De Beers Proposes Industry Action on Conflict Diamonds

June 14, 2000

De Beers Proposes Industry Action on Conflict Diamonds

De Beers has called for a collective industry action regarding conflict diamonds, asking associations to expel any members found to be dealing in such diamonds.

The request was in a letter signed by De Beers Chairman Nicky Oppenheimer and Managing Director Gary Ralfe. The letter was sent to the presidents of the World Federation of Diamond Bourses, the International Diamond Manufacturers Association and other diamond industry associations worldwide. The missive also praised Israel for its recent call for dealers in conflict diamonds to be expelled from the Israeli Diamond Exchange.

De Beers' letter proposes the diamond industry, as well as governments that import or export diamonds, undertake the following steps to curtail trade in conflict diamonds:

• All importing countries should have standard policies requiring a true certificate of origin from legitimate producing countries for all diamonds. Failure to disclose the certificate would result in confiscation of the diamonds.
• Governments should legally empower diamond import control offices to refuse entry to rough diamonds whose origin is in question.
• Diamond control offices should acquire original run-of-mine alluvial rough samples to enable officers to determine rough origin.
• Banks serving the diamond industry should agree on a standard declaration, to be signed by their customers, stating customers will not deal in conflict diamonds. Bank customers who refuse to sign or abide by the declaration would not be allowed access to the banking facilities.
• Alluvial diamond-producing countries and diamond-cutting center import/export offices should organize an exchange of staff to harmonize paperwork and train staff to recognize origin of diamond imports.
• There should be a mandatory publication of official annual rough diamond import/export statistics by countries that handle rough diamonds.

"The world is calling for the industry to separate legitimate from non-legitimate diamonds," De Beers Spokesman Andy Lamont says. "As an industry, it is our moral obligation to make it difficult for anyone to do business with illicit diamonds."

Lamont acknowledges it's impossible to shut down the illicit flow completely. "It's not possible for any one entity to tackle the problems alone," he says. "Every interested party from associations, governments, producers and importers should put in place mechanisms like the ones we have outlined, to make illicit diamond trading much more difficult and uncomfortable."

In December of last year, De Beers took action to ensure its diamonds do not come from conflict zones. According to the Financial Times, a recent U.S. Agency for International Development report on how Sierra Leone could regulate its diamond industry says consumer backlash against conflict diamonds could increase De Beers' sales. "Ironically, the diamond giant De Beers might stand to gain the most from disruption or boycott of trade in diamonds from conflict countries," reads the report. "This is because De Beers has the greatest likelihood of being able to certify the origin of its traded stones due to the high proportion of its vertical integration."

The USAID report also notes De Beers seems "genuinely to deplore the connection between diamonds and violent conflicts in Africa and be committed to achieving results in reducing smuggling."

- by Robert Weldon, G.G.