[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
TRADE IN AFRICAN DIAMONDS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON TRADE
of the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 13, 2000
__________
Serial 106-72
__________
Printed for the use of the Committee on Ways and Means
_______________________________________________________________________
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC
20402
__________
U.S. GOVERNMENT PRINTING OFFICE
68-040 WASHINGTON : 2000
COMMITTEE ON WAYS AND MEANS
BILL ARCHER, Texas, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
BILL THOMAS, California FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana JIM McDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania KAREN L. THURMAN, Florida
WES WATKINS, Oklahoma LLOYD DOGGETT, Texas
H.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
A.L. Singleton, Chief of Staff
Janice Mays, Minority Chief Counsel
______
Subcommittee on Trade
PHILIP M. CRANE, Illinois, Chairman
BILL THOMAS, California SANDER M. LEVIN, Michigan
E. CLAY SHAW, Jr., Florida CHARLES B. RANGEL, New York
AMO HOUGHTON, New York RICHARD E. NEAL, Massachusetts
DAVE CAMP, Michigan MICHAEL R. McNULTY, New York
JIM RAMSTAD, Minnesota WILLIAM J. JEFFERSON, Louisiana
JENNIFER DUNN, Washington XAVIER BECERRA, California
WALLY HERGER, California
JIM NUSSLE, Iowa
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed hearing record remains the official
version. Because electronic submissions are used to prepare both
printed and electronic versions of the hearing record, the process of
converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
Page
Advisories announcing the hearing................................ 2
WITNESSES
U.S. Department of State, William B. Wood, Principal Deputy
Assistant Secretary, International Organization Affairs........ 32
______
Diamond Manufacturers and Importers Association of America,
Jeffrey Fischer................................................ 58
Gemological Institute of America, William E. Boyajian............ 73
Global Witness, Alex Yearsley.................................... 52
Hall, Hon. Tony P., a Representative in Congress from the State
of Ohio........................................................ 7
Jewelers of America, Inc., Matthew A. Runci...................... 39
McKinney, Hon. Cynthia A., a Representative in Congress from the
State of Georgia............................................... 20
Payne, Hon. Donald M., a Representative in Congress from the
State of New Jersey............................................ 17
Physicians for Human Rights, Holly Burkhalter.................... 61
Rough Diamond Consultancy, J.F. ``Jack'' Jolis................... 69
Wolf, Hon. Frank R., a Representative in Congress from the State
of Virginia.................................................... 14
World Diamond Council:
William E. Boyajian.......................................... 73
Matthew A. Runci............................................. 39
SUBMISSIONS FOR THE RECORD
Diamond Dealers Club, New York, NY:
Jacob Banda, letter.......................................... 86
Mayer Herz, statement........................................ 13
Liberia, Republic of, His Excellency William V.S. Bull,
Ambassador to the United States, letter and attachment......... 84
MONDERA.com, New York, NY, Mayer Herz, statement................. 13
Rosen, Elly, Appraisal Information Services, Brooklyn, NY, Gems
and Jewelry Reference, and Appraiser's Information Network,
statement...................................................... 82
Women's Commission for Refugee Women and Children, New York, NY,
Mary Diaz, statement........................................... 87
World Vision, Rory E. Anderson, statement........................ 89
TRADE IN AFRICAN DIAMONDS
----------
WEDNESDAY, SEPTEMBER 13, 2000
House of Representatives,
Committee on Ways and Means,
Subcommittee on Trade,
Washington, D.C.
The Subcommittee met, pursuant to notice, at 9:35 a.m., in
room 1100, Longworth House Office Building, Hon. Philip M.
Crane (Chairman of the Subcommittee) presiding.
[The advisories announcing the hearing follow:]
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON TRADE
CONTACT: (202) 225-1721
FOR IMMEDIATE RELEASE
August 10, 2000
No. TR-23
Crane Announces Hearing on Trade in African Diamonds
Congressman Philip M. Crane (R-IL), Chairman, Subcommittee on Trade
of the Committee on Ways and Means, announced today that the
Subcommittee will hold a hearing on trade in African diamonds. The
hearing will take place on Tuesday, September 12, 2000, in the main
Committee hearing room, 1100 Longworth House Office Building, beginning
at 10:00 a.m.
Oral testimony at this hearing will be from both invited and public
witnesses. Invited witnesses will include officials from the U.S.
Department of State and the U.S. Department of the Treasury. Also, any
individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Committee or for
inclusion in the printed record of the hearing.
BACKGROUND:
Recently, there has been intensified international focus on the
trade in diamonds and its link to illegal arms trafficking and civil
war in Africa. Often called ``conflict'' or ``blood'' diamonds, such
diamonds generally come from mines controlled by rebel forces and are
traded for arms to fuel civil war in Africa.
Many claim that the Sierra Leone rebel organization Revolutionary
United Front has engaged in atrocious acts against civilians and has
been trading conflict diamonds to finance its war against the
Government of Sierra Leone. On July 5, 2000, the United Nations adopted
a resolution calling for an 18-month embargo against diamonds from
Sierra Leone. The resolution calls on member States to ban the
importation of rough diamonds from Sierra Leone unless those diamonds
are exported under a certificate system approved by a Security Council
Sanction Committee. This ban is similar to the U.N. embargo implemented
against diamonds from Angola in June 1998.
The United States has been actively involved in efforts to curb
trade in conflict diamonds. In May 2000 in Kimberly, South Africa, the
United States, along with South Africa, the United Kingdom, Belgium,
and representatives of the diamond industry reached an agreement on key
issues establishing a certification system, accountability and
oversight for the industry. The United States has also taken a lead in
establishing Sierra Leone's Commission on the Management of Strategic
Resources and has committed over $1 million as well as technical advice
for this effort.
In response to the international focus on conflict diamond trade
and the U.N. ban against diamonds from Sierra Leone, the World Diamond
Congress (comprised of the World Federation of Diamond Bourses and the
International Diamond Manufacturers Association) adopted on July 19,
2000, a joint resolution laying out a proposal for oversight,
accountability and specific actions to track the flow of rough
diamonds. The proposal requires each accredited rough diamond importing
country to enact ``redline'' legislation prohibiting the importation of
any parcel of rough diamonds unless such parcel has been sealed and
registered in a universally standardized manner by an accredited export
authority from the exporting country. In addition, the proposal does
the following: (1) calls for the exporting country to implement an
accredited export system; (2) prohibits the importation of diamonds
from countries that have not enacted redline legislation; (3) requires
countries to adopt criminal penalties for trading in illicit rough
diamonds; and (4) requires adherence to a code of conduct. Under the
proposal, compliance is to be monitored and controlled by the industry,
the International Diamond Council.
Under U.S. law, the origin of a cut diamond is the country where
the diamond was cut, and U.S. Customs does not require any information
relating to the country of mining of the imported cut diamond. Most
experts agree that once a diamond has been cut and polished, it is
difficult to determine the country where it was mined.
There have been a number of legislative proposals in Congress
seeking to address the trade in conflict diamonds, including banning
diamonds from specified countries and requiring a certification of
where the diamond sought to be imported was mined. These proposals have
not received the support of the Administration, largely because of
concerns that they are not administrable and have the potential to harm
legitimate diamond trade.
In announcing the hearing, Chairman Crane stated: ``This hearing
will provide the Subcommittee with an opportunity to review the options
available to curtail conflict diamond trade that is World Trade
Organization (WTO) consistent and does not impact legitimate diamond
trade. We must break the link that makes diamonds a rebel's best
friend, but we must also not harm legitimate diamond trade that is a
vital link to the world's economy.''
FOCUS OF THE HEARING:
The focus of the hearing will be to evaluate options available that
are administrable and WTO consistent and will effectively curtail
conflict diamond trade without impacting legitimate diamond trade. The
Subcommittee is interested in receiving testimony on possible
approaches to this issue, including testimony on current and developing
technology that can determine the country of mining of a cut and
polished diamond.
DETAILS FOR SUBMISSIONS OF REQUESTS TO BE HEARD:
Requests to be heard at the hearing must be made by telephone to
Traci Altman or Pete Davila at (202) 225-1721 no later than the close
of business, Tuesday, September 5, 2000. The telephone request should
be followed by a formal written request to A.L. Singleton, Chief of
Staff, Committee on Ways and Means, U.S. House of Representatives, 1102
Longworth House Office Building, Washington, D.C. 20515. The staff of
the Subcommittee on Trade will notify by telephone those scheduled to
appear as soon as possible after the filing deadline. Any questions
concerning a scheduled appearance should be directed to the
Subcommittee on Trade staff at (202) 225-6649.
In view of the limited time available to hear witnesses, the
Subcommittee may not be able to accommodate all requests to be heard.
Those persons and organizations not scheduled for an oral
appearance are encouraged to submit written statements for the record
of the hearing. All persons requesting to be heard, whether they are
scheduled for oral testimony or not, will be notified as soon as
possible after the filing deadline.
Witnesses scheduled to present oral testimony are required to
summarize briefly their written statements in no more than five
minutes. THE FIVE-MINUTE RULE WILL BE STRICTLY ENFORCED. The full
written statement of each witness will be included in the printed
record, in accordance with House Rules.
In order to assure the most productive use of the limited amount of
time available to question witnesses, all witnesses scheduled to appear
before the Subcommittee are required to submit 200 copies, along with
an IBM compatible 3.5-inch diskette in WordPerfect or MS Word format,
of their prepared statement for review by Members prior to the hearing.
Testimony should arrive at the Subcommittee on Trade office, room 1104
Longworth House Office Building, no later than Friday, September 8,
2000. Failure to do so may result in the witness being denied the
opportunity to testify in person.
WRITTEN STATEMENTS IN LIEU OF PERSONAL APPEARANCE:
Any person or organization wishing to submit a written statement
for the printed record of the hearing should submit six (6) single-
spaced copies of their statement, along with an IBM compatible 3.5-inch
diskette in WordPerfect or MS Word format, with their name, address,
and hearing date noted on a label, by the close of business, Tuesday,
September 26, 2000, to A.L. Singleton, Chief of Staff, Committee on
Ways and Means, U.S. House of Representatives, 1102 Longworth House
Office Building, Washington, D.C. 20515. If those filing written
statements wish to have their statements distributed to the press and
interested public at the hearing, they may deliver 200 additional
copies for this purpose to the Subcommittee on Trade office, room 1104
Longworth House Office Building, by close of business the day before
the hearing.
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a
witness, any written statement or exhibit submitted for the printed
record or any written comments in response to a request for written
comments must conform to the guidelines listed below. Any statement or
exhibit not in compliance with these guidelines will not be printed,
but will be maintained in the Committee files for review and use by the
Committee.
1. All statements and any accompanying exhibits for printing must
be submitted on an IBM compatible 3.5-inch diskette in WordPerfect or
MS Word format, typed in single space and may not exceed a total of 10
pages including attachments. Witnesses are advised that the Committee
will rely on electronic submissions for printing the official hearing
record.
2. Copies of whole documents submitted as exhibit material will not
be accepted for printing. Instead, exhibit material should be
referenced and quoted or paraphrased. All exhibit material not meeting
these specifications will be maintained in the Committee files for
review and use by the Committee.
3. A witness appearing at a public hearing, or submitting a
statement for the record of a public hearing, or submitting written
comments in response to a published request for comments by the
Committee, must include on his statement or submission a list of all
clients, persons, or organizations on whose behalf the witness appears.
4. A supplemental sheet must accompany each statement listing the
name, company, address, telephone and fax numbers where the witness or
the designated representative may be reached. This supplemental sheet
will not be included in the printed record.
The above restrictions and limitations apply only to material being
submitted for printing. Statements and exhibits or supplementary
material submitted solely for distribution to the Members, the press,
and the public during the course of a public hearing may be submitted
in other forms.
Note: All Committee advisories and news releases are available on
the World Wide Web at ``http://waysandmeans.house.gov.''
The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four
business days notice is requested). Questions with regard to special
accommodation needs in general (including availability of Committee
materials in alternative formats) may be directed to the Committee as
noted above.
***NOTICE--CHANGE IN DATE AND TIME***
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON TRADE
CONTACT: (202) 225-6649
FOR IMMEDIATE RELEASE
September 6, 2000
No. TR-23-Revised
Change in Date and Time for Subcommittee Hearing on
Trade in African Diamonds
Tuesday, September 12, 2000
Congressman Philip M. Crane (R-IL), Chairman of the Subcommittee on
Trade of the Committee on Ways and Means, today announced that the
Subcommittee hearing on trade in African diamonds, previously scheduled
for Tuesday, September 12, 2000, at 10:00 a.m., in the main Committee
hearing room, 1100 Longworth House Office Building, will now be held on
Wednesday, September 13, 2000, beginning at 9:30 a.m.
All other details for the hearing remain the same. (See
Subcommittee press release No. TR-23, dated August 10, 2000.)
Chairman Crane. Welcome to this important hearing on
conflict diamonds. I especially want to thank the witnesses,
many of whom had to reschedule their plans so that they could
testify. Some of you have crossed oceans to get here and I know
how important this issue is to everyone present here today.
Africa is a continent of magnificent landscape, beautiful
coastline, and abundant natural resources, including diamonds.
Despite its abundance in natural wealth, Africa remains poor
and war-torn. In order for Africa to move in the direction of
economic prosperity, we must ensure that its natural wealth is
not used to keep African countries fettered in rebel wars and
poverty. This aim brings us to the subject of trade and
conflict diamonds, which are diamonds controlled by rebel
forces and traded to fuel their wars against civilians and
governments, as is presently the case in Sierra Leone.
Eighty-five percent of the world's rough diamonds pass
through Antwerp, Belgium, and then to central selling offices
in London and other places for sale to diamond cutters. Experts
everywhere agree that once a diamond is cut and polished, it is
almost impossible to tell the country where the diamond was
mined. To effectively end trade in conflict diamonds, the
countries exporting and importing rough stones in particular
must work together to make sure that these diamonds do not have
a market, so that conflict diamond peddlers cannot stay in
business. I am pleased that the diamond industry based in
Antwerp recognizes this and I applaud the industry for taking
steps toward achieving this goal.
Legitimate diamond trade is worth about $55 billion per
year and estimates indicate that illegal diamond trade accounts
for less than 4.5 percent of the rough diamond production
worldwide. Trade in conflict diamonds is a portion of this 4.5
percent. However, even this small percentage of conflict
diamond trade is too much, but we must ensure that the steps we
take do not undermine legitimate diamond trade through
government bureaucracy and tightened price controls. If this
happens, the losers are consumers and the African countries
engaged in legitimate trade. The winners are the central
selling offices of rough diamonds.
Accordingly, I will be looking at all proposals with an eye
to determining whether they are administrable, effective, and
consistent with our WTO obligations. So let us work together so
that we are all winners and send a clear signal that conflict
diamonds are not forever.
Mr. Levin. Thank you, Mr. Chairman. I appreciate this
hearing and the opportunity to hear these distinguished
witnesses. Thanks to those of you seated at the witness table,
also human rights organizations and others, we have been made
aware in recent years of the tragedy of conflict diamonds.
Items that should be precious objects of beauty have become too
often the currency that perpetuates unthinkable human strife.
In Sierra Leone and Angola, rebel groups are appropriating
rough diamonds, selling them, using the proceeds to acquire
arms and otherwise continue violent internal conflicts. The
practice of trafficking in conflict diamonds has serious
implications both for U.S. foreign policy and U.S. consumer
protection. This country strives to conduct a foreign policy
that emphasizes humanitarian objectives. We take seriously the
need to promote respect for human rights around the world. For
this reason, we cannot turn a blind eye to this problem.
Further, we have an obligation to protect American
consumers from becoming unwitting supporters of gross human
atrocities. Diamonds should enrich the lives of peoples in
countries that are naturally endowed with them, but instead,
peoples in Angola, Sierra Leone, and others are being brought
pain and suffering.
I am encouraged that the administration and the
international community are taking steps to prevent rebel
groups from financing their activities through illegal diamond
sales. The two Security Council resolutions are welcome first
steps. Likewise, I believe that the diamond industry's efforts
to curtail trade in these diamonds are a positive development.
So we look forward to listening to you, our colleagues, as well
as witnesses from the Department of State, the private sector,
human rights groups, and others.
A short time ago, Congress passed and the President signed
into law historic trade legislation making the nations of Sub-
Saharan Africa our partners in economic progress and
prosperity. When fully implemented, that legislation should
help to promote increased trade and boost the economic
development of those nations.
By contrast, the trade in conflict diamonds is actually a
set-back to economic development. We must do our part to deter
that trade. So I hope today the witnesses will offer helpful
suggestions on how we might do just that, and I want to thank
all of you in advance for joining us today and we look forward
to your testimony.
[The opening statement of Hon. Jim Ramstad follows:]
Opening Statement of the Hon. Jim Ramstad, a Representative in Congress
from the State of Minnesota
Thank you, Mr. Chairman, for holding this important hearing
today. As a committed believer in international trade, I have
consistently supported opening markets providing more access to
goods from around the world.However, as civil war has ravaged
some countries in Africa, rebel forces, like the Revolutionary
United Front (RUF) in Sierra Leone, have captured diamond mines
and used the income from those mines not to help the poor, but
to enrich themselves and provide arms and munitions for war.
They have also participated in horrific acts of brutality
against their opponents and against innocent citizens who
happened to be in the wrong place at the wrong time.
To combat this growing problem, the United Nations on July
5th of this year adopted a resolution calling for an 18-month
embargo against diamonds from Sierra Leone unless the diamonds
can be certified as coming from legitimate sources. Also, the
World Diamond Congress has also adopted a proposal to track the
source of diamonds.
At this time, U.S. law does not require any information as
to the origin of diamonds. I am extremely interested to hear my
good friend Rep. Tony Hall's proposal to change that.
While I have concerns about enforcement of the legislation,
I am anxious to hear the reactions of the Administration and
the industry. Rest assured I will give this important
legislation the consideration it deserves and I look forward to
today's testimony.
Chairman Crane. Thank you, Mr. Levin. Now I would like to
tell our witnesses that if you can keep your oral testimony to
in the neighborhood of five minutes, we would appreciate it.
All written testimony, however, will be made a part of the
permanent record.
With that, we yield to our distinguished colleague from
Ohio, Mr. Hall.
STATEMENT OF HON. TONY P. HALL, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF OHIO
Mr. Hall. Thank you, Mr. Chairman, Mr. Levin, members of
the subcommittee. I appreciate the chance to testify on a very,
very important issue. I appreciate also that my full testimony
will be part of the record. I will read from parts of it and
refer to parts of it. Thank you.
My focus today is on the humanitarian cost, the human costs
of the trade in conflict diamonds. We also call them blood
diamonds, or trading of arms for diamonds. I have seen it in
Angola. I am aware of it in Liberia and in the DRC. But it has
never been more clear than in Sierra Leone, where Congressman
Wolf and I had traveled last year. What I want to focus on is
the role diamonds play in the butchery in some of the nations
blessed with a resource that has become really a curse.
1999 was a very good year for the diamond industry.
DeBeers, the monopoly which controls 65 percent of the market,
posted profits 86 percent higher than in 1998. As a rule, 30
percent of those profits come from conflict diamonds, even
though these stones make up between five and 15 percent of the
total supply, because they tend to be large and
disproportionately valuable stones. In Sierra Leone, diamonds
average two carats in size.
1999 was a bad year for the people of Sierra Leone and
little better for many in Angola and the Democratic Republic of
the Congo. The billion or so dollars brought in by these
countries' diamonds last year was used to buy the machetes that
severed the limbs, the weapons that have turned rag-tag gangs
into their tormenters, and military forces for the
international community to reckon with.
When Frank and I were in Sierra Leone last year, we went to
the amputee camps. We saw the results of what can happen when
you take diamonds and you trade it for arms. We saw a rag-tag
army go from 500 rebels to 25,000 strong. We saw the kind of
games, or heard about the kind of games, that they played on
the people of Sierra Leone. One of the games is, you stick your
hand in a bag. You pull out a piece of paper. If it says
``hand,'' they chop it off. If it says ``ear,'' the ear comes
off. If it says ``foot,'' they hack it off with a hatchet.
The year 2000 has not changed the equation much except in
Sierra Leone. Now U.N. peacekeepers, whose deployment is
costing $1.5 million per day, have joined on the misery side of
the equation. Five hundred were kidnapped in May and held for
more than a month. Today, 13,000 are reportedly holed up in
fortified areas, unable to open the country's main road. The
force's commander blames diamonds both for rebels' refusal to
disarm, as they promised, and for infighting that has paralyzed
his peacekeepers.
Unfortunately, these wars have not stopped the diamond
business. For other manufacturers, war threatens workers and
factories and farmers. For oil companies, war jeopardizes
pipelines and equipment. For a diamond trader, though, the
economic incentives are backwards. War favors traders who can
deliver weapons and supplies. It increases the supply of
diamonds available. In fact, wars have been great for business.
Consumer opinion should be an added incentive to do the
right thing for most businesses, and it would seem to make the
diamond industry particularly sensitive to any link between
their product and the savage wars that might stain its image. I
think what we see is that the worth of diamonds is pretty much
what they symbolize, love and commitment. The image was created
and is sustained by an advertising campaign worth hundreds of
millions of dollars a year. But it is only an image. Fur, which
is another luxury product with an image problem, does keep you
warm. Diamonds' worth depends wholly on consumers' perceptions.
So sometimes diamonds are not a girl's best friend.
American consumers, who buy two-thirds of all the world's
diamonds, have a very different understanding of diamonds than
Sierra Leoneans or Angolans or Congolese people, and with the
increase in media attention to the horrors of the diamond wars,
reality is almost certain to make these conflicting images
apparent. Americans are smart and they want action, and they
are going to be outraged. I do not think they really know what
has happened with conflict diamonds. They are going to be
outraged if we do not do something about this.
I was encouraged to see the diamond industry finally do
something to end its assistance to this blood trade two months
ago. Last year, Frank and I and Cynthia McKinney came up with a
more traditional approach, giving consumers information to make
their own decisions. We had urged the industry to either
support it or counter it. I had hoped to introduce implementing
legislation for their counter proposal, but the industry has
not yet finalized its approach.
To encourage this process, I have introduced the CARAT Act,
H.R. 5147. Title III expresses the sense of Congress that our
government should do all it can to put this proposal or
something like it into effect. I believe it is critical that
Congress express this now because key countries and segments of
the industry are dragging their feet.
The United States is the largest market for diamonds. We
have a moral obligation to speak out and what we say will make
a difference. Title II aims to add some encouragement to this
process in the form of requiring diamonds' origin to be
certified as soon as that is technologically feasible and cost
effective. Title IV requires the administration to work more
coherently on this problem. Under Ambassador Halperin's
leadership, there has been more attention and focus.
But much more effort is needed. Over the past decade, our
government, has sent $3 billion in humanitarian aid to Angola,
Liberia, the DRC, and Sierra Leone, while over the same period
$10 billion in diamonds was smuggled out.
Several months ago, 70 American human rights and
humanitarian organizations led by Physicians for Human Rights
formed a coalition to press for the industry to act on the
problem of conflict diamonds. I was not surprised to see their
enthusiasm for this work and pleased to learn that they are
proceeding in a responsible manner. Launching a boycott of
diamonds would be the easiest thing in the world to do on this
issue, and this coalition has not done that. Instead, they are
waiting to see whether the diamond industry will implement its
proposal and what Congress is going to do. I do not expect this
coalition to wait forever. Christmas is coming and with it a
golden opportunity to educate consumers about where the money
they spend on tokens of love goes.
Mr. Chairman, we are running out of time. This has been
going on for too long. We have little leverage over these
countries in Africa. The threat of our taking away food aid or
medicines is not enough leverage. We are not going to commit
troops to countries in Africa. We have pretty much determined
that. What leverage do we have? I think the only leverage we
have in this particular case is to take the profit out of wars,
by stopping the trade in blood diamonds. We have a chance to
make a difference.
I urge the committee to mark-up H.R. 5147. I would also
request that you include the testimony of Mayer Herz, who is a
member of the U.S. diamond industry who was not able to
testify. Thank you.
[The prepared statement and an attachment follow:]
Statement of Hon. Tony P. Hall, a Representative in Congress from the
State of Ohio
Mr. Chairman, Mr. Levin, and Members of the Subcommittee: I
appreciate your focus today, and the opportunity to testify to
you. My focus is on the human cost of the trade in conflict
diamonds. I have seen it in Angola, in Liberia, and in the DRC
but it has never been clearer or sadder than in Sierra Leone,
where Congressman Wolf and I traveled last December.
Frank Wolf speaks eloquently about the people who lost
their arms, and ears, and lives to machetes wielded by rebels
trying to overthrow this small country's democratic government,
so I'll let him tell that story. And Cynthia McKinney can tell
you what she and other members of the International Relations
Committee are trying to do to stop the diamond wars and repair
the damage they have caused.
What I want to focus on is the role diamonds play in
butchery of people whose nations are blessed with a resource
that has become a grotesque curse.
Industry and People
1999 was a very good year for the diamond industry.
DeBeers, the monopoly which controls 65 percent of the market,
posted profits nearly 90 percent higher than in 1998.
As a rule, 30 percent of these profits come from conflict
diamonds (even though these stones make up between 5 and 15
percent of the total supply) because they tend to be large and
disproportionately valuable stones. In Sierra Leone, diamonds
average two carats in size.
1999 was an unspeakably bad year for the people of Sierra
Leone, and little better for many in Angola and the Democratic
Republic of Congo. The billion-plus dollars brought in by these
countries' diamonds last year was used to buy the
machetés that severed their limbs, and the weapons that
have turned rag-tag gangs into serious military forces their
neighbors and international troops will reckon with for years
to come.
The year 2000 hasn't changed the equation much--except in
Sierra Leone. Now UN peacekeepers, whose deployment is costing
$1.5 million per day, have joined on the misery side of the
equation. In May, 500 were kidnaped and held for weeks. Today,
13,000 are virtually holed up in fortified areas--unable to
open the country's main road, much less protect civilians. The
force's commander blames diamond profiteering both for rebels'
broken promise to disarm, and for in-fighting that has
paralyzed his peacekeepers.
Incentives All Wrong
Unfortunately, until very recently, the diamond industry
hasn't considered any of this to be its problem. For most
manufacturers, war threatens their workers and factories. For
oil companies, war jeopardizes their pipelines and equipment.
For the diamond industry, though, the economic incentives are
backwards. War favors traders who can deliver weapons and
supplies, and war increases the supply of diamonds available.
In recent years, war has been great for the diamond business.
The niceties of international law haven't been much of a
deterrent to the diamond industry's participation in these wars
either. For eight years, traders dealt gladly with rebels who
tried to overthrow Sierra Leone's elected government, and
briefly succeeded.
The business partners of a generally respectable industry
there were rebels who used the profits from their trade to turn
children into their parents' murderers, and then into soldiers
and sex slaves. . . rebels who spent their earnings on drugs to
make their young fighters fearless, and to buy the weapons that
make this one of history's uniquely brutal wars on civilians.
Traders reported these as Liberian diamonds--six million carats
a year worth, when they knew full well that Liberian mines can
produce just 2 percent of that.
There are similar stories in the Congo and in Angola, whose
people are now beginning to starve and whose land has been
turned into a minefield. In Angola, DeBeers bragged in a recent
annual report about its prowess in being profitable enough to
buy enough rebel diamonds to keep prices from collapsing.
Consumer Opinion
So economic and legal incentives for peace failed. For most
businesses, a third factor often is reason enough to do the
right thing: customer opinion. The diamond industry would seem
to be particularly sensitive to any link between its product
and savage wars that might stain its glittering image.
Industrial diamonds (most of which are man-made) have a real
value--but diamond gemstones' worth is in what they symbolize:
love and commitment. This image was created and is sustained by
an advertising campaign worth hundreds of millions of dollars a
year. . . but it is only an image. Fur, another luxury product
with an image problem, does keep you warm. Diamonds have no
intrinsic value: their worth depends wholly on consumer
sentiment.
American consumers--who buy two-thirds of all the world's
diamonds--have a very different understanding of diamonds than
Sierra Leonean, or Angolan, or Congolese people. And with the
increase in media focus on the horrors of the diamond wars,
reality is almost certain to reveal these conflicting views. As
the situation now stands, though, there isn't much American
consumers can do to cut off their support for the diamond wars.
Most diamonds are mined in South Africa, Botswana, and other
countries that--aided by a geological quirk of nature that
makes it easier to control their diamonds--have used these
resources for their people's benefit. And most diamonds are cut
in India, a poor country with a long history of democracy, or
Israel--two more places we would be loathe to hurt.
The people of these countries should not have to pay for
the diamond industry's greed, its arrogance, or its refusal to
follow accepted norms of responsible behavior. But in fact,
they probably will be the ones who will get burned once any
spark ignites this tinderbox.
Whether Congress likes it or not, American consumers simply
will not be a party to this blood trade once the Benetton ads
showing diamond bracelets on Sierra Leone amputees start to
run. That is the challenge we face. That--and not the industry-
backed Antwerp plan, or other approaches--is the real threat.
Just ask the fur industry.
Industry Response
I was encouraged to see the diamond industry finally do
something to end its assistance to this blood trade two months
ago. Last year, when I came up with a more traditional
approach--giving consumers information to make their own
decisions--I urged the industry to either support my approach
or counter with something better. I had hoped to introduce
legislation implementing their counterproposal, but the
industry has not yet finalized its approach.
The CARAT Act
To encourage this process, I have joined Mr. Wolf and Ms.
McKinney in introducing the CARAT Act, HR 5147. With your
permission, I'm going to talk about it a little out of order.
Title III
Title III expresses the Sense of the Congress that our
government should do all it can to implement the industry's
Antwerp proposal, or something like it. I believe it is
critical that Congress weigh in on this early, because key
countries and segments of the industry are dragging their feet.
The United States is the largest market for diamonds; we have a
moral obligation to speak out, and what we say will make a
difference.
It is my understanding that some Members of this
Subcommittee question the wisdom of this approach, and have
particular concerns about its compliance with the WTO. I have a
few qualms of my own, but I've been persuaded that--until
technology advances--we need the industry's cooperation to make
any system work. This is what the industry's leaders have
agreed to; unless we have a better idea, I think we should
support it.
Title II
Title II aims to add some encouragement to the Antwerp
process, by requiring diamonds' origin be certified as soon as
that is technologically feasible and cost-effective. It permits
the Treasury Secretary to waive this if the system Title III
envisions is up and running. I know the industry doesn't like
Title II; I hope that including it will motivate them to be
sure it's never needed. I also hope it will spur technologies
that will let us determine the origin of a cut diamond because
I sincerely believe that consumers have the right to know that.
We know where our cars are from, and the parts in them; we know
where are clothes and our cheese were made. Why can't we know
where a diamond, which represents a significant investment of
money, was mined?
Title IV
Title IV requires the Administration to work more
coherently on this problem. Under Ambassador Halperin's
leadership, more attention has been paid to it, and Ambassador
Holbrooke's focus probably has added momentum to this work.
But, as your Subcommittee has learned, Mr. Chairman, there is
apparently not the sustained commitment from senior
Administration officials this issue merits.
And much more effort is needed: over the past decade, our
government has sent more than $3 billion in humanitarian aid to
Angola, Liberia, the DRC, and Sierra Leone. Over the same
period, $10 billion in diamonds was smuggled out of these
countries, turned into weapons, and turned against their
suffering civilians.
As long as any criminal can capture diamond mines that
generate that kind of money, we will be stuck in this vicious
cycle. It is above all a human crisis; but it is a diplomatic
and a financial one as well, and the Administration's attention
needs to be sustained.
Title I
Finally, Title I implements two United Nations embargoes,
on Sierra Leone and Angolan rebels' diamonds, and expands them
to countries involved in the transshipment of diamonds banned
by the United Nations.Congressman Wolf has taken the lead on
this provision, so I'll let him explain it fully.
Because the United States imports very few rough diamonds,
Title I's embargoes will only become as tough as they sound
when the either Title II, or the system Title III encourages,
is implemented. But we have an obligation as members of the
United Nations to enact legislation to enforce these UN
embargoes; doing so in the context of a system for targeting
the roots of this problem signals our seriousness. And since
more than ample waivers are included, this provision can remain
current and fair.
Congress Needs to Act
The CARAT Act does not bind the legitimate diamond
industry, but it does send a strong message that is urgently
needed. Hopefully, it also will spur the technology needed to
empower consumers if the industry fails to control this blood
trade.
I am pleased this bill has won the support of the NGO
community. I will look to the industry to demonstrate its
sincerity by helping me to win your support for it. And I urge
this Committee to mark it up in time for a vote by the House
and Senate before we leave town. Time is short, but this is an
unusual opportunity to make a difference. The media spotlight
is on this problem; and human rights activists and the
legitimate industry are on the same side--for now. We won't
have this happy situation if we wait.
NGO Response
Which brings me to the human rights community. Several
months ago, more than 70 respected American organizations--led
by Physicians for Human Rights--formed a coalition to press the
industry to address the problem of conflict diamonds. I was not
surprised to see activists' enthusiasm for this work: this
would make great TV, and it is one of the few straightforward
ways to connect American consumers to a problem in Africa.
I am pleased to see that activists are proceeding in a
responsible manner, though, and working out of the limelight
for a lasting solution. Launching a boycott of diamonds would
be the easiest thing in the world to do on this issue; this
coalition has not done that. Instead, they are waiting to see
whether the diamond industry will implement its ambitious
proposal--which it promised to have in place later this month.
I don't expect the coalition to wait forever, though.
Christmas is coming, and with it a golden opportunity to
educate consumers about where the money they spend on tokens of
love goes. Before then, two networks are planning exposes of
conflict diamonds that will be seen by tens of millions of
Americans. It will be increasingly difficult for these
thoughtful but powerful organizations to continue to wait for
industry and Congressional action.
Congressional Response
I appreciate that time for the 106th Congress to act is
short; that is why I tried to make the CARAT Act as flexible as
possible. If the industry fulfills its promise to devise a
workable system, there will be time next year to come back to
debate how to implement that without running afoul of the WTO
or prudence.
But this Committee and this Congress need to do something
before we go home next month.
I do not want to face constituents who've just seen 20/20
or 60 Minutes if we haven't done something. I do not want to
face my local jewelers, who may be trying to explain the human
rights activists' pickets to their customers, with the excuse
that we need to study the problem a little more.
And I do not want to tell taxpayers that we would rather
spend billions of dollars to treat the symptoms of the diamond
wars, rather than try to get to the root of the problem.
Thank you for your time, Mr. Chairman, and for your
Committee's work on this issue. I particularly appreciate the
efforts Savitri Singh has devoted to this matter, and want to
commend you for her diligence.
I would be happy to answer any questions.
Statement of Mayer Herz, Vice President, Diamond Acquisitions,
MONDERA.com, New York, New York, and Officer, Diamond Dealers Club, New
York, New York
A Positive Approach to Solving the Problems of Conflict Diamonds
The world diamond industry created the Antwerp Proposals, a
sound effort to stem the flow of conflict diamonds into
legitimate channels. As I was involved in drafting these
proposals, I would personally recommend that we try to make
them WTO consistent so that rough diamonds can be traded like
other commodities. This will eliminate the need to create a
whole new bureaucracy to implement the Antwerp Proposals.
The concept that I would like to discuss today is
revolutionary in its approach to the solution of conflict
diamonds. To resolve any conflict or problem one needs to deal
with its root cause. The root cause of conflict in African
diamond-producing countries is that, for decades now, traders,
major buyers and corrupt government officials are illegally
exporting the rough diamonds, robbing these countries of their
wealth, thus leaving the people and legitimate governments with
no sustaining revenues to build on. Corruption and bribes are
the norm.
Unscrupulous dealers become rich while legitimate
governments and the general population remains destitute. In
the best of cases, export duties and taxes are collected only
on a fraction of the value of the diamonds taken out of the
country. The governments are left with very little revenue to
build the infrastructures of a nation that will benefit all the
people. The miners and diggers usually don't get more than 20
percent to 35 percent of what their product is worth on the
world market. In this environment, the whole economic structure
is derailed
Rice is a daily staple, yet unethical traders exploit the
need to feed the hungry. They are selling rice at highly
inflated prices and making absurd profits. With these profits,
the traders buy rough diamonds and smuggle them out of the
country. As a result, both the country's natural resources and
the traders'' ill-gotten financial gains are drained out of the
country. The tragic consequence is that there are very few
resources left to drive the local economy. The ordinary people
of these countries resent their exploitation, but there is
little they can do against these powerful forces. Conflict and
war is what follows.
The problem has been growing unchecked for too long. Now
that the world is focusing on the problem of conflict diamonds,
thanks to NGO's like Global Witness, I would like to ask
Congress and the Administration to address the root cause of
this problem. The State Department and its Agency for
International Development and the Department of Commerce and
the Office of the Trade Representative for Africa should help
establish direct trade between the American diamond industry
and legitimate diamond producers in Africa. The foundation of
this relationship must be in educating these governments and
their business people that unscrupulous deals and corruption in
the long term is detrimental to a country's stability and its
business infrastructure. We must start a process of dealing
only through legitimate governments and we must make our
dealings completely transparent, with total accountability on
the part of all involved. We must make people understand that
the only way that commerce in this trade will be stable is if
it's done legitimately.
The diamond resources of Africa are vital to the New York
diamond industry. To its credit, the American diamond industry
has not been involved in trading in rough diamonds that is not
legitimate and transparent. We stand proud of our ethics and
high standards; and have taken the lead in transforming this
industry. While we strive to work ethically, others are abusing
the existing system of exploitation. As a result, the New York
diamond industry has suffered financially. Large quantities of
rough diamonds from Africa change hands each day but these
supplies are not destined to reach New York. It is ironic that
the American diamond industry, which consumes more than 50
percent of the world''s annual diamond production and is still
growing, has lost more than 70 percent of its diamond cutters.
By working closely with African governments we can import
diamonds legally and at fair prices, and we can re-invigorate
the American diamond cutting industry while at the same time
giving the diamond producing nations the full benefit of their
natural resources.
I believe that we can create a new way of trading in
diamond rough, where transparency, accountability and
legitimacy are the way of life. Diamonds can become the
commodity that will help to rebuild suffering African countries
and that will enable those nations to raise the standard of
living of their people, who are now victims of vicious wars
fueled by diamonds.
Blood diamonds, conflict diamonds, the trading of arms for
diamonds--these can all be replaced with stability diamonds,
and a fair exchange of diamonds for healthcare, food and the
staples of life. It is possible to create a diamond trade that
benefits everyone all around, if we are willing. Revolutionary
ideas like these can help us do it.
In closing, I would like to express my sincerest gratitude
to Congressman Tony Hall and his staff for always giving me a
helping hand. To Ambassador Howard Jetter, who was always
willing to give advice, I wish him all the best in his new
posting as US ambassador to Nigeria. To Sylvia Fletcher of AID,
thanks for the superb study on the Sierra Leone diamond
industry revival. And last, but not least, thanks to Rosa
Whitaker, U.S. Trade Representative for Africa, for her
constant encouragement.
I am available at 212-981-0279 and e-mail:[email protected]
Chairman Crane. Thank you.
Mr. Wolf.
STATEMENT OF HON. FRANK R. WOLF, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF VIRGINIA
Mr. Wolf. Thank you, Mr. Chairman. I want to thank you and
your staff for organizing the hearings and I also want to
acknowledge Ms. McKinney and Mr. Payne for their efforts and
also my good friend Tony Hall, who has done more to bring this
issue to the public's attention than anyone else.
Mr. Chairman, millions of people have died in Africa
because of the bloodshed surrounding conflict diamonds. Rebel
groups and military forces, Sierra Leone, Angola, Democratic
Republic of Congo, have committed horrible atrocities. At least
$10 billion in diamonds have been smuggled from these countries
in the past decade. In the Congo in the last 20-some months,
1.7 million people have died, 35 percent under the age of five.
Many in this room are familiar with the sad story of
Angola, where the rebel movement UNITA paid for weapons and
kills people in order to maintain the control of the diamonds.
In Sierra Leone, aside from the shocking reality of live
amputations and children soldiers, an estimated 75,000 people
have died because of the rebels' vicious campaign to control
the country's diamonds.
Mr. Chairman, we speak many times in numbers and figures on
the atrocities of Africa and the reality just does not sink in.
The thought of a million deaths, it does not seem real. Rebel
atrocities is a term that may not sink in until we actually see
it. The picture behind me is of a two-year-old Sierra Leonean
girl. She asks her mom whether her arm will grow back. She will
likely never wear one of these diamond rings. To this little
girl, diamonds have a very different meaning than we are used
to. Can you imagine if this image were connected in the
American consumer's mind to diamonds, the symbol of eternal
love and commitment?
Sierra Leone is a country that is blessed with diamonds and
an abundance of other natural resources, a scenic coastline,
and wonderful people, and yet today is cursed as to be one of
the worst places in the world. The average lifespan is 25
years. Everyone on the dais and everyone behind you would be
dead if you lived in Sierra Leone.
I like to focus on that country because that is where the
scramble for diamonds and the link between diamonds and
atrocity is the most direct. As Mr. Hall said, we visited there
and saw firsthand these young children and older men with their
arms and legs and ears and noses cut off.
Certain countries around Sierra Leone play a major role in
facilitating this. Many of these countries surrounding Sierra
Leone have few diamonds to mine, yet countries like Liberia,
Burkina Faso, Togo, and the Ivory Coast have exported millions
of carats of diamonds--Sierra Leone diamonds--billions of
dollars in value, to the diamond cutting centers in Antwerp,
Israel, India, Holland, and New York. While officially denied
by representatives of these governments, the U.S. intelligence
community--and get the briefing from the CIA--and numerous
other sources possess a wide array of evidence that documents
this illicit diamond smuggling.
As of now, certain leaders have direct financial gain to
keep this rebellion going. Liberia and its President Charles
Taylor supply weapons to the rebels in exchange for diamonds.
In 1998, Liberia, whose natural resources would have allowed
the exportation of approximately $10 million worth of diamonds,
exported $297 million worth of diamonds. Other countries in the
area have served as direct arms suppliers or transit points.
The industry has long maintained the count of only four
percent. If this were true, it is four percent too much, but
there are others here today who will testify that the figure is
likely higher. Whatever the figure, we believe that the
industry has a responsibility to stop this revenue incentive
for African atrocities.
Also, the legitimate industry has a strong financial
incentive, as Mr. Hall said, to remedy the situation. The U.S.
consumes 65 percent of the world's diamonds. A U.S. consumer
boycott similar to the fur industry would cripple the diamond
industry. Legitimate diamond-producing countries, such as
Botswana and South Africa, would seriously be destabilized and
many of their citizens' livelihood jeopardized.
I would ask you to mark up Mr. Hall's bill and put it on
some omnibus bill. If you would give me the consideration, I
would put it on the transportation appropriations bill if we
had the approval of the leadership of both sides. We could use
that as a vehicle to move this. The transportation bill will be
signed by the President. It is relatively one of the non-
controversial ones. We could put it on that or some other. The
time is urgent and failure to do anything, I think, will have
disastrous consequences on all involved.
One last comment, Mr. Chairman, in keeping with the time.
The issue of conflict diamonds goes to a larger issue of
Africa. The problems of Africa and the misery of Africa is our
misery. We cannot in the year 2000 ignore the tragedies that go
on there. For hundreds of years, this continent has been
exploited and the people have suffered more than anyone has to
suffer. Places like Sierra Leone and the Congo and others that
I have not mentioned, like Sudan that Mr. Payne has done such a
great job, seem distant from the confines of this room.
I know the political realities of any large-scale U.S.
involvement in Africa, but we should take at least this minimal
step. As Mr. Hall said, we are not going to send troops and we
ought not send troops. We are not going to cut off humanitarian
supplies and we ought not do it. But Mr. Hall's bill is
something that we could really make a difference.
So in closing, Mr. Chairman, I thank you for the hearings.
I thank your staff. I would also like to remind the
subcommittee that on September 26 at 9:00 a.m., Mr. Royce will
be sponsoring with Mr. Hall and others several children whose
hands were amputated by the rebels. They will be in a briefing
in Room 2172 and from there they are going to go to see doctors
in New York who are going to help with prosthetic devices.
Again, thanks for the hearing and thank you to your staff.
[The prepared statement follows:]
Statement of Hon. Frank R. Wolf, a Representative in Congress from the
State of Virginia
Thank you Mr. Chairman. I would also like to thank the
committee including the staff for organizing and conducting
this hearing on this extremely important issue.
First, I must acknowledge my fellow panel member and good
friend Congressman Tony Hall for doing so much to bring
attention this important global matter. He has been out front
on this issue as long as anyone, and deserves the credit for
moving the process forward to address this immediate problem.
Mr. Chairman, millions of people have died in Africa
because of the bloodshed surrounding conflict diamonds. Rebel
groups and military forces in Sierra Leone, Angola, and the
Democratic Republic of the Congo have committed horrible
atrocities to gain control of and to profit from diamonds. At
least $10 billion in diamonds have been smuggled from these
countries over the past decade.
In the Congo, some 1.7 million people have died because of
the fight to control Congo's natural resources, primarily
diamonds. Thirty-five percent of these deaths are to children
under the age of 5. There are currently eight countries
involved in this terrible conflict--many with a direct interest
in the diamond trade.
Many in this room are familiar with the sad story of
Angola, where the rebel movement UNITA pays for weapons and
kills people in order to maintain control of Angola's diamonds.
In Sierra Leone, aside from the shocking reality of live
amputations and children soldiers, an estimated 75, 000 people
have died because of the rebels vicious campaign to control the
country's diamonds.
Mr. Chairman, sometimes we speak in numbers and figures on
the atrocities of Africa and the reality just doesn't sink in.
The thought of a million deaths--it doesn't seem real. Rebel
atrocities is a term that may not sink in until we actually see
it. The picture behind me is of a 2 year old Sierra Leonean
girl. She asks her mom whether her arm will grow back. She will
likely never wear a diamond ring. To this little girl, diamonds
have a very different meaning than we are used to. Can you
imagine if this image was connected in the American consumer's
mind to diamonds--the symbols of eternal love and commitment?
Sierra Leone is a country that is blessed with diamonds and
an abundance of other natural resources, a scenic coastline and
beautiful people, yet today it is cursed as one of the worst
place in the world. The average life span is now about 25
years, the citizens are terrified and as one periodical
described, it is a place where angels fear to tread.
I would like to focus on Sierra Leone and West Africa. .
.where the scramble for diamonds and the link between diamonds
and atrocities is the most direct.
Mr. Hall and I visited Sierra Leone last December and met
and talked with hundreds of people who had their arms, legs or
hands cut off by Sierra Leonian rebels--all to scare and
intimidate the local population so the rebels could gain
control of Sierra Leone's diamond producing region.
Certain countries surrounding Sierra Leone play a major
role in facilitating this chaos. Many of these countries
surrounding Sierra Leone have few to zero diamond mines. Yet
countries such as Liberia, Burkina Faso, Togo, and the Ivory
Coast have exported millions of carats of diamonds--Sierra
Leone's diamonds--billions of dollars in value--to the diamond
cutting centers in Antwerp, Israel, India, Holland, and New
York.
While officially denied by representatives of these
governments, the U.S. Intelligence community and numerous other
sources possess a wide array of evidence that documents this
illicit diamond smuggling. As of now, certain leaders have a
direct financial incentive to keep the ``rebellion'' in Sierra
Leone going, to prevent peace and therefore sustain their
access to Sierra Leone's precious stones.
Liberia and its president, Charles Taylor, supply weapons
to the rebels in exchange for diamonds. In 1998 Liberia, whose
natural resources would allow the exportation of approximately
$10 million worth of diamonds, exported $297 million worth of
diamonds. Other countries in the area have either served as
direct arms suppliers or transit points for diamonds and arms
into and out of Sierra Leone. This incentive structure also
existed for weapons exchanges between governments and diamond
stealing rebel groups in the case of Angola and the Congo.
The industry has long maintained that conflict diamonds
account for only about 4 percent of the world trade. If this
were true I still believe that this is 4 percent too much.
There are others that will testify today that this figure is
likely higher. Plain common sense tells us that these diamonds
are going somewhere--someone is buying them and somehow the
rebels are gaining access to arms and supplies.
Whatever the figure, we believe that the industry has a
responsibility to stop this revenue incentive for African
atrocities. Also, the legitimate industry has a strong
financial incentive to remedy this situation. The U.S. consumes
over 65 percent of the world's diamonds. A U.S. consumer
boycott, similar to the fur industry, would cripple diamonds.
Legitimate diamond-producing countries such as Botswana and
South Africa could become seriously destabilized and the many
of their citizens' livelihoods jeopardized. I joined
Congressman Tony Hall in introducing the Consumer Access to a
Responsible Accounting and Trade Act of 2000. This legislation,
which combines elements of Congressman Hall's earlier diamond
certification legislation with language that was in the FY 2001
Treasury/Postal Appropriations bill combines import
restrictions from known conflict diamond areas in West Africa
with a implementing a certification scheme for diamond origin,
something the industry has already expressed an interest in
achieving. This legislation also goes further than previous
legislation by creating a permanent representative within the
executive branch to deal with conflict diamonds.
Mr. Chairman, this legislation is urgently necessary. It is
flexible and takes into account the technical realities of
tracing diamond origin. This panel will hear testimony today on
some of the specific implementation issues that are involved
and the feasibility of enforcing any import restriction. I am
not hear to testify about the technology that could potentially
be used for enforcement.
However, I will say that a failure to do anything will have
disastrous consequences for all involved. The status quo will
mean more death, more suffering and more instability on a
continent that has suffered too much.
Mr. Chairman, in closing I would like to make one more
comment. The issue of conflict diamonds goes to the larger
issue of Africa. The problems of Africa, the misery of Africa,
is our misery. We cannot in the year 2000 ignore the tragedies
that go on there. For hundreds of years this continent has been
exploited and the people have suffered more than anyone should
have to suffer. This beautiful and vast continent has been
cursed by its abundance.
Places like Sierra Leone, the Congo and others I haven't
mentioned like the Sudan seem distant from the confines of this
room. I know the political realities of any large scale U.S.
involvement in Africa, but shouldn't we at least take minimal
steps to alleviate massive suffering? Addressing conflicts
diamonds is one such step. Our affluence should not be someone
else's nightmare.
I want to again thank you, Mr. Chairman, and the committee
for holding this hearing, and I look forward to helping in any
way I can to keep the process moving to bring an end to this
urgent problem.
Chairman Crane. Thank you, Mr. Wolf.
Mr. Payne?
STATEMENT OF HON. DONALD M. PAYNE, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEW JERSEY
Mr. PAYNE. Thank you, Mr. Chairman, and thank you for
allowing me to present my testimony here today. I would like to
commend my colleagues Hall, Wolf, and McKinney for their
longstanding support for the right thing to do.As the ranking
member on the Subcommittee on Africa, the issue of conflict
diamonds is one I have been concerned about in our committee
for many years. The Subcommittee on Africa held a hearing
entitled, ``Africa's Diamonds: Precious, Perilous, Too'' on May
9 of this year. At that hearing, we heard from a number of
witnesses, including Mr. Holoi, Special Advisor to the Minister
for Minerals and Energy of the Republic of South Africa. We
extended an invitation to the representatives from DeBeers, but
they declined our offer to participate.
I wanted to participate in this hearing for a couple of
reasons, but mainly to bring attention to the issue of dirty or
conflict diamonds. I am very concerned, however, that
legitimate markets of Botswana, South Africa, and Namibia that
depend almost exclusively on the diamond revenues to sustain
their local economies do not experience backlash from the
boycott of illegal diamonds of Sierra Leone, Angola, and the
Democratic Republic of the Congo.
As you already know, the RUF, a brutal rebel army, has
committed egregious violations of human rights by maiming,
injuring, and killing many of the innocent men, women, and
children living in Sierra Leone. The RUF receives its revenues
from neighboring countries, but the real commodity driving the
war comes from diamonds inside the country. The rich diamond
areas of the Kailahun, Kenema, and Bo are controlled by the RUF
and the so-called West Side Boys. In Angola, UNITA, headed by
Jonas Sivimbi, controls Lundi, Malange, and Bie.
I am pleased, though, that the United Nations passed a
resolution on July 5 banning the sale of and exportation of
diamonds being bought from Angola's UNITA, Sierra Leone's RUF,
and hopefully one will be introduced that condemns Zimbabwean
soldiers' excavation in Mbuji Maya in the Democratic Republic
of Congo.
Let me say that I agree with the reports that getting
control of the diamond mining areas only ends the conflict. We
have to deal with several other issues, including sustainable
poverty. We must deal with these tremendous issues that Africa
is faced with and debt relief.
Several African countries have made substantial changes to
their mining laws to try to attract private sector investors.
Botswana is one country that has done just that. On a recent
visit in July to Gaborone, Botswana, I had an opportunity to
tour the main operating diamond facility in the heart of
downtown. At independence in 1966, this patch of the Kalahari
Desert in Southern Africa was one of the world's poorest
countries. Botswana, nearly as big as Texas, now is one of the
few real democracies in Africa, richer than Russia in per
capita income and boasting to have the second-fastest-growing
economy in the world. Diamond mining was and still is a primary
driver of its boom, and former President Masire and now
President Mogae said at the visit recently that in order for
Botswana to survive long term, though, they need to diversify.
With the passage of the Growth and Opportunity Act this
year, the United States will be importing and trading more with
our African partners. The diamond regime needs a major overhaul
so it does not affect our industry or the industries of those
countries I previously mentioned, the countries that are
dealing in this industry the way they should not, the conflict
diamonds.
At the subcommittee hearing, Eli Haas, president of the
Diamond Dealers Club, said that ``while there is discussion of
the development of a technology to come up with identifying
marks or fingerprints to determine particular countries of
origin of diamonds, no such technology is currently
available.'' I find it hard to believe that the central selling
organization of DeBeers, an organization that Botswana supplied
over $2.05 billion to last year and whom South Africa supplies
over $850 million, cannot develop the technology to mark the
origin of diamonds.
New diamond fingerprint technology is being developed in
consultation with the Royal Canadian Mounted Police. The RCMP
states that the potential difficulties in applying the
technology are reduced, however, by the fact that the bulk of
the rough diamonds trade is centralized in only two
organizations and two locations, the HRD in Antwerp and
DeBeers' CSO in London.
In conclusion, I agree that there is a need to be sure that
these rebel groups cannot continue to acquire diamonds and sell
them to fuel home-grown wars. Also, we need to have the fact
that proliferation in diamonds and other mercenary groups who
are also benefitting, like Executive Outcomes and Sandline, who
are mercenary groups who also get their pay from the diamond
industry. This all must end.
I would just propose, one, a permanent independent
international standards commission should be created under the
United Nations in order to establish and monitor codes to
regulate the global diamond industry, and a more effective
auditing system is desperately needed to control where the flow
of these diamonds come from. Presently, the CSO audits itself.
It needs to have external auditing.
Thank you, Mr. Chairman. I appreciate this opportunity.
[The prepared statement follows:]
Statement of Hon. Donald M. Payne, a Representative in Congress from
the State of New Jersey
Good morning. Thank you Mr. Chairman for allowing me to
present my testimony today before this Committee. As the
Ranking Member of the Subcommittee on Africa of the Committee
on International Relations, the issue of conflict diamonds is
one that I have been concerned with for many years now. The
Subcommittee on Africa held a hearing entitled, ``Africa's
Diamonds--Precious, Perilous Too?'' on May 9th of this year. At
that hearing, we heard from a number of witnesses including Mr.
Nchakna Moloi, Special Advisor to the Minister for Minerals and
Energy of the Republic of South Africa, and Ms. Gooch, Director
from Global Witness. We extended an invitation to the
representative from De Beers but they declined our offer to
participate.
I wanted to participate in this hearing for a couple of
reasons but mainly to bring attention to the issue of dirty or
conflict diamonds. I am very concerned, however, that the
legitimate markets of Botswana, South Africa, and Namibia that
depend almost excessively on the diamond revenues to sustain
their local economies, do not experience backlash from the
boycott of illegitimate diamonds of Sierra Leone, Angola and
the Democratic Republic of the Congo.
As you already know, the Revolutionary United Front, a
brutal rebel army, has committed egregious violations of human
rights by maiming, injuring and killings many of the innocent
men, women and children living in Sierra Leone. The RUF
receives its revenues from neighboring countries but the
commodity driving the war comes from diamonds within the
country. The rich-diamond areas of Kailahun, Kenema and Bo are
controlled by the RUF and the so-called West Side Boys. Similar
to Angola, I am pleased that the United Nations passed a
resolution [5 July 2000] banning the sale and exportation
diamonds from being bought from Angola's UNITA's, Sierra
Leone's RUF and hopefully one will be introduced that condemns
Zimbabwean soldiers excavation into Mbuji Mayi. Let me say that
I agree with the reports that getting control of diamond mining
areas only ends the conflict; it is not a catalyst for real
democratic change. That requires a great deal more.
Mining is the most important economic sector in several
African countries, and it is vital to the economies of many
others. For example, the minerals sector accounted for 10
percent of South Africa's gross domestic product and 51percent
of its export earnings. Several African countries have made
substantial changes to their mining laws to attract private-
sector investment. Botswana is one country that has done just
that. On a recent visit in July to Gaborone, Botswana, I had an
opportunity to tour the main operating diamond facility in the
heart of downtown. At independence in 1966, this patch of the
Kalahari Desert in Southern Africa was one of the world's
poorest countries. Botswana, nearly as big as Texas, had 2
paved roads, one public secondary school and life expectancy
for its people of 40 years. Now it is one of the few real
democracies in African--richer than Russia in per capita income
and boasting to have the second-fastest economy in the world.
Diamond mining was and still is the primary driver of its boom
and former President Sir Ketumile Masire and now President
Festes Mogae--told me during my visit--in order for Botswana to
survive long term, we need to diversity our economy from being
overly dependent on our mineral revenue. He said that he
understood that nations in which a single mineral dominates
production have proven especially vulnerable to cyclical drops
in world prices.
According to a recent survey by the Mineral commodity, 25
percent of African cobalt, the main substance in diamonds, is
imported to the United States. With the passage of the Growth
and Opportunity Act this year, the U.S. will be importing and
trading more with our African partners. The diamond regime
needs a major overhaul so it does not effect our industry and
the industry of the countries I previously mentioned. At the
Subcommittee hearing Eli Haas, President of the Diamond Dealers
Club, said that ``while there is discussion of the development
of a technology to come up with identifying marks or
fingerprints to determine particular countries of origin of
diamonds, no such technology is currently available.'' I find
it hard to believe that the Central Selling Organization (CSO)
of De Beers, an organization that Botswana supplied over $2.05
billion to last year and whom South Africa supplies over $850
million can not develop the technology to mark the origins of
the diamonds. New Diamond fingerprinting technology is being
developed in consultation with the Royal Canadian Mounted
Police (RCMP). The RCMP state that the potential difficulties
in applying the technology are reduced, however, by the fact
that the bulk of the rough diamond trade is centralized in only
two organizations and two locations, the HRD in Antwerp and De
Beer's CSO in London.
In conclusion, I would like to submit for the record the
testimony of Ian Smillie from Partnership Africa Canada. I
agree that there needs to be oversight from rebel groups
acquiring diamonds fields to fuel their home grown wars and
also we need oversight from the proliferation of diamond
revenues to pay international security firms such as Executive
Outcomes and Sandline, mercenaries groups operating in Africa.
This is short-term. In the long-term, the international
community must establish:
A permanent Independent International Standards
Commission should be created under the United Nations in order
to establish and monitor codes to regulate the global diamond
industry and.
A more effective auditing system is desperately
needed. Presently, the CSO audits itself.
Thank you once again Mr. Chairman for allowing me to
testify before this Committee today.
Chairman Crane. Thank you, Mr. Payne.
Ms. McKinney?
STATEMENT OF HON. CYNTHIA A. McKINNEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF GEORGIA
Ms. McKinney. Thank you, Mr. Chairman, Ranking Member
Levin, other members of the committee. I want to thank you for
scheduling this very important hearing on the role diamonds
play in the conflicts of Sub-Saharan Africa. I would also like
to thank Congressman Hall for his leadership, as well, in
introducing the Consumer Access to a Responsible Accounting of
Trade Act, or as many of us know it, the CARAT Act, or the
Blood Diamond Bill.
As the ranking member of the Human Rights Subcommittee on
the International Relations Committee, I fully support the
intentions to implement a coding system that would stop the
illicit diamond trade. With this, the diamond's origin can be
certified in order to sever the funding link that has allowed
mercenary groups and so-called rebel groups in Sierra Leone,
Angola, and elsewhere to enrich themselves and commit gross
abuses against governments and unarmed people.
The illicit diamond trade has assisted a few bad men to
create anarchy and chaos on the African continent, but it has
made all of us complicit in the crimes against humanity and the
suffering that these men create. In order to break that
complicity, we need a prompt review of U.S.-Africa policy. We
need to pass Tony Hall's bill and we need to implement
sanctions against countries and individuals who have already
been named as diamond traffickers.
I would also like to ask the committee to seriously
consider action against diamonds that are certified as having
come from Liberia, as well. While Liberia has not been the
subject of any U.N. Security Council resolutions or reports, it
is physically impossible for Liberia to produce the diamonds
that it says it does. It is clear that Sierra Leone's diamonds
are being laundered through Liberia and on to the legal market
and then to our jewelry, most likely right here to the United
States, since the U.S. consumes two-thirds of all the diamonds
produced.
In the Congo, forces allied with Uganda and Rwanda have
occupied nearly half that nation, including the Congo River
city of Kisangani, a major trading center for the diamonds
pulled from the surrounding jungles. The battle is for Mbuji
Mayi, the capital of the southeastern province of East Kasai
and the center for Congo's diamond mining.
In Angola, sanctions busting led to a report released by
the United Nations panel on March 15 carefully documenting the
ways in which UNITA has been able to circumvent the U.N.
sanctions against its trade of diamonds extracted from UNITA-
controlled areas in Angola. We all know the objectives of
UNITA, to foment chaos in Angola and render it ungovernable.
They pretty much were able to do that due to their trade in
illicit diamonds. They even went so far as to shoot down U.N.
planes carrying individuals committed to making peace.
The resultant Fowler Report of the United Nations Security
Council, named after Robert Fowler of Canada who led the
investigation team, took the bold step of naming names of
individuals and countries that were sanctions busters. Some of
the sanctions busters are our allies. If we were really serious
about the diamond trade, our leadership could make a
difference, and we should lead the effort to implement the
Fowler recommendations, not to just study them. People are
losing their homes and their lives while this administration
studies. Ambassador Harold Jeter acknowledged support for the
Fowler recommendations, yet to my knowledge, not much beyond
that has been done to implement them.
U.N. Secretary Robert Fowler's report recommends that
anyone trading in illicit diamonds will be expelled from the
industry and that any country knowingly involved in smuggling
will lose its export accreditation. Under the proposal, all
rough diamonds are to be exported in sealed packages certified
by the authorities in exporting nations and verified by a new
international diamond council, made up of governments,
industry, and non-governmental organizations.
At the World Diamond Congress, which took place in Antwerp,
Belgium, in July, the International Diamond Manufacturers
Association and the World Federation of Diamond Bourses agreed
to establish a system of certificates of origin to identify the
provenance of diamonds.
The United States and Europe must also begin bilateral and
multilateral discussions with Israel, a leading destination for
the illicit diamonds. The U.S. must also show leadership and
act more swiftly against other countries mentioned in the
Fowler Report. Countries such as Burkina Faso, Togo, and Rwanda
were named in Fowler's report as being involved in the illegal
trading operations with Mr. Savimbi's forces.
Also, another important move in the right direction that
was thwarted was the British move to deny the State Controlled
Corporate Entity in which the Democratic Republic of Congo and
Zimbabwe attempted to form an autonomous, State-owned, joint
venture to market independent of anyone else's control
Democratic Republic of Congo's diamonds. I view this as an
effort to further entrench the current State and non-State
actors and to deny African governments the right to control
their own diamonds.
I would like to commend Namibia, a nation that is doing
things right. The first thing they did was to deny the
mercenary companies a foothold in their diamond industry, and
as Congressman Hall has pointed out, we owe passage of this
bill to those who depend on the legitimate trade in South
Africa, Botswana, Namibia, and who will be hurt by a consumer
backlash against the entire diamond industry.
Why should we care that Africa is being ravaged by war as
we speak? Because we bear a good deal of the responsibility for
what is happening there. The diamonds that we wear to adorn our
bodies and the oil that we pump into our SUVs has a direct
bearing on the quality of life that someone in another part of
the world in some far-away place. We do not need to hurt people
or to allow our allies to hurt people to have diamonds or oil,
but too often we do. I know we can do better and we must.
Finally, I would like to call your attention to a very
important book that details our Africa policy during the
Clinton administration. It is explosive in its content and in
its accuracy, from my point of view. I would commend it to all
of you and hope that you would purchase it and read it
personally and then move to change that which is wrong in our
policy and save that which is right. The book is Genocide and
Covert Operations in Africa from 1993 to 1999 by Wayne Madsen,
just recently published.
Diamond certification is an important step in the right
direction to stem the tide so innocent Africans will not
continue to die. Making this bill the law of our land is an
important step in the right direction.
Thank you very much.
[The prepared statement follows:]
Statement of Hon. Cynthia A. McKinney, a Representative in Congress
from the State of Georgia
Mr. Chairman:
Let me begin by thanking the leadership of the Ways and
Means Trade Subcommittee for scheduling this important hearing
on the role diamonds play in the conflicts of sub-Saharan
Africa.
I am pleased to give testimony today with this
distinguished bipartisan panel who are imploring you to take
decisive action to stem the entry into this country of illicit
or ``blood diamonds.''
I would also like to thank Congressman Hall for his
leadership in introducing the Consumer Access to a Responsible
Accounting of Trade Act, or as many know it, the CARAT Act; or
the ``Blood Diamonds'' Bill.
I fully support his intentions to implement a coding system
the would stop the illicit diamond trade. With this
legislation, a diamond's origin can be certified in order to
sever the funding link that has allowed mercenary groups and
so-called rebel groups in Sierra Leone, Angola, and elsewhere
to enrich themselves and commit gross abuses against
governments and unarmed people.
The illicit diamond trade has assisted a few bad men to
create anarchy and chaos on the African Continent. But it has
made all of us who fail to act complicit in the crimes against
humanity and the suffering that these men create. In order to
break that complicity we need a prompt review of US Africa
policy, we need to pass Tony Hall's bill, and we need to
implement sanctions against countries and individuals who have
already been named as diamond traffickers.
I would also like to ask the Committee to seriously
consider action against diamonds that are certificated as
having come from Liberia as well. While Liberia has not been
the subject of any UN Security Council Resolutions or reports,
it is physically impossible for Liberia to produce the diamonds
that it says it does: it is clear that Sierra Leone's diamonds
are being laundered through Liberia and onto the legal market
and then to our jewelry. Most likely, right here to the United
States since the US consumes two-thirds of all the diamonds
produced for jewelry.
In Angola, sanctions-busting led to a report released by a
United Nations panel on March 15th of this year carefully
documenting the ways in which UNITA has been able to circumvent
the U.N. sanctions against its trade of diamonds extracted from
UNITA-controlled areas in Angola. We all know the objectives of
UNITA: to foment chaos in Angola and render it ungovernable.
They pretty much were able to do that due to their trade in
illicit diamonds. They even
went so far as to shoot down UN planes carrying individuals
committed to making peace.
The resultant Fowler Report of the United Nations Security
Council, named after Robert Fowler of Canada who led the
investigation team, took the bold step of naming names of
individuals and countries that were sanctions busters.
We should lead the effort to implement the Fowler
recommendations, not just to study them. People are losing
their homes and their lives while this Administration studies.
U. N. Secretary Robert Fowler's report recommends that
anyone trading in illicit diamonds be expelled from the
industry and that any country knowingly involved in smuggling
lose its export accreditation.
Under the proposals, all rough diamonds are to be exported
in sealed packages certified by the authorities in the
exporting nations and verified by a new international diamond
council, made up of governments, industry, and non-governmental
organizations.
Some of the sanctions-busters named by Ambassador Fowler
are our allies. If we were really serious about the diamond
trade our leadership could make a difference.
The U. S. must show leadership and act more swiftly against
all the countries mentioned in the Fowler Report including
Burkina Faso, Togo, and Rwanda who were named in Fowler's
Report as being involved in illegal trading operations with
UNITA's Jonas Savimbi.
In the Congo, Uganda and Rwanda have occupied nearly half
of that nation including the Congo River City of Kisangani, a
major trading center for the diamonds pulled from the
surrounding jungles. The battle now rages for Mbuji-Mayi, the
capital of the southeastern province of East Kasai and the
center for Congo's diamond mining.
Rwanda is ``running'' diamonds looted from Congo and Angola
and wreaking havoc on the people of Eastern Congo in reckless
pursuit of its own policies, encouraged by the United States
and the international community, as we all stand and do
nothing.
At the World Diamond Congress, which took place in Antwerp,
Belgium in July, the International Diamond Manufacturers'
Association and the World Federation of Diamond Bourses agreed
to establish a system of certificates of origin to identify the
provenance of diamonds.
I would encourage them to move swiftly or a boycott of all
diamonds might occur. I note that DeBeers is already running
ads to encourage Christmas diamond purchases.
The United States and Europe must also begin bilateral and
multilateral discussions with Israel a leading destination for
the illicit diamonds. The sad fact is that diamonds from Africa
have helped to build and enrich the cities of Antwerp,
Brussels, Tel Aviv, and New York. Yet Africans remain
hopelessly impoverished and are even going backward. Something
is terribly wrong with this industry. And that should be
addressed too.
Africans should control their precious resources. But the
West actively thwarts such efforts. For example, an important
move in the right direction was recently halted when the
British refused to list on their stock exchange a joint venture
between Zimbabwe and Democratic Republic of Congo so that Congo
could market its diamonds independent of anyone else's control.
I view this blockage as a direct effort to further entrench
the current State and non-State actors and to deny African
governments the right to control their own diamonds
Chairman Crane. Thank you, Ms. McKinney.
The Customs Service has stated that it is impossible to
administer the CARAT Act, which requires a certificate of
origin where the diamond was mined, given the amount of
transshipment that occurs in Africa. Could you please comment
on how country of mining can be traced so the requirement is
enforceable, to one and all?
Mr. Hall. I heard that argument about a year ago and I
heard that argument mostly from diamond dealers and DeBeers
themselves. They kept saying it the whole year. We cannot do
this. We cannot do this. It is impossible. It is very
interesting, at the Antwerp meeting of a few weeks ago of which
I was at, they passed this global certification program which
pretty much says that they can do it and they can do it through
a process of once the legitimate diamonds leave the country,
they are sealed, they are certified, they are entered, and they
stay in this packet. I cannot explain every aspect of it, Mr.
Chairman, but the fact is that they can do it. They denied it
all year and said it cannot be done, but it is very
interesting, they are all saying, or a lot of them are saying
that they can do it, and that is what they passed in Antwerp.
These are the diamond dealers of the world.
So the fact is that it can be done and it should be done. I
do not know why we cannot do it, especially on rough diamonds.
If I looked at your shirt and the suit that you are wearing
today, the cheese that you are going to eat, I know where that
is coming from because it is marked. We can mark diamonds.
Because we buy 65 percent of all the diamonds in the world here
in this country, we ought to have a right to say, where did
this diamond come from? We are not talking about every little
diamond, because that is impossible. We are talking about the
rough diamonds that are chopped up into pretty sizeable
diamonds.
Yes, I believe it can be done. I believe that technology is
coming. And I know that diamond dealers believe this because
they passed it in Antwerp.
Chairman Crane. We will later, after you folks, have
William Wood, who is the Principal Deputy Assistant Secretary
of International Organization Affairs at the Department of
State, testifying after you folks. Someone else here, Miles
Harmon, is the supervisory attorney advisor with the U.S.
Customs Office. So I would hope that you folks might, if you
are not under tight time constraints, have a chance to at least
talk to them on that issue to try and resolve it.
Mr. Wolf. Mr. Chairman, on that, we have a paper, too,
called ``Possibilities for the Identification, Certification,
and Control of Diamonds,'' which we would like to submit for
the record.
Chairman Crane. Absolutely.
[The attachment is being retained in the Committee files.]
Mr. Wolf. And also, as I made the point, in 1998 in
Liberia, whose natural resources would only allow the
exportation of $10 million of diamonds, they exported $297
million. So the people who bought the $287 million knew that
they were buying conflict diamonds, but I will just submit this
for the record, Mr. Chairman.
Chairman Crane. Very well.
Ms. McKinney. Mr. Chairman, I would also like to submit
some additional paperwork for the record. Studies have been
done by Global Witness that talk about bar coding, and also I
would like to submit the Fowler Report with its recommendations
to the record, as well.
Chairman Crane. Without objection, so ordered.
[The information was not received at the time of printing.]
Mr. Payne. Mr. Chairman, the work that is being done by the
Canadian Mounted Police, we are going to try to get the origin
of that and have that submitted also for the record.
Chairman Crane. Yes, indeed.
[The information was not received at the time of printing.]
Chairman Crane. Mr. Levin?
Mr. Levin. Thank you, and thank you so much for your
testimony. I think it would be helpful if in the next few days,
as soon as we can get into this, with all the other work that
is before us, if you would work with us to work out the issue
that Mr. Crane has raised. As I understand the legislation, it
would start a certification process before the Antwerp or other
public/private proposal is complete. So I think we need to
discuss the feasibility of that. You need to help us work
through that. That is the first issue. If we can do that, it
would be highly necessary and valuable.
Secondly, I think it would be useful if you could work with
some of us and USTR relating to the question of WTO
consistency, because that has been raised at least indirectly
relating to your bill. So let us work in the days ahead on
those two key issues.
I do not believe that anybody can challenge the need for
action. I do not think anybody can challenge the descriptions
that you have given so graphically and to others as to what is
going on in Africa relating to this. I think that is
unchallengeable. It simply lays down before us the task of
determining what we can do quickly, feasibly, effectively. So
let us work together on those issues as intensively and
intensely as we can.
Mr. Hall. Mr. Levin, I think all of us here at the table
are very willing to sit down and work with all of you on this
piece of legislation. Nothing is in concrete here. Actually,
the bill, according to my opinion, has too many waivers in it.
I think there are too many outs in it. I would make it much
tighter than what it is if I thought we could pass it. This is
a piece of legislation that has waivers for the President and
the Secretary of Treasury and they have waivers to be able to
overlook the certification problem if, in fact, the technology
is not there.
As far as the WTO, none of us here, especially me--I am not
an expert relative to the WTO, how this affects it. I have to
leave that up to the trade experts, yourself and people on this
committee, others. But failure to act on this and failure to
act and to implement the Antwerp agreement will be, I think,
disastrous for the diamond industry. I really believe that
because there will be a consumer boycott, in my opinion, if we
do not act on this.
So this bill has a lot of waivers. It has too many as far
as I am concerned, but I am willing to go along with it to get
something in the record to start to stop the flow of some of
these conflict diamonds.
Mr. Levin. Let us work on it. We are going to have a vote,
I think, fairly soon, and then the marriage penalty, and we
probably could not resolve these issues today, but I think your
testimony makes it clear we have to confront them and as
quickly and as effectively as we can.
Mr. Payne?
Mr. Payne. Yes, Mr. Chairman. Let me just reiterate what we
have all said. They are the countries of South Africa, Botswana
and Namibia, that depend on this industry that are doing the
right thing. They are very, very concerned. As I indicated, I
went to Botswana and the overriding discussion with the
president was the fact that if there is a boycott on diamonds,
already he is hit with an AIDS pandemic and trying to put
resources in that, but he said if there is a boycott on
diamonds, they are really right back down to where they were 40
years ago.
So we are not opposed to diamonds. They claim they are a
girl's best friend. I do not bother with them. But the fact is
that we have got to separate them. We saw what happened in the
furs. We do not want that to happen. We owe it to the African
countries that have this resource to be able to have a clean
commodity.
And secondly, it is the most controlled industry in the
world. Diamond prices are controlled, as you know, because the
number of diamonds that are allowed to come out on the market
is controlled by just one or two or three organizations. That
is why the price of diamonds never varies. It is not like OPEC.
They do not go up and down. They stay the same. They determine
how many they are going to put out, and if they are not
selling, they simply do not put any more out. They just store
them for decades until the time comes that they will buy them.
So I believe that there is such an internal control that
there can be something, and if we push this, then we see the
industry tends to step forward and come up. They know best what
can be done. I think this would be a catalyst to having them do
the right thing.
Mr. Levin. Thank you. Well said. Thank you very much.
Mr. Ramstad. [presiding]--I believe I am next. I have been
handed the gavel and I believe I am next in the line of
questioning. I want to make a couple of comments and then ask
one question before yielding to my friend from Louisiana.
First of all, I want to state for the record my deep
respect for all four of you. No members of Congress have done
more to further the cause of human rights than the four of you
sitting at this witness table today and I applaud you for that.
The horrific acts of brutality that are occurring in Sierra
Leone and other parts of Africa are unspeakable crimes against
humanity, obviously against innocent people who happen to be in
the wrong places at the wrong time and something that concerns
or should concern not only every member of Congress but every
citizen of this country and of the world.
I was also, secondly, encouraged by the summary statement
of Chairman Crane when he said conflict diamonds are not
forever. I also share the concerns raised by the ranking
member, my good friend Mr. Levin, and Chairman Crane as to
the--which is the same concern of the administration--how we
are to enforce this proposal.
Let me just ask any of the members of the panel for my
edification. I think there is an education job that needs to be
done here. With respect to rough diamonds, Tony, you mentioned
that there are means to identify and certify. Are there
geological markers that differentiate diamonds mined in
different parts of the world as far as rough diamonds are
concerned? I really am ignorant as to whether there are
geological markers or how exactly are they to be identified and
certified.
Mr. Hall. You should look at the Antwerp agreement where
there would be a global certification, that once the diamonds
came from a country and the government that we recognize that
is legitimate, it is something that they will declare for their
country. These would be sealed. I am not sure how they would
seal it. They would seal it in an envelope or some kind of
container where it could not be broken and it would be
registered. These would be legitimate diamonds. As they find
their way to either Antwerp or Israel, et cetera, then they
would be cut up and the certificate would follow it.
Once you cut and polish a diamond, there is no way you can
tell where it came from. Some diamond dealers can tell you on
the rough diamonds pretty much the area that these diamonds
might have come from, but you cannot depend on that, not at
all.
Mr. Ramstad. Is this a process----
Mr. Hall. They can be marked by lasers. There are people
that are working on it in Canada, as I understand from Mr.
Payne's testimony, from my own testimony, that they are working
on technology to market. That technology is probably not there
yet. But even before you market, it can be done. If it could
not be done, they would not have passed that resolution, that
plan of action in Antwerp a few weeks ago.
Ms. McKinney. If I could add to that, we had testimony, I
believe it was in the Africa Subcommittee, and Donald, you can
help me on that, on this issue. There was testimony from South
Africa, Charmian Gooch, I believe is the woman, from Global
Witness who spoke specifically to the issue of the geological
indications of the origin of a diamond. That is why I want to
make all of their reports available to the committee, because
it is my understanding that there are, indeed, ways with
geological markings to determine whether or not a diamond is
from South Africa or Namibia or Sierra Leone.
Mr. Ramstad. This agreement that you are describing, is
this the same proposal to track the source of diamonds that the
World Diamond Congress adopted? Is that the same proposal?
Mr. Hall. Yes.
Mr. Ramstad. That is the Antwerp agreement?
Mr. Hall. Yes.
Mr. Ramstad. Okay. Mr. Payne?
Mr. Payne. Also, about two years ago, on one of my trips to
South Africa, I met with one DeBeers official, and although he
indicated it was an informal meeting and discussion, he
indicated that there are ways that they believe you can mark
somehow the bulk of them. Like I said, there is new technology.
They call it fingerprints. It is too technical for me, too. I
am still on my AOL. But they claim they have really a lot of
new possible developments.
My point is this, as I indicated. It is a most controlled
business. They have ways of being able to know exactly the
weight of diamonds. I went to a diamond facility run by the
government of Botswana. You had diamonds all over a bench that
was almost as long as this. They weigh them when they come in
and they weigh them when they go out and bells simply ring
because the weight remains the same. It is just amazing. So
they have evidently done a lot with diamonds that we do not
know about and I think that this is the challenge to them. If
they want to preserve this controlled economy that they have
and has been good to them, then I think that they will come
forth.
Mr. Wolf. Mr. Ramstad, very briefly, there is a book,
following up with what Ms. McKinney said, called The Genesis of
Diamonds by Alpheus Williams. In it, the book gives a detailed
analysis of diamonds from the production of different mines in
South Africa and demonstrates the level of detailed information
that can be gathered on surface features. Also, as Mr. Hall
said, there is a waiver in the bill that if it is not
available, there is a waiver.
Mr. Ramstad. Speaking of bells ringing and going off, I
want to get Mr. Jefferson's questions in so this panel can be
excused before we go to vote.
The enforceability issue and then the WTO question that Mr.
Levin raised, I think those are the two issues, and you have
gone a long way certainly in explaining the enforceability
aspect of this legislation.
Let me now yield to my friend from Louisiana, Mr.
Jefferson, and then following Mr. Jefferson's line of
questioning, we will dismiss this panel and recess to go vote.
Mr. Jefferson. I thank you, Mr. Chairman. I want to ask my
colleague, Don Payne, a question. All of us have seen the
suffering that goes on because of these diamonds, which we call
conflict or blood diamonds, whatever. The big issue is what to
do about it. How can we really step in and provide an effective
answer or an effective solution to it?
One of the concerns is how does it affect the countries
that have the clean diamonds? How does it affect Botswana and
South Africa and so on? I want to know, in your talks with them
on your recent visit, how do they feel about this legislation?
Do they want us to go forward with this? Do they think it
presents no risk for them or do they think it provides a remedy
for their countries?
Mr. Payne. Yes, that is a very good question. One of the
purposes for our visiting and having discussions with the
leaders of the country was to find out how do you really feel
about this. Festes Mogae, who was elected last year, as you
know, Botswana, the most stable government, they have had
because of diamonds about a billion dollars in surplus almost
over a decade. They have had a surplus each year because of
that and they have been very frugal in the manner in which the
government has been spending money in a planned way.He is
extremely concerned about the fact that people are saying
diamonds are rebels' best friends. Now, if you use a general
statement like that, that simply means that all diamonds tend
to be bad diamonds. So they, of course, are not aware of
exactly what can be done, but they really want to see their
diamonds continue to move forward and that there be some
distinguishing way that their diamonds can be segregated from
those blood diamonds.
So I could speak very specifically about President Mogae,
who once again last week at the millennium, I had an
opportunity to talk to him about this issue, extremely
concerned, probably the number two issue in his country because
the AIDS pandemic, he says, is number one. But this is
something that he definitely wants to see something happen. He
does not have the answer, but he knows that his diamonds are
clean, are good, it is helping his country along. He wants his
diamonds to be separated from those Sierra Leonean, Democratic
Republic of Congo, and Angola diamonds.
Mr. Jefferson. Does he support the approach that the bill
takes or supporters take or the U.N. takes or does he support
the self-regulation that is going on with Antwerp?
Mr. Payne. He simply supports the concept in general. I am
not sure that he has the details of the legislation, and Tony
may know better than that, but we may ensure that those
embassies do get copies of the legislation.
Mr. Jefferson. Mr. Hall?
Mr. Hall. Let me just say that this piece of legislation
really protects legitimate diamonds, diamonds coming from
Botswana, South Africa. As a matter of fact, that is pretty
much what the Antwerp agreement is, that legitimate diamonds
coming into the various diamond centers, they will be
protected. What they are trying to stop is the conflict
diamonds.
I want to reiterate again, if we do not pass something and
if the diamond dealers do not implement the plan they just
agreed on a few weeks ago in Antwerp, there will be a consumer
boycott and people will ask the question, where is that diamond
from? Countries like Botswana, South Africa, Namibia,
legitimate diamond dealers in our own country, will be
affected. These are legitimate businesses. They will be
affected in a very adverse way.
So I am saying that there are consumer groups, consumer
boycott groups that are ready. We must pass something and we
must implement that plan that they passed in Belgium or we will
see a boycott, and we do not have to worry about whether this
bill is technically correct or not because it is all over. I
mean, it will be a disaster for the diamond business.
Mr. Jefferson. Frank, I want to ask you a question, if I
could, about the U.N. resolution. What is happening with that?
The U.N. passed it. What are they doing to enforce it, because
your bill calls for the Congress to pass the bill to pick up
the U.N. legislation, the U.N. sanctions and so on. What is
happening under that provision? How is it working?
Mr. Wolf. I think unless the United States participates
actively by passing something like Mr. Hall is talking about,
for all practical purposes, it is just not going to work. Now,
I have been supportive of the U.N. effort. I have been
supportive of the U.N. effort with regard to the peacekeepers
in Sierra Leone. Unfortunately, the Congress has not seen that.
But the U.N. has been ineffective in even dealing with peace in
Sierra Leone or getting arms cut off.
So the resolution is interesting and it is helpful, but
until the United States, which is 65 percent--two-thirds of
every diamond sold in the world is sold right here in the
United States--until we act, frankly, I think it will not be
very, very effective.
Ms. McKinney. Basically, the United Nations is studying, as
is this administration, studying. But I would just like to add
further to what my colleague Tony Hall has said, and that is
that there are groups out there--we have been working with
them--who are ready to do a boycott, and a boycott, I believe,
is the last thing that any of the legitimate, the leaders of
the legitimate diamond industry and countries want.
Mr. Jefferson. And you believe that if we do not act this
session on this bill, that this boycott will occur? That is
what you are saying?
Ms. McKinney. Absolutely. That is my opinion.
Mr. Jefferson. Does this bill, Tony, does it have a
companion in the Senate? Is it moving somewhere over there?
Does this bill have a companion in the Senate? Is it moving in
the Senate?
Mr. Hall. Yes. I do not know if the bill has been
introduced, but we do have a couple Senators very interested in
it. Senator Gregg originally put together a much tougher piece
of legislation that Frank and I favored, added it to the bill.
That is when we had the debate on the floor with Mr. Crane,
when he agreed to have the hearing. So this bill is not a
perfect bill. To me, it has too many waivers. If I could, I
would make it much stronger. But it will stop many conflict
diamonds, not all, because this sets up a system for the first
time.
I am very unhappy with our State Department, the way they
have handled this. Before, under Mr. Morrison, they had some
people that were very out front on it. But I think they are
being very soft and kind of neutral on this. Mr. Holbrooke has
been great. He has been wonderful. Everybody can be neutral,
but if we do not do something and the Antwerp agreement is not
carried out, there will be a boycott and I think all of us will
be very disappointed. I am not sure I will not be part of it.
Ms. McKinney. I know I will be a part of it, but I would
like to also just recommend once again to the panel the book by
Wayne Madsen, Genocide and Covert Operations in Africa, 1993 to
1999. There, it clearly spells out the role of our own
government in this whole issue.
Mr. Payne. I just could not reiterate it any more. I think
it is essential that we do something. We have been, as a
country, in the past decade standing on the side of too many
issues that if we had acted--the genocide of Rwanda would not
have occurred if we had moved in and given the green light for
something to happen. We did nothing. We had hearings, four
hearings. Genocide was not mentioned once in the Africa
Subcommittee.
So we have a responsibility, because from the Rwanda
situation, the Congo situation was created, and you have
spillovers that keep going. Sierra Leone actually should be a
receivership. The U.N. should come in and actually run the
country to put it back like it is trying to do in Cambodia or
something. There is no government. The diamond people are
stronger than the Nigerian forces that were there. We can win
that battle if we have the proper resources, but we are not
going to be able to dilly-dally and send untrained troops and
inadequate numbers in order to secure peace in that country.
Mr. Jefferson. One last thing. Short of this bill passing,
given the time that we have to get this done, do you think some
sort of a statement about this, some sort of, as Tony is
talking about, expression by the State Department is helpful in
this regard, and if so, what form should that take?
Mr. Hall. Did you say, Mr. Jefferson, that some kind of a
statement from the State Department would help?
Mr. Jefferson. No, I was asking you that. I was saying,
short of this bill passing, and there is a decided likelihood
that it might not given the time we have to deal with it, would
some expression from the State Department be helpful, and if
so, what form should it take?
Mr. Hall. I do not think it would be helpful at all. We
have been making statements for a year and a half. I do not
think it will do anything.
Mr. Jefferson. You just criticized them for not doing the
right thing, for not saying anything, not doing anything, and I
am asking whether there is anything they can do or say that
makes any difference.
Mr. Hall. Unless you have some kind of certificate of
origin, unless you have some kind of sense of Congress, unless
you do embargoes on these countries that we know are dealing in
conflict diamonds, there have been a lot of statements and the
statements have not worked.
Ms. McKinney. The Fowler Report, the report of the
Secretary General on the sanctions busting with respect to
UNITA and the illicit diamond trade that has funneled money and
arms into UNITA, had specific recommendations. My
recommendation to the State Department would be to not just
study the Fowler recommendations but to implement them. The
Fowler Report went farther than any other report. It named
names. It named countries. So we know who is helping to launder
these diamonds. Put them on a list and deny them entry into
this country. We have not done that. Freeze their assets. We
have not done that. So there are things that can be done. It is
in the Fowler Report and it needs to be done. The State
Department needs to do it and stop talking about it.
Chairman Crane. [presiding]--I want to thank all of our
panelists here for their presentations and we look forward to
continuing working with you. With that, this panel can be
excused.
I would now like to ask William Wood, the Principal Deputy
Assistant Secretary with our International Organization Affairs
of the U.S. Department of State to come forward and testify.
Mr. Wood, if you could, try and keep your oral testimony to in
the neighborhood of five minutes. Any written testimony will be
made a part of the permanent record and you may proceed.
STATEMENT OF WILLIAM B. WOOD, PRINCIPAL DEPUTY ASSISTANT
SECRETARY, INTERNATIONAL ORGANIZATION AFFAIRS, U. S. DEPARTMENT
OF STATE
Mr. Wood. I would like to express my thanks to the
subcommittee for inviting the State Department to testify on
this very important issue. It is an issue that is a growth
industry, if I may say so, gathering both diplomatic momentum
and practical expertise as nations, private sector, and non-
governmental organizations work together to develop an
effective way to prevent some of nature's most beautiful
objects from being used for some of mankind's most hideous
purposes.
My written testimony details the history since, in essence,
1998 of U.S. efforts in this regard. The United States is proud
to really have been a leader in both the theory and in the
implementation of measures to block the illicit trade in
diamonds and their use to support insurgencies against
legitimate governments in Africa. We have mentioned here the
resolutions in the Security Council. The United States
supported those strongly. We have mentioned the Antwerp
meeting. The United States supported that strongly. We have
mentioned the Kimberley process. The United States supports
that strongly and, indeed, will be attending the ministerial
level meeting convening in South Africa next week, which is the
next key step in this process.
The administration is committed to working with
governments, private industry, and non-governmental
organizations to end the large-scale diversion of
internationally traded diamonds by unlawful, violent, and
destabilizing elements. We believe we have seen good
cooperation. The diamond industry, both because of its desire
to distance itself from the misuse of the product and to avoid
being identified with that misuse, has actively participated.
We believe that non-governmental organizations, several of
which are going to be testifying later today, have provided
both impetus and technical insight into the issue.
We believe that the ministerial in South Africa next week,
which will build on the proposals developed in Antwerp, will be
an important step in laying the groundwork for an international
regime creating certificates of origin that are reliable and
that are effective in controlling the illicit trade in diamonds
by insurgent movements.
Mr. Chairman, my formal testimony started out by noting
that the illicit trade in rough diamonds bears some resemblance
to the illicit trade in narcotics. The most crucial similarity
is that in both cases, the illicit trade destroys lives. This
is a crucial and tragic situation.
Unlike, unfortunately, the illicit trade in narcotics, the
illicit trade in diamonds exists side by side with a large,
flourishing, and important legitimate trade, and it is very
important as we work through the techniques of restraining and
rechanneling the illicit trade into licit channels that we not
damage the legitimate trade, the legitimate trade which is
important to countries like Botswana in Africa, Namibia, to
countries like Israel in the Middle East and India in Asia, to
allies like the Dutch and the Belgians in Europe, and to our
own active legitimate diamond trading industry.
I think I will cut it off there, Mr. Chairman, in the
interest of getting to questions and answers, but the one last
thought I want to leave you with is, the administration is
proud of its efforts and creativity to advance this issue. We
believe that diplomatic momentum and practical techniques are
building and we continue to continue this effort as we did in
the Security Council and we did in the G-8, both foreign
ministers and summit meetings, as we did in the Security
Council summit that occurred last week and as we will do in
South Africa next week.
Thank you very much, Mr. Chairman.
[The prepared statement follows:]
Statement of William B. Wood, Principal Deputy Assistant Secretary,
International Organization Affairs, U. S. Department of State
The Administration has been concerned for some time about
the role the illicit trade in diamonds can play in motivating
and fueling conflict, especially in Africa. Illicit trade in
diamonds has played a particularly pernicious role in the
internal conflicts in Angola, Sierra Leone, Liberia, and
elsewhere in Africa. Diamonds, like illicit drugs, frequently
are found in isolated regions, bear little or no evidence of
their origin, and embody a high value in a relatively small and
concealable volume. Unlike illicit narcotics, there is a large,
legitimate market in diamonds in Africa, Europe, Asia, and the
United States.
As conflicts in Africa proliferated in the mid-1990's, and
especially following the breakdown of the Luanda Peace Accord
in Angola and the resumption of fighting there, international
attention focussed on ways to reduce these conflicts by
eliminating the illicit trade in diamonds which fueled these
insurgent movements.
To address this problem, the United States and the United
Kingdom worked together to launch a series of consultations
with leaders from the governments of diamond-trading nations,
legitimate private diamond enterprises, and non-governmental
organizations.
In June, 1998, the United States supported Security Council
resolution 1173 which, inter alia, prohibited the direct or
indirect import from Angola of all diamonds not controlled
through the Certificate of Origin regime of the Angolan
government. Subsequently, with the assistance of Canada,
Chairman of the UN Sanctions Committee for Angola, the Security
Council explored and approved new steps to reduce the
substantial evasions of sanctions which continued to finance
UNITA operations. This effort still goes on.
This year, following the breakdown of the Lome Agreement
which provided a framework for peace in Sierra Leone, the
Security Council acted again. In July, 2000, the Security
Council in Resolution 1306 placed a mandatory prohibition on
the purchase of diamonds from Sierra Leone not certified by the
government of that country. Since, at that time, there was no
regime for certification of diamonds, the practical effect was
a mandatory boycott on all diamonds believed to originate in
Sierra Leone. Subsequent to the UN resolution, the United
States participated in a mission to Sierra Leone with the UK
and Belgian governments and the Belgian Diamond High Council
and continues to support the government's efforts to design a
credible and effective certification regime.
We see the effort in Sierra Leone to create a certification
system for rough diamonds, based on an improved version of the
system used in Angola, as a model for other diamond exporting
countries. These country-specific certification regimes could
then be linked into a network with key importing and cutting
and polishing centers in Belgium, Israel, India, and elsewhere,
forming the basis for an eventual international certification
system for rough diamonds.
As you can see, the effort to halt the illicit use of
diamonds to sustain armed conflict is a serious effort and also
quite new. We are working hard to develop the techniques and
mechanisms to put an end to the misuse of some of nature's most
beautiful stones to serve some of mankind's most hideous
purposes.
We are also working hard to ensure that measures to block
the illicit trade in diamonds do not have the unintended effect
of damaging the legitimate diamond industry. Botswana, a
democratic nation with one of the world's highest incidences of
HIV/AIDS, is dependent on an active diamond sector for its
economic health. South Africa relies on its diamond sector.
Close allies in Europe, such as the Belgians and Dutch, rely on
a healthy, legitimate trade in diamonds for part of their
national income. Israel is an active participant in the
legitimate international diamond trade. And the United States,
the largest consumer of diamonds in the world, is the home of a
substantial diamond-trading sector. Equally important, nations
in crisis such as Sierra Leone and Angola would benefit
enormously if diamonds, now traded illegitimately by
insurgents, could be rechanneled through legitimate markets to
provide employment, taxable income, and another source of
stability for the country.
The Administration is committed to working with
governments, private industry, and non-governmental
organizations to end the large-scale diversion of
internationally traded diamonds by unlawful, violent, or
destabilizing elements. We have seen good cooperation. The
diamond industry, both because of its desire to distance itself
from the misuse of its product, and to avoid being identified
with that misuse, has actively participated. I am pleased to
report that the resolution adopted by the Congress of the World
Council of Diamonds in Antwerp in July, which Congressman Hall
addressed, constitutes a very constructive initiative to
address the problem of conflict diamonds.
A key element of the evolving U.S. approach has been
cooperation with the concerned diamond-producing States in
southern Africa, spearheaded by South Africa. Beginning with
the convening of a technical forum in Kimberly, South Africa in
May of this year, the South Africans have led what has come to
be known as the Kimberly Process, a series of working group
meetings made up of a wide variety of key governments,
industry, and NGOs, which will culminate in a Ministerial
meeting in Pretoria South Africa on September 21. As an active
member, the U.S. has worked to broaden the participation of
this group so that it now includes not only Belgium, but also
the other key producing and manufacturing countries,
specifically Canada, Russia, Israel, and India.
The broad proposal which will be discussed at the
Ministerial meeting next week is an international certification
system for rough diamonds, building on the systems in Sierra
Leone and Angola. Similar to the industry's proposal, such a
system would require that all rough diamonds have to be
accompanied by a forgery-proof certificate of origin or
legitimacy issued by a State diamond authority. Each country
would be responsible for registering its exports and imports in
a database to enable verification and reconciliation.
The key to making such a system effective is to gain the
agreement of all countries which trade in rough diamonds to
participate in and enforce it. This is where the Kimberly
process has played a critical role in bringing together the
major players in the diamond trade. However, we are well aware
that we must next move to a broader inter-governmental forum,
possibly under the auspices of the UN, which engages all the
countries which trade in diamonds.
Under such a system, consumers buying a diamond in any
jewelry store would have the assurance that the diamonds they
were buying are in fact legitimate, and are not playing a role
in perpetuating devastating wars in Africa.This approach is in
line with our efforts in the Group of 8 which resulted in a
call by the Heads of State and Government this summer for an
``international conference, building on Security Council
Resolution 1306 and the 'Kimberly' process launched by the
Government of South Africa, to consider practical approaches to
breaking the link between the illicit trade in diamonds and
armed conflict,'' including a possible international agreement
on certification for rough diamonds.
More recently, in the declaration adopted last week by the
UN Security Council Summit, the Heads of State and Government
decided to take resolute action in areas where illegal
exploitation and trafficking of high-value commodities
contributes to the escalation or continuation of conflict.
I know all of us wish that we had readily available
technology for marking diamonds or determining their origin
geologically, but unfortunately that does not exist. That is
why we have turned to a certification system. Nevertheless, we
do believe that such technology could be available in another
few years and will work to encourage and support these research
and development efforts.
We have already achieved a remarkable level of
collaboration between governments, industry and NGOs--thanks in
large part to the efforts of organizations like Global
Witness--that we would not have dreamed possible a year ago.
While we have some hurdles ahead of us, particularly in getting
broader international participation and ensuring compatibility
with prevailing international trade obligations, I am confident
that we will overcome the remaining challenges.
Thank you for your interest. I welcome any questions you
may have.
Chairman Crane. Thank you, Mr. Wood.
Customs has stated that it would be impossible to enforce
H.R. 5147, the revised CARAT Act, because of the difficulty
relating to the certificate of origin requirement for the
country where the diamonds were mined and that there is simply
no practical means effectively to enforce this. Can you comment
on this? Is H.R. 5147 consistent also with the WTO?
Mr. Wood. A couple of points there, Mr. Chairman. First of
all, we certainly applaud the dedication, commitment, and
energy of Congressman Hall, Congressman McKinney, Congressman
Payne, and Congressman Wolf in this regard and we have complete
sympathy and support for the objectives that gave rise to the
legislation you have referred to.
We do, however, believe, as Mr. Levin indicated, that there
are elements of that legislation that may be getting ahead of
the international consensus that will be required to make any
regime work. We do have concerns relating to the enforcement
and the implementation provisions in that legislation, relating
to creation of a certificate of origin, a regime that is not
yet in place internationally, relating to certifications
regarding transshipment, which is a certification that at
present there is no technical way to make because there is no
technical way to accumulate the information.
We have interests in some of the countries that are
mentioned in Title I. Just to mention one, Ukraine. Ukraine, of
course, is on the Security Council and, indeed, supported the
Security Council resolution banning non-certified diamonds
produced in Sierra Leone. I think that this is a classic
illustration of the kind of complexity within the international
environment regarding this very difficult issue. We believe
that we can work successfully with Ukraine as we worked on the
Security Council to come up with a positive regime that will
control illicit diamonds and rechannel them into legitimate
channels.
We are not immediately sure that creating a negative list
is the best approach at this time. I do not want to rule it out
at some time in the future. But right now, that is not the
direction in which the international effort is moving. We will,
again, know more following the ministerial in South Africa next
week.
Regarding the question on the WTO, we are still in the
initial phase of developing a system, so it is difficult to be
really precise. But we are working closely with our trading
partners to devise an approach that will both effectively
address the problem of illicit trade in diamonds and minimize
any potential WTO concerns.
For example, by focusing on rough diamonds, we are seeking
to limit the complexity of the certification system to the
extent possible and at the same time to limit the universe of
countries that would be directly impacted by the regime. By
focusing on a simple, transparent process of certification, we
are attempting to ensure that the system will be non-
discriminatory and that it will impose relatively little burden
on exporting and importing countries.The responsibility for
enforcing the system will be vested in sovereign governments.
That is identical with the system used by the United Nations in
which the enforcement of sanctions is vested in sovereign
governments acting individually or collectively. Governments
will retain the ultimate responsibility for deciding what
actions to take.
I would like to go slightly further than that, though, and
say the predominant characteristic of the international
discussion on illicit trade in diamonds right now is one of
growing consensus and commitment across sectors by national
governments, by private industry, by non-governmental
organizations.
Mr. Chairman, I have some experience, indeed, too much
experience in supporting sanctions regimes in the U.N. that
looked terrific on paper but did not do the job. We think that
a regime that genuinely has wide international backing, that is
enforced by sovereign governments, implemented largely by the
diamond industry, and that has governments, diamond industry,
and non-governmental organizations as watchdogs can be an
effective regime. But I think that we need to keep pace with
the pace of international dialogue on this subject so that we
can come to a regime that meets all of our criteria and
fulfills all of our objectives. Thank you.
Chairman Crane. Do you see establishing direct trade
between the American diamond industry and legitimate diamond
producers as a practical solution to the illicit diamond trade?
Mr. Wood. Direct trade, sir?
Chairman Crane. Direct trade between the American diamond
industry and legitimate diamond producers.
Mr. Wood. We certainly think that there should be full
dialogue among both the American consumers and the legitimate
producers. I am not sure that we are calling for a, if I
understand your question, sir, a reorganization of the industry
so to cut out, for instance, the diamond middlemen in our
allied nations of Belgium or the Netherlands or the diamond
cutting industry in India or something like that, if I
understood your question, sir. I would be glad to take the
question and get a fuller response back to you.
Chairman Crane. Does the State Department intend to take
action concerning the U.N. Security Council resolution
requiring member States to prohibit rough diamond imports from
Sierra Leone unless certified by the government?
Mr. Wood. Absolutely. We are taking steps in two
directions. One, we have got technical experts in Sierra Leone
who are helping them to develop a diamond certification regime
that is technically sound. Right now, there is no such
certification regime so the prohibition on certified Sierra
Leonean diamonds amounts to a boycott, a mandatory boycott of
Sierra Leonean diamonds at the moment.We are trying to assist
them to develop a certification regime and, of course, for our
part, the administration will be putting forward implementing
regulations to make sure that the United States adheres to the
mandatory provisions of that resolution for which we voted and
which we fully support.
Chairman Crane. Mr. Jefferson?
Mr. Jefferson. Mr. Wood, were you in the room a minute ago
when we heard some complaints from members of Congress that the
State Department has done, well, nothing in this area as far as
they are concerned? You take issue with that, I take it, but in
what respect and what has the State Department done in this
area?
Mr. Wood. Thank you for asking me that question. I do take
issue a little bit with that perspective. The issue of
controlling illicit trade in diamonds is a new area. The
question of trying to find effective sanctions to contain
conflict, to bolster legitimate governments, and to weaken the
rebels and insurrectionists and the brutal elements that are
conducting so much violence in Africa and elsewhere right now
is one of the administration's highest, highest objectives. We
believe that sanctions can be effective, as a way of putting
pressure on the bad guys short of military means, which is both
highest cost, highest risk, and also is likely to have the most
collateral damage. So we think that sanctions are important.We
think that creative ways to control the illicit trade in
diamonds offers real potential to get at a resource that not
only fuels but also motivates rebellion. It allows these
movements to purchase weapons and it allows the leaders of
these movements to amass a level of personal wealth that in
many cases may well be their principal motivation for leading
an insurrection. So we think that this is an important
element.Starting in 1998 with the adoption of the prohibition
on purchase of uncertified Angolan diamonds, the United States
began to conduct with the United Kingdom a dialogue with
interested national governments, the private sector, and non-
governmental organizations to see how we could make this more
effective. The fact of the matter is, the certification regime
in Angola has not worked all that successfully. It is being
strengthened with our assistance. And the international
controls over Angolan diamonds that may not have passed through
that certification regime was not effective at all.So we began
this dialogue. We broadened this dialogue, among other places,
to the Group of Eight. The Group of Eight is fairly important
because they represent a block of the principal consuming
countries in the world and, therefore, exercise some influence
over not only the industry but also the producing countries,
and over a six-or eight-month period, we developed a major
proposal within the Group of Eight which was formalized at the
foreign minister's meeting in Osaka in July and endorsed at the
head of State level in Okinawa that same month.Similarly--and
that is sort of the formal government-to-government process,
with the one addition of our strong support for a resolution
also in July, if memory serves, banning or prohibiting the
purchase of uncertified diamonds from Sierra Leone. I guess
that was June.That is sort of the formal government process. At
the same time, some of our policy planning people, some of our
Africa experts, some of our economic experts have been engaged
in parallel discussions of the kind that governments do not
very often have in which you sort of say, look, we all know
what the objective is. We all know that it is a complicated
equation. Let us figure out how we can together, your country,
my country, your industry, my private sector, your non-
governmental organizations, our non-governmental organizations,
how we can all get together and put together a regime that is
not rhetorical, that does not inflict high collateral damage on
either an innocent legitimate diamond industry, innocent
producers, or innocent countries, but at the same time can have
a real impact on the illegitimate, illicit trading of diamonds
to support brutal insurgent armed groups. That process is not
complete.
Mr. Jefferson. But it is an ongoing process?
Mr. Wood. The ministerial meeting in South Africa next
week, which is the culmination of the Kimberley process, which
has been a process of working groups meeting over the last
several months, will be another key step. We expect this issue,
which was mentioned in the Secretary General of the U.N.'s
report to the Millennium Summit, to be discussed in the General
Assembly of the United Nations this fall. This is a live issue.
It is one in which the momentum is growing.
We, frankly, from the State Department's view, would
welcome a sense of the Congress statement urging further
progress or something like that. We are not sure that the
specifics contained in draft legislation on the table right now
is going to conform ultimately with the end result of the
Kimberley process and the international dialogue. But as is so
often the case, there is a genuine coincidence of objectives in
this regard and it is important that we not allow differences
of tactical nuance to undermine what is genuinely a common
effort to achieve that goal.
Mr. Jefferson. You are saying that the State Department
would welcome urging by the Congress to complete the Kimberley
process and complete the international dialogue between the
various countries with respect to these issues?
Mr. Wood. And to find effective measures to control the
illicit trade of diamonds as it supports insurgent elements.
But again, this would be a declaration of, if I may say so, a
common objective rather than a more specific recipe of
measures.
Mr. Jefferson. Thank you, Mr. Chairman.
Chairman Crane. Thank you. Mr. Wood, I want to apologize
for our members not being here, but on the floor right now is
being debated the effort to override the President's veto of
the marriage penalty tax elimination and for that reason our
colleagues are over there participating.
With that, I want to thank you for your participation and
we will be back in touch with you.
Chairman Crane. With that, I would now like to convene our
panel from the private sector, Matthew Runci, President and
Chief Executive Officer, Jewelers of America, Inc.; Alex
Yearsley, Campaigner, Global Witness, from London, England;
Jeffrey Fischer, President, Diamond Manufacturers and Importers
Association of America; Holly Burkhalter, Advocacy Director,
Physicians for Human Rights; Jack Jolis, President, Rough
Diamond Consultancy, Antwerp, Belgium; and William Boyajian,
President, Gemological Institute of America. Please take seats.
Folks, if you could please contain your oral presentations
to five minutes or less, your written statements will all be
made a part of the permanent record. With that, we will proceed
with Mr. Runci.
STATEMENT OF MATTHEW A. RUNCI, PH.D., PRESIDENT AND CHIEF
EXECUTIVE OFFICER, JEWELERS OF AMERICA, INC., NEW YORK, NEW
YORK, ON BEHALF OF WORLD DIAMOND COUNCIL
Dr. Runci. Thank you, Mr. Chairman, members of the
subcommittee. I am Matthew Runci, President and Chief Executive
Officer of Jewelers of America, the national association of
more than 12,000 professional retail jewelers in the United
States. I appear before you today on behalf of the World
Diamond Council, an international body formed in July to
rapidly develop and implement a comprehensive plan to curtail
trade in conflict diamonds. Membership of the council is
comprised of all segments of the international diamond
industry, producers, manufacturers, traders, and retailers, as
well as financial institutions, governments, and relevant
international and civil society organizations.
The WDC is dedicated to the eradication of the trade in
conflict diamonds, allowing the legitimate diamond industry,
which handles 96 percent of world rough diamond production and
gives employment to more than two million people, to continue
the promotion and sale of diamonds as a symbol of love and as
an agent for economic growth and prosperity. A framework for
effectively curtailing conflict diamond trade without adversely
impacting legitimate businesses and national economies must, in
our opinion, adhere to six principles.
First, while industry efforts already underway are making
and will continue to make a difference, industry efforts alone
will not be sufficient to end the trade in these products
completely. Cooperative and coordinated initiatives between all
stakeholders will greatly improve the prospects for ending this
illicit trade.
Second, the origin of individual diamonds cannot be
reliably determined by non-destructive analytical means.
Contrary to certain popular misunderstandings, it is not a
matter of devising or perfecting a tool for diagnostic
measurement. The necessary distinguishing properties are simply
not present in the stone from nature to begin with.
Third, certifying that the origin of a diamond is conflict-
free may only be achieved through the systematic tracking of
shipments, beginning with controls in the country of rough
extraction. Unless rough diamonds can first be certified as
conflict-free at the time they are exported from the country of
mining, there is no method by which to verify their origin as
conflict-free afterward.
Fourth, a system of tracking rough diamond shipments from
mining sources through cutting centers is ambitious but
feasible, because while the volume of stones produced annually
is large, the number of export and import control points is
small.
From that point onward, however, the task of tracking
polished diamonds is neither feasible nor necessary. Fossils of
polished stones are routinely sorted, mixed, and repackaged at
each level of the distribution chain as economics drives the
selection and supply is continually adjusted to meet demand in
a way that yields profit. Diamonds often pass through as many
as a dozen hands before they ultimately reach the retail
counter.
Sixth, most diamonds are sold in an undifferentiated manner
in the marketplace. The current trend toward identifying some
polished diamonds by a brand name should not be confused with a
system of market controls that would be required to establish a
chain of assurance certifying that diamonds are conflict-free
in origin. At this time, in fact, only one or two companies in
the world possess the wherewithal to establish and maintain the
requisite system of controls from the mining source onward, as
well as the trade distribution network required to validate a
chain of assurance through to the consumer.
Statutory authority possibly will be required in the United
States in the future to implement necessary controls. However,
it is imperative that the provisions of U.S. legislation be
fully consistent with a broad international framework of rough
diamond controls. It is not possible to legislate a national
solution to the conflict diamond problem without inflicting
significant economic damage on the diamond and jewelry
industries of the U.S., Israel, India, Belgium, Botswana, South
Africa, Namibia, and Russia.
Mr. Chairman, a transnational problem requires an
international solution. For this reason, we respectfully
request that Congress defer action on pending legislation until
an assessment has been made of the outcome of the ministerial
meeting on this topic scheduled in London in October. At the
same time, however, we do propose an international system to
control the flow of rough diamonds and there are four simple
points in summation.
First, all polished diamond imports entering the U.S. in
commercial quantities would be required by law to originate in
countries that have rough diamond controls in place.
Rough diamond controls should be defined as, second, that
all countries that export or import rough diamonds should have
official import/export offices with data on shipments
registered in an international diamond database. Rough diamonds
would be sealed in standardized tamper-proof containers,
accompanied by counterfeit-proof documentation.
Third, all countries that import commercial quantities of
polished diamonds should adopt legislation requiring
certification that imports of commercial quantities of polished
diamonds may only come from countries that have implemented
rough controls.
And finally, fourth, all countries should adopt legislation
to authorize the criminal prosecution of those who are found to
be knowingly dealing in conflict diamonds.
Mr. Chairman, it is imperative that the U.S. coordinate its
efforts with other stakeholders in order to ensure that our
shared goal will be achieved. Preemptive U.S. legislation,
however well intentioned, will not achieve the desired outcome
and will instead adversely impact legitimate diamond economies
all over the world and tens of thousands of small businesses
throughout the United States, while perhaps benefitting only a
few large diamond producers who possess the internal capacity
to self-guarantee the origin of their products.
Mr. Chairman, let us work together in solving this terrible
problem. Thank you.
[The prepared statement follows:]
Statement of Matthew A. Runci, Ph.D., President and Chief Executive
Officer, Jewelers of America, Inc., New York, New York, on behalf of
World Diamond Council
The World Diamond Council (WDC) is the international body
chartered in Antwerp in July by the World Federation of Diamond
Bourses and the International Diamond Manufacturers
Association, solely for the purpose of rapidly developing and
implementing a comprehensive plan to curtail trade in conflict
diamonds while minimizing impact on the legitimate diamond
industry. Membership of the Council is comprised of all
segments of the international diamond industry--producers,
manufacturers, traders, and retailers--as well as financial
institutions, governments and relevant international and civil
society organizations.
The World Diamond Council is dedicated to the eradication
of the trade in conflict diamonds, allowing the legitimate
diamond industry--which handles 96 percent of world rough
diamond production and gives employment to over 2 million
people--to continue the promotion and sale of diamonds as the
ultimate symbol of love and as an agent for economic growth and
prosperity in stable African democracies such as Botswana,
Namibia, and South Africa.
The Council held its inaugural meeting on Thursday,
September 7, in Tel Aviv to begin implementation of its plan.
The main features of the plan, detailed later in this
testimony, include:
1) Establishment of dedicated import/export offices for
rough diamonds closely supervised by individual government
authorities;
2)Adoption of a uniform international certification system
of sealing and authenticating each parcel of rough diamonds
prior to export;
3) Monitoring industry wide compliance with ethical codes
of conduct that prohibit the trade in conflict diamonds;
4) Obliging banks, insurance companies, shipping companies
and other providers of auxiliary goods and services to cease
business relations with any company or individual knowingly
involved in dealing in conflict diamonds;
5) The result of these steps will be to support a chain of
assurance for traders of polished diamonds based on rough
controls.
The WDC calls upon the governments of those countries
involved in the diamond trade to enact and enforce the measures
described above. The WDC offers its expertise and assistance to
governments in drafting appropriate legislation.
In addition the WDC calls on all relevant governments, and
the United Nations, to initiate with utmost urgency an
international embargo on the trade in weapons that provides
rebel forces in Africa with the means to wage war.The WDC
invites the UN, governments and NGO's, in the pursuit of
international peace and security, to examine the role of other
natural resources and, most importantly, the arms trade, in
perpetuating conflict in Africa.
Introduction
Mr. Chairman and members of the subcommittee, I am Matthew
Runci. the President & CEO of Jewelers of America (JA), the
national association of professional retail jewelers in the
United States. Our membership of more than 12,000 stores
encompasses large national chains such as the Zale Corporation
and Sterling Jewelers, luxury brands such as Tiffany and
Cartier, and nearly ten thousand independent family-owned
retail jewelry stores in all fifty States.
I appear before you today on behalf of the newly formed
World Diamond Council (WDC), an international body chartered in
Antwerp in July, solely for the purpose of rapidly developing
and implementing a comprehensive plan to curtail trade in
conflict diamonds while minimizing impact on the legitimate
diamond industry. Membership of the Council is comprised of all
segments of the international diamond industry--producers,
manufacturers, traders, and retailers--as well as financial
institutions, governments and relevant international and civil
society organizations.
The World Diamond Council is dedicated to the eradication
of the trade in conflict diamonds, allowing the legitimate
diamond industry--which handles 96 percent of world rough
diamond production and gives employment to over 2 million
people--to continue the promotion and sale of diamonds as a
symbol of love and as an agent for economic growth and
prosperity in stable African democracies such as Botswana,
Namibia, and South Africa.
A list of Council members is appended to this statement as
Attachment 1.
The Council held its inaugural meeting on Thursday,
September 7, in Tel Aviv to begin implementation of its plan.
The main features of the plan, detailed later in this
testimony, include:
1) Establishment of dedicated import/export offices for
rough diamonds closely supervised by individual government
authorities;
2) Adoption of a uniform international certification system
of sealing and authenticating each parcel of rough diamonds
prior to export;
3) Monitoring industry-wide compliance with ethical codes
of conduct that prohibit the trade in conflict diamonds;
4) Obliging banks, insurance companies, shipping companies
and other providers of auxiliary goods and services to cease
business relations with any company or individual knowingly
involved in dealing in conflict diamonds;
5) The result of these steps will be to support a chain of
assurance for traders of polished diamonds based on rough
diamond controls.
The WDC calls upon the governments of those countries
involved in the diamond trade to enact and enforce the measures
described above. The WDC offers its expertise and assistance to
governments in drafting appropriate legislation.
In addition the WDC calls on all relevant governments, and
the United Nations, to initiate with utmost urgency an
international embargo on the trade in weapons that provides
rebel forces in Africa with the means to wage war.
The WDC invites the UN, governments and NGO's, in the
pursuit of international peace and security, to examine the
role of other natural resources and, most importantly, the arms
trade, in perpetuating conflict in Africa.
The Situation
Legitimate and socially responsible businesses in the
diamond and jewelry industries deplore the fact that even a
very small portion of the world's annual rough diamond
production is being used to fuel conflict in Sierra Leone,
Angola, and Congo.
Diamonds are a symbol of love and purity, and most
definitely should not be exploited as a means to commit
violence. Diamonds stand as timeless symbols of romance,
mystery, eternity, beauty, prestige, tradition, purity and
rarity. That diamonds have been exploited to enable the
purchase of weapons that serve to brutally extend the suffering
of people in parts of Africa is truly appalling to socially
responsible business people in this industry.
We must keep in mind that informed estimates today agree
that 96 percent of the world's rough diamonds come from
legitimate sources--that is from mines certified by local
authorities. Conflict diamonds--that is rough diamonds
illicitly seized and sold by representatives of rebel movements
for the purpose of buying weapons--constitute an estimated 4
percent of the world's annual gem production-a share believed
to be still declining. See Attachment 2--Conflict Diamonds
Estimate Against Total World Production, 1999.
We must remember too that natural resources like diamonds
are in fact morally neutral. Thus legitimate diamonds--that is
96 percent 0f the world's annual diamond production--are an
important source of economic vitality worldwide. Nowhere is
this more apparent than in southern Africa, where in the
economies of Botswana, Namibia and South Africa, diamonds have
fueled economic growth and prosperity. Take Botswana, for
example, a country that serves as a model not only for Africa
but also for all developing countries. As reported in Time
Magazine Europe (July 10, 2000), since the discovery of its
diamond deposits, Botswana has achieved record economic growth.
Last year it was again one of the fastest growing economies of
the world with real GDP growth of 9 percent. Diamonds provide
75 percent of foreign exchange earnings, 65 percent of
government revenue, and 33 percent of GDP. Today Botswana
stands as a model of the way mineral wealth, in this case
diamonds, can be deployed for the benefit of a country as a
whole.
Similarly, in Namibia, where the organized diamond industry
dates back to the beginning of the 20th century, diamonds today
account for 40 percent of the country's foreign exchange
earnings. In South Africa, the diamond industry as a whole
gives employment to 30,000 people and is vitally important to
the country as a whole.
Clearly, a solution to curtailing world trade must not come
at the expense of the remarkable positive achievements that
diamonds have brought to this region. At a conference in
Kimberley in May, Inge Zaamwani, a Namibian, spoke on behalf of
all three southern African countries when she said:
The linkage of civil strife with the diamonds industry
threatens our economic livelihood in a very serious way. .
.Realism demands that we put the conflict diamonds issue in
perspective.
Diamonds are not the principal source of all too numerous
armed conflicts on this and other continents. The principal
blame must lie with those who started the wars and the arms
merchants who supplied them with the weapons. The manufacturers
and suppliers of automatic weapons, landmines, missiles and
other essentials of modern bush warfare are not Africans.
Diamonds must not become the scapegoat for the world's failure
to stop atrocities or rebellions or the arms that abet such
rebellions. Long after the question of conflict diamonds has
faded from political or press attention we on the ground in
Africa will be left to grapple with the challenges of war and
peace, justice and injustice, poverty and prosperity, and the
complex role that resources of every kind should play in
contributing to one or the other.
Current Industry Actions
The world diamond industry is currently doing everything
possible to address this problem in a timely, responsible and
effective manner. Leading producers, such as DeBeers, have been
working in close collaboration with the governments of southern
Africa, the U.S. Department of State, the United Nations, and
the British Foreign Office, as well as NGO's such as Global
Witness, and diamond industry associations, to advance workable
and practical solutions that could be applied immediately.
Leading diamond industry associations, the International
Diamond Manufacturers Association (IDMA) and the World
Federation of Diamond Bourses (WFDB), representing all
principal diamond manufacturing and trading centers of the
world, adopted an historic joint resolution at the World
Diamond Congress in Antwerp in July. This document, now known
as the Antwerp Resolution, laid out a plan to curtail world
trade in conflict diamonds and established a new permanent
body, the World Diamond Council (WDC), comprised of producers,
manufacturers, traders, retailers, banks, and relevant
international and civil society organizations, to monitor
compliance with the plan. See Attachment 3--The Antwerp
Resolution.
In the United States, which today accounts for
approximately half of the $56 billion in diamond and diamond
jewelry retail sales in the world annually, diamond and jewelry
trade organizations formed a working group almost one year ago
to share information and coordinate industry action in support
of curtailing the trade in conflict diamonds.
The Jewelers of America (JA) have prioritized this matter
for the past year, issuing a continuing series of
communications to the trade to inform and sensitize retail
jewelers to the vital importance of this issue; developed and
issued a guidance agreement for use by all retail jewelers with
their diamond vendors; and established training programs for
deployment in stores and for presentations to trade audiences
at industry events. As signatories to a code of ethics as a
requirement of membership in the association, all members of
the Jewelers of America have pledged to their customers that
they will not knowingly sell these illicit diamonds and will
undertake reasonable measures to help prevent the sale of such
diamonds in the U.S. Most importantly retail jewelers are
requiring the explicit commitment of their diamond vendors
(diamond wholesalers, diamond taders, and jewelry
manufacturers) not to knowingly sell illicit diamonds and to
undertake reasonable measures to help prevent the sale of such
diamonds in the U.S. In turn, their vendors are requiring
identical assurances from their suppliers as well.
Demonstrated responsible behavior by ethical and socially
responsible members of the U.S. retail jewelry community,
together with the demonstrated commitments and actions of
diamond producers, manufacturers and traders alike worldwide,
have begun the process by which trade in conflict diamonds will
be effectively curtailed.
The International Framework for Curtailing Trade in Conflict
Diamonds
Any effective framework intended to curtail conflict
diamond trade without adversely impacting legitimate businesses
must, in our view, adhere to six principles:
1) While industry efforts already underway are making a
difference, industry efforts alone will not be sufficient to
end the trade in these products completely. Cooperative and
coordinated initiatives between industry, governments,
international organizations, and civil society organizations
will greatly improve the prospects for curtailing the illicit
trade.
2) Scientific expertise tells us that origin of individual
diamonds cannot be reliably determined by non-destructive
analytical means. Diamonds do not present useful evidence for
this diagnostic purpose. Contrary to misunderstandings that
have been circulating, it is not a question of devising or
perfecting a tool for diagnostic measurement. Scientists advise
us that the necessary distinguishing properties are not present
in the stone to begin with. This is critical because, when
retail jewelers purchase diamonds--polished diamonds--from
their trade vendors, neither they nor their vendors can
determine through any type of examination from what source of
mining or extraction those diamonds originated. Any attempt to
impose upon the industry a requirement to identify the specific
country of origin of a polished diamond at the retail counter
is doomed to fail and will cause unnecessary hardship on an
industry comprised almost entirely of small businesses.
3) Certifying that an individual diamond's origin is
conflict free may, therefore, only be determined through the
systematic tracking of shipments with controls extending from
the country of rough extraction forward through the diamond
pipeline. Unless rough diamonds can first be certified as
conflict-free in origin at the time they are exported from the
country of mining or extraction, there is no method by which to
verify their origin as conflict free afterward.
4) A system of tracking rough diamond shipments from mining
sources through cutting centers is a huge undertaking, but is
at least feasible, because while the volume of stones produced
annually is large, the number of export and import control
points that would be required is limited. Gem quality diamonds
are mined in twenty-two countries and the bulk of manufacturing
(i.e., cutting and polishing) takes place in seven countries.
This point is illustrated in the Table of Diamond Mine
Production (Attachment 4) and diagram of The Diamond Pipeline
(Attachment 5).
5) From that point onward, however, the task of tracking is
simply not feasible. Transactions involving commercial
quantities of polished diamonds from the cutting centers onward
do not routinely occur in a linear sequence from producers to
manufacturers to traders to retailers. In fact the pattern is
quite irregular, with manufacturers and traders routinely
selling back up, across, as well as down, the pipeline. Parcels
of stones are routinely sorted, mixed, and repackaged as
economics drives selection and supply is adjusted to meet
demand in a way that yields profit. Thus, diamonds often pass
through as many as a dozen hands before they ultimately reach
the retail counter. Given the characteristics of the pipeline
as described above, it is easy to understand why most diamonds
are sold in an undifferentiated manner in the marketplace.
6) Formal branding of diamonds is a new phenomenon and
represents only a small fraction of the market today. The
current trend toward identifying diamonds by a brand name
should not be confused with a system of market controls such as
would be required to establish a chain of assurance certifying
that diamonds are conflict-free in origin. At this time only
one or two companies in the world possess the wherewithal to
establish and maintain the requisite system of controls from
the mining source onward, as well as the trade distribution
network required to validate the chain of warrants through the
pipeline, with marketing programs to support the product
through to the consumer. Thus, any effort to impose
requirements on the industry through legislation that cannot be
achieved will not only fail to curtail conflict diamond trade,
but will almost certainly bring considerable advantage to the
one or two producers in the world who possess that capacity. In
light of the above, the Council has proposed that an effective
worldwide framework to control trade in rough diamonds must
contain the following elements:
1) All countries that export rough diamonds should have
official dedicated import/export offices for rough and/or
polished diamonds closely supervised by government authorities
that register data on export shipments in an international
diamond database (IDD). Furthermore, the diamonds are to be
sealed in standardized tamperproof containers, which will
include an officially signed document capturing all the
information entered into the IDD and thereby certify the origin
of the contents of the shipment.
2) All countries that import rough diamonds should have
official dedicated import/export offices for rough and/or
polished diamonds closely supervised by government authorities
that register import shipments in the IDD. No rough diamonds
are to be imported unless they are in a standardized sealed
tamperproof container from the country of export and the export
shipment information in the international diamond database
corresponds to the enclosed official documentation. The
importing country will enter date and country of importation in
the IDD.
3) All countries that import commercial quantities of
polished diamonds should adopt legislative programs requiring
certification that imports of commercial quantities of polished
diamonds may come only from countries that have implemented
rough controls, as defined in #1 and #2 above, and allowing
criminal prosecution of those who are found to be knowingly
dealing in conflict diamonds.
The Need for U.S. Legislation
Statutory authority possibly will be required in the United
States to implement those controls that would be required to
bring this market into compliance with an international
framework such as the one proposed. We believe that a well-
timed and properly focused legislative initiative in the United
States could influence positively the actions of other
countries in connection with this matter and help drive
worldwide compliance, and thereby further curtail the trade in
conflict diamonds.
However, it is imperative that if the US is to lead
constructively in this process, the provisions of US
legislation should be fully consistent with an international
framework of rough diamond controls. On this point, we
understand that ministers from more than thirty countries are
scheduled to convene in London next month, consistent with the
decision of the G-8 in July, to coordinate national legislative
efforts. The agenda for this meeting includes:
Planning legislative programs in each country,
requiring certification of rough diamond imports and exports
and enacting laws to allow seizure and/or criminal prosecution
of those who are found to be dealing conflict diamonds;
Establishing a regime to back such laws and
regulations by monitoring the flow of rough diamonds and the
documentation that goes with them;
Getting key countries to agree to co-sponsor a UN
resolution on conflict diamonds at the upcoming General
Assembly session.
We would therefore strongly urge those in Congress who
currently advocate specific legislative proposals to address
the conflict diamond situation to recognze that it is simply
not possible to legislate a national solution to the conflict
diamond problem in the US market alone, without inflicting
significant economic damage on the diamond and jewelry
industries of the US, Israel, India, Belgium, Botswana, South
Africa Namibia and Russia. A transnational problem requires an
international solution.
For this reason we respectfully request that Congress defer
action on pending legislation until the results of the upcoming
London ministerial meeting have been assessed.
At the same time we recommend that future US legislation,
if required, be structured in accordance with the following
points:
1) All polished diamond imports entering the U.S. in
commercial quantities would be required to originate in
countries with rough diamond controls in place;
2) Rough diamond controls to be defined in terms of strict
adherence by each country to an international regime comprised
of:
All countries that export rough diamonds should
have official dedicated import/export offices for rough and/or
polished diamonds closely supervised by government authorities
that register data on export shipments in an international
diamond database (IDD). Furthermore, the diamonds are to be
sealed in standardized tamperproof containers, which will
include an officially signed document capturing all the
information entered into the IDD and thereby certify the origin
of the contents of the shipment;
All countries that import rough diamonds should
have official dedicated import/export offices for rough and/or
polished diamonds closely supervised by government authorities
that register import shipments in the IDD. No rough diamonds
are to be imported unless they are in a standardized sealed
tamperproof container from the country of export and the export
shipment information in the international diamond database
corresponds to the enclosed official documentation. The
importing country will enter date and country of importation in
the IDD;
All countries that import commercial quantities of
polished diamonds should adopt legislative programs requiring
certification that imports of commercial quantities of polished
diamonds may come only from countries that have implemented
rough controls, as above, and allowing criminal prosecution of
those who are found to be knowingly dealing in conflict
diamonds.
The Administration could certify annually
compliance by countries with the provisions for rough diamond
controls specified above, and upon the determination that all
countries were in compliance, disband the controls once the
trade in conflict diamonds has ceased (sunset provision).
We applaud the efforts of those in Congress who have
stepped forward in an effort to stop the trade in conflict
diamonds. Because we too deplore the link between diamonds and
acts of violence, we strongly urge those in Congress who
currently advocate specific legislative proposals in an effort
to curtail trade in conflict diamonds that, in taking the lead
with legislation, it is imperative that the US coordinate its
efforts with industry, the UN, NGO's and the ministries of
other key governments around the world. This is the only way to
ensure that our shared goal will be achieved. Premature or
uncoordinated efforts will not achieve the desired outcome and
may instead adversely impact legitimate diamond economies all
over the world and tens of thousands of small businesses
throughout the United States, while perhaps benefitting only
one or two large diamond producers who possess the internal
capacity to self-guarantee the origin of their products.
Mr. Chairman, the planets are moving into alignment in a
way that will enable all of us to accomplish our common goal--
to stop the terrible trade in conflict diamonds. The timing and
coordination of our respective efforts are now critical to
success in this mission.Let us work together. Thank you.
World Diamond Council Members
------------------------------------------------------------------------
Title &
Name Organization Country
------------------------------------------------------------------------
Eli Izhakoff.................... Chairman--World U.S.A.
Diamond Council.
Sean Cohen...................... Vice Chairman--WDC South Africa
President--Intern
ational Diamond
Manufacturers
Association.
Abraham Fischler................ Vice Chairman--WDC Belgium
President--World
Federation of
Diamond Bourses.
Sergei Oulin.................... Vice Chairman-- Russia
WDCVice
President--Alrosa.
Shmuel Schnitzer................ Vice Chairman--WDC Israel
President--Israel
Diamond Exchange.
Matthew Runci................... Secretary General-- U.S.A.
WDCPresident &
CEO--Jewelers of
America.
Noa Balthazar................... President--Ascorp. Angola
Ernest Blom..................... President--Diamond South Africa
Merchants
Association of
Southern Africa.
William Boyajian................ President--Gemolog U.S.A.
ical Institute of
America.
Robert Bridel................... Executive U.S.A.
Director--A.G.S..
Andrew Coxon.................... Director--DTC De England
Beers.
Frank Demeyere.................. Chief of Cabinet-- Belgium
Ministry of
Economic Affairs,
Belgium.
Jeffrey Fischer................. President--DMIA... U.S.A.
Stephan Fischler................ Secretary General-- Belgium
IDMA.
Sylvia Fletcher................. Senior Advisor-- U.S.A.
USAID Office of
Transition
Initiatives.
Cecelia Gardner................. Executive U.S.A.
Director--Jeweler
s Vigilance
Committee.
Freddy Hager.................... President--London England
Diamond Bourse.
Gordon Gilchrist................ Managing Director-- Australia
Argyle Diamonds.
Paul Goris...................... Chairman--Antwerp Belgium
Diamond Bank.
Peter Gross..................... General Manager-- Belgium
International
Diamond Division,
ABN Amro.
Terry Janes..................... BHP Diamond Inc... Canada
Sanjai Kothari.................. .................. India
Michael Kowalsky................ President & CEO-- U.S.A.
Tiffany & Co..
Lawrence Ma..................... Chairman--Diamond China
Federation of
Hong Kong.
Barbara Masekela................ De Beers--South South Africa
Africa.
Peter Meeus..................... General Manager-- Belgium
High Diamond
Council.
Dianna Melrose.................. Foreign & U.K.
Commonwealth
Office.
Nchaka Moloi.................... Advisor to South Africa
Minister of
Minerals and
Energy.
Louis Nchindo................... Botswana Diamond Botswana
Company.
Benjamin Oshman................. President & CEO-- Israel
Union Bank,
Israel.
Youri Rebrik.................... .................. Russia
Martin Rapaport.................
Rapaport Corporation............ U.S.A.............
Shri Nilesh Shah................ Gem and Jewelry India
Export Promotion.
Udi Sheintal.................... Diamond Israel
Controller--Minis
try of Trade and
Commerce.
Abraham Traub................... President--Kidum Israel
for the
Advancement of
the Diamond
Industry.
Inge Zaamwani................... Managing Director-- Namibia
Namdeb Diamond
Corporation.
------------------------------------------------------------------------
[GRAPHIC] [TIFF OMITTED] T8040.001
Joint Resolution World Federation of Diamond Bourses (W.F.D.B.) and
International Diamond Manufacturers Association (I.D.M.A.)
ANTWERP July 19, 2000
WFDB and IDMA, representing all the principal diamond
manufacturing and trading centers of the world, have
consistently been aware of and been involved in combating the
conflict diamonds problem. Particularly, they point to the
numerous resolutions passed by themselves and their members.
We believe that more can and should be done to limit, if
not eliminate, this problem entirely. We believe that the
solution to the conflict diamonds problem is a moral imperative
above all others. However we do not believe that the solution
necessarily entails damage or limitation to the 96+% of the
world diamond trade which is legitimate. On the contrary, we
believe that an enlightened and effective approach to the
problem can lead to the improvement of the diamond market
overall.
It is our understanding that all concerned parties are
aware of the positive benefits of diamonds as well as their
potential role in providing prosperity, a key ingredient of
peace, in countries currently experiencing strife. Over the
past year, various solutions have been proposed. We have
analyzed these proposals, some of which we have found to be
ineffective, others more practical and some impractical. All
the proposals have had elements that we believe are logical and
should be incorporated into an effective solution.
As diamond manufacturers and traders primarily responsible
for the conversion of rough diamonds into polished and the
marketing of those polished diamonds, we are proposing a number
of concrete steps to be taken by all parties concerned which we
believe will lead to a more effective and immediate resolution
of the problem.
While our proposal may be subject in the future to any
number of improvements, we believe it is, in the first
instance, practically implementable in the short term, and it
does not preclude further steps being taken as and when the
means and requirement arise.
Specifically and most importantly, we are mindful that the
next phase of solution must start sooner rather then later and
that if this is to be done in a non-destructive manner, the
most practically implementable steps must be taken first, in
order that the process not be delayed with theoretical concepts
and technologies.
1. We recognize that rough diamonds individually are not
sufficiently determinable as to source and origin. However,
with the correct system, rough diamond parcels can be monitored
within a net.
2. There is not implementable means of tagging, tracking
and identifying finished polished diamonds.
3. All legitimate diamonds in their rough form can travel
within an identifiable net.
Accordingly we propose:
1. Each accredited rough diamond importing country, whether
a producer, manufacturing or dealing center, enacts ``redline''
legislation. As such, no parcel of rough may be imported unless
such parcel of rough has been sealed and registered in a
universally standardized manner by an accredited export
authority from the exporting country.
2. Each exporting country, which can be either a producer
country or accredited dealing/manufacturing center, will
establish accredited export offices or diamond board which will
seal parcels of rough diamonds to be exported and registered in
an international database. If the country is a producer
country, it will be accredited only if it has control
mechanisms in place to determine the flow of rough and
legitimate ownership of rough presented to the export
authority.
3. Polished diamond consuming countries will enact
legislation forbidding importation of polished diamonds from
any manufacturing/dealing country that does not have
``redline'' legislation as regards the importation of rough.
4. Each and every country, as part of the diamond net, be
they rough exporters, importers, or polished consuming
countries, enacts legislation bringing criminal penalties on
any individual and/or company proven to be knowingly involved
in illegal rough diamonds.
5. Each and every diamond organization adopts an ethical
code of conduct as regards conflict diamonds, labor practices
and good business practices in general, the failure to adhere
to which would lead to expulsion from WFDB, IDMA and all other
relevant organizations.
6. As a positive measure of compliance, all relevant and
interested parties promote adherence to the code of conduct as
a positive consumer choice in the marketplace.
7. We enlist the support of the banks, insurance, shipping
companies and other pertinent providers of goods and services
to our industry to expose and cease-business relations with any
entity that is found knowingly to violate these principles.
8. That there is a continual analysis of relevant
technologies and investment by the industry in developing them
further for implementation leading to greater compliance.
9. That compliance with the above be monitored and
controlled by an International Diamond Council comprised of
producers, manufacturers, traders, governments and relevant
international organizations. that this process be fully
verified and audited.
A joint committee of both organizations has been formed in
order to ensure rapid implementation of the above.
As we envisage it, each time rough diamonds leave a
producer or rough trading center, those rough diamonds would be
sealed in a standardized manner by an authority accredited by
the international diamond council. This is the only means by
which those diamonds could be imported into the next country.
We understand that it is the nature of the diamond business
and directly related to the profitability of mines and the
efficient manufacturing processes currently employed, that
rough diamonds of various origins and qualities are mixed
together into ``saleable'' parcels. Therefore, our system
allows for the mixture of such parcels by requiring their
further export and import from any mixing or dealing center to
be subject once again to sealing and documentation.
Key to the whole process is monitoring and keeping accounts
of the data flows. In particular, it is essential to be able to
verify and see that one country's exports to another are
matched by the country's official imports from the exporting
country. All accounts should, ultimately, balance. The
establishment of the International Diamond Council is crucial
to this process in that the International Diamond Council would
be required to balance all imports and exports and accredit
importing and exporting authorities in each country.
Just as importantly, it is undoubtedly correct to assume
that a certain degree of deliberate noncompliance may occur.
The International Diamond Council would be required to remove
export accreditation from producer countries where rough
exports are known to exceed production capacity or verified
official imports.
By the same taken, the International Diamond Council would
be able to remove the accreditation of countries to import
diamonds if it was found that those countries were allowing the
import of non-verifiable rough.
We believe that funding for our proposals can be achieved
through charging a minimal levy, both on the import and export
of rough diamonds. Undoubtedly, effectiveness of the system can
be improved over time. However, we believe that we will
immediately close off all the legal loopholes by which conflict
diamonds may currently be entering the trade. This will make
the task of relevant customs and criminal authorities far
easier in terms of identifying and prosecuting perpetrators. In
particular, if all legitimate rough diamonds are knowingly
``declared'', the four percent of conflict rough diamonds will
be impossible for those few companies trading in them to hide.
As a final note, we do not claim that this is an
immediately perfect system or that improvements cannot be made.
However, we believe that these are practically implementable
measures, that they will be highly effective in terms of the
current status quo and that they can be relatively rapidly
implemented without precluding any further additions.
Most significantly, we believe that our proposals will see
immediate results and that they are non-destructive to the
legitimate industry and producer countries. In fact they stand
to enhance the legitimate trade. By adopting a code of conduct,
consumer choice can be made into a positive enhancement of the
diamond industry, without the necessity of negative imagery.
[GRAPHIC] [TIFF OMITTED] T8040.002
[GRAPHIC] [TIFF OMITTED] T8040.003
Chairman Crane. Thank you.
Mr. Yearsley?
STATEMENT OF ALEX YEARSLEY, CAMPAIGNER, GLOBAL WITNESS, LONDON,
ENGLAND
Mr. Yearsley. Good morning, Chairman Crane and members of
the committee that are still left here. My name is Alex
Yearsley and I am a campaigner for Global Witness. I am pleased
to appear at this meeting and I thank you for holding it.
Global Witness are a British-based non-governmental
organization that focuses on the links between environmental
and human rights abuses, especially the impacts of natural
resource exploitation upon countries and their people.
In late 1996, Global Witness began to look at the role of
diamonds in funding the tragic conflicts in Angola. In December
1998, we published our first report on conflict diamonds
called, ``A Rough Trade: The Role of Governments and Companies
in the Angolan Conflict.'' In June of this year, we published
our second report, simply entitled, ``Conflict Diamonds:
Possibilities for the Identification, Certification, and
Control of Diamonds.''
Since late 1996, my colleague and I, Ms. Charmian Gooch,
have traveled extensively to the diamond producing and
marketing countries of Angola, Botswana, Belgium, Sierra Leone,
South Africa, Namibia, Israel, India, and the United States in
order to see whether a solution is possible to the curse of
conflict diamonds. As a result of this work and due to the
extensive contact we have had with many of the companies, trade
associations, government officials, and individuals in the
diamond industry, we believe that, indeed, a solution that is
practical, implementable, WTO compatible, and that will not
damage the legitimate trade but will protect it is entirely
feasible.
Four months ago, my colleague, Ms. Charmian Gooch, gave
evidence at a Congressional hearing on the issue of conflict
diamonds. Today, 127 days later, are we any closer to a
solution? Whilst we wish that a system could have been imposed
many years ago, I believe that we are looking at the possible
solutions to this deadly trade. I think it is fair to say that
we have come a long way in a very short time. This, I believe,
is testimony to the gravity of the situation and some of the
expert work carried out by government, industry, and civil
society individuals.
However, currently as I speak, the diamond trade as a
unified whole has failed to put recognizable or verifiable
controls or certification in place that can reliably attach
conflict-free status to diamonds. However, since late 1998,
there has been a shift in world opinion on the issue of
conflict diamonds which in itself is a new term. No longer is
the soaking up of open market goods from areas of conflict
deemed to be an inevitable consequence of the need to stabilize
the world price of diamonds. Governments have ceased to accept
this as an argument for non-interference, as, and probably more
importantly, have consumers.
The majority of the proposals I am about to suggest are
ideas that are consistent with the suggestions of the Kimberley
Working Group, of which Global Witness is a member. The problem
that these proposals aim to address is that of illicitly traded
rough diamonds being used to finance weapons purchases and fuel
wars in Africa. This problem can only be addressed by all the
relevant stakeholders in the diamond producing, processing, and
consuming nations and all segments of the diamond industry
working together to curb the trade in conflict diamonds whilst
avoiding harm to the legitimate trade.
However, it is important to remember, though, that no
system will be 100 percent watertight, and with a commodity as
valuable and as fungible as diamonds, determined individuals
will always manage to get through. However, what the system
will do is prevent the horrors of the 1990s, when companies
such as DeBeers were able to buy up several hundred million
dollars worth of rough diamonds that originated from the
diamond mines under the control of the UNITA rebels in Angola
on the markets of Tel Aviv, Antwerp, London, and New York.
Possible solutions: The only solution to have been so far
identified that is currently both practical and implementable
is the creation of an international certification system for
all rough diamonds. There are, indeed, many potential
technological solutions, such as laser marking. However, these
are currently not financially viable or practical to implement.
However, I would urge this committee to consider the funding of
continued research in this field.
Much thought and deliberation has gone into how this system
could work, most notably by the Kimberley Working Group. The
general consensus reached by the group regarding the creation
and implementation of an international system has been
explained. Information contained on the certificates would
build upon existing national systems currently in place and
should certainly not water down any existing national systems.
However, as a basic international standard which needs to be
agreed to under best principles, the certificate should contain
a minimum of the following information relating to the diamond
shipment: The total caratage of diamonds, the aggregate value
of the diamonds, and the country of origin, country of origin
meaning extraction.
Global Witness believes that it is necessary to go several
stages beyond the certification scheme and that more specific
requirements are needed for countries where diamonds are mined,
commercially traded, manufactured, and reexported.
Whilst no one within Global Witness professes to be an
expert in international trade law or the WTO, we have carried
out some basic research into this important question. If, as is
expected and hoped, the recommendations of the Pretoria
ministerial meeting goes through United Nations General
Assembly vote to ratification into a global treaty, then there
should be no problems with WTO compatibility and, hence, will
be free from any significant challenges.
However, in conclusion, there are still some countries and
individuals that believe a sledgehammer is being used to crack
a nut. Nothing could be further from the truth. Those with
personal vested interests argue that an international system
will be restrictive of trade and will impact upon the small
miner. Again, nothing could be further from the truth. All that
will happen is that the great majority of illicit smugglers and
those that benefit will be caught.
Whilst not wanting to end on a pessimistic note, I think it
would be folly not to raise this issue here. There are many in
the press and the diamond trade who believe that a diamond
boycott is fast approaching. Whilst I certainly agree with them
regarding the devastating negative impact this will have on
legitimate producers and my complete condemnation for such
action, I can see it gaining ground if concerted action is not
taken soon. Conflict diamonds have been in the public eye for
nearly two years now, and in reality, the diamond trade, whilst
publicly tackling the issue, practically have done as little as
possible to prevent the entry of conflict diamonds into the
global marketplace. Many find words have been offered, but what
has actually changed? And if reports from the marketing centers
of Antwerp and Tel Aviv are to be believed, I am afraid, very
little.
Consumers and the press are and will ask more questions. In
America, jewelry retailers have begun to take action regarding
education campaigns on the issue, and rightly so. The United
States accounts for nearly 65 percent of the world's diamond
jewelry sales per annum and all of those diamonds have to be
imported from somewhere. Indeed, two of the major documentary
series, ``60 Minutes'' and ``20/20'' both have programs planned
for the fall on the issue of conflict diamonds. When the public
and consumers see that the diamond trade as a collective whole
have failed to live up to their extremely laudable goals, they
will judge accordingly, rightly or wrongly. The result is not a
position I would like us even to contemplate.
As a result, I would urge the committee to support any
initiative on the implementation of U.S. legislation, be it
from the diamond trade, civil society, or your own legislators,
that sought to introduce a system for rough controls that is
similar to the Kimberley process, for if we put our trust and
faith in the countries of the world to act with speed with one
voice, it could have devastating consequences for millions of
people in Africa. Thank you.
[The prepared statement follows:]
Statement of Alex Yearsley, Campaigner, Global Witness, London, England
Good morning Chairman Crane and Members of the Committee.
My name is Alex Yearsley and I am a Campaigner for Global
Witness. I am pleased to appear at this hearing and I thank you
for holding it. Global Witness are a British based non
governmental organisation that focuses on the links between
environmental and human rights abuses, especially the impacts
of natural resource exploitation upon countries and their
people. In late 1996 Global Witness began to look at the role
of diamonds in funding the tragic conflict in Angola. In
December 1998 we published our first report on conflict
diamonds called, `A Rough Trade: The role of governments and
companies in the Angolan Conflict,' in June of this year we
published our second report, which hopefully you will have in
front of you and simply entitled, ' Conflict Diamonds,
Possibilities for the Identification, Certification and Control
of Diamonds.' Since late 1996 my colleague and I, Ms. Charmian
Gooch, have travelled extensively to the diamond producing and
marketing countries of Angola, Botswana, Belgium, Sierra Leone,
South Africa, Namibia, Israel, India and the United States and
also to transhipment countries such as Rwanda, Uganda and
Zambia in order to see whether a solution is possible to the
curse of conflict diamonds. As a result of this work and due to
the extensive contact we have had with many of the companies,
trade associations, government officials and individuals in the
diamond industry we believe that indeed a solution that is
practical, implementable, WTO compatible and that will not
damage the legitimate trade, but will protect it is entirely
feasible.
Four months ago my colleague Ms.Charmian Gooch gave
evidence at a Congressional hearing on the issue of conflict
diamonds. Today, 127 days later are we any closer to a
solution? Whilst we wish that a system could have been imposed
many years ago I believe that we are looking at the possible
solutions to this deadly trade--I think it is fair to say that
we have come along way in a very short time. This I believe is
testimony to the gravity of the situation and to some of the
expert work carried out by government, industry and civil
society individuals.
Currently as I speak the diamond trade as a unified whole,
has failed to put recognisable or verifiable controls or
certification in place that can reliably attach `conflict free'
status to diamonds. However since late 1998 there has been a
shift in world opinion on the issue of conflict diamonds, which
in itself is a new term. No longer is the `soaking up' of 'open
market goods' from areas of conflict deemed to be an inevitable
consequence of the need to stabilise the world price of
diamonds.
Governments have ceased to accept this as an argument for
non-interference, as and probably more importantly, have
consumers.It is vital that a long-term solution to this very
complex problem be found, and that can only work if some of the
underlying structures are addressed rather than the commercial
sector of the industry dealing with each problem country on a
case-by-case basis. This is no way to deal with the atrocities
and horrors inflicted upon peoples of affected countries nor to
protect the legitimate diamond economies. It is clear that
there is a need to create a 'chain of custody' within the
diamond trade--a verifiable trail from the mine to the consumer
that can work with existing structures and patterns of trade.
In response to the growing international concern over the
problem of conflict diamonds, the Southern African Development
Community (SADC) producer States (Botswana, Namibia and South
Africa) initiated an African regional initiative to identify
possible solutions. In May 2000, the South African Department
of Minerals and Energy organised a Technical Forum in
Kimberley, South Africa to address the problem of `conflict
diamonds.' It is fair to say that the Kimberley meeting has set
new standards in bringing together different stakeholders from
government, industry and civil society.
Participants were drawn from leading producing nations and
the majority of importing, marketing, cutting and polishing
centres. A working group made up of the relevant stakeholders
was created and has met three times in Angola, Namibia and the
UK. This working group will produce a report, which will be
presented at a Ministerial meeting in Pretoria, South Africa on
September 21st.
The majority of the proposals that I am about to suggest
are ideas that are consistent with the suggestions of this
working group, of which Global Witness is a member. The
problems that these proposals aim to address, is that of
illicitly traded rough diamonds being used to finance weapons
purchases and fuel wars in Africa. This problem can only be
addressed by all the relevant stakeholders in the diamond
producing, processing and consuming nations, and all segments
of the diamond industry working together to curb the trade in
conflict diamonds, whilst avoiding harm to the legitimate
trade.
At this point I would like to mention that some initiatives
have already begun at the national level. However this has only
been due to the intense pressure of international criticism
from civil society, the UN and some governments. In Angola, one
of the most affected countries by conflict diamonds, the
Government has introduced a new administrative system for
controlling diamond exports under agreement with the High
Diamond Council (HRD) in Antwerp, Belgium. It is stated that an
unforgeable Certificate of Origin for the export of all
diamonds is in use. The Government of Angola has also stated
that it is implementing measures to control artisanal mining
and marketing, however, after many repeated requests the
Government of Angola have failed to clarify what these measures
are and how they are to be introduced. It is these measures
that are crucial to the avoidance of conflict diamonds being
sold into the legitimate trade and I urge the Government of
Angola to publicly clarify their position. In Sierra Leone the
government is also developing a new Certification Scheme in co-
operation with the governments of Belgium, the United State's
and the United Kingdom. This system has only been in operation
for a number of days so it is still too early to report on its
success or failure.
It is important to remember though that no system will be
100 percent watertight and with a commodity as valuable and as
fungible as diamonds determined individuals will always manage
to get through. However what this system will do is prevent the
horrors of the 1990s, when companies such as De Beers, were
able to buy up several hundred million dollars worth of rough
diamonds, that originated from the diamond mines under the
control of the Unita rebels in Angola, on the markets of Tel
Aviv, Antwerp, London and New York.
Although conflict diamonds have been sold for nearly the
last 15 years the term has only been in use for about a year
and a half and a final definition still has to be reached. In
Africa it is possible to be clear as to what constitutes
conflict diamonds as being diamonds that originate from areas
controlled by forces fighting the democratically elected and
internationally recognised government of the relevant country.
At this point I would like to emphasise that conflict diamonds
are not an African problem, they are a problem that effects all
those involved in the diamond trade--be they a high street
retailer in New York or a diamond buyer in Sierra Leone.
Possible Solutions
As mentioned in my opening statement the only solution to
have been so far identified that is currently both practical
and implementable is the creation of an international
certification system for all rough diamonds. There are indeed
many potential technological solutions, such as laser marking,
however these are currently not financially viable or practical
to implement. however I would urge this committee to consider
the funding of continued research into this field.
How will an international certification system work?
Much thought and deliberation has gone into how this system
could work, most notably as mentioned earlier by the Kimberley
Working Group. The general consensus reached by the group
regarding the creation and implementation of an international
system is as follows.
`No country would permit the importation of any diamonds
unless they are accompanied by a Certificate of Origin which is
issued by an internationally accepted State or State accredited
body in the exporting country for all diamonds lawfully mined,
purchased or imported in that country by a person accredited by
that authority and that they are exported in a tamper proof
sealed parcel from a mutually notified exit site to a mutually
notified import site that would issue a matching Certificate of
Import after inspection of the diamonds and accompanying
documentation.'
Information contained on the certificates would build upon
existing national systems currently in place and should
certainly not water down any existing national systems. However
as a basic international standard, which needs to be agreed to
under best practice principles, the certificate should contain
the minimum following information relating to the diamond
shipment:
The total caratage of diamonds;
The aggregate value of the diamonds;
The country of origin (extraction);
Global Witness believes that it is necessary to go several
stages beyond this certification scheme and that more specific
requirements are needed for countries where diamonds are mined,
commercially traded, manufactured and re-exported.
All diamond producing and exporting countries should
implement the following measures to ensure that conflict
diamonds can no longer enter in the global market.
route all diamonds through a government run
diamond office;
establish a licensing system for the extraction of
any diamonds, whether the extraction is being carried out by a
large company or an alluvial digger;
establish a system of countercheck paperwork for
extraction licences and applications for export;
establish a registry for official diamond buyers
and exporters;
criminalise the handling of rough diamonds without
an official licence;
exclude the holders of government office, the
military, and the police as well as the close family members of
the aforementioned-from being registered to mine or trade in
diamonds;
publish publicly on a monthly basis diamond
production and export figures.
For countries involved in the trading and importing of
diamonds in parallel with establishing the international
certification system they should:
amend importation legislation to insist on the
country of extraction appearing on importation documents;
insist on all diamond shipment documentation to be
checked against forwarded documentation;
enforce penalties such as the confiscation and the
seizure of the diamonds if the appropriate paperwork is not or
cannot be provided;
physically inspect every parcel of rough diamonds
entering their territory;
ensure that customs officials have access to an
international database of diamond shipments;
publish on a monthly basis all figures for the
import and export of diamonds.
For all diamond traders, polishers, manufacturers
and retailers they should:
only trade in diamonds with a verifiably
legitimate product trail;
implement the measures agreed to at the World
Diamond Council meeting in Antwerp in July 2000.
Will an international certification system be WTO compatible?
Whilst no one within Global Witness professes to be an
expert in international trade law or the WTO we have carried
out some basic preliminary research into this very important
question. If, as is expected and hoped, the recommendations of
the Pretoria Ministerial meeting goes to a United Nations
General Assembly vote for ratification into a global treaty
then there should be no problems with WTO compatibility and
hence will be free from any significant challenges.
How the certification scheme could work under WTO rules:
The following are grounds under which the international
certification scheme could be justified under WTO rules.
If as just mentioned the international certification system
is bought into being pursuant to a UN resolution then a WTO
member could invoke an exception rule contained in Article
XX1(c) of the GATT to justify its certification requirement.
This provision allows a WTO member to take measures that would
otherwise be in breach of its WTO obligations provided that it
is acting in pursuance of its obligations under the United
Nations Charter of the maintenance of international peace and
security.
Under WTO rules it could be possible for a WTO member to
rely on either of the exceptions set down in Article XXI(b)(ii)
or (iii) GATT. These relate respectively to measures taken by a
WTO member which it considers necessary for the protection of
its essential security interests in relating to the traffic in
arms, ammunition and implements of war and to such traffic in
other goods and materials as is carried on directly or
indirectly for the purpose of supplying a military
establishment. Hence in respect of Article XXI.b(ii) it would
be possible for a WTO member to justify the certification
requirement on the basis that non-certified diamonds from the
countries concerned are being used to finance the purchase of
weapons and are thus perpetuating wars in areas of the world
which may effect its essential security interests.
Similarly, in respect of the Article XXI. b(III) exception
it could be argued that the situation in several key diamond
producing countries gives rise to an emergency in international
relations which justified the WTO member concerned introducing
its certification requirement.
In conclusion there are still some countries and
individuals that believe a sledgehammer is being used to crack
a nut. Nothing could be further from the truth. Those with
personal vested interests argue that an international system
will be restrictive of trade and will impact upon the small
miner--again nothing could be further from the truth--all that
will happen is that the great majority of 'illicit diamond'
smugglers and those that benefit will be caught.
Many people talk about the law of unintended consequences
and indeed there will be many unintended consequences if this
system is successfully applied for as a result, not only will
conflict diamonds be taken out of the market place--but so will
'illicit' diamonds which are diamonds that are stolen or
smuggled from a country. This will have many implications as
there are many respectable companies and individuals involved
in the diamond trade that make a good deal of their profits
from this 'illicit' trade and upsetting this particular apple-
cart may be too much to handle for some. However one thing is
certain--if you have nothing to hide then you will have nothing
to fear from this system--it will be interesting to watch who
protests the most at the imposition of this system.
Whilst not wanting to end on a pessimistic note I think it
would be folly not to raise this issue here. There are many in
the press and the diamond trade who believe that a diamond
boycott is fast approaching. Whilst I certainly agree with them
regarding the devastating negative impact this will have on
legitimate producers and my complete condemnation for such
action, I can see it gaining ground if concerted action is not
taken soon. Conflict diamonds have been in the public eye for
nearly 2 years now and in reality, the diamond trade, whilst
publicly tackling the issue, practically have done as little as
possible to prevent the entry of conflict diamonds into the
global market place. Many fine words have been offered but what
has actually changed, and if recent reports from the marketing
centres of Antwerp and Tel Aviv are to be believed, I'm afraid
very little. Consumers and the press are and will ask more
questions. In America jewellery retailers have begun to take
action regarding education campaigns on the issue and rightly
so. The United States accounts for nearly 65 percent of the
worlds diamond jewellery sales per annum and all of those
diamonds are have to be imported from somewhere. Indeed two of
the major documentary series, 60 minutes and 20/20 both have
programmes planned for the Fall on the issue of conflict
diamonds and when the public and consumers see that the diamond
trade as a collective whole have failed to live up to their
extremely laudable goals they will judge accordingly--rightly
or wrongly. The result is not a position I would like us even
to contemplate. As a result I would urge the Committee to
support any initiative on the implementation of US legislation,
be it from the diamond trade, civil society or your own
legislators, that sought to introduce a system for rough
controls that is similar to the one I have proposed in some
detail earlier. For if we put our trust and faith in the
countries of the world to act with speed with one voice it
could have devastating consequences for millions of people in
Africa.
Chairman Crane. Thank you.
Mr. Fischer?
STATEMENT OF JEFFREY FISCHER, PRESIDENT, DIAMOND MANUFACTURERS
AND IMPORTERS ASSOCIATION OF AMERICA, NEW YORK, NEW YORK
Mr. Fischer. Mr. Chairman and members of the subcommittee,
my name is Jeffrey Fischer and I thank you for inviting me to
address you today in my capacity as President of the Diamond
Manufacturers Association of America. Our association includes
virtually all of the major cutting firms in the United States.
Our membership is unanimous in its revulsion of any connection
between diamonds and human suffering and is dedicated to
helping solve the problems which we address today.
As Vice President of the International Diamond
Manufacturers Association, I also serve on the steering
committee of the World Diamond Council and have been actively
involved in its creation.
You have asked me to give you a brief overview of how
diamonds flow from mine to consumer through the diamond
pipeline. Please refer to the chart of the pipeline we have
provided. A single diamond can be sold and resold numerous
times before it ultimately adorns a retail consumer. Diamonds
are frequently traded upstream and downstream between dealers
in the normal course of business. As the diagram illustrates,
even the consumer can eventually become the seller. After all,
the diamond itself endures forever.
What is most important to note from the diagram is the line
drawn between rough and polished diamonds. Most of the dealing
in polished diamonds, jewelry manufacturing and retailing is
done by people who have had no more experience with rough
diamonds than the typical member of Congress. All polished
starts as rough, and once polished remains polished forever.
That transformation is the only irreversible transaction in our
pipeline.
A single rough stone is commonly cut into two polished
diamonds. Often, a piece of rough yields only one stone.
Sometimes it yields multiple stones, or it may never be
polished at all and may be sold for industrial purposes. As we
proceed down the pipeline, the frequency of transactions and
the number of small businesses involved increases dramatically,
while the average size of a typical transaction diminishes in
monetary terms. Throughout the pipeline, these diamonds are
constantly assorted, mixed, and reassorted to meet different
commercial requirements.
To further complicate matters, already polished diamonds
are frequently recut for improvement or repair, altering their
characteristics to varying degrees. Further, polished diamonds
are frequently unset and reset in different jewelry, sometimes
alone, sometimes with other diamonds. Trying to track polished
diamonds effectively would be a nightmare and would accomplish
nothing.
The place for effective, administrable import/export
controls is at the rough level. We believe that the system of
proposed controls adopted at the World Diamond Congress in July
and now being brought forward by the World Diamond Council is
the most practical and most effective means to filter out from
the pipeline the less than four percent of worldwide rough
production which is being misused to fund conflict. By
effectively placing this filter at the rough level, all
resulting polished will comply with conflict-free status and it
will do it at no cost to American taxpayers.
We are practical, realistic, ethical business people. We
seek support from Congress to sever the link between diamonds
and brutality without delay. We hope to actively participate in
the creation of the best possible legislation, legislation that
will not do serious damage to the legitimate Southern African
economies so dependent on diamonds, that will not wreak havoc
with U.S. customs procedures, and will not harm the livelihoods
of millions of people worldwide directly employed by or
benefitting from the diamond industry.
It would be a shame if this precedent-setting constructive
collaboration of government, the U.N., private industry, and
the NGOs results in anything less than the best possible
solution. We implore Congress to consider the World Diamond
Council proposals before taking action. We reiterate our desire
to contribute whatever assistance and expertise we can provide.
Thank you.
[The prepared statement follows:]
Statement of Jeffrey Fischer, President, Diamond Manufacturers and
Importers Association of America, New York, New York
Mr. Chairman and members of the subcommittee, my name is
Jeffrey Fischer and I thank you for inviting me to address you
today in my capacity as president of the Diamond Manufacturers
and Importers Association of America. Our association includes
within its membership virtually all of the United States' major
diamond cutting firms. Our membership is unanimous in its
revulsion of any connection between diamonds and human
suffering, and is dedicated to helping solve the problems,
which we address today. I also serve on the steering committee
of the Would Diamond Council and have been actively involved in
its creation.
I have been invited to give a brief overview of how
diamonds flow from mine to consumer through what we refer to as
the Diamond Pipeline and how diamonds are merchandised along
the way.
Please refer to the chart we have provided titled
``Simplified Schematic of Diamond Pipeline.''
A single diamond can be sold and re-sold numerous times
before it ultimately adorns a retail consumer. Diamonds are
frequently traded ``upstream'' and ``downstream'' between
dealers at marginal price differences in the normal course of
business. As the diagram illustrates, while it is not a
significant part of the picture, even the consumer can
eventually become the seller--after all the diamond ``is
forever.''
From the outside, the diamond market may appear confusing,
fragmented, perhaps even inefficient, but it exemplifies the
free market ideals that our American economic system extols.
What is most important to note from the diagram is the line
drawn between rough and polished diamonds. Most of the polished
dealing, jewelry manufacturing, and retailing is done by people
who have had no more exposure to rough diamonds then the
typical member of Congress. All polished starts as rough, and
once polished, remains polished forever. That transformation is
the only irreversible ``transaction'' in our pipeline.
A single rough stone is commonly polished into two polished
diamonds. Often, a piece of rough yields only one stone,
sometimes it yields multiple stones, or it may never be
polished and sold for industrial purposes.
As we proceed down the pipeline, the frequency of
transactions and the number of small businesses involved
increases dramatically, while the average size of a typical
transaction diminishes in monetary terms. Throughout the
pipeline diamonds are constantly assorted, mixed and re-
assorted to fit differing commercial requirements.
To complicate matters further, already polished diamonds
are frequently ``re-cut'' for improvement or repair, altering
their characteristics to varying degrees. Moreover, polished
diamonds are frequently unset and re-set in different jewelry
sometimes alone, sometimes with other diamonds.
The place for effective administerable import/export
controls is at the rough level. We believe that the system of
proposed controls adopted at the World Diamond Congress in July
and now being brought forward by the World Diamond Council is
the most practical and most effective means to filter out from
the pipeline the less than four percent of world-wide rough
production which is being misused to fund conflict. By
effectively placing this ``filter'' at the rough level, all
resulting polished will comply with ``conflict-free'' status.
We are practical, realistic, business people and as such
are tackling the conflict diamond problem with idealism
strengthened by realism.
We do anticipate seeking assistance from Congress in
severing the link between diamonds and brutality without
delay--but not simply legislation--the best possible
legislation. Legislation that will be most effective and
enforceable, that will not do serious damage to the legitimate
southern African economies so dependent on diamonds, that will
not wreak havoc with US Customs procedures, and will not harm
the livelihoods of millions of people world wide directly
employed by or benefiting from the diamond industry. This
legislation must be fully consistent with an international
inter-governmental agreement backed by industry.
It would be a shame if this precedent setting constructive
collaboration of government, the United Nations, private
industry, and the non-governmental organizations result in
anything less than the best possible solution.We implore
Congress to consider the World Diamond Council's proposal
before taking action. We reiterate our desire to contribute
whatever assistance and expertise we can provide.
Thank you.
[GRAPHIC] [TIFF OMITTED] T8040.004
Chairman Crane. Thank you, Mr. Fischer.
Ms. Burkhalter?
STATEMENT OF HOLLY BURKHALTER, ADVOCACY DIRECTOR, PHYSICIANS
FOR HUMAN RIGHTS
Ms. Burkhalter. Thank you, Chairman Crane. Physicians for
Human Rights welcomes your interest in this issue and we
welcome the diamond industry's remarkable action taken at
Antwerp. We welcome the international process that my friend
and colleague Alex has described to create an international
system for legitimizing an industry. And we welcome Tony Hall's
legislation. But I have a concern about all of these various
developments. All of them are too slow to impact what is going
on in Sierra Leone right now.
Sierra Leone is controlled by the RUF, about half of its
territory, including 90 percent of the diamond-producing areas.
The presence of 16,000 U.N. troops has not made a difference in
the RUF's ability to control and abuse the civilian population.
Recently, I heard a report from the foremost human rights
activist in Sierra Leone, a wonderful woman named Zainab
Bangura, who had just received the word about the RUF's
youngest rape victim, who was 12 months old. So long as the RUF
is in place in Sierra Leone, it will continue to commit abuses
like this, and the key to the RUF maintaining its power and
authority and military supremacy in Sierra Leone is diamond
revenues.
Last year, Liberia, precisely the year that the region was
under the closest international scrutiny and there were the
most protestations about conflict diamonds including a host of
international meetings, Liberia had a boom year for sales,
exporting $290 million worth of stones. So any action that is
taken has to happen very quickly to deprive the RUF by
depriving Liberia and others who transship Sierra Leonean
stones of resources and revenues with which they are buying
weapons to abuse the civilian population.
When you consider, for example, that the Swiss government
released figures that the Liberian sales doubled last year to
$30 million just to Switzerland, that buys a lot of rifles. The
RUF is not buying aircraft carriers. They are not buying cruise
missiles. They are buying guns, and with those guns,
particularly when their adversaries tend to be about five years
old, they can do a great deal of damage.
Thus, I am concerned that the legislation you are
considering right now has a two-year waiver. The RUF can be in
place for two years without seeing a dent in the resources it
gains through the illicit transfer of diamonds through Burkina
Faso, Liberia, Togo, and other countries.
Similarly, with the RUF controls regimen proposed in
Antwerp, which we strongly support, even under the most
optimistic scenario, a global regimen under U.N. auspices that
requires a treaty, that requires every exporting and importing
country in the world to take legislative action, that requires
consistent packaging in every producing country,
understandably, is going to take some months, if not years, to
put in place, and in the meantime, Liberia and others continue
to export diamonds in huge amounts.
My own view is that the United States Congress should take
action immediately to put in place an import regimen that says
the U.S. will not import any cut and finished stones from any
country that does not have an embargo in place on the
importation of rough stones from Liberia.
Basically, this is the kind of legislation that is going to
be required once the Antwerp system is in place. I am simply
urging you to put it in place early and put it in place now. It
is not a substitute for the Antwerp system and it is not a
substitute for the international regimen, but it would allow
the United States to push very hard at the major importing
nations of rough stones, that is to say Israel, India, and
Belgium, that they must themselves throw up import restrictions
on the importation of the principal countries that are
transshipping Sierra Leonean gems.
It does not do any good for Belgium to say solemnly, we are
not importing any stones exported from Sierra Leone when
everybody knows that Sierra Leone is not officially exporting
any stones. Sierra Leonean stones are going almost exclusively
through Liberia, through Burkina, through Togo, through Guinea,
and through other countries. So saying you are not handling
conflict stones while you are allowing a boom number of stones
to come in from Liberia is simply disingenuous.
So my view is that the United States cannot control the
diamond industry. It cannot control the import and export
policies of its allies and those that are the principal players
in the diamond industry, but we can control what we are
importing and we can put import controls in place tomorrow that
would make it impossible for Belgium, India, and Israel to
continue handling rough stones and expect to export the
finished product here.
I would allow you a six-month waiting period if you asked,
because these things cannot be done overnight. But I think the
two-year waiting period in the Hall bill and the ``however long
it takes'' for the Antwerp system is simply too long given the
urgency of the problem in Sierra Leone today. Thank you very
much.
[The prepared statement follows:]
Statement of Holly Burkhalter, Advocacy Director, Physicians for Human
Rights
Introduction:
Good morning, Chairman Crane and Members of the Committee.
My name is Holly Burkhalter, and I am the advocacy director of
Physicians for Human Rights. I am honored to appear at this
hearing; thank you for conducting it. Physicians for Human
Rights is a human rights organization that utilizes the skills
of the medical and scientific professions to investigate and
prevent human rights abuses around the world.
My organization, which conducted an investigation of rape
and sexual violence in Sierra Leone last March, has organized
in collaboration with InterAction and the Africa Advocacy
Network an informal coalition of some seventy U.S.-based human
rights, humanitarian, and religious groups to promote
protection of human rights in Sierra Leone. As a part of that
effort, we have called upon the diamond industry to take
specific action to deprive the Revolutionary United Front (RUF)
of revenues from their control of Sierra Leone's diamond
resources, as a way of denying them access to weapons and
ending their control of and abuses against the civilian
population. It goes without saying that if diamond revenues
were not being used to purchase weapons that are used against
the unarmed population, Physicians for Human Rights would not
be concerned about the RUF's control of Sierra Leone's
diamonds. For it is the link between diamonds, weapons, and
abuses that is of concern, not diamonds in and of themselves.
My remarks today focus on diamonds and violence in Sierra
Leone, but the observations about the need for reforming the
diamond industry apply to Angola as well, and to future
conflicts that may arise in other diamond-producing countries.
Summary:
Physicians for Human Rights is deeply concerned about the
continued sale of diamonds by insurgent forces in Sierra Leone
and Angola, and the flow of weapons to the combatants in
return. We welcome the diamond industry's recent commitment to
developing a global certification regimen that eventually will
marginalize the trade in conflict diamonds, and we urge all
governments to diplomatically support the initiative. In the
meantime, however, it is vitally important that the world's
principal importers of rough diamonds--Belgium, Israel, and
India--immediately enact unilateral prohibitions on the import
of rough diamonds laundered through Liberia, Burkina Faso, and
Togo, and enact a quota on imports of diamonds from the Ivory
Coast and Guinea that is commensurate with their indigenous
diamond producing capacity. We respectfully urge this Committee
to enact legislation this year that prohibits American imports
of diamonds from countries that have not erected meaningful
trade barriers against diamonds arriving from countries known
to launder Sierra Leonean and Angolan gems, or that permit the
diamond industry within its borders to handle stones from such
sources.
Background:
The Committee is familiar with the role that diamonds have
played in funding and fueling appalling human rights abuses in
Sierra Leone; indeed, that is why you have called this hearing.
The misappropriation of Sierra Leone's diamond resources by
insurgents and renegade army officers and soldiers dates back
to the early 1990's, and official corruption and theft of
Sierra Leone's diamond resources is a decades-long problem. But
the linkage between diamonds and conflict only recently riveted
the world's attention because of the RUF's extraordinarily
cruel violence against unarmed men, women, and children. The
insurgents' signature violations include mass rape of women and
children of all ages; widespread amputation of limbs; and
extensive forcible recruitment, deployment, and abuse of child
soldiers.
Physicians for Human Rights' preliminary medical
investigation of human rights abuses conducted last spring
revealed that in areas under RUF control (approximately half of
Sierra Leone) almost every Sierra Leonean institution, town,
village, and family has been weakened, scarred, maimed or
destroyed by the insurgents' reign of terror.\1\ PHR
researchers have been informed by local human rights activists
that in some communities almost every woman and girl has been
raped. Thousands of women and children were abducted by RUF
insurgents to serve as sexual slaves or child combatants and
hundreds are still in their custody.
---------------------------------------------------------------------------
\1\ The RUF is the principal violator of human rights in the
conflict of the past decade, but Sierra Leonean army forces and militia
members (the so-called Karmajors) have also engaged in gross violations
of human rights, including capture and use of child soldiers. PHR is
particularly concerned about abuses attributable to forces under the
authority of Johnny Paul Koromo, who is now allied with the government
of Sierra Leone.
---------------------------------------------------------------------------
The ubiquitous practice of rape is particularly appalling.
This is a crime that carries great shame and stigma for the
victims, and many rape victims who have escaped from the RUF
(often pregnant or with new babies) have been rejected by their
families and communities. These innocent victims, many of whom
survived other gross crimes, such as amputation and mutilation
and many of whom are HIV-positive as a result of rape, need
extensive mental and physical health services as well as job
training and humanitarian assistance. But such services are all
but nonexistent outside of Freetown because of the security
threat that humanitarian organizations face in working in areas
under the RUF's control, and the paucity of such services
generally.
The RUF's violence (as well as war crimes by other parties
to the conflict) has resulted in upwards of a million
noncombatants fleeing the country altogether and another
million being displaced from their homes inside the country.\2\
But it was not until the rebel force attacked U.N. peacekeepers
attempting to disarm and demobilize RUF combatants in the
diamond-mining areas, killing several and taking five hundred
hostage in May, that the international community at last was
moved to outrage and action. That action has included,
appropriately, demands that the RUF be deprived of the revenues
from diamond smuggling that have been crucial to its military
campaign that nearly destroyed Sierra Leone and its people.
---------------------------------------------------------------------------
\2\ These numbers amount to half the population of Sierra Leone
being displaced from their homes.
---------------------------------------------------------------------------
The Revolutionary United Front insurgency appears to have
grown and developed largely because of its access to diamond
resources, with which the rebel force transformed itself into a
formidable fighting force of some 15,000 fighters, well-armed
and well-equipped with everything that money can buy. As
Ambassador Richard Holbrooke stated in his July 31 testimony
before the Security Council, ``A year ago, the RUF were drug-
crazed, machete-wielding thugs. They are now acquiring machine
guns, shoulder-fired surface-to-air missiles and the means to
shoot down aircraft.'' In a region where an AK-47 can be
purchased for $5, millions of dollars in diamond revenues have
permitted the RUF to exert enormous control over the civilian
population of the country.
The RUF does not appear to have an ideological basis for
its war against its own people, nor do ethnic or tribal
divisions offer an explanation for its struggle. Rather, the
insurgents' seizure of territory appears to be based
exclusively on their quest for diamonds, money, and power.
Without its access to Sierra Leone's vast diamond wealth and
the assistance of a powerful patron in neighboring Liberia,
Charles Taylor, the RUF would never have become the military
force that it is today.
Although Liberian officials have taken great umbrage at
denunciations by the Clinton Administration and British
officials at its role in laundering the RUF's illicit diamond
wealth, export statistics are a damning indictment. Official
exports of diamonds from Sierra Leone in recent years have only
averaged 8,500 carats annually, but historically Sierra Leone's
annual production has totalled 530,000 carats. Where are the
missing diamonds? The RUF controls 90 percent of Sierra Leone's
diamond-producing areas and diamonds are most assuredly being
mined and exported. They are entering the world market through
a number of other countries, most notably Liberia.
Liberia's average annual mining capacity is 100,000-150,000
carats, but the official Diamond High Council in Antwerp
recorded Liberian imports into Belgium of more than 31 million
carats over the past five years; an average of 6 million carats
a year. U.S. Government officials estimate that the RUF has
accrued $30--$50 million and perhaps as much as $125 million a
year from the illicit sale of diamonds.\3\
---------------------------------------------------------------------------
\3\ Statement of Ambassador Richard Holbrooke, Exploratory Hearing
on Sierra Leone Diamonds, Security Council, July 31, 2000.
---------------------------------------------------------------------------
The role of neighboring countries in transshipping diamonds
mined elsewhere can be seen in statistical records from the
past decade in Belgium: Guinea exported 2.8 times more than it
produced; Ivory Coast exported eight times more than it
produced; and Liberia exported 40 times more than it
produced.\4\ The Canadian non-governmental organization,
Partnership Africa Canada, which has investigated the issue of
conflict diamonds extensively, has identified the active
involvement of Liberian officials in serving as a fencing
operation for diamonds smuggled from other nations, including
Angola and Sierra Leone.
---------------------------------------------------------------------------
\4\ Notes for UN Security Council Committee on Sierra Leone
Sanctions, Partnership Africa Canada, July 31, 2000.
---------------------------------------------------------------------------
In a report this year, Partnership Africa Canada detailed
the links between diamonds and weapons in Sierra Leone:
``British newspaper accounts in January 1999 reported that late
the previous year the RUF had contracted two British companies
operating 'aging' Boeing aircraft to transport AK47 rifles and
60 mm. portable mortars to rebel-held territory in eastern
Sierra Leone. The 40-ton consignment of arms, from Brataslava
in Slovakia, was undoubtedly acquired with diamond resources.
The arms were crucial in the RUF's successful and highly
destructive attack on Freetown in January 1999.'' \5\
---------------------------------------------------------------------------
\5\ ``The Heart of the Matter, Diamonds and Human Security,''
Partnership Africa Canada, 2000.
---------------------------------------------------------------------------
Other nations, notably Burkina Faso, Guinea,\6\ the Ivory
Coast, and Togo are also implicated in diamond smuggling from
Sierra Leone, according to United Nations experts. Burkina
Faso's president, Blaise Campoare, is intimately involved with
the RUF and a key advisor on its military stratgies. According
to British Foreign Ministry official Stephen Pattison, Campoare
and Charles Taylor regularly meet with RUF military commanders
to discuss strategy. The meetings are chaired either by Taylor
or Campoare. Pattison offered a detailed description of recent
meetings between the RUF, Campoare, and Taylor, describing how
three rebels, one carrying diamonds to pay for `material' from
Burkina Faso, traveled with Charles Taylor to a June 5 meeting
in Ouagadougou; five days later, the rebel commander flew to
Monrovia to meet Taylor, carrying more diamonds to buy
equipment.\7\
---------------------------------------------------------------------------
\6\ Guina, which is said to be a transshipment point for a
significant quantity of insurgent-controlled stones is in a different
category than Liberia and Burkina Faso. There is no evidence of
official Guinean government complicity in the smuggling, and the
authorities have appealed for international assistance in stopping it.
\7\ ``African Nations Threatened with Sanctions,'' The Washington
Post, July 31, 2000.
---------------------------------------------------------------------------
International attention to the role of diamonds in the
ongoing destruction of Sierra Leone because of the U.N. hostage
crisis and fear of possible consumer boycott of diamonds
persuaded the diamond industry in May of this year to undertake
comprehensive reforms. At a meeting of diamond-producing
nations and the industry in Kimberly, South Africa, a plan for
developing a global certification regimen for legitimate
diamonds was developed and a follow-up meeting was held in
Luanda in May. The most significant development was in mid-July
at Antwerp, where the World Diamond Congress (the industry
trade association) formally announced a comprehensive, global
certification plan for assuring that the industry does not
trade in conflict diamonds. A preliminary diplomatic meeting of
key diamond producers and importers was held last week in
Windhoek, Namibia, and ministerial meetings are scheduled for
Pretoria in two weeks to finalize the agreement.
Put overly simply, the industry's proposed global
certification scheme, known as ``rough controls,'' would work
as follows. Rather than attempting to identify and exclude all
conflict stones from the international diamond trade, the
global certification scheme instead creates a certification and
delivery system for legitimate exports and bars all others from
certified cutting and finishing centers. No country is
permitted to import rough diamonds unless packets of these
uncut diamonds have forgery-proof certificates of origin
granted by governments and are in tamper-proof packaging. The
rough exports are logged in an international computer database
when they leave a country and when they enter, so that
discrepancies between exports and imports from any country
would immediately be apparent. An international monitoring
authority, the proposed International Diamond Council, would
conduct oversight of the entire system, and violators would be
prosecuted and banned from the trade.
It is important to note that once rough packets have been
accepted into legitimate, certified cutting and finishing
centers (largely based in Belgium, India, and Israel) the
packets of rough diamonds would be broken up and the country-
of-origin certification would be lost. The industry insists
that it is absolutely impossible to retain such documents for
individual stones once they are cut, polished, traded,
exported, and sold. (And, it is only fair to note that the
diamond industry's most prominent critics, Global Witness and
Partnership Africa Canada, agree with that assessment.) If the
global certification regimen is in place and operating
properly, the industry maintains that it is not necessary to
know the country of origin of stones coming out of its cutting
centers because all stones in legitimate cutting centers will
themselves be legitimate. Countries importing cut and polished
diamonds will not be required to source them to country of
mined origin,\8\ but rather to impose strict prohibitions on
the entry of stones from any country where diamonds are
finished that does not itself have rough controls in place.\9\
---------------------------------------------------------------------------
\8\ At this time the technology does not exist to source the mined
origin of a cut and polished diamond. Experts are often able to
ascertain the source of a run of diamonds in the rough. But once the
alluvial material and other distinctive geological features are removed
in cutting and polishing, it is said to be impossible to identify the
gem's mined origin.
\9\ The United States does not import rough diamonds. Almost all
the diamonds that enter the U.S. are cut and finished elsewhere. Thus
the U.S. is not itself in a position to impose import restrictions on
rough stones.
---------------------------------------------------------------------------
Weakness in the Proposed Plan of Rough Controls:
Mr. Chairman, the diamond industry can justly be praised
for moving quickly in recent months to create a global system
to squeeze out the trade in conflict diamonds in a far-
reaching, comprehensive way. Nonetheless, Physicians for Human
Rights is deeply concerned about what appears to be a
significant weakness in the industry's proposal: transshipment
and export by other countries of rough stones mined in rebel-
controlled Angola and Sierra Leone. The industry's proposed
global certification scheme requires tamper-proof packaging and
double-entry booking in a computer registry. But what is to
prevent a country from officially packaging and sealing
diamonds smuggled from Sierra Leone or Angola as their own, and
exporting them openly and transparently through designated,
monitored exit points? Only in cases where exports grossly
exceed the transshipping State's own capacity (which in the
case of Liberia was so negligible that the country's role in
laundering others' diamonds was immediately apparent) would the
counterfeit be obvious.
The diamond industry has pledged not to deal in conflict
stones, and we welcome that pledge. On August 7, for example,
Indian government officials announced that they will require
Indian traders who import uncut diamonds to declare that they
do not originate from Sierra Leone, Angola, or the Democratic
Republic of Congo. This is an important statement, given that
India is reportedly responsible for finishing over 55 percent
of the world's cut diamonds. But to my knowledge, neither the
key countries that import rough diamonds for cutting and
finishing nor the diamond industry itself has taken action to
bar the importation of rough diamonds from Liberia, Burkina
Faso, or Togo. Since virtually all of Sierra Leone's diamonds
are coming from those countries, not from Sierra Leone itself,
commitments not to import from Sierra Leone are not especially
useful in actually stopping the trade in blood diamonds and the
flow of money and weapons to the RUF.
One measure to deal with this issue has been proposed by
Ian Smillie, the leading non-governmental expert on conflict
diamonds who is now a member of the U.N. Security Council's
expert panel to review the effectiveness of the Sierra Leone
diamond embargo. Mr. Smillie has called for an immediate cap or
exclusion from world markets of those exports of diamonds that
significantly exceed a country's known resource base.\10\ This
provision is included in the working document to be considered
at the upcoming ministerial conference. But the diamond
industry as well as the key importers of rough stones, Israel,
Belgium, and India, should not wait for the establishment of a
global regimen to be completed, which may take years, before
announcing and implementing such a policy today.
---------------------------------------------------------------------------
\10\ A difficulty with this proposal is the inexact nature of
assessing a country's mining capacity. Huge exports from a country with
almost no capacity, like Liberia, are easy to spot. But in countries
like Russia, with virtually unknown but presumably vast resources,
determining mining capacity precisely will be impossible, thus allowing
the possibility that such a country could serve as a transshipment base
for diamonds from anywhere else in the world.
---------------------------------------------------------------------------
In July of this year, some seventy American non-
governmental organizations released a letter calling upon the
World Diamond Congress to immediately announce that no packets
of rough diamonds would be accepted into its cutting centers
from Liberia, Togo, Burkina Faso, the Ivory Coast, or the
Democratic Republic of Congo. This action would not be a
substitute for the comprehensive, global system of rough
controls needed that, indeed, the diamond industry has agreed
to. It is, rather, a vital step urgently required now while the
global certification regimen is settling into place.
It is my understanding that the organized diamond industry
firmly opposes taking this action because there is no
international sanctions regimen in place against those
countries transshipping conflict diamonds, only against rebel-
controlled Angola and Sierra Leone. This is a disappointing
response. The role of Sierra Leone's neighbors, particularly
Liberia and Burkina Faso, in laundering Sierra Leonean diamonds
in exchange for weapons is well known. It should not require a
United Nations embargo to persuade the diamond industry to
actually carry out what it has pledged to do: cease handling
rough stones from Angola and Sierra Leone. Making good on that
oft-stated promise obliges the three major importers and the
industry to immediately prohibit all contact with those
countries that launder conflict diamonds. To date, I have not
seen evidence that that step has been taken. Moreover, the
bountiful exports of diamonds within the last year from non-
producing Liberia make it inescapably clear that Sierra Leonean
diamonds are entering the industry's cutting centers and are
being traded and sold in the international market.
The United Nations Sanctions Committee's expert commission
on the Sierra Leonean diamond embargo has been tasked to make
its report on October 31. At that time, the United Nations may
enlarge the Sierra Leonean diamond embargo to include Liberia
and perhaps other countries. Let us hope that the three major
importing countries and the diamond industry will then do what
it should have done years ago: publicly announce that it is
closing the doors of its cutting centers to all diamonds
emanating from Liberia and other countries known to transship
Sierra Leonean gems. Those centers concerned with their
international reputation would do well to immediately develop
and publicize a protocol for identifying and excluding such
stones and invite the U.N.'s investigative body to regularly
inspect its surveillance and vetting operations.
Physicians for Human Rights strongly supports the
industry's proposed global certification regimen of rough
controls adopted in Antwerp. But even under the most optimistic
timeline for the plan's adoption by the international
community, it seems unlikely that the program can be put in
place in less than a year or two. Accordingly, it will be a
very long time before these reforms choke off the RUF and
UNITA's trade in diamonds and their ability to purchase weapons
with the proceeds.
American officials have reported that Liberia exported $290
million in smuggled diamonds last year alone. A Swiss customs
official reported on August 9 of this year that diamond imports
from Liberia have soared in the past year, and estimate that
many are coming from rebel-held areas of Sierra Leone. Swiss
diamond imports from Liberia have totaled almost $30 million
this year, compared with $15 million last year, and the quality
of the stones make it clear that they did not come from
Liberia.\11\
---------------------------------------------------------------------------
\11\ ``Liberian Exports Flood Into Switzerland,'' Associated Press,
August 9, 2000.
---------------------------------------------------------------------------
Legislation:
Physicians for Human Rights and our partners in the non-
governmental community applaud Representative Tony Hall and his
cosponsors for highlighting the link between diamonds and human
rights violations, and for proposing to take action to limit
their importation into the United States. We have endorsed the
original CARAT Act, and urged our physician members to
encourage their own representatives in Congress to co-sponsor
it.
t is my understanding that Congressman Hall's revised CARAT
Act requires that diamonds entering the United States be
accompanied by a certificate of mined origin, which can be
waived if the rough controls regimen is in place and is
effective in stopping the trade in conflict diamonds. The Act's
import restrictions would not go into effect until two years
after enactment.
We would welcome action on the Hall-Wolf bill this session.
It presses the diamond industry to implement what it has
pledged to do, and it holds out the possibility of imposing a
more rigorous import regimen--country-of-origin certification--
if it does not. Nonetheless, I still have concerns that neither
the CARAT Act nor the global certification scheme of rough
controls will have any impact in the short run on the trade in
RUF and UNITA-controlled diamonds, and will do little to
deprive those forces of their diamond revenue and thus their
means of waging war.
Without meaning in any way to undermine either the CARAT
Act or the global certification regimen, I would like to
suggest that the Committee consider revising the legislation.
The bill should include a prohibition on U.S. importation of
any finished diamonds from countries, specifically including
Belgium, India, and Israel, which have not erected effective
national embargoes on the importation of rough diamonds from
Liberia, Togo, Burkina Faso, and the DRC, and which have not
prohibited the cutting centers that operate within their
national boundaries from handling such stones if they are
smuggled in. The U.S. could also prohibit the entry of finished
diamonds from countries that have not set a quota on the volume
of diamonds that may be imported that is commensurate with the
exporting country's own mining capacity. Thus the Ivory Coast
and Guinea, which have their own diamond production, could
export, but they could not export amounts disproportionate to
their own production, that is, launder diamonds for others.
The United States is not in a position to regulate the
diamond industry, nor can it force any other government to take
the actions that are required for the global certification
program to become a reality. The only thing that the U.S. can
do is control its own imports. By conditioning American imports
of finished diamonds on the actions of the world's largest
importers of rough stones--Belgium, Israel, and India--the U.S.
would encourage those governments to take meaningful action in
the short run that could help stem the flow of revenues to the
RUF and UNITA almost immediately. Such an action is not a
substitute for the global system that the diamond industry has
agreed to, and which I believe is vitally needed. But it does
encourage in a meaningful way very rapid action on the part of
both the diamond industry and the world's leading importers of
rough stones to cease importing conflict stones exported by
Liberia, Burkina Faso, and others.
Conclusion:
Mr. Chairman, I would not want to suggest by my testimony
that diamonds alone are the problem or the answer to the
heartbreaking human rights crisis in Sierra Leone. It is
crucial, for example, that the United Nations and its strongest
members take immediate and forceful steps to implement the
international weapons embargo on the RUF, in place since 1997
and the arms embargo against Liberia, which was imposed in
1992. The United Nations Security Council must put some teeth
into these measures by establishing responsible monitoring
bodies and publicly report and condemn violations. Moreover,
competent troops should be posted at the Sierra Leonean-
Liberian border, at airfields, and other delivery points to
seize shipments of weapons to the RUF. U.N. forces should take
immediate action to disrupt the RUF's weapons supply lines,
including on roads and waterways, airports and airfields.\12\
---------------------------------------------------------------------------
\12\ For detailed information on arms flows to the RUF, see
``Neglected Arms Embargo on Sierra Leone Rebels,'' a Human Rights Watch
briefing paper dated May 15, 2000.
---------------------------------------------------------------------------
What is needed most of all, in my opinion, is for the
United Nations, generously supported by the U.S. and its
allies, to implement a forceful military strategy to dislodge
the RUF from the areas that it controls (including the diamond-
producing regions) and defeat, demilitarize and demobilize the
insurgents. International peacekeeping forces should establish
security and protection for all civilians throughout Sierra
Leone so that they may rebuild their shattered lives and
country. Extensive humanitarian and development assistance
should be provided once security is established so that Sierra
Leonean refugees in Guinea can return home. Those implicated in
human rights abuses, particularly those in command positions,
should be apprehended and turned over to the Sierra Leonean
authorities, and, eventually, to the international tribunal
that the United Nations is establishing to prosecute war crimes
in Sierra Leone for investigation and prosecution.
Most of the members of the non-governmental coalition that
Physicians for Human Rights has helped organize to work on
conflict diamonds have been equally outspoken about the need
for protection of the civilian population and enforcement of
international human rights standards in Sierra Leone. We are
very grateful for the attention that Representatives Hall and
Wolf have given to the issue of human rights in Sierra Leone
and the role that diamonds have played in the country's
destruction, and appreciate the Chairman and members of this
Committee highlighting our concerns so prominently at this
important hearing.
Thank you.
Chairman Crane. Thank you.
Mr. Jolis?
STATEMENT OF J.F. ``JACK'' JOLIS, PRESIDENT, ROUGH DIAMOND
CONSULTANCY, ANTWERP, BELGIUM
Mr. Jolis. Thank you, Mr. Chairman. I am an American
diamond dealer/consultant and have worked for 30 years in every
part of the globe where diamonds are mined, bought, sold, and
cut. Having for the past year or so read and heard so much
about how the relatively small diamond business is responsible
for funding the maniacal carnage we witness pretty much
throughout Africa, I feel compelled to reply.
Let us take a look at Africa and its suddenly infamous
diamond producing countries. Sierra Leone--even if not a single
diamond existed there, not a man, woman, or child would escape
being amputated or beheaded by a rusty machete. Let us not
waste valuable time talking about peacekeeping or mercenary
forces in Sierra. Peacekeepers? They consist mostly of Nigerian
gangsters assisted by some Guinea gangsters who are not only
better armed but even more intent on killing anyone who gets in
their way of putting their hands on the diamonds.
And in Sierra, there is a lovely bunch of drugged-up thugs
called the KAMAJORS, who, while professing to support the
current government, find themselves fighting their allies,
enemies, even themselves, not for diamonds but because they are
drugged and all they know what to do is fight. You think they
would know how to sell an uncut diamond?
Do diamonds pay for this mayhem? I doubt it, not when you
are offered, as I was recently in Kinshasa, a fully-loaded AK-
47 for U.S. $10. To top it all, the Leonean government hires a
bunch of quaintly named South African mercenaries called
Executive Outcomes who are not only paid by the government with
diamonds but are even given diamond fields to exploit, and this
by a government supported by the U.N. that is bleating about
their rebellion being financed by diamonds.
Angola--sure, for the time being, most of the diamond
fields lie in UNITA hands, but these areas change hands
according to the fortunes of war. In any case, the MPLA also
have diamond fields of their own and I happen to know at first
hand of many of the MPLA's generals who sell their diamonds to
UNITA. The MPLA have infinitely more money, in any case, from
oil to buy weapons than UNITA has diamonds, not to mention the
fact that UNITA diamonds, which are mostly on the western bank
of the Cuango River, are in no way distinguishable from the
same diamonds found on the Congo side of the river.
There is a lot of uniformed talk of some sort of invisible
infrared internal marking scheme for polished stones, which,
even were it possible, which it is not, would immediately wipe
out the entire category of D-flawless polished stones.
And then there is a theory about branding rough diamonds.
Eh? First of all, branding a rough diamond makes about as much
sense as branding a cow and then trying to determine where the
resulting steak came from. And as for the notion of branding a
cut diamond along its border with, say, something like
``DeBeers 2001X,'' any half-clever diamond cutter could do the
same using the same number he might have come across a similar-
sized DeBeers stone.
So there is a lot of uninformed chatter about identifying
the providence of diamonds, whether cut or uncut. No can do,
certainly not in any court of law. Any expert will be countered
by an opposing expert.
Which brings me back to what is currently known as D.R.
Congo, a country with at least three different areas producing
distinctly different diamonds, some rebel, some government. Mix
them together in a single parcel and the job of determining
which are the clean stones becomes even more impossible.
Angola stones? Take some from UNITA-held zones, mix them
with stones from the MPLA, add some stones from Ivory Coast,
some others from Guinea, the Central African Republic, and what
have you got? A big load of nothing that is remotely
identifiable by anyone reputable.
If diamonds were the proximate cause of African tribal
butchery, how can one explain the Congolese civil war of 1960?
Pro-Western Moise Tschombe tried to establish independence for
his copper-rich and diamond-rich province today known as
Kolwezi. He was foiled by the U.N.-sponsored Kasavubu, who in
turn was overthrown by the equally U.N.-sponsored Mobutu, whose
people killed the communist Lumumba. But the point of all this
ancient history is that at the time, nobody even uttered the
word ``diamond.'' It was all ``copper.''
And do you remember the civil war in Nigeria between the
breakaway Biafra and the then-Federal Government? What did
diamonds have to do with that butchery? Right, exactly nothing.
Of the five civil wars in the Tchad, over diamonds? Sorry,
nary a one. Or even the 40-plus-year civil war in the Sudan,
over diamonds? The only diamond you might find in the Sudan
would be lodged between the Mahdi's cadaver's two front teeth.
And the unspeakable mangle-shambles that used to be
Somalia, any diamonds involved in that particular charnel
house? I do not think so. And finally, in the worst killing
fields since Cambodia is the incredibly barbaric Hutu-Tutsi
mutual genocide. Is it in any way financed by diamonds of the
blood kind or any other kind? No.
That Africa is in a dreadful and perhaps even terminal mess
is undeniable, but to fob off this horrible internecine
catastrophe on the fact that diamonds, along with a heck of a
lot of other stuff, abound there is to utterly lose any claim
to a perspective on the problem. As I said earlier, you could
take away every diamond that exists under the soil in Africa
and not a single human being who is currently being killed,
tortured, or maimed would be spared.
An interesting case in point is the Central African
Republic, where the two major tribes, the Bayas and the Bandas,
have been both at each other's throats since time immemorial,
and yet diamonds are found in profusion in both these tribes'
areas. They are manifestly not killing each other over
diamonds.
There are really only two possible solutions to the
problem. First, and this is not really much of a solution at
all, is to let them chop each other up until the last man is
standing.
Second would be to send in the only men who are competent
and incorruptible enough to do the job properly, the British
SAS and their Parachute Regiment, the French Foreign Legion and
their Régiments Etranger Parachutés, and the U.S.
Special Forces and our Delta Force. Neo-colonialism? You
betcha, and 99 percent of the people of the embattled Africa
would kiss your feet for it.
But ban blood or any other diamonds? First of all, such a
plan would not succeed. Diamonds are like fine art. They are
non-fungible and by definition are not controllable. And even
in the unlikely event that such an anti-diamond scheme did have
a measure of success, the only people it would hurt would be
the already dirt-poor, hard working, artisan/digger poor devils
digging away in the third world, certainly not diamond dealers
who have stocks like Uncle Scrooge had a swimming pool
overflowing with golden spondulics.
Thank you, Mr. Chairman.
[The prepared statement follows:]
Statement of J.F. ``Jack'' Jolis, President, Rough Diamond Consultancy,
Antwerp, Belgium
DIAMONDS: AND AFRICAN CONFLICTS
I am an American diamond dealer/consultant and have worked
for thirty years in every part of the globe where diamonds are
mined, bought, sold and cut. Having for the past year or so
read and heard so much about how the relatively small diamond
business is responsible for ``funding'' the maniacal carnage we
witness pretty much throughout Africa, I feel compelled to
reply.
Let's take a look at Africa and its suddenly infamous
diamond producing countries:
Sierra Leone: Even if not a single diamond existed there,
not a man, woman or child would escape being amputated or
beheaded by a rusty machete.
Let us not waste valuable time talking about ``peace-
keeping'' or ``mercenary'' forces in Sierra. ``Peacekeepers''?
They consist mostly of Nigerian gangsters, assisted by some
Guinean gangsters, who are not only better armed, but even more
intent on killing anyone who gets in their way of putting their
hands on ``the diamonds.'' And in Sierra, there is a lovely
bunch of drugged-up thugs called the KAMAJORS, who, while
professing to support the current government find themselves
fighting their allies, enemies, even themselves--not for
diamonds, but because they're drugged and all they know what to
do is fight. You think they would know how to sell an uncut
diamond?
Do diamonds pay for this mayhem? I doubt it, not when you
are offered, as I was recently in Kinshasa, a fully-loaded AK-
47 for $10. To top it all , the Leonian government hires a
bunch of quaintly named South African mercenaries called
``Executive Outcomes'' who are not only paid by the 'government
with diamonds, but are even given diamond ``fields'' to
exploit. And this by a government, supported by the UN, that is
bleating about their ``rebellion'' being financed by diamonds.
Angola. Sure, for the time being most of the ``diamond
fields'' lie in UNITA hands, but these areas change hands
according to the fortunes of war. In ANY case, the MPLA ALSO
have diamond fields of their own and, I happen to know at first
hand of many of the MPLA's ``generals'' who sell THEIR diamonds
to UNITA. The MPLA have infinitely more money from oil to buy
weapons than UNITA has diamonds. Not to mention the fact that
the UNITA diamonds which are mostly on the western bank of the
Cuango River are, IN NO WAY distinguishable from the same
diamonds found on the Congo side of the river. So?
There is a lot of uninformed talk of some sort of
``invisible infra-red internal marking'' scheme for polished
stones, which, even were it possible, which it isn't, would
immediately wipe out the entire category of ``D-Flawless''
polished stones. And then there is a theory about ``branding''
rough diamonds. Eh? First of all, ``branding'' a rough diamond
makes about as much sense as branding a cow and then
determining where the resulting steak came from. And, as for
the notion of ``branding'' a cut diamond along its border
(with, say, something like ``DeBeers 2001 X) ``, any half-
clever diamond cutter could do the same, using the same number
he might have come across a similar-sized DeBeers stone.
So there is a lot of uninformed chatter about ``identifying
the provenance of diamonds,'' whether cut or un-cut. No can do.
Certainly not in any court of law--any ``expert'' will be
countered by an opposing ``expert.''
Which brings me back to what is currently known as the D.R.
Congo, a country with at least 3 different areas producing
distinctly different diamonds. Some ``rebel.'' Some
``government.'' Mix them together into a single parcel, and the
job of determining which are the ``clean'' stones becomes even
more impossible Angola stones? Take some from UNITA-held zones,
mix them with stones from the MPLA, add some stones from Ivory
Coast, and some others from Guinea and the Central African
Republic, and you've got what? A big load of nothing that is
remotely identifiable by anyone reputable.
If diamonds were the proximate cause of African tribal
butchery, how can one explain the Congolese civil war of 1960?
Pro-Western Moise Tschombe tried to establish independence for
his copper-rich (and diamond-rich) province today known as
Kolwezi. He was foiled by the UN-sponsored Kasavubu, who in
turn was overthrown by the equally UN-sponsored Mobutu, whose
people killed the communist Lumumba--but the point of all this
ancient history is that at the time nobody even uttered the
word ``diamond''--it was all COPPER!
And do you remember the civil war in Nigeria, between the
breakaway Biafra and the then-"Federal'' Government? What did
diamonds have to do with that butchery? Right. Exactly nothing.
Or the 5 civil wars in the Tchad? Over diamonds. Sorry.
Nary a one.
Or, even the 40+-year civil war in the Sudan. Over
diamonds? The only diamond you might find in the Sudan would be
lodged between the Mahdi's cadaver's 2 front teeth.
And the unspeakable mangle-shambles that used to be
Somalia. Any diamonds involved in that particular charnel
house? I don't think so.
And finally, in the worst killing fields since Cambodia is
the incredibly barbaric HutuTutsi mutual genocide in any way
financed by diamonds? Of the ``blood'' kind or any other? No.
That Africa is in a dreadful and perhaps even terminal mess
is undeniable. But to fob off this horrible internecine
catastrophe on the fact that diamonds--along with a heck of a
lot of other stuff--abound there is to utterly lose any claim
to a perspective on the problem. As I said earlier, you could
take away every diamond that exists under the soil there and
not a single human being who is currently being killed tortured
or maimed would be spared.
(An interesting case in point is the Central African
Republic, where the two major tribes, the Bayas and the Bandas,
have been at each others' throats since time immemorial. And
yet diamonds are found in profusion in BOTH these tribes'
areas. They are manifestly not killing each other for
diamonds.)
There are really only two possible solutions to the
problem:
First, and this is not really much of a solution at all, is
to let them chop each other up until The Last Man Is Standing.
Second would be to send in the only men who are competent
and incorruptible enough to do the Job properly: The British
SAS and their Parachute Regiment; The French Foreign Legion and
their Regiments Etranger Parachutes; and the US Special Forces
and our Delta Force. Neo-colonialism? You betcha. And 99
percent of the people of embattled Africa would kiss your feet
for it.
But ban ``blood''--or any other--diamonds? First of all,
such a plan would not succeed . Diamonds, like fine art, are
non-fungible, and by definition, are not ``controllable.'' And,
even in the unlikely event that such an anti-diamond scheme DID
have a measure of success, the only people it would hurt would
be the already dirt-poor hard-working artisan/digger poor
devils, digging away in the Third World--certainly not diamond
dealers who have stocks like Unca Scrooge had a swimming pool
overflowing with golden spondulics.
Chairman Crane. Thank you, Mr. Jolis.
Mr. Boyajian?
STATEMENT OF WILLIAM E. BOYAJIAN, PRESIDENT, GEMOLOGICAL
INSTITUTE OF AMERICA, CARLSBAD, CALIFORNIA, ON BEHALF OF WORLD
DIAMOND COUNCIL
Mr. Boyajian. Mr. Chairman, I am Bill Boyajian, President
of the Gemological Institute of America, GIA. GIA is a
nonprofit 501(c)(3) public benefit corporation. As a nonprofit
education and research institution, we ensure the public trust
in diamonds and gemstones by educating and serving the gem and
jewelry industry worldwide. GIA is headquartered on a sprawling
18-acre campus in Carlsbad, California, and has a significant
office and laboratory in New York City. We employ some 700
professionals and have campus facilities in eight countries on
three continents.
Everyone concerned believes that it is in the long-term
best interest of the trade and the public that the exploitation
of diamond resources to fuel war and conflict in African
countries be halted immediately. Over the past year, the
Gemological Institute of America has been asked to research,
review, and comment on the feasibility of identification of
country of origin of rough and polished gem diamonds. I will
speak very briefly today on GIA's view of those possibilities
and limitations as they currently exist.
From the outset, let me state that based upon all of our
current knowledge and that which we have been able to glean
from the literature and other noted experts, there is no known
scientific and practical means for determining the country of
origin of rough and polished gem diamonds. And while some have
suggested that visual means alone will distinguish rough
diamond origin, we would view this as highly problematic and
overly subjective, at best.
We believe that if steps must be taken now to curtail the
flow of so-called conflict diamonds into the trade, and we
believe this to be so, such steps must entail the tracking of
diamonds in the rough, from mine through manufacturer, in order
to assure the retail community and ultimately the consumer that
diamonds entering the marketplace are conflict-free. To
succeed, such a tracking system will require the increased
cooperation of all organizations in the diamond industry and
all governments of countries involved in the mining,
exportation, importation, manufacturing, and/or distribution of
rough gem diamonds.
Of the 100-plus millions of carats of diamonds mined
annually, only a few percent actually originate in countries of
known civil conflict. In this regard, it should be understood
that country of origin means the country where diamonds are
mined or extracted and not necessarily the places where they
were deposited in the earth's crust. Diamonds originally
emplaced in several primary deposits in one or more countries
could be weathered out of their original host rock, transported
by rivers, and become concentrated in a secondary deposit in
another country. I might add that many of the diamond deposits
in the countries of conflict in Africa are those of secondary
deposits. That is, they have been carried there through the
transport of rivers and weathered from their original host.
If identifying characteristics existed for the diamonds
from a particular primary deposit, these features may or may
not be retained during the weathering and transport of the
diamonds. Moreover, from a single secondary deposit in a
conflict country, one could potentially find diamonds with
characteristics distinctive of several primary deposits in one
or more countries. Therefore, these characteristics would
provide no information on where the diamonds were mined but
only where they were first brought to the surface, possibly in
a neighboring non-conflict country that depends on diamond
exports to maintain economic and social stability.
Even if a high proportion of rough diamonds from a
particular geographic area does not have some distinctive
physical characteristics, many such characteristics are lost
during the manufacturing process. This means that even fewer
characteristics exist for determining the geographic source of
polished diamonds.
Analogous to studying the country of origin of diamonds is
that of the country of origin of various colored stones--ruby,
sapphire, emerald in particular. Because GIA has long felt that
the best research data and expertise has not resulted in a
standard of consistency and scientific backing acceptable to
our institution, we have never entered the arena of providing
origin reports on colored gemstones and continue to hold this
fundamental view.
Likewise, except and until the advent of so-called conflict
diamonds, GIA as a world authority on polished diamonds has
never seriously been asked or even contemplated the prospects
of attempting to determine the country of origin of rough
diamonds.
In summary, based upon current knowledge, there is no known
scientific way to determine the country of origin of rough or
polished gem diamonds, nor do we foresee practical ways being
developed in the near future. Likewise, we would be highly
suspect of those who might characterize visual observation
alone as a means of rough diamond identification. Such claims,
in our view, are fraught with danger.
Therefore, a chain of warranties or a system of
certification to track diamonds from their country of origin
through the manufacturing process and ultimately to the
retailer and the consumer would provide a better alternative at
this time to the goal of preventing the sale of conflict
diamonds. As a nonprofit public benefit institution, GIA is
committed to assisting the trade, governments, and non-
governmental organizations in whatever way possible to curtail
the mining and flow of conflict diamonds.
Chairman Crane, as President of the Gemological Institute
of America, I have also been asked to serve on the World
Diamond Council and have been asked to chair the technical
committee of that council and our goal would be to implement
the Antwerp resolution as it was currently passed. Thank you.
[The prepared statement follows:]
Statement of William E. Boyajian, President, Gemological Institute of
America, Carlsbad, California, on behalf of World Diamond Council
Introduction
Mr. Chairman and members of the subcommittee, I am William
E. Boyajian, President of the Gemological Institute of America
(GIA). Founded in 1931, GIA is the largest educational and
research institution in the world, with some 700 employees on
campuses in eight countries on three continents. Incorporated
as a 501(c) 3 public benefit corporation, GIA's mission is to
educate and serve the gem and jewelry industry, creating
standards of professionalism to benefit the trade and,
therefore, uphold the public trust in diamonds and other
gemstones. We educate some 15,000 people each year in
gemological training programs and conduct state-of-the-art
gemological research to ensure the integrity of gems. Our Gem
Trade Laboratory grades most of the major polished diamonds
that are bought and sold around the world each year, estimated
at a value of some $3 billion at the wholesale level. We also
design and manufacture fine gemological testing equipment to
assist jewelers in identifying and grading diamonds and other
gemstones.
Over the past 18 months, interest has been expressed by
certain governmental and non-governmental organizations in
establishing a mechanism to determine the ``country of origin''
of gem diamonds. These organizations suggest that if such a
determination could be made, the diamonds being mined in
particular conflict countries could be identified and banned
from international commerce. This action would deprive the
combatants involved of an important source of revenue for their
activities.
Of the hundred-plus millions of carats of diamonds produced
annually, only a few percent originate in conflict countries.
Despite this fact, public pressure is being placed on the
jewelry trade to quickly develop a mechanism to segregate those
diamonds that are illicit. GIA has therefore been asked to
research, review and comment on the feasibility of
identification of country of origin of rough and polished gem
diamonds. This report sets forth the position of GIA as to
whether the country of origin for gem diamonds can be
determined.
There are two different parts to the problem of determining
the country of origin--identifying the geographic source of
rough or polished diamonds, and tracking diamonds from their
source through the diamond ``pipeline.'' Can an analytical
means be developed to determine the geographic source of rough
and polished diamonds whose origins are uncertain? Can a
procedure be organized for tracking particular diamonds from
the mine through manufacturing and retailing to the consumer,
to prevent diamonds originating in certain countries from being
sold? This report will address these questions.
Based upon current knowledge, no practical means exist
today for determining the country of origin of rough or
polished diamonds, although means may be developed to make such
a determination for some percentage of rough diamonds. We
believe that steps can be taken to track diamonds from the mine
through to the manufacturer and retailer. To succeed, such a
tracking system would require increased cooperation among all
organizations of the diamond industry.
This report will focus on discussing the technical
considerations involved in determining the country of origin
for rough and polished diamonds, and will conclude with a few
remarks about a diamond tracking system. Before discussing
these issues, it is first necessary to make a few preliminary
comments as background information.
General Comments Relevant to Determining Country of Origin
Diamond Formation. Diamonds crystallize deep in the earth's
mantle, and are brought to the surface through magmatic
activity. At the surface, the diamonds occur in certain kinds
of volcanic rocks (kimberlites and lamproites). From the
primary deposits in these rocks, some diamonds are released
during rock weathering and can become concentrated in secondary
alluvial deposits formed along rivers, or in the marine
deposits under the ocean along the western coast of southern
Africa.
Like other minerals and rocks, diamond crystals contain
within themselves a record of their geologic history in terms
of their morphology, detailed chemical composition, growth and
etching features, and inclusions. Interpreting this record is a
current focus of geological research to better understand the
physical conditions and processes that take place where
diamonds crystallize in the mantle. For scientists, diamonds
are particularly valued for this purpose because they, and
their mineral inclusions, undergo so little alteration after
the diamonds are emplaced in the crust. Thus, this record
provides much information on the conditions of growth of
diamonds, and some information on their post-growth conditions,
in the mantle. However, the record provides little or no
information on the geographic source of diamonds in the earth's
crust where they are found and mined. Thus, the features of
diamonds may provide no indication of their country of origin.
Meaning of ``country of origin.'' In discussions on the
subject of determining geographic source, it should be
understood that country of origin means the country where the
diamonds are mined or extracted, and not necessarily the places
where they were deposited in the earth's crust. Diamonds
originally emplaced in several primary deposits (in one or more
countries) could be weathered out of their original host rock,
be transported by rivers, and become concentrated in a
secondary deposit in another country. If identifying
characteristics existed for the diamonds from a particular
primary deposit, these features may or may not be retained
during the weathering and transport of the diamonds to
secondary deposits. Moreover, from a single secondary deposit
in a conflict country, one could potentially find diamonds with
characteristics distinctive of several primary deposits in one
or more other countries. Therefore, these characteristics would
provide no information on where the diamonds were mined (i.e.,
in a conflict country), but only where they were deposited,
possibly in a neighboring non-conflict country that depends on
diamond exports to maintain economic and social stability.
Distance from the source. As diamonds travel further from
their geographic source through the diamond ``pipeline,'' the
likelihood of recognizing their source decreases. In most cases
today, a manufacturer purchases an assortment of rough
diamonds, possibly from a number of different geographic
sources that are not all fully known to them, to polish as
gemstones. The contents of this assortment are often determined
based upon the particular needs and capabilities of the
manufacturer. Mixing diamonds from several sources also
provides for a more equitable distribution of diamonds among
manufacturers. These factors all contribute to an uncertainty
about geographic source as the diamonds are bought and sold in
the trade.
Loss of features during manufacturing. Even if a high
proportion of rough diamonds from a geographic area does have
some distinctive physical characteristics, many such
characteristics are lost during the manufacturing process to
produce polished gemstones. This means that even fewer
characteristics exist for determining the geographic source of
polished diamonds.
Acceptable proof of a country of origin. Among the
organizations advocating that the jewelry trade takes steps to
identify diamonds from conflict countries, there has yet to be
much discussion on what would be considered acceptable proof
that the features of particular diamonds establish that they do
or do not come from a conflict country.
Unique Characteristics of a Diamond
Determination of the country of origin depends upon the
existence of characteristics that are unique to diamonds from a
particular geographic source. Possible distinctive
characteristics include visual features of the rough or
polished diamonds, gemological properties, spectrum bands, and
chemical composition data. To the extent that the diamond
crystals in a deposit have a common geologic history, they may
have such similar characteristics that are unique to that
deposit. Documenting these characteristics may then allow the
determination of a country of origin. Such unique
characteristics would need to be established on the basis of
statistical studies of numerous diamonds from an area, with the
resulting information being compiled into a database. Many
diamonds from all similar sources would have to be investigated
to check claims of uniqueness.
Characteristics of diamonds that are potentially diagnostic
of geographic source fall into several categories:
1) Visual features of rough diamonds--size, crystal
morphology, surface features (resulting from growth, etching,
abrasion, and radiation exposure), color, and inclusions.
2) Visual features of polished diamonds--size, color,
clarity, transparency, fluorescence, inclusions, and quality of
polish.
3) Physical properties--visible, infrared, luminescence,
and Raman spectra, anomalous birefringence patterns, and
measurements of other physical property.
4) Detailed chemical composition analysis--trace elements,
trace element ratios, and isotopic data.
Determining unique characteristics. Geologic studies have
shown that in some primary deposits, all the diamond crystals
have a common geologic history. In other deposits, the diamonds
have differing histories (that is, they originated from
different areas in the mantle). Secondary alluvial deposits
contain diamond crystals from all primary deposits sampled by
the waters that transported the crystals to the alluvial
deposit; in some cases, this transport can extend over great
distances. At present, there exist scattered scientific studies
of diamonds from several deposits, limited mining records, and
anecdotal evidence which suggest that, on average, diamond
crystals from some deposits do have some identifying
characteristics (such as shape, surface features, and color).
However, the existing data are too limited and too sketchy to
identify the place of origin of any given random diamond
crystal with a high degree of certainty.
In order to determine if certain characteristics are
typical of diamonds from a geographic source, one would need to
gather many kinds of analytical data. These data would be
required from a sufficient number of diamonds known to be from
a particular area, to find both the average characteristics and
the unusual ones, in order to have a statistical degree of
confidence in this information.
To further determine whether these average characteristics
are diagnostic of diamonds from a particular deposit, one would
need the same large quantity of data, from a similarly large
number of diamonds, from each of the other commercial diamond-
producing areas around the world. Collection of these data
could be more easily accomplished for primary deposits that
occur in well-defined areas, and under the control of major
mining companies. Collection of data on diamonds from secondary
alluvial deposits would be much more difficult to achieve both
because there is less control over mining activities
(undertaken by numerous groups or individuals on a legal or
illegal basis), and because the productive areas may be
geographically very large. For both primary and secondary
deposits, a determination would need to be made about what
would constitute a truly representative sample of diamonds from
an area. Statistical studies would then need to be carried out
to analyze the characteristics of the diamonds from each
deposit, to determine if such characteristics are unique to the
diamonds from that deposit.
Results of these statistical studies would need to be
compiled into a database, against which the features of
diamonds of unknown source could be compared. At this time,
such a database does not exist. Gathering sets of diamonds from
known deposits would be a first step toward building this
database. An appropriate procedure to document the
characteristics of these sets of diamonds would need to be
agreed upon and implemented. Creation of this kind of
information database is a large research undertaking, and would
likely take a several years (and millions of dollars) to
complete. Even then, one cannot rule out the possibility that
diamonds from some deposits will not have features diagnostic
of their geographic source, and that some atypical diamonds
will exhibit characteristics suggestive of deposits other than
the one from which they were mined.
Source determination for rough versus polished diamonds.
Various features have been suggested as being potentially
characteristic of rough diamonds from a particular country.
These include crystal morphology, surface features, inclusions
and internal structure, shape or surface profiling, and trace
element chemistry. While diamonds from some deposits seem to
have similar characteristics, no studies have been published
which indicate that mixed parcels from multiple sources could
be separated on the basis of such characteristics. Many of the
surface and shape features present on rough diamonds are lost
during the manufacturing process, leaving even fewer
characteristics of polished diamonds that are related to their
geographic source.
Over the past 50 years, millions of polished diamonds have
been examined, and their gemological properties carefully
documented, in gemological laboratories during the production
of quality grading reports. During this extensive opportunity
to examine numerous polished diamonds, no observations have
been reported which indicate that polished diamonds from a
particular geographic source could be recognized during the
grading procedure. Distinctive light reflection patterns
arising from the arrangement of facets, and the use of logos or
other identifying marks, have each been proposed for
distinguishing polished diamonds. Except for a few isolated
studies, no extensive research work has been undertaken to
establish if any of these features will allow the recognition
of particular polished diamonds originating from conflict
countries. On the contrary, past observations suggest that the
features of polished diamonds are not distinctive of geographic
origin.
Documentation of spectra or other physical properties.
Features of the spectra of diamonds, or measurements of other
physical properties, vary greatly within the diamonds from the
deposits that have been studied. Such features result from the
conditions of growth or post-growth to which the diamonds were
subjected to in the mantle. While some generalizations can be
made (for example, many diamonds from the Premier mine in South
Africa display strong blue ultraviolet fluorescence), no data
have been published which propose that spectral features or
other physical properties are unique to diamonds from a
deposit, or to claim that all diamonds from a deposit exhibit
given features.
Documentation of chemical composition. Compared to most
other minerals, diamond is chemically quite pure. Nitrogen may
occur at concentrations up to 0.5 percent. Other trace elements
can occur at very low concentrations (levels of parts per
million or parts per billion).
Detection of trace elements at these very low levels in
diamonds requires sophisticated and sensitive analytical
techniques, such as neutron activation analysis or laser
ablation mass spectrometry. Such techniques are expensive and
time-consuming, taking hours per sample to complete an
analysis. The former technique requires the diamond to be
irradiated in a nuclear reactor, and then the radioactive decay
of each of the various trace elements present in the diamond to
be counted using gamma spectroscopy methods. The latter
technique, also referred to as LA-ICPMS, is a destructive
method of chemical analysis, although on a small scale. A few
cubic micrometers of the diamond are vaporized by a laser beam
(and a tiny hole is produced), and the resulting components in
the vapor are then analyzed with a plasma mass spectrometer.
The small area chosen for analysis would need to be
representative of the chemistry of the entire diamond.
Achieving a representative area may be quite difficult, because
past studies have shown that diamonds can be chemically quite
inhomogeneous in terms of their trace elements. This could
require multiple analyzes be made of an individual diamond. A
third method might be to chemically analyze the isotopes of
carbon or the trace elements in a diamond, which would also be
destructive to the sample. Although quite sensitive, all three
techniques are impractical in terms of cost and time for
analyzing a large number of diamonds. For each of these
methods, the analyzed areas would need to be cleaned of surface
contaminants, whose presence could prevent or render inaccurate
the detection of trace elements at very low concentration
levels. Data obtained from these analytical techniques would
need to be compiled in a computer database, and analyzed by
statistical methods.
Even if trace element data existed for diamonds from all
major deposits, little or no results have been published to
suggest that polished diamonds from a particular geographic
source could be recognized on the basis of such information.
Like mineral inclusions, the trace element composition of
diamonds reflects their environment of crystallization in the
mantle, and so it may vary among the crystals within a given
deposit, especially an alluvial one.
Country of Origin of Colored Stones
Analogous to studying the country of origin of diamonds is
that of the country of origin of various colored stones: ruby,
sapphire and emerald, in particular. Several respectable
laboratories have sought to compile databases on the country of
origin of these stones to meet market interests by producing
gemological reports on the origin of country of such gemstones.
Even with decades of independent research and the
collection and analysis of comprehensive data, country of
origin of colored stones is not an exact science and can more
reasonably be characterized as professional opinions based on
the best evidence available to date and to that lab. Such
interpretations or conclusions can and do vary from laboratory
to laboratory. Because of this and for other reasons,
laboratories offering origin reports often state that it is
their ``opinion'' of origin or that a stone has characteristics
similar to that of certain countries.
As you can probably surmise, country of origin
determinations are a hotly debated subject in the colored stone
world. Because GIA has long felt that the best research data
and expertise has not resulted in a standard of consistency and
scientific backing acceptable to our institution, we have never
entered the arena of providing origin reports on colored
gemstones, and continue to hold this fundamental view.
Likewise, except and until the advent of so-called conflict
diamonds, GIA has never seriously been asked or even
contemplated the prospects of attempting to determine country
of origin in diamonds.
Conclusion
Based upon current knowledge, we do not know of any
scientific way to determine the country of origin of rough or
polished gem diamonds, nor do we foresee practical ways being
developed in the near future. Determination of geographic
source might be made for some percentage of rough diamonds,
because of the additional identifying characteristics they may
exhibit. However, considerable research work would be needed
before one could estimate how large that percentage might be.
Even in the best-case scenario, it is to be expected that a
significant number of rough diamonds would not show sufficient
distinctive characteristics for their country of origin to be
determined.
Therefore, a chain of warranties or a system of
certification to track diamonds from their country of origin
through the manufacturing process to the retailer and the
consumer would provide a better alternative at this time to the
goal of preventing the sale of illicit diamonds. Useful
discussions have already begun within the trade on how such a
tracking system could operate. Some of the organizational
structure for cooperation among trade groups to implement a
tracking system for legitimate diamonds already exists. Such a
system could be initiated rather quickly if it should become a
legal requirement. This will oblige dealers to declare the true
origin of their diamonds, and will in turn act as a guarantee
that parcels of diamonds sold under such a system would not
contain so-called conflict diamonds. Initiation of a tracking
system would be an important step toward preventing illicit
diamonds from passing along the diamond ``pipeline'' to the
consumer, and the funds from the sale of these illicit diamonds
being used by conflict combatants.
As a nonprofit public benefit institution, GIA remains
committed to assisting the trade, governments and
nongovernmental organizations in whatever way possible, to
curtail the mining and flow of so-called conflict diamonds.
Chairman Crane. Thank you, Mr. Boyajian.
I apologize to all of you for the absence of our
colleagues, but as I indicated earlier, we have the debate
going on over on the floor to try and override the President's
veto of the marriage penalty tax, and that marriage penalty tax
in my district alone affects approximately over 140,000 of my
constituents that are taking the hit because of that absurdity
in our tax code. If we did not punish people for getting
married with our tax code, that would translate into almost
$100 million a year more to those individuals affected in my
district. I suspect they would be buying more diamonds for
their wives if we did not have that obscene code in place.
At any rate, we are going to be wrapping up after your
panel, but I would like to ask just a few questions of you, if
I may, before you depart.
Ms. Burkhalter, can you comment on whether the NGOs have
any efforts underway to boycott diamonds?
Ms. Burkhalter. The 70 humanitarian, human rights, and
religious organizations that joined with Physicians for Human
Rights in calling on the diamond industry to take action
against specifically transshipment countries, as well as to
implement the global scheme that they did, indeed, agree to,
have never announced a boycott on diamonds, in large part
because of our concern about the legitimate diamond producers
that have been mentioned more than once in today's hearing.
I will say, however, that there is enough concern within
this community, that without speaking for every group, if by,
oh, I do not know, Valentine's Day there is no sign that either
the Antwerp regimen is in place and moving or the producing
countries, particularly those that are dragging their feet,
such as Russia, are committed to moving very smartly forward,
and if we are not seeing a diminution in the exports from known
transshipping countries that have no productive capacity of
their own, namely Liberia, I think there would be an interest
in an education campaign. That campaign might urge the many
hundreds of thousands of members of our many groups,
particularly in the faith community, to educate our membership
about the role of conflict diamonds in the situation in
particularly Sierra Leone. We would probably be eager to urge
consumers and certainly our own membership to start asking
questions at the retail level about whether this diamond can
be--whether the diamond people are looking to purchase can be
assuredly a conflict-free stone, or more specifically, whether
the retailer can promise that this diamond did not transship
through Liberia.
Now, of course, the retailer will not be able to do so, and
whether that then translates into a boycott or a consumer's
decision not to buy, I cannot say. I do not want to leave you
with the impression that we are announcing a boycott, but I
will leave you with the impression that the groups that have
joined with my organization in pressing on the diamond industry
are plenty agitated about this and only very fast action is
going to, I think, relieve their anxieties about it.
Chairman Crane. Mr. Fischer and Mr. Runci, if you would
both comment, I understand that the largest selling company of
rough stones has begun to market its diamonds as clean diamonds
and that some U.S. retail stores have begun to advertise their
diamonds as clean diamonds and are charging premium prices.
Some people see this as a confirmation that legislation to
control the flow of diamonds will result in tightened price
controls, for the largest diamond dealers shut out smaller
dealers and the consumers will end up paying higher prices for
diamonds.
Would you please comment on this and whether you foresee
higher diamond prices if legislation is enacted to control the
flow of diamonds, and Mr. Fischer, you might go first and then
Mr. Runci.
Mr. Fischer. Thank you. DeBeers has, in fact, started
labeling the boxes of rough diamonds that it sells as conflict-
free. They have stopped buying diamonds on the markets, on the
open markets in Africa, to assure that they are not buying
conflict diamonds. They have made a kind of a unilateral
decision to be careful that there is not an issue about
transshipping and things like that during these times.
Ultimately, the issue about whether a market would be
divided up into clean diamonds and non-clean diamonds certainly
has several concerns. One is that we share a concern that
controls be put into place that are effective so that when
diamonds are labeled clean, and hopefully all diamonds under
our system will be labeled clean, these labels will not be
superficial but they will be real, that they will have reality
behind them.
Regarding two different pricing systems, it is somewhat
speculative how a market might develop, but if there were a
system of clean and unclean diamonds, you can go ahead and do
intellectual gyrations that the public would put more value on
those that were labeled as conflict-free. The issue is that
without a comprehensive program, that there will be clear
labeling of the conflict-free diamonds versus other diamonds
that are not labeled so, but there will not be in reality a
clear distinction. That is why we want to put this safety net
up as high as we can in the system where it can be filtered,
where as difficult a challenge as it is, we believe that it is
achievable. Anywhere lower down in the system where it is done
closer to the consumer and the retail jeweler, it is just not
workable. It is not going to accomplish what we all want.
Chairman Crane. Mr. Runci?
Dr. Runci. Speaking from the position of retailers, Mr.
Chairman, there is no way in the current regime for a retail
jeweler to directly and absolutely certify that any diamond
that he or she sells to a consumer is conflict-free. The most
that retailers can do today and, in fact, the majority of
retailers are doing today, is to assure consumers that they
have made every effort in working with their diamond suppliers,
be they jewelry manufacturers or dealers or traders in polished
diamonds, which are the only kinds of diamonds that retailers
buy, to require that they, in turn, have made every effort to
ensure that the purchases they make from their suppliers are
assured as being conflict-free. In other words, a chain of
assurance as opposed to a chain of warrants. In order to
institute a true chain of warrants to ensure that no conflict
diamonds are being sold, as I said in my testimony, we would
require controls in place first in the countries of extraction.
As to the presence of claims by some jewelers that their
stones are conflict-free, I believe those claims are now being
made by some jewelers based on the assurances they have
received from their suppliers. The irony here is that everyone,
to my knowledge, in the industry in the United States is acting
in good faith out of their, not only a desire to preserve their
businesses, but out of true abhorrence to the connection that
has, in fact, been established between four percent of the
world's production of rough diamonds and these atrocities.
Everyone wants that to end.
But the reality is that the retail jeweler, and the
majority of retailer jewelers in this country, are small
family-owned businesses. The retail jeweler is powerless to
provide 100 percent assurance today. But they are making their
best-faith effort. They are requiring similar assurances from
their suppliers, and I am happy to say that the supply side of
the industry in the United States has moved swiftly to offer
those assurances and, in turn, to pass those requirements on up
to their suppliers overseas. I believe the process is in
motion.
Chairman Crane. Mr. Runci, the retailers are at the far end
of the diamond pipeline and they have little control, if any,
over the diamonds they import and they have to rely on what
rough diamond dealers tell them is the source of their diamond
imports. What steps can retailers take to accurately ascertain
the mining source of imported diamonds?
Dr. Runci. Retailers typically purchase their diamonds, Mr.
Chairman, from traders or diamond wholesalers here in the
United States. Large retailers may purchase their diamonds from
diamond traders or wholesalers outside the United States.
Retailers have been enlightened on this issue for the past year
as a result of a continuing series of information bulletins
that we have issued because this was an issue, quite frankly,
that, with all due respect to the civil society community, they
were on top of much earlier than the jewelry industry here in
the United States. Jewelers have no conception, nor have they
ever had to be concerned with the ultimate origin in terms of
extraction of the diamonds that they buy and that they sell to
consumers.
The very last thing that a jeweler wants is for a consumer
to say, ``how can you assure to me that this stone is not
tainted?'' No such absolute assurance could be given. The chain
of assurances that has been put in place for the past nine
months through our repeated communications to our members and
their use of those communications with their vendors, the so-
called Vendor Guidance Agreement that the Jewelers of America
developed, seems to be working in terms of elevating the level
of awareness up within the trade and increasing the level of
assurance that any retailer can, in fact, offer their consumer.
We look forward to the day when simple international
controls have been put in place, starting in the countries of
extraction. That ultimately ensures that the flow of diamonds
forward is, in fact, untainted and that if, sadly, there are
still conflict diamonds, they are, in fact, being diverted to
those markets that have not instituted those controls.
I think the United States and Congress can play an
important leadership role in this effort, but hopefully it will
be in concert with the international community, through leading
the international community, but not with a gun to the retail
jeweler's head that he simply cannot accept without his
business being on the line. Thank you.
Chairman Crane. Mr. Boyajian, do you foresee the
possibility of practical technology in the near future to
determine the country of mining of a cut and polished diamond?
Mr. Boyajian. I do not. As I mentioned in my testimony, we
have never been asked, nor have we even contemplated the idea
of origin of country of polished diamonds. We ourselves are not
experts in rough. We are experts in polished. We grade most of
the major diamonds that are bought and sold around the world,
especially the larger, more important diamonds. We put quality
analyses on them with color grade and clarity grade and cut.
But I just do not see the technology developing to be able
to implement a system of being able to identify country of
origin, and again, as I mentioned in my testimony, in my
written testimony and also my oral testimony, it is
extraordinarily difficult to know where the diamond has
actually come from. Where it was mined from may not be where it
originated.
The sources that have been identified in previous reports
that have been submitted perhaps to this group, perhaps to your
committee, have identified sources of scientific data back to
the beginning part of the 20th century. It is important to
remember that when goods were only coming from South Africa,
for example, it was much easier to study one mine's production
and be able to determine certain chemical or physical
characteristics of diamonds that might lead you to be able to
determine origin. Such cases have been cited many times in
these reports.
My concern is that diamonds are found all over the world
today. Russia is a major producer of diamonds, as is Australia
and now Canada, all of Southern Africa. It is extraordinarily
difficult to distinguish between primary and secondary sources.
I just do not see the technical feasibility. I would not know,
sir, where to start.
Chairman Crane. I want to express appreciation to all of
you for your testimony this morning. Again, I apologize for the
absence of my colleagues, but your written testimony and your
response to questions will be made a part of the record and so
they will have access to what you said.
I would appreciate it if you would stay in touch with us,
though, on an ongoing basis. This is an issue obviously of
concern and concern to some of our colleagues who have already
attempted to approach it legislatively. I am not sure exactly
yet what the answer is, but we appreciate all the help we can
get from you.
With that, the committee stands adjourned.
[Whereupon, at 11:54 a.m., the hearing was adjourned.]
[Submissions for the record follow:]
Statement of Elly Rosen, Founder and President, Appraisal Information
Services, on behalf of Gems and Jewelry Reference, and Appraiser's
Information Network
Mr. Chairman and members of the subcommittee, my name is
Elly Rosen and I am founder of Appraisal Information Services
(AIS), an online reference resource and networking forum for
members of the gems and jewelry and other personal property
trades, as well as for practitioners in the personal property
appraisal profession.
I would first like to commend this subcommittee and the
various members of congress who have been working towards
finding a solution to the problems inherent in the sale of
African diamonds whose proceeds are used to fuel the fires of
war. I also commend you for providing this opportunity for
trade leaders to present the perspective of an industry whose
members are generally honest hard working merchants who should
not become further innocent victims of these terrible
conflicts. America and its citizenry have a moral obligation to
enter into the international dialogue being conducted on this
issue and we all owe a debt of gratitude to those members of
Congress who are trying to assure such entry at an early stage.
For context of your considering my brief comment, I should
add that sections within our site include the Appraisers'
Information NetWork (AIN), the Gems & Jewelry Reference (GJR),
the Guide for Personalty Expert Witnesses & Trial Consultants,
and the Appraisal Information ClientCenter (AIC). Our
membership includes appraisers from the most recognized
professional personal property appraisal organizations and
practitioners from all segments of the gems and jewelry trade,
including wholesale suppliers, retail jewelers, artisans,
gemologists,labs, and appraisers. Our forums and reference
areas are currently accessed in 5 countries on 4 continents and
in 31 U.S. States.
I appreciate the opportunity to submit this statement for
the record of your most important subcommittee hearings on
``Trade in African Diamonds'' and I am submitting it to urge
you to support current efforts by the international diamond and
jewelry communities to develop meaningful procedures and
safeguards as might be needed to resolve the problem of that
small portion of mined diamonds being usedto finance African
conflicts. Other respected leaders of the gemstone and jewelry
industry have appeared before you who can best speak to such
efforts currently under way by the World Diamond Council as
well as to the subject of gemological realities related to
identifying the country of origin of rough and polished
diamonds. I will be addressing just a few points related to the
realities of manufacturers, retailers, gemologists and
appraisers, and how congressional activity might impact daily
efforts to conduct their businesses.
The World Diamond Council, established by the Antwerp
Resolution,appears to be making a concerted effort to lay out
and put into affect plans to deal with this problem at the
source; the only place where it can be dealt with most
efficiently and in a manner which would avoid needless and
unjustified harm to this important industry. We all owe a debt
of gratitude to the sponsors of the C.A.R.A.T Act of 2000 as it
made clear that the United States will be a leader in resolving
this world problem. However, the CARAT Act can not be
administered from a practical standpoint and would present an
unjustified burden on all segments of the trade. Unfortunately
the well intentioned proposals in the Act would also make it a
meaningless burden as it would be close to impossible for many
trade segments to comply.
Once rough diamonds leave their country of origin they are
then bought and sold, and resold, in varying configurations and
parcels, in diamond centers all over the world. Once polished
it gets even more complex and efforts to track and label every
polished diamond (above some relatively low dollar base) would
cause total chaos--if it could be done at all. It should not be
difficult to envision how polished diamonds move from importer
to finished jewelry. They are sorted by shapes, sizes and
quality grades as well as in melange (mixed) parcels.
Manufacturers and diamond suppliers then do their own
sorting based on the needs of their customer base and their in
house quality control procedures. Customs laws would have to
changed to have country of origin labeling reflect the place of
mining, rather than the current designation requirement that it
be the country of processing, or polishing. But that is where
the problems would only begin. If each diamond had to be
labeled based on country of origin, diamond suppliers would
have to separate all their current categories of diamonds by as
many subcategories as there are diamond producing countries.
For jewelry manufacturers and small manufacturing retail
jewelers it would be even more complex.
Such smaller manufacturers go through numerous parcels to
mix and match qualities and sizes for a particular item. In
addition, many retailers buy ``semi-mounts'' which are jewelry
items containing the smaller stones and then separately buy
center stones or maintain an inventory selection of such
stones. If such a manufacturer, or manufacturing retailer could
somehow manage to keep track of each individual stone,
compliance with the CARAT Act could result in one small ring
having five designations on it for the countries of origin of
each diamond. Even that might have to then be changed if a
small diamond broke in setting and had to be replaced. This is
just one example of the chaos that could ensue when good and
honest folks make a sincere effort at CARAT Act compliance.
Small gemologist and appraisal practitioners will not be
able to avoid being dragged into the fray either. Once this
snowball starts to roll there will invariably be consumers
asking us to confirm that their diamonds are from the country
represented at point of sale. We will not have the ability to
do so and confusion will reign supreme as fodder for media
expose sensationalists always on the hunt for a good story or
some free publicity.
It seems to make much more sense, and seems more practical
and efficient to nip the whole thing in the bud at the source.
If current industry proposals can succeed in sealing and
certifying rough diamonds before leaving their country of
origin then we could all know from that point on that those
diamonds, the overwhelming majority of diamonds mined, are OK
wherever they then go. We urge Congress to avoid precipitous
action and allow the international trade leadership reasonable
time to develop, foster and implement such procedures.
For the Gems & Jewelry Reference and the Appraisers'
Information
NetWork, thanks for taking the time to consider our
comments.
Embassy of the Republic of Liberia
Washington, DC
September 12, 2000
The Honorable Philip Crane
Chairman, Subcommittee on Trade
House Ways and Means Committee
1104 Longworth House Office Building
Washington, D.C. 20515
Dear Mr. Chairman:
I have the honor to first thank the Subcommittee for the
opportunity to submit a statement on behalf of the Government of
Liberia on the issue of conflict diamonds. The issue is critical to our
neighbor, Sierra Leone, but it is also of vital importance to my
country, also a diamond producer.
I am attaching to my statement a copy of a letter written on August
28, 2000 to United Nations Secretary General, Mr. Kofi Annan, by the
President of Liberia, Dr. Charles Ghankay Taylor. A similar letter was
also sent to President William Jefferson Clinton. In both letters,
President Taylor re-affirms Liberia's unreserved support for Security
Council resolution 1300 (2000) which calls, inter alia, for an end to
the smuggling of diamonds from Sierra Leone. In addition to our support
for the UN resolution, Liberia recently undertook several new
initiatives to assist in the international battle against conflict
diamonds and the dangerous purposes for which they are traded-namely,
arms to fuel civil conflicts in Africa.
We have enacted a statute criminalizing the export of undocumented
or uncertified diamonds. We have undertaken the enforcement of
legislation requiring the Central Bank of Liberia to issue certificates
or origin for Liberian diamonds. We have asked the International
Monetary Fund and the World Bank to provide experts who would assist in
the development of a transparent certification process. Further, we
have called for assistance from the international community to urgently
convene a meeting of international experts to focus on the trade and
certification process in the Mano River Union Countries (Liberia,
Sierra Leone and Guinea).
Liberia has taken these steps not only out of concern for the peace
and stability of the region, but also to ensure our territorial
integrity as well as the security of our citizens. Liberians are no
less impacted by the illegal diamond trade than our neighbors and have
the same interests in seeing it halted as the rest of the international
community.
Mr. Chairman, I appreciate the opportunity to provide this
information that I trust will assist your committee in its
deliberations. If I can answer any questions regarding Liberia's views,
please do not hesitate to contact me.
Please accept, Mr. Chairman, the renewed assurances of my highest
consideration.
Sincerely,
William V.S. Bull
Ambassador to the United States of the
Republic of Liberia
Attachment:
Letter from the President of Liberia to the United Nations Secretary
General contained in UN Security Council
I extend compliments on behalf of the people of Liberia and
in my own name to you on the occasion of the convocation of the
Millennium Summit, where leaders of the world would be expected
to define problems besetting our global family and determine
solutions the alleviation of those problems, engendering hope
in the future of our one world and carving new aspirations for
the United Nations. Against this background, I am pleased to
acquaint you with the current status of Liberia's engagement in
Sierra Leone, a troubled portion of our global village.
You may recall the commitment of the Government of Liberia
to remain constructively engaged in the resolution of the
crisis in the sisterly country of Sierra Leone. Recently, our
involvement, among other things, culminated in the release of
over 500 United Nations peacekeepers who were unfortunately
held against their will by the Revolutionary United Front
(RUF). Our Government will continue to be steadfastly bound to
an immediate, peaceful and diplomatic solution to the crisis in
the subregion, and will continue to offer public and practical
expressions to these endeavours.
However, the apparent silence of the international
community to the repeated violations of our territorial
integrity by armed insurgents from the area of the Guinea-
Sierra Leone borders, including a third and most recent attack
emanating from the Republic of Guinea, which is ongoing,
continues to overburden the Liberian Government with
unnecessary loss of lives and property and the displacement of
a large number of our people. It is the request of the
Government of Liberia that you utilize all forms of influence
at your disposal to ensure the sanctity of our borders and the
maintenance of peace, security and stability within the
framework of the Mano River Union.
As the inviolability of the borders between Liberia Guinea
and Sierra Leone remains a crucial issue, I recommend the
following and request the support of the United Nations in
ensuring their speedy implementation:
(a) The Government of Liberia again calls for a monitoring
presence of the United Nations at these borders to monitor all
crossing points capable of conveying vehicular traffic. We
recognize the enormous cost to individual nations of policing
the entire length of these borders and suggest the utilization
of an airborne multi-spectral service in detection of any
unusual movements along the entire border.
Intelligence gathered therefrom could be shared by all
appropriate authorities. The cost, which is relatively minor,
could be borne by the international community;
(b) On the status of RUF, as has been previously done, the
Liberian Government has again called for the immediate
disarmament and simultaneous deployment of troops from the
Economic Community of West African States (ECOWAS) under the
United Nations Mission in Sierra Leone (UNAMSIL) in areas
recently considered as RUF-dominated.
Along these lines, RUF has announced a new leadership
acceptable to ECOWAS and has informed EDOWAS through its
Chairman that it welcomes our call for disarmament and
demobilization and that it has begun the process leading to the
transformation to a political entity and subsequent
reintegration into society. Additionally, RUF has informed
ECOWAS of its wish to return weapons retrieved from United
Nations peacekeepers and its desire to establish communication
with the High Command of UNAMSIL, to facilitate and accelerate
the return of the weapons and the process of confidence-
building.
In keeping therewith, it is our recommendation that these
initiatives be immediately exploited by the United Nations,
leading to a ceasefire; the withdrawal of all belligerent
forces to positions as at 7 July 1999; the simultaneous
deployment of ECOWAS troops, under UNAMSIL; and the total
disarmament and demobilization of the armed factions.
You are doubtlessly aware of our unreserved support for
Security Council resolution 1306 (2000), calling for an end to
the smuggle of diamonds from Sierra Leone. As evidence of this,
we are undertaking several initiatives, including the enactment
of a statute criminalizing the export of undocumented or
uncertificated diamonds; the enforcement of legislation
requiring the Central Bank of Liberia to issue certificates of
origin; and our request to the International Monetary Fund and
the World Bank to second experts who would assist in the
development of a transparent process. Furthermore, the
Government calls for assistance from the international
community to convene a meeting of international experts to
focus on the trade and certification process in the Mano River
Union countries.
The Government of Liberia assures you of its continued
commitment to the pursuit of peace and stability both at home
and in the subregion and welcomes the convening of this Summit
with hope and anticipation for the evolution of solutions that
will make our world a safer place for our children.
Finally, I wish to request that you kindly circulate the
present letter to all members of the Security Council as a
document of the Council.
Dahkpannah Dr. Charles Ghankay Taylor
Diamond Dealers Club, Inc.
New York, New York
September 19, 2000
Congressman Philip M. Crane, Chairman
Subcommittee on Trade
House Committee on Ways and Means
Longworth House Office Building
Washington, D.C.
Dear Congressman Crane,
I am pleased to have the opportunity to offer our comments
regarding the hearing on trade in African diamonds convened by the
Subcommittee on Trade of the Committee on Ways and Means that was held
on September 13, 2000.
The Diamond Dealers Club is a trade association of diamond dealers,
brokers and manufacturers established in 1931. Since the founding of
our organization, we have been located in New York City. Our nearly
2,000 members come from more than 30 different countries and are
importers of the overwhelming percentage of diamonds that enter the
United States. Our By-Laws embody our founders recognition of our
organization's key goal ``to cooperate with governmental agencies.''
The following comments are presented with this goal in mind.
As mutilations of civilians and severe civil rights violations
occurring in certain civil wars in Africa became more frequent, we
became increasingly appalled. Particularly alarming to the diamond
industry was the news that diamonds, which enter the world diamond
market from these countries, are responsible for these violations and
are used to finance civil wars. Therefore, beginning in 1999, we
devoted considerable attention to resolving the problem of conflict
diamonds. We have met and worked with members of the U.S. Congress,
representatives of foreign governments and industry leaders to come up
with an effective solution to this problem.
Our commitment to eliminating the sale of conflict diamonds is
evident. Our membership-elected Board of Directors adopted the
following resolution to battle the sale of conflict diamonds: ``Dealing
in conflict diamonds shall constitute conduct unbecoming of a member
for which suspension shall be instituted.''
The Diamond Dealers Club supports the resolution adopted by the
World Diamond Congress on July 19, 2000. We believe that the effective
implementation of this proposal would go a long way towards eliminating
the problem of conflict diamonds and their use to purchase arms and
finance civil wars.
Clearly, the WFDB proposals would benefit both the diamond-
producing nations as well as the American industry. Their strict
implementation would mean that instead of diamonds being used to
finance the death and destruction of innocent civilians, they would
provide--as they have in such countries as South Africa and Botswana--
employment for tens of thousands of Africans as well as encourage
economic development in diamond-producing nations.
Concomitantly, we feel that proposals that could lead to a boycott
of diamonds would be harmful to the entire diamond industry. This
includes the miners and governments in the producing nations that have
benefited from these resources as well as the small business dominated
diamond industry in several countries including the United States.
We hope that the Subcommittee finds these comments useful in its
deliberations on the subject of trade in African diamonds. We look
forward to working with you to resolve the problem of conflict
diamonds. If you have any requests for additional information from the
Diamond Dealers Club, please do not hesitate to contact us.
Sincerely,
Jacob Banda
President
Statement of Mary Diaz, Executive Director, Women's Commission for
Refugee Women and Children, New York, New York
The Women's Commission for Refugee Women and Children is an
expert resource and advocacy organization working to improve
conditions for refugee women and children around the world. The
Women's Commission has sponsored several fact finding missions
in West Africa, including Sierra Leone, Liberia and Angola over
the past five years and released a report assessing the
protection and assistance needs of Sierra Leonean children and
adolescents. As part of a campaign to monitor the situation in
Sierra Leone, the Women's Commission has supported local
women's organizations, who are working to rebuild their
country.
The following question and answer piece was initially prepared to raise
awareness among consumers about the problem of conflict diamonds and to
promote possible solutions.
Diamonds: Symbols of Love or War?
Questions and Answers
1. Why should I be concerned about diamonds?
Diamonds from Sierra Leone, Angola, and the Democratic
Republic of the Congo have been used by rebel groups to
purchase weapons and commit unspeakable atrocities against
civilian populations. In Sierra Leone, with the aim of
conquering diamond-rich areas and securing the mines for
themselves, rebels have used machetes to brutally chop off the
limbs of women, children, and even babies. They have forcibly
recruited and drugged child soldiers. They have also abducted
thousands of women and young girls as sex slaves who are often
beaten and gang-raped. This violence has displaced almost a
million people within Sierra Leone, created 460,000 refugees in
neighboring countries and abroad, and left thousands of
children disabled by dismemberment and mutilation. American
consumers buy about 65 percent of diamonds worldwide, and while
diamonds are usually regarded as symbols of love and
commitment, diamonds mined from conflict areas are actually a
source of horror.
2. How can the United States play a leadership role in stopping
diamond fueled conflict?
The US can play a leadership role by enacting the Consumer
Access to a Responsible Accounting of Trade (CARAT) Act.
Currently, there is no way of guaranteeing where diamonds sold
in the US, or anywhere else in the world, originate. The CARAT
Act would require the diamond industry to provide US consumers
with information about whether a diamond for sale originated
from a conflict area. The Consumer Access to a Responsible
Accounting of Trade Act, otherwise known as the CARAT Act (HR
3188) was introduced by Congressman Tony Hall (D-OH) and
Congressman Frank Wolf (R-VA) in November of 1999. A revised
version will be introduced this September. This bipartisan
legislation acknowledges that some diamonds fuel Africa's wars
and seeks to give Americans crucial information about the
diamonds they buy.
3. What are conflict diamonds?
Conflict diamonds are diamonds mined or stolen by rebel
forces who are fighting the legitimate and internationally
recognized government of that country. Currently, these
conflict diamonds are mined in Sierra Leone, Angola, and the
Democratic Republic of the Congo. They are often smuggled out
of these countries and into neighboring countries such as
Liberia and the Ivory Coast. The latter have negligible diamond
resources themselves but sell millions of US dollars worth of
diamonds to trade centers around the world. Liberia's illicit
diamond trade is widely recognized by diamond industry experts;
to illustrate, Liberian diamond mining capacity is only about
100,000 to 150,000 carats per year but the country has exported
over six million carats annually.
4. Can the American consumer help break the cycle of violence
in the illegal diamond trade?
Yes. The Women's Commission has joined a broad based
coalition of non-governmental and humanitarian assistance
organizations that are committed to educating consumers about
the illegal diamond trade and providing information that will
allow consumers to make informed diamond purchases. Independent
diamond experts have estimated that about 10-15 percent of the
world's supply of diamonds are from conflict areas in Africa.
Although this is a relatively small percentage of the overall
diamond market, it is significant because the diamonds from
these conflict countries are largely gem quality diamonds. Gem
quality diamonds are the most valuable portion of the diamond
market and constitute 75 percent of the diamond profit. Because
rebels are able to sell diamonds throughout the world at a
large profit, they are able to sustain the wars in these
countries. Therefore, it is imperative that consumers know
where their diamonds are from in order to make informed
purchasing decisions and eliminate these conflict diamonds from
the market.
5. Are all diamonds from conflict areas?
No. In fact, diamonds from Africa can have a very positive
effect on those countries with legitimate diamond industries
and cutting centers. In Botswana, Namibia, and South Africa,
the diamond industry has bolstered the economies, making them
among the most prosperous and stable countries in Africa.
Diamond cutting centers in India and Israel employ large
numbers of people. If you buy a diamond from these areas, you
will actually be supporting a vital industry. We are not
advocating for a total boycott of diamonds because this would
prove detrimental to these vital legitimate industries. Rather,
informed consumers can do the responsible thing by buying
legitimate diamonds and avoiding conflict diamonds.
6. What can be done to end the trade in conflict diamonds?
Support the CARAT Act (HR 3188) that would provide
consumers with information about where their diamonds
originate;
Educate consumers about diamonds that fuel
Africa's wars, such as those from Sierra Leone, and those from
legitimate diamond industries, such as Botswana;
Demand that every diamond be accompanied by full
forgery-proof documentation of the country of origin, not just
the place of purchase or export;
Support government regulation to bring
transparency to diamond transactions such as through Customs
offices that employ statistical procedures to identify the
number of carats exported from a particular country and ensure
that the export number is consistent with that country's mining
capacity;
Support technology for diamond ``fingerprinting''
to reliably determine the origin of diamonds.
This research was compiled based in part on information from
the following sources:
Ashton, Hilton. ``Technical Forum on the Issue of
``Conflict Diamonds,'' summary by BoE Securities of ``Conflict
Diamonds--Maintaining Consumer Confidence,'' forum held May 11-
12, 2000 in Kimberley, South Africa. May 25, 2000.
De Beers Mining Company. ``De Beers: U.S. Congressional
Hearings,'' Written testimony before the US Congress, House
Subcommittee on Africa, hearing on ``Conflict Diamonds.'' May
9, 2000.
Global Witness. ``Conflict Diamonds: Possibilities for the
Identification, Certification, and Control of Diamonds.'' May
10, 2000.
Harden, Blaine. ``Africa's Gems: Warfare's Best Friend.''
The New York Times on the Web, April 6, 2000.
Rapaport, Martin. ``Guilt Trip.'' April 7, 2000. Available
at www.diamonds.net
Smillie, Ian, Lansana Gberie and Ralph Hazleton. ``The
Heart of the Matter: Sierra Leone, Diamonds, and Human
Security.'' Partnership Africa Canada, January 2000.
Other useful sources:
Collier, Paul. ``Economic Causes of Civil Conflict and
their Implications for Policy.'' World Bank. June 15, 2000.
Fowler, Robert R. ``Report of the Panel of Experts on
Violations of Security Council Sanctions Against UNITA.''
Report to the United Nations Security Council. March 10, 2000.
Global Witness. ``A Crude Awakening: The Role of the Oil
and Banking Industries in Angola's Civil War and the Plunder of
State Assets.'' January 2000.
Global Witness. ``A Rough Trade: The Role of Companies and
Governments in the Angolan Conflict.'' December 1998.
Kempster, Norman. ``Dripping in Diamonds--and Blood.'' Los
Angeles Times. May 12, 2000.
National Intelligence Council. ``Africa: The Economics of
Insurgency in Angola, the Democratic Republic of the Congo, and
Sierra Leone.'' Report from State Department conference on
October 5, 1999. October 1999.
Rapaport, Martin. ``Blood Money.'' Rapaport Corporation.
November 5, 1999. Available at www.diamonds.net
``Report of the Panel of Experts on Violations of Security
Council Sanctions Against UNITA'' Report to the United Nations
Security Council. March 10, 2000.
Statement of Rory E. Anderson, Government Relations Manager, and Africa
Policy Specialist, World Vision
Thank you, Mr. Chairman, for the opportunity to present
testimony to the Trade Subcommittee on solutions to the
``conflict diamond'' trade in Africa. I am Rory E. Anderson,
Government Relations Manager and Africa policy specialist for
World Vision, the largest privately-funded international relief
and development organization in the U.S. Later this month World
Vision will celebrate its 50th anniversary. Currently, World
Vision implements more than 6,000 relief, rehabilitation and
long-term development projects in 95 countries.
Natural resources, from diamonds to oil, have a significant
role in igniting and fueling human conflict. In Africa, the
shape of Post-Cold War conflict has increasingly been financed
and perpetuated by natural resources, which conveniently do not
demand any ideological loyalty. The May 4th capture of UN
peacekeepers in Sierra Leone has brought widespread scrutiny to
the causes of this 9-year conflict, and has forced policymakers
at all levels to ask why war seems intractable in many parts of
Africa. In the recent conflicts of Sierra Leone, Angola and the
Democratic Republic of the Congo, diamonds are at the heart of
the matter, and access to this and other resources have become
a primary incentive for war.
Conflict Diamonds Defined
There are various nuanced definitions of the term
``conflict diamonds.'' In this testimony, I attempt to describe
both potential as well as current situations where the sale of
diamonds are used to sustain violent conflict. As defined here,
conflict diamonds are those which originate from areas under
the control of forces that are in opposition to democratically
elected and internationally recognized governments,\13\ or
diamonds used by State institutions or non-State forces to fund
campaigns of human rights abuses against civilians. Many
critics of the term ``conflict diamonds'' argue that diamonds
don't kill people, rather, people and guns kill. But in each of
the above cases, diamonds fund the purchase of small arms which
perpetuate conflict. Diamonds are lucrative stones. In 1998 the
diamond industry produced an estimated 115 million carats of
rough diamonds with a market value of US$6.7 billion. At the
end of the diamond pipeline, this was converted into 67.1
million pieces of jewelry worth close to US$50 billion.\14\ At
both ends of the diamond pipeline--from mine to finger--there
are huge financial incentives. Further, diamonds are easily
smuggled. To the untrained eye, rough diamonds look like mere
pebbles, which can innocently be wedged in a shoe, sock, or any
kind of body orifice, and can go undetected through most metal
detectors or x-ray machines.
---------------------------------------------------------------------------
\13\ Conflict Diamonds: Possibilities for the Identification,
Certification and Control of Diamonds, briefing document by Global
Witness, June 2000, p. 1.
\14\ Smillie, I., Gberie, L., Hazelton, R. The Heart of the Matter:
Sierra Leone Diamonds and Human Security, Partnership Africa Canada,
Ottawa, Canada: January 2000, p. 1.
---------------------------------------------------------------------------
The most visible examples of diamonds and their role in
conflict have been in Sierra Leone, Angola and the Democratic
Republic of the Congo (DRC). In all three of these cases,
guaranteed access to the diamond mines has been a dominant
incentive for war, and, ironically, war has enabled the diamond
industry to prosper. Because diamonds can move so easily and
quickly, a dealer can buy low, sell high and reap windfall
profits, particularly during the height of a war. For the
seemingly intractable wars of Sierra Leone, Angola and the DRC,
the point of each of these wars may not be to actually win
them, but to engage in profitable crime under the cover of
warfare. Over the years, the informal diamond mining sector,
long dominated by what might be called ``disorganized crime,''
has now become increasingly influenced by organized crime and
by the transcontinental smuggling of diamonds, guns, drugs, and
vast sums of money in search of a laundry. Each of these
smuggled items has become critical components to warfare, and
thus, violence becomes central to the advancement of those with
vested interests.\15\
---------------------------------------------------------------------------
\15\ Smillie et al, p.1.
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Conflict Diamonds in Africa
In the current deliberations on conflict diamonds there
have been fewer references to the DRC, yet diamonds from this
area are equally problematic. Several warring factions,
including the rebel government and multiple international armed
forces who all desire access to the DRC's mineral resources,
have wrecked a humanitarian crisis that is quickly outpacing
the enormity of the Sudan. This factor, coupled with gross
human rights abuses committed among all factions, warrants the
label of conflict diamond for any stone originating from the
DRC. In Sierra Leone, two inseparable factors have enabled the
violence to perpetuate. A legacy of decades of official
corruption--much of which was rooted in the diamond trade--has
left remnants of a weakened State unable to defend its
territory from internal and external threats, which has
resulted in the breakdown of law and order. This absence of
national security has expanded the economic opportunity of
conflict diamonds.
In Angola, political power implies a license for
kleptocracy over the country's resources. Rather than accept
the 1992 elections which foreign observers judged free and
fair, UNITA (Union for the Total Independence of Angola) rebel
leader Jonas Savimbi simply resumed his war by seizing control
of the Cuango River Valley, Angola's richest diamond territory.
UNITA began a major mining operation that made them the richest
rebels in Africa. Diamond money paid for UNITA offensives that
in the 1990s elevated Angola's civil war to a new plateau of
savagery, killing more than half a million, displacing 4
million, and maiming 90,000 as a result of land mines.\16\
---------------------------------------------------------------------------
\16\ ``Africa's Diamond Wars,'' Harden, B. The New York Times on
the Web, www.nytimes.com/library/world/africa/040600africa-
diamonds.html.
---------------------------------------------------------------------------
The Humanitarian Impact
For every conflict diamond sold, there is a corresponding
humanitarian crisis. It has been said that Angola is the worst
place to be a child. Thirty percent of Angolan children die
before they reach their fifth birthday.\17\ As of April 2000, a
total of 3.7 million people were classified as ``war affected''
by the UN, defined as ``those who depend on emergency
humanitarian assistance due to war and the resultant loss of
assets and earning opportunities.'' \18\ Of these, over 1.7
million are displaced, three-quarters of whom are women and
children.\19\ One-hundred and fifty thousand (150,000) people
are estimated to have either been killed or permanently maimed
due to landmine accidents.\20\ Two-thirds of the Angolan
population live in absolute poverty.
---------------------------------------------------------------------------
\17\ UN Secretary General's report to UN Security Council, 23
November 1998.
\18\ UN Consolidated Appeal for Angola for Jan-Dec 2000, November
1999
\19\ IRIN-SA, ``A grim humanitarian outlook by UNICEF,'' 13 Jan
2000
\20\ UN Consolidated Appeal for Angola for Jan-Dec 2000, November
1999
---------------------------------------------------------------------------
In the DRC, it has been found that since August 1998 there
has been at least 1.7 million deaths in war-affected areas over
and above the 600,000 that would normally be expected. The
overwhelming majority of these additional deaths are
attributable to preventable diseases and malnutrition--a tragic
consequence of a health care system destroyed by war. On
average, some 2,600 people are dying every day, and further
research is finding that the first months of the year 2000 were
even worse than 1999.\21\ Thirty four percent of these deaths
have been children under the age of five (over 590,000), and 47
percent of all violent, war-related deaths are women and
children. The highest death rates are among populations
displaced by the fighting, and civilians continue to be
targeted by all sides in the conflict. As one NGO leader has
explained this: ``The loss of life in the Congo has been
staggering, It's as if the entire population of Houston was
wiped off the face of the earth in a matter of months.'' \22\
---------------------------------------------------------------------------
\21\ Mortality in Eastern DRC: Results from Five Mortality Surveys,
International Rescue Committee Report, May 2000.
\22\ Ibid.
---------------------------------------------------------------------------
Ranked last on the UN Human Development Index, the war in
Sierra Leone has exacted a heavy humanitarian toll on the
population. An estimated 70,000 people have been killed since
the war started in 1991. Approximately 5,000 were killed in and
around Freetown in the January 1999 rebel offensive against the
capital. Civilian and child amputations have been a trademark
atrocity, with estimates of 1,800 amputees. Currently, almost 1
million Sierra Leonians are internally displaced, in addition
to the 470,000 refugees who have fled to neighboring Guinea and
Liberia. Thirty percent (30 percent) of Sierra Leone's
population of 4.6 million have been uprooted because of this
conflict. Humanitarian response continues to be hampered by the
issue of access to war-affected populations trapped in the
northern and eastern parts of the country. Fifty-five percent
(55 percent) of the population live in conflict affected areas
and are inaccessible by humanitarian aid.
Remedies: Coordinated and Structural Solutions
This humanitarian legacy of conflict diamonds is indelible
and undeniable; so are the solutions. Although not necessarily
complicated, an effective solution strategy first requires the
recognition that it is actually a marriage of two components:
coordinated and structural solutions. This recognition enables
stakeholders to manage and ultimately contain the problem of
conflict diamonds. Coordinated solutions mean actions
implemented and communicated by the specific primary and
secondary stakeholders. Assuming that all concerned
stakeholders have the same goal of ending the trade in conflict
diamonds, solutions will naturally compliment and not compete
with one another, but the effectiveness is in the communication
and coordination of action so that loopholes are closed.
Structural solutions involve remedies aimed at providing
alternatives to conflict diamonds.
Coordinated Solutions
I have identified three stakeholders as the first line of
defense against conflict diamonds:
Industry Local civil society groups in diamond
producing countries,
Rough diamond exporting governments, and
The diamond, especially rough stone traders.
Secondary stakeholders in the second line of defense
include:
Rough diamond importing governments,
Cut diamond consuming governments,
International regulatory and trade bodies, and
Cut diamond consumers.
Each stakeholder has a unique role to play:
Local Civil Society. In Africa, particularly in
rural areas, because communal obligations are usually placed
above the individual, informal networks are strong. Because of
this, it is well known who are the specific individuals mining
and purchasing conflict stones. Grassroot organizations in
diamond producing areas need to formalize this knowledge by
documenting evidence so that this part of the solution does not
turn into a witch hunt, but, rather, an effective monitoring
tool.
Diamond Exporting Governments. Because the profit
incentives are so high, it is important that diamond exporting
governments maintain tight regulations over this resource,
otherwise anarchy results--as in the case of Sierra Leone and
the DRC--and different factions violently compete over access
to these lucrative resources. Closely associated with this
strategy of regulation is reinvestment. National and local
governments must reinvest diamond wealth in public goods like
healthcare, education, roads and electricity, so there are
fewer incentives for factions or individuals to trade in
diamonds for the purpose of providing these basic needs.
The Diamond Industry. The industry proposal laid
out in Antwerp in July 2000 was a critical step for delineating
specific actions needed by various stakeholders, while
committing the industry to play a part in the solution. The
industry has two unique mandates: the first is taking
leadership in establishing its proposed rough controls, where
stones are ``sealed and registered in a universally
standardized manner'' (Joint Industry Statement, July 19,
2000); and, second, enforcing the code of conduct. Because the
industry is organized and takes pride in its structure of
informal networks, such as the production level, members within
the industry know individuals who are dealing with conflict
stones. Therefore, the industry's second mandate is to maintain
its commitment to the code of conduct stated in the Antwerp
document, whereby ``failure to adhere to [an ethical code of
conduct] regarding conflict stones [will] lead to the expulsion
from the World Federation of Diamond Bourses, the International
Diamond Manufacturers Association, and all other relevant
organizations.'' Though the specific language is slightly vague
in that no ethical codes of conduct were explained in the
statement, the intent of the Antwerp document is very clear:
any member of the industry caught dealing in conflict stones
will be expelled from the industry. Given this intent, it is
the industry's sole responsibility to enforce this code.
Rough Diamond Importing Governments. The role of
importing is to reject parcels which are not sealed and
registered by accredited diamond export authorities.
Legislation must be passed and customs officials must be
trained to implement new rough diamond control laws.
Cut Diamond Importing Governments. Cut diamond
importing States must enact responsive laws to prohibit the
possibility of conflict diamonds from entering the market. In
the U.S., the proposed Carat Act effectively does this. With
tracking regimes, customs officials will subsequently be able
to reject or accept parcels according to any international
embargoes. An additional tool which both types of importing
governments can use is one of diplomacy. As in the case of
Liberia a known trans-shipment agent of conflict diamonds,
diplomatic tools are helpful to politically isolate rogue
countries involved in this type of trade.
International regulatory and trade bodies. The
proposed international diamond council, which will be comprised
of industry, civil society and government, should be an
important player in 1) the accreditation process of rough stone
exporting centers; 2) monitoring the rough control system; and
3) auditing both industry and exporting governments' handling
of rough stones. Beyond this, it is also necessary to involve
international governing and trade regimes like the WTO and the
UN who have the authority of international law to arbitrate
trade disputes and to enact sanctions against transgressor
countries.
Consumers. Although consumers are at the very end
of a somewhat convoluted pipeline, they are the final but the
most effective line of defense against conflict diamonds. The
power of the purse can never be underestimated, particularly
with the benefits of a free market economy where consumers can
easily choose alternative gems or synthetic diamonds. If
lawmakers and the industry fail to implement the described
necessary changes, consumers could merely boycott diamonds all
together, severely damaging both the conflict and the
legitimate diamond business. Given the positive trends of
reform, a boycott may not be necessary, but consumers still
have an obligation and a right to know the origins of such a
costly purchase. To maintain pressure on the industry and
lawmakers to limit this trade in misery, consumers should
demand to know the origins when purchasing a diamond, even if
that information is not yet readily available.
I have described the key stakeholders who have critical
roles to play in the solution to end trade in conflict
diamonds. The necessity and the miracle of involving so many
coordinated players in the solution is like constitutional
checks and balances; individual stakeholder actions can offset
any weak link in the chain.
Structural Solutions
Reinforcing Weak Links
Solutions are also needed to address the structural causes
for conflict diamonds. These structural solutions can
essentially be categorized in the areas of reinforcement and
economic incentives. I recommend these solutions:
1. Reinforce support of rough diamond exporting governments
to establish viable certificate of origin schemes and systems
of regulation over diamond mining areas. This could include
capacity building in export licensing systems and establishing
appropriate punitive actions for individuals who are found
trading in illicit and conflict diamonds.
2. Assist rough diamond exporting countries in the areas of
good governance, linking all types of financial assistance to
poverty reduction and social reinvestment.
3. Build capacity among grassroot civil society groups to
effectively monitor and report on the diamond trade at the
local level, while being careful to ensure the safety of local
evaluators.
Income Generation
Along with solutions of structural reinforcement, there is
a foundational need to address the economic reasons why
individuals trade in conflict diamonds in the first place. Some
of these reasons can be addressed at the government level, but
many of the solutions have to reach the individual by providing
economic alternatives to conflict diamonds and rebel violence.
Micro-enterprise loan funds have been successful throughout the
world in providing a way out of poverty by providing income
choices. Expanded support for proven successful initiatives is
important.
Operational non-governmental organizations (NGOs) in
Angola, DRC and Sierra Leone have to deal with the impact of
conflict diamonds every day. In trying to provide structural
solutions, World Vision, like many other NGOs, has found that a
combined approach of temporary emergency relief coupled with
income generation and civil society mobilization, are all
important elements toward building long term peace and
stability. In Sierra Leone, World Vision is finding success in
the following ways:
Food Aid. World Vision's food aid program in
Sierra Leone is based on three premises: 1) give the farming
population the tools and the best seeds they need to produce
again, assist them with the best possible technical assistance
and provide food to them so they do not eat their seeds and so
they have strength to cultivate and harvest; 2) provide food to
those populations who cannot provide for themselves, such as
the vulnerable (elderly, institutionalized), the severely
malnourished; and 3) give skilled tradesmen food so they can
begin to reconstruct homes, clinics and schools. More than
10,000 metric tons of US food will be used. The goal of this
project is to significantly improve household food security and
sustained productive capacity of the Sierra Leonian waraffected
communities in 16 chiefdoms in Bo, Bonthe, and Pujehun and in
11 chiefdoms in the Kono diamond district. This program
addresses the acute food needs of 149,000 vulnerable persons
through increased availability of, and access to food. It also
increases household food security of 10,000 waraffected,
returning farm families through increased availability of, and
access to food and agricultural inputs (labor, seed rice,
etc.). This program will improve organizational, physical, and
productive infrastructure in rural areas through food-for-work
activities, engaging 70,000 individuals, and it will enhance
community interest and participation in the formal and
nonformal education of youth via support to 4,500 at risk
youth. This program is funded by USAID, Food for Peace.
Transition Initiatives through Civil Society. The
World Vision Sierra Leone Transition Initiatives Program was
first established in January 1997 to address grassroots
reconciliation and peace building issues. Funding was suspended
after the May 25, 1997 military coup and was reinstated in 1998
after the return of democracy. This program aims at
facilitating the process of raising awareness on civic rights;
local capacity building for peace, constructive engagements
with combatant and other differing factions; effective
consensus building; reconciliation and peaceful coexistence;
youth recovery from marginalization and exploitation, and
generally supporting the process of youth empowerment, so as to
deter them from the lures of rebel warfare. World Vision works
with over 50 different community and civic groups in Sierra
Leone to accomplish the objectives of this program, which is
funded by the Office of Transition Initiatives.
Support for agriculture. The agriculture
productive infrastructure of Sierra Leone started to
deteriorate even before the war began in 1991. According to FAO
reports, production of the country's staple crop, rice, fell 18
percent between 1990 and 1997. As a result of the war,
estimates have only half of the nation's requirement for rice
being produced locally in 1999. People are beginning to return
to their land and World Vision, with the support of the Office
of Foreign Disaster Assistance, is helping to improve food
production in Sierra Leone through support to the agriculture
sector. There are three main objectives: 1) provide seeds and
tools to 16,000 returnee and vulnerable farm families in the
Kono district (10,000) and Kailahun district (6,000) during
this year's crop season; 2) capacity building to improve
agricultural practices among 48,396 farm families in our target
communities through increased access to a network of
strengthened communitybased extension services; and 3) improve
agricultural productivity for 21,841 farm families in the
Southern region by addressing other issues of agricultural
recovery beyond the emergency supply of seeds and tools.
Conclusion
Effective, holistic solutions are not implemented in a
vacuum. Wise policymakers recognize that the solution to
conflict diamonds is a constellation of actions involving key
stakeholders, coupled with solutions addressing the fundamental
causes for the proliferation of conflict diamonds. The diamond
industry has an incentive to eliminate conflict diamonds by
better monitoring the flow of rough stones. However, much of
the success of these initiatives will have to come from
importing and exporting governments and international
regulatory and trade regimes. Given the present media attention
and consumer scrutiny, there has been a lot of movement at
government levels to address the issue of conflict diamonds. It
is essential that civil society in diamond importing and
exporting countries watch both industry and governments, and
hold them accountable. No system is perfect, but no system
means war. As long as greed exists, conflict diamonds won't
entirely go away, but cooperative and consistent action can
help to minimize the economic incentives for war.
Thank you, Mr. Chairman, for the opportunity to present
this testimony to the committee. I look forward to answering
questions of the committee. Also, World Vision is prepared to
work with the Congress and the Administration to implement any
solutions that will lessen the suffering of people caused by
conflict diamonds and restore stability, peace and responsible
governance in Africa.