Mon, 05 Jun 2006

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/

American Gem Registry

A few resources: