Diamond trade cleans up

The numbers didn't add up. The Republic of Congo was sending hundreds of millions of dollars worth of uncut diamonds to polishing centers abroad. Yet the nation had few known diamond resources of its own.

The disparity raised suspicions that the country might be a clearinghouse for conflict diamonds, the illegally mined stones used to fund African civil wars. When a team of experts dispatched this May could not adequately account for the extra diamonds, 43 countries representing 98 percent of the world's diamond trade announced an embargo on diamonds from the Congo Republic.

Last week's move - the first time a country has been sanctioned for illegal diamond trading under a 2003 agreement known as the Kimberley Process - is a welcome victory in the fight against the illicit trade, blamed for fueling brutal wars in Liberia, Sierra Leone, Angola, and Congo. But activists warn that this new approach still requires some polishing.

"It's a good step forward," said Corinna Gilfillan of Global Witness, a British-based organization that had criticized the Kimberley Process for its failure to include a monitoring mechanism to ensure that countries - both producers and buyers - upheld the agreement. "This kind of decision shows that there is some monitoring going on and that once a country was found to be in noncompliance they were removed from the process."

The journey of an African diamond to a newlywed's finger is a long and often tortuous one. From high-security mines in peaceful Botswana or muddy pits in Congo, the rough, dull stones travel in pockets or planes through jungles and over deserts, eventually landing in cutting and polishing centers in New York, Antwerp, and Tel Aviv. Often, they pass through the hands of several middlemen in different countries, making it difficult to track their original origin.

When they reach glass display cases in the US - which makes up more than half of global diamond jewelry retail sales - they all sparkle. It is impossible to tell which are stained with the blood of African civil wars.

Under pressure from groups like Global Witness and worried about growing public awareness of the problem, diamond producing and buying nations began meeting in May 2000 in the South African diamond producing city of Kimberley to discuss ways of keeping conflict diamonds off the market.

"It was important that we made sure that the diamonds that reach the consumers are conflict-free and assure the consumer that their symbol of love that is not tainted," says Eli Izhakoff, chairman and CEO of the World Diamond Council.

Under the resulting agreement, which went into effect in January 2003 and has received UN backing, diamond producing nations agreed to transport rough diamonds in sealed, tamper-resistant containers and to certify their origin and that they were mined conflict free. Diamond-buying countries agreed to purchase only those diamonds with valid certificates.

The problem, say groups like Global Witness, is that there is no system for ensuring that all parties uphold their part of the agreement. As the current chair of the Kimberley Process, Canada decided to sent the review mission to the Congo Republic and to take action against them. But future chairs may be less aggressive.

Before the Kimberley Process, the easiest way of smuggling diamonds was to simply fly them directly to one of the buying and polishing centers and claim they were from a peaceful country.

Although the new requirement that diamonds have certificates of origin largely cut off that route, analysts said that many of the illegal diamonds were simply being rerouted through countries like the Congo Republic that were issuing false certifications of origin.

"Initially, Kimberley just legitimized the smuggling in [the Congo Republic]," says Christian Dietrich, a conflict-diamond researcher for the Belgium-based International Peace Information Service. "To become a Kimberley member, all you had to do was send them a postcard with your address and the name of a contact in the Ministry of Mines and then you became a member. By the middle of last year, you had to enact domestic legislation that basically would go along the guidelines of Kimberley. But that was it."

However, the sanctioning of the Congo Republic, says Mr. Dietrich, shows there is the will to hold countries accountable.

Most of the African wars fueled by diamonds are over or drawing to an end. Liberian leader Charles Taylor is in exile in Nigeria, Angola is heading towards elections, and a power-sharing government now rules in Congo.

But diamond smuggling continues by people who wish to bypass national taxes or to disrupt peace processes. And questions remain about the use of diamonds by terrorist organizations like Al Qaeda.

With the removal of the Congo Republic, one door for illegal diamonds has been closed. But, say Dietrich and Ms. Gilfillan, many more remain open. Other African countries are suspected of issuing false certificates, while some polishing centers may be continuing to allow the importation of uncertified rough diamonds.

"The jury is still out," says Gilfillan. "There still is illicit trading and other loopholes in other places where diamonds could get through.... That's why it's so important for there to be continued review and monitoring."