The Trade In Conflict Diamonds Need Not Be Forever

An insidious sliver of the diamond trade that helps to finance violence in parts of Africa is the subject of mounting concern–and rightly so. A WomanNews story (“Price is too high for some gems, groups say,” Feb. 7) reflected that concern. Jewelry retailers, like other interested parties, are appalled that rebels use profits from smuggled “conflict diamonds” to buy the weapons used to terrorize fragile societies like Sierra Leone and Angola.

The global community, while starting slower than it might have, is now mobilized to squelch this practice. In this context, the community includes the countries in which diamonds are mined, processed and imported; international organizations starting with the United Nations; and all sectors of the diamond industry. Solid progress toward an effective international regulatory system is being made. With cooperation from the U.S. government, it can begin operating this year.

The question today is whether momentum can be maintained, or whether confusion about what needs to be done will impede the effort. Some well-meaning groups apparently believe that conducting street theater and promoting laws that cannot be enforced will produce better results than a program that addresses the problem’s core. Waving a placard in front of a jewelry store helps not a single victim of violence in Sierra Leone.

A few facts will help consumers understand what can work. It would be wonderful if we could identify the place of origin of each diamond in a showcase. But science does not yet provide that capability where cut and polished stones are concerned. It is also difficult to identify the origin of rough diamonds, particularly in small quantities.

American retailers typically import diamonds that have been cut in processing centers abroad. Starting in 1999, Tiffany instructed its suppliers overseas that we would not do business with anyone trafficking in conflict diamonds.

The most reputable supplier, however, could have tainted stones without knowing it. The fact is that conflict diamonds pollute the supply chain at an early stage–after they are extracted from the earth and before they are sent to processing centers, where shipments from different sources are mixed.

As the UN, individual governments and the industry focused on the problem, two realities became clear. First, no solution would work unless it had the cooperation of all the major actors in the public and private sectors. Second, an effective program would require strong measures to bar tainted rough diamonds from entering the early phase of the supply chain. Melding these essential elements will make it possible to tell during later stages of distribution where a stone did not originate. Then a consumer can be assured that he or she is not buying a conflict diamond.

Last year these realities guided forward-looking activities in a variety of forums. A coalition of African nations started what became known as the Kimberley Process, seeking cooperative measures to eliminate conflict diamonds.

Both the UN Security Council and the General Assembly took similar steps. And the diamond industry, meeting in Antwerp, Belgium, adopted a set of strong principles that would underpin an international regulatory system. To implement those principles, participants at the Antwerp conference created the World Diamond Council, in which Tiffany is playing a prominent role.

The regulatory system we envision focuses on a “certificate of origin” program in which exporting and importing nations cooperate. It aims at protecting the security of rough diamonds as they move from the point of extraction to processing centers. It includes the use of tamper-proof containers, counterfeit-proof documents accompanying each parcel and electronic databases in which each shipment’s number and carat weight is recorded.

Refusal to participate would be costly to any country involved in the diamond trade. It would be illegal to import diamonds into the U.S., for instance, from a country that fails to employ adequate regulations on rough diamonds.

As a pilot project, the system is now used to monitor diamonds obtained in government-controlled areas of Sierra Leone and sent to Belgium.

What must happen now is adoption of uniform standards by the many nations involved. To accelerate this process, the World Diamond Council commissioned the drafting of model legislation. Our proposed bill has two major provisions:

It would prohibit importation into the U.S. of diamonds from countries that fail to observe the certificate of origin rules and make violators subject to stiff penalties.

It would authorize the U.S. president to negotiate agreements with other nations to formalize the international standards.

Because the U.S. is the world’s largest importer of diamonds, firm action by Washington will greatly influence others. And because of its impact on the market, the U.S. has both the obligation and the opportunity to lead. In taking the unusual step of requesting government regulation, the diamond industry has shown its commitment to eliminating conflict diamonds. Now government must do its part.

Michael J. Kowalski is the president and CEO of Tiffany & Co. and a member of the World Diamond Council