How to avoid ‘Conflict Diamonds’

Diamonds should be a blessing to all they touch, from the mine to the consumer, and everyone involved in the chain should be doing their best to insure that this happens. For the most part, they are. Diamonds and the related industries continue to provide a living for hundreds of thousands of people in Africa, India and in nearly every country on earth. Effective management of their diamond resources is the major reason that Botswana is a successful nation and Canada is using diamonds to bring prosperity to the native population in their depressed far north. Australia, Russia, Namibia, Belgium, Israel and Armenia are just a few more of the places touched by – and benefited by – the diamond trade. They are indeed a blessing.

Unfortunately, there’s a dark side as well. Sierra Leone , Congo , Liberia and other West African nations have been engaged in some of the most uncivil wars the world has ever seen and diamonds have played a role. Pirates and warlords have enslaved the people to steal their resources and the resultant diamonds have been used as currency to buy weapons used to commit further atrocities against both the people and their lands. Diamonds used for this purpose have become known as ‘blood diamonds’ or ‘conflict diamonds’ and, although most of the combat seems to be over for now, the problems of West Africa and elsewhere continue. Next time, and there undoubtedly will be a next time, it may not be diamonds, and it may not be in Africa but the objective will still be the same – your money. This means that YOU have the power to help the next victim. Here are some strategies for using your wallet to make the world a better place.

1. Buy Canadian.

The government of the Northwest Territories has a certification scheme for diamonds mined and manufactured in Canada that has been in place since 2000. These diamonds are distributed worldwide with a certificate and a girdle inscription as provenance of their Canadian origins. Canada is a wonderful place and anyone can be proud to buy their products.

2. Buy antique, vintage or just plain ‘used’ diamonds.

Recycling stands on it’s own as both a social and environmental good. This is just a side benefit. If you have evidence that the stone was first purchased prior to 1990, you have good evidence that it was NOT involved in the Sierra Leone revolution or any of the subsequent conflicts.

3. Buy synthetics.

Several labs have announced that they are or will soon be producing jewelry grade diamonds that are purely manmade. By eliminating the mine, they have eliminated the opportunity to exploit the miners.

4. Buy KP certified diamonds

The Kimberley Process is a system developed by the diamond industry to address this very issue and was adopted by the United Nations in 2003. It’s ‘voluntary’ up to the point the diamonds cross international borders. Then the customs authorities get involved. Every rough diamond legally imported into the United States or any of the other signatories including Israel , India , China , Belgium , South Africa and any of the other mining and cutting centers since that time must be KP compliant. According to Kimberley, and apparently supported by Global Witness (an NGO that watched them), 99.8% of the world’s diamonds production is now KP compliant.

It’s worth noting that the above rules only apply to rough diamonds. Polished diamonds are different and Kimberley no longer directly applies. Polished diamonds are covered by the USA Patriot Act (which requires KP compliance) because diamonds are classed as financial instruments and are therefore subject to the anti-money laundering rules. Every US dealer must comply or be subjected to stiff penalties. Overseas cutters and manufacturers who don’t maintain their KP compliance can get themselves excluded from international trade and, in the extreme, can end up with a visit from the men in black and an indefinite vacation to sunny Guantanamo.

How then, do you know if a diamond you are considering is KP compliant? Simple, ask. Every dealer should be prepared to provide you with the following written statement or words to this effect:

The diamonds herein invoiced have been purchased from legitimate sources not involved in funding conflict and in compliance with United Nations Resolutions. The seller hereby guarantees that these diamonds are conflict free, based on personal knowledge and/or written guarantees provided by the supplier of these diamonds.

This isn’t nearly as toothless as it seems at first glance. By issuing this guarantee, they are setting themselves up personally for both civil and criminal prosecution if it turns out to be false. The vast majority of jewelers and their suppliers are ethical and responsible businessmen and women. They no more want to be party to the atrocities than you do and they are happy to participate in the solution. Requiring them to include this pledge causes them to make the same requirement of their sources. At the same time, the criminals are hesitant to agree because it puts them on the wrong side of the Patriot act. This is not a simple FTC violation for advertising violations and the enforcement comes from the Treasury department (IRS), Homeland Security and the US Justice department.

Note: It’s not unusual for jewelry store employees to have never heard of this. Ask for the manager. If they still don’t know, walk. They’ll look it up after you leave. Many stores also have inventory for which they can’t make this guarantee, in particular anything imported before 2003. You may want to avoid these stones but the fact that they carry them isn’t evidence of any skullduggery on the part of the jeweler.

KP has an inherent power that the other approaches lack because of it’s multi-national approach. Instead of just eliminating a particular consumer from the process, it provides an incentive for the producers to engage in sustainable and responsible development. The Kimberly Process isn’t just about avoiding ‘conflict diamonds’, it’s about encouraging ‘development diamonds.’

Several new documents are becoming available from IGI, GCAL and probably others that are based on KP compliance and that certify a stone as being conflict-free. Expect this trend to continue.

5. Avoid diamonds entirely

This isn’t an unreasonable plan. Diamonds are completely unnecessary after all. If you choose this, be careful of the alternatives you select. Other gemstones are subject to the same problems and have far less intervention from government and non-government overseers. Mining, agriculture, manufacturing and trading all have their dark sides and, if you are going to be a consumer, you’re a participant. Next time it probably won’t be diamonds, and it’s the next time that you can help to prevent.

Most of the imitations on the market are synthetics of other materials and therefore avoid the problems of mining abuses. They can be both lovely and far less expensive.

6. What else can you do?

Pay attention. The situation in Sierra Leone started getting ugly in 1991. It’s 2006 and it’s finally starting to get significant media attention. If there’s a moral to this story it’s that there is no longer such a thing as an isolated regional conflict and maybe there never was. Silence kills. Try to shop responsibly for everything you buy, not just diamonds. Even if you don’t want to buy their diamonds, support other products from the good people of Africa. They both need and deserve your business. Buy from established, legitimate sources and let your suppliers know that price isn’t your only consideration. Money is not the only cost to commerce. Teach this to your children and grandchildren. Support the non-government organizations. Recycle.

by Neil Beaty
Professional Appraisals in Denver
http://www.americangemregistry.com/