US Legislative Report by Matthew A. Runci



Summary: While the significance of the WDC legislative achievement of 2001 stands, the US House of Representatives’ adoption of HR 2722 last November must be matched by a companion step on comparable legislation in the US Senate this year in order for any differences between the two versions to be resolved in conference before the end of the year. If the Senate fails to act, or if House-Senate conferees cannot agree on one version, or if the President does not sign the legislation into law, once Congress adjourns the legislative process must start from the beginning all over again when a new Congress is seated in 2003 after the mid-term elections. Thus, in 2002 the industry must continue its lobbying effort, focusing on the Senate (in particular the offices of Senators Durbin, Feingold, DeWine, and Gregg, original co-sponsors of S 1084), and on the Bush administration (in particular Treasury, State, the US Trade Representative, and the White House), in order to maximize the likelihood of succeeding with its legislative program on conflict diamonds before the current legislative year expires. At this time 78 legislative days remain in the session.


In Congress

…there has been no forward movement since action by the House last November. The Ways & Means Committee leadership remains resistant to any bill stronger than the one voted on at the end of the last session.


In the Senate, the Durbin-DeWine-Feingold-Gregg group will not act on the House-approved version. Rather Senator Durbin’s office has advised it is about to draft a new bill.  While no specific information is available as yet on its contours, it is reasonable to think that this measure may attempt to find a middle ground between the final version of the House bill* and last June’s Senate proposal**.  Highlights of both versions may be found in the Appendix attached to this report.



The prospect of a new bill raises a variety of considerations, some of them negative. For instance, it could serve as an excuse for continued trumpeting of the kind of rhetoric heard at the recent Senate Governmental Affairs Committee hearing***, where the bin Laden issue was heavily stressed.  But a new Senate bill can also be a positive opportunity — assuming its contents are workable — by giving the industry and the NGO community a renewed common cause.  This is important because the NGO community both in the US and internationally has been increasingly of late restive because it views the Bush administration as a quasi-adversary and believes that the WDC has lapsed into passivity where the Kimberley Process is concerned.


The news media scene

…in the US has gone almost totally negative since mid-fall because of The Washington Post‘s al-Qaeda stories, The Wall Street Journal‘s tanzanite articles, and the fact that interested members of the House and Senate have chosen to echo those assertions as established fact***.  The most recent Post story, on Feb. 26, underscores what is happening.  Namely: the old conflict diamond problem, the diamond-terrorist link, and tanzanite are becoming co-mingled to a frightening degree. The tanzanite lawsuit, however spurious in substantive terms, attracts additional coverage. The Victor Bout angle, about which we’ll probably hear more — serves as cord for this noxious package. Robert Block of The Wall Street Journal is currently working on a story that ties these elements together by depicting the overall vulnerability of the gemstone trade (i.e., both diamonds and colored stones) to exploitation by criminal elements, including terrorists.


The present media situation offers very limited openings for significant proactive PR efforts.  The central problem is that just about everyone in the media who pays attention to diamonds or tanzanite finds the terrorist link irresistible. In short, the Post-Journal assertions are pretty much accepted as accurate.  The State Department’s no-current-evidence line is of some limited use re: tanzanite, while the latest construct concerning diamonds is of barely marginal utility in PR terms.


A new (or renewed) legislative drive would provide grounds for becoming more active concerning diamonds-cum-terrorism. One strong line, for instance, would be that effective U.S. legislation is necessary both to solve the “old” conflict diamond problem and prevent possible exploitation by terrorist groups. And if the administration continues to be evasive on legislation, that fact deserves to be publicized.



Our next phase

… starts where the current action is, in the Senate. We are exploring the degree of cooperation possible concerning the prospective new Durbin bill.  At minimum, we have already signaled our determination to be helpful and our desire to have input. Obviously we cannot provide assurance of support until we know at least the main content.  But it is logical to assume that the bill will strongly resemble the version that the industry fully supported last June and thus that we will be able to support it enthusiastically.


Once we are comfortable on that score, WDC should mount a new lobbying effort aimed primarily at the administration.  It was the administration that caused the House bill to be diluted last fall. And under present circumstances the administration would probably work against passage of a new Senate bill, since it vastly prefers a more straightforward legislative approach through Kimberley-implementing legislation instead. So this obstacle must be overcome.


To achieve at least a degree of compromise, some reinforcements will be very helpful. That is, in addition to those long active on the front lines, we should recruit heavyweight representatives of several leading retailers and diamond firms to do some face-to-face sales work at appropriate agencies in Washington. Specific targets would be at higher levels at State, USTR, and the White House.


The exact lobbying pitch will have to be worked out. But it is likely that compromise on a handful of items would likely establish the basis of a new consensus between industry, the principal Senators involved and NGO representatives. Even if agreement among all parties eludes us in the end despite the strongest effort possible, the fact that we undertook the effort would be a strong reminder that we take the alliance seriously.  Such a reminder has considerable value of its own.  Once this effort is in train, it would be realistic to seek media attention, using op-eds and perhaps a modicum of advertising in Capitol Hill periodicals, as was done effectively last year in connection with HR 2722.


Similarly, the WDC should ratchet up efforts to secure a more effective outcome to the Kimberley Process. As with the domestic legislative issue, the strengthening required isn’t necessarily wholesale. A handful of adjustments would probably suffice, adding considerable heft to the argument that the excellent cannot be allowed to be enemy of the good. A constructive effort will be required to get NGO signoff on “good.”


There is a double missionary job to be done here. The WDC must recognize that the terrorism factor has raised the stakes in the U.S. and that this new dimension of our old problem isn’t going to go away very soon.  Therefore the fact that peace seems to have come to Sierra Leone, or that Joseph Savimbi has been eliminated, or that Charles Taylor may soon be overthrown, does not promise relief. The WDC, in turn, needs to convey that same reality to Kimberley Process participants.  If the U.S. retail market is damaged, many parties in several countries will feel the pain.  They need to look no further than Tanzania to get a simple math lesson.  U.S. pressure on the overseas players should not be kept a secret from the media, starting with the trade press.