April 2018

Easily concealed, immensely valuable and largely untraceable, stones from rebel-held mines have raised billions of dollars on world markets to finance insurgencies in several african countries against the legitimate governments.

The United Nations defines conflict diamonds as ‘diamonds that originate from areas controlled by forces or factions opposed to legitimate and internationally recognized governments, and are used to fund military action in opposition to those governments, or in contravention of the decisions of the Security Council’. These diamonds are also referred to as ‘blood diamonds’.

For years these illegal market has allowed rebel leaders to arm and equip their armies in violation of UN weapons and financial sanctions. Rebel armies in Angola, Sierra Leone and the Democratic Republic of the Congo exploited the alluvial diamond fields of these countries in order to finance wars of insurgency. Alluvial diamonds, unlike those mined in the deep kimberlite ‘pipes’ of Botswana, Russia and Canada, are found over vast areas of territory, often only a few inches or feet below the surface of the earth. Alluvial diamonds have proven difficult to manage and to regulate. Because of their high weight-to-value ratio, the ease with which they can be mined, and endemic corruption in the global diamond market, alluvial diamonds became a ready target for rebel armies.

The trade in conflict diamonds began in the early 1990s with Jonas Savimbi’s National Union for the Total Independence of Angola, but was quickly copied by the Revolutionary United Front in Sierra Leone, with assistance from Liberia’s warlord president, Charles Taylor, who is now being tried in The Hague for war crimes and has recently showed up in western newspaper for having allegedly gifted top-model Naomi Campbell with a few illicit stones.

Even if the diamonds industries used to inscribe the commerce of conflict diamonds in an optimistic 4% figure, NGOs involved in the fight against this trade like Partnership Africa Canada stated that as much as 15% of the world’s $10 billion annual rough diamond production fell into the category of conflict diamonds in the late 1990s.

A most important trade sector for South Africa

Today diamonds are mined in about 25 countries but roughly 49% of diamonds originate from central and southern Africa, while significant sources of the mineral have been discovered in Canada, India, Russia, Brazil and Australia. South Africa is the fourth diamond producer country in the world by value.

The story of diamonds in South Africa begins in 1866, when 15-year-old Erasmus Jacobs found a transparent stone on his father’s farm, on the south bank of the Orange River and Kimberley, the present capital of Northern Cape, became ground-zero for the South African diamond industry GSI.

The largest company to operate a diamond mine in South Africa during the diamond rush was the De Beers Company, founded by Cecil Rhodes. The De Beers empire was started on a farm owned by two Boer War settlers, brothers D. A. and J. N. De Beer. Around 1873 the De Beer brothers sold out to a group of mining syndicates who later merged with Cecil Rhodes’ pumping company to form ‘De Beers Consolidated Mines’.

Today De Beers alone mines about half the world’s annual diamond output. It also controls as much as 80% of global diamond sales through its Central Selling Organization, which purchases and stockpiles diamonds from other suppliers to keep availability low and prices high. De Beers was known to be a major purchaser of conflict diamonds from Angola, Sierra Leone and other African conflict zones.

Through the years, Kimberly lost its relevance in the production of diamonds, but is still the De Beers’ headquarter and the start point of the movement which involved the major diamond companies and was aimed to put an end to the trade of conflict diamonds.

The Kimberley Process Certification Scheme

Since 1998, UN’s Security Council has mounted a determined campaign to halt the trade in conflict diamonds, launching investigations into the illicit trade in uncut diamonds, naming individuals and countries suspected of trafficking in the stones and pressuring the secretive diamond industry to adopt measures to keep the gems out of the international marketplace.

Against a widening debate about the humanitarian and economic impact of comprehensive trade sanctions on civilians and neighbouring states, the Council’s diamond campaign was part of an ongoing UN effort to make sanctions more selective, better targeted and more rigorously enforced instruments for the maintenance of international peace and security.

It is extremely difficult to distinguish one uncut diamond from another, making it easy to mix illicit diamonds with legal stones. Moreover, the principal world market for uncut diamonds, Antwerp, is legendary for the laxity of its regulations on the handling of the stones. According to a study on diamonds and conflict in Sierra Leone by Partnership Africa Canada, Antwerp dealers routinely settle multi-million dollar transactions in cash and rarely offer receipts.

Since the South African leading cartel De Beers had successfully resisted boycott pressures from anti-apartheid activists in the 1970s and 1980s, there seemed little reason to believe that the UN would be more successful.

In contrast to previous efforts, however, there was growing consumer awareness of the link between diamonds and African conflicts in the US and Europe, where the overwhelming majority of diamond jewellery is sold. NGOs, including Partnership Africa Canada and Global Witness, had begun to campaign against blood diamonds in industrialized countries. Graphic press reports tying diamonds to the brutal insurgency in Sierra Leone began to appear in fashion magazines, threatening the industry’s expensively nurtured image in its core consumer base.

The industry wanted to avoid backlashes such as those against the fur industry in the 1990s and was more receptive, therefore, to Security Council calls for a global tracking system for uncut diamonds that would identify the origins of the stones, confirm their legal export from the country of origin and establish a paper trail of ownership. Addressing industry leaders at the World Diamond Congress in Antwerp on 18 July 2000, UN Ambassador Robert Fowler emphasized that the Council was eager to avoid damaging the legitimate diamond trade but ‘the diamond industry must take the lead, and be seen to be taking the lead, in demonstrating publicly that its products are conflict-free’.

On the following day the two principal industry associations, the World Federation of Diamond Bourses and the International Diamond Manufacturers Association, adopted a joint proposal to establish a global certification programme for uncut diamonds. They declared that ‘the solution to the conflict diamonds problem is a moral imperative above all others’.

In 2002, the UN approved the Kimberley Process Certification Scheme (KPCS) aimed at preventing conflict diamonds from entering the legitimate rough diamond market. Yet major diamond-producing countries remain worried about the impact of the conflict diamond campaign on the legitimate trade.

Former South African Minister of Minerals and Energy Affairs Phumzile Mlambo Ngcuka failed to attend a meeting in London in October 2002 to discuss UK proposals for an international treaty on diamond sales. The reason for her absence, South African UN Ambassador Dumisani Kumalo told the UN commission Africa Recovery in early December the same year, was that ‘the London conference was called to discuss a formal treaty’ on conflict diamonds.

‘If you go the [UN] treaty route you open it up to 189 countries, most of whom have nothing at stake.’ For South Africa, Namibia, Botswana and Angola, he continued, ‘the diamond industry is our lifeline. Many thousands of people are affected. So it is important for us to protect the industry as such’.

How effective the Kimberly regulations has been in keeping conflict diamonds off the fingers of consumers is also a subject of debate. Ambassador Fowler told Africa Recovery that, while no controls can be 100% effective in blocking items as small and as valuable as gems, they would help. The campaign, he asserted, has already hurt the rebels. ‘The traders know we are watching, and those who still buy are demanding a higher risk premium.’

On the other hand, Mr Jakkie Cilliers, head of the South African Institute of Strategic Studies, told the media that the real issue is arms, not diamonds. ‘If the major powers were serious about ending African conflicts they would halt the trade in arms. But the major powers produce arms, so they go after diamonds instead. They have a conflict of interest.’