DDC Takes Stand on Conflict Diamonds

May 23, 2000

DDC Takes Stand on Conflict Diamonds

In a hearing of the U.S. House of Representatives' subcommittee on Africa earlier this month, Eli Haas, president of the Diamond Dealers Club of New York City, outlined DDC's stance on conflict diamonds.

Haas emphasized DDC's abhorrence of the trading and commerce of diamonds to finance civil wars in Angola, Sierra Leone and the Democratic Republic of Congo. Haas strongly supports the United Nations Resolution 1173 which prohibits the direct or indirect import of diamonds from Angola which are not traded through Angola's recognized government.

Haas praised the intent of the bill proposed by Rep. Tony Hall (D-OH) in November 1999, which sought to require certificates of origin for diamonds imported into the U.S. "The Hall proposal, however well-intentioned, would neither lead to the successful implementation of the U.N. sanctions nor end the ongoing civil wars and the deaths of innocent civilians," Haas said. "Rather, it would harm the diamond industry worldwide and have serious implications for stable and developing countries in southern Africa."

Haas cited the lack of technology to correctly identify the marks or fingerprints of a diamond's country of origin. He said even it were possible to identify origin, it would still be impossible to sort out legitimate diamonds from illegitimate ones. Haas said the bill would, in fact, substantially harm countries, such as Botswana, doing legitimate diamond business and whose gross domestic product depends on diamond sales.

Haas explained a "proactive approach" to reining in conflict diamonds, which he said would promote stability, accountability and transparency in diamond trading. "We must establish a direct relationship between African diamond mining nations and the American diamond-cutting industry," he said. "This means the American diamond industry should be able to deal on a business-to-business basis with African diamond-producing nations to purchase stones that have been licensed for export by legitimate governments. The establishment of a direct pipeline would play a significant role in overcoming the current shortage of rough diamonds. In turn this would revitalize our cutting and polishing industry."

Such a move, sanctioned and supported by the U.S., would deliver a blow to the single channel of distribution – the hallmark of De Beers' control of the diamond business for close to a century. De Beers currently controls 60-70% of the global diamond business. De Beers recently stopped purchasing diamonds from areas of conflict and supports the U.N. resolution.

- by Robert Weldon, G.G.