Republic of the Congo, and Ivory Coast have all been plagued by civil conflicts that centered on control of the diamond trade as the means to finance the activities of insurgent groups. The commerce in these “blood diamonds” (or “conflict diamonds”) was at one time thought to make up as much as 15 percent of the world diamond trade, generating hundreds of millions of dollars of illicit revenues used by rebel groups to purchase war matériel. The cost in human terms has been incalculable, with literally millions killed or maimed and tens of millions of refugees.

The phenomenon of blood diamonds became an issue early on among the Nongovernmental organizations (NGOs) constituting international civil society. The United Nations declared sanctions on the importation of Angolan diamonds beginning in 1997, later to be expanded to include Sierra Leone. An NGO from the United Kingdom, Global Witness, compiled an investigative report in 1998 (“A Rough Trade”) demonstrating the commercial relations existing at the time between Angola’s National Union for the Total Independence of Angola (UNITA) rebels and De Beers, the dominant agent in the global diamond cartel. Many other NGOs also brought attention to the issue, including Amnesty International, Partnership Africa Canada, and Physicians for Human Rights. It had become evident that the diamond industry was bound to suffer unless the issue of blood diamonds was addressed.

President Thabo Mbeki of South Africa responded to the rising tide of public concern by convening a conference in the city of Kimberley in May of 2000. Attending were government officials from the major diamond-producing and -trading nations, as well as representatives of the diamond industry and NGOs. This meeting was to initiate a process of negotiations among all interested parties and lead to the establishment of an international system of diamond certification.

The eventual outcome, officially launched in January, 2003, was the Kimberley Process Certification Scheme (KPCS), a protocol for excluding any diamonds originating in conflict areas from entering the supply chain of legitimate trade. The system initially advocated in Kimberley was known as “rough controls.” This approach was intended to create a “chain of warranty” for all stones from minehead to final consumer. As long as stones could be identified in regard to their places of origin and importing nations refused to accept stones that could not be certified as “conflict-free,” then blood diamonds would be effectively eliminated from the global marketplace. It remained to be determined how these conditions were to be met and what mechanisms would ensure the cooperation and compliance necessary to achieve this lofty goal. A straw in the wind was the letter of June, 2000, signed by the chairman of De Beers, Nicky Oppenheimer, calling on industry leaders to take forceful steps to eliminate the trade in blood diamonds. The letter contained a number of recommendations mirroring those discussed at Kimberley.

The reaction of the diamond industry to the mounting pressures coming from consumers, governments, and civil society was revealed at the biannual meeting of the World Diamond Congress on July 17-19, 2000, in Antwerp, Belgium. This was a joint meeting of the two trade organizations that effectively spanned every aspect of the global diamond industry—the World Federation of Diamond Bourses (WFDB) and the International Diamond Manufacturers Association (IDMA). The WFDB represents the twenty-six largest diamond bourses (trading centers for both rough and finished stones). Founded in 1947, it has provided a framework for the integration of the global diamond trade by establishing a unified set of trading practices. It has also worked toward the establishment of new bourses for eventual affiliation. The IDMA, founded in 1946, represents the most important diamond manufacturing centers (where rough stones are cut, polished, and marketed). It provides a venue for discussion of issues such as grading standards, rough supplies, and financing.

On July 19, 2000, the World Diamond Congress issued what became known as the Antwerp Resolution, which established a new and separate organization, the World Diamond Council (WDC). This formal structure was created to represent the interests of the diamond business in the collective negotiation process begun in Kimberley. This new organization was chaired by the honorary lifetime president of the WFDB, Eli Izhakoff.

The WDC embraced the “rough controls” approach outlined at the Kimberley conference, laying out a plan combining legislation, self-regulation, and third-party monitoring. The council proposed a system of export and import controls based on standardized certification for each parcel of rough stones. Every importer would enact legislation to forbid the purchase of uncertified rough; exporters would establish an export accreditation authority (under the supervision of the WDC) to verify all shipments of rough with respect to place of origin and to register them in a shared database. Each parcel would be required to be sealed in a tamper-proof container and be accompanied by a forgery-resistant certificate documenting its conflict-free status. All participants would levy criminal penalties on deliberate evasion of the controls. The entire process would be monitored both statistically (import and export account balances) and by direct inspection. Finally, all members of the industry would incorporate the above principles in their ethical codes and business practices.

Significance

The Antwerp Resolution represented a breakthrough in that it was the first time the diamond industry had ever recognized any interests extraneous to those bearing directly on its own profitability. While the major players of the industry were clearly trying to get to the head of the parade (the better to give the impression of having been in the lead from the beginning), the very fact that formerly sacrosanct industry perquisites were to be subject to multiparty negotiations was a major concession. It resulted in the introduction of a degree of transparency into what had previously been one of the most secretive industries on earth. This opening of long-standing structures and practices to public scrutiny was an important factor leading to the reduction (if slight) in the strength of the stranglehold of the De Beers-led cartel on the worldwide diamond trade.

The formation of the WDC also marked a milestone in the maturation of the institutional framework of international civil society, with the guiding roles played by the United Nations, Global Witness, and other NGOs in informing the public, motivating policy formulation, and monitoring ongoing events. Finally, with the integration of the WDC into the structure of the KPCS, there has been achieved a substantial reduction in the flow of blood diamonds into the diamond pipeline. Even given the numerous subsequent critiques of the industry’s commitment to the KPCS, the industry’s participation has been invaluable in terms of progress to this point.

Bibliography

Campbell, Greg. Blood Diamonds: Tracing the Deadly Path of the World’s Most Precious Stones. Boulder, Colo.: Westview Press, 2004. Details the trade in blood diamonds and its impacts on citizens of Sierra Leone. Extensive index and notes.

Kanfer, Stefan. The Last Empire: De Beers, Diamonds, and the World. New York: Farrar, Straus and Giroux, 1995. Captivating history of the De Beers diamond cartel; emphasis on events, characters, and narrative, with adequate analysis of modern developments.

Roberts, Janine. Glitter and Greed: The Secret World of the Diamond Cartel. New York: Disinformation Company, 2003. Written by an experienced documentary producer, the book focuses on recent challenges to De Beers’s dominant position in the diamond industry, detailing the strategies and tactics used to protect the cartel. Glossary, bibliography, and index.

Tamm, Ingrid J. Diamonds in Peace and War: Severing the Conflict-Diamond Connection. Cambridge, Mass.: World Peace Foundation, 2002. Comprehensive description of the diamond trade, its connection with conflict, and assessment of the Kimberley Process and related legislative and regulatory efforts to deal with the problem of blood diamonds.

Zoellner, Tom. The Heartless Stone: A Journey Through the World of Diamonds, Deceit, and Desire. New York: St. Martin’s Press, 2006. Investigative work documenting the global extent of the De Beers cartel. Contains a chapter devoted to blood diamonds in the context of the Angolan civil war. Notes and index.