Tainted gems lose sparkle as prices fall

A two-year international campaign to dim the glitter of "blood diamonds" appears to be working, though methods for tracking suspect stones are still being honed.

Gems mined in the war-torn areas of Sierra Leone, Angola, and the Democratic Republic of the Congo are fetching prices about 30 percent below those from reputable mines in South Africa, Botswana, Namibia, Australia, Canada, and Russia, according to Global Witness, a United Kingdom-based non-governmental organization that investigates and opposes the use of natural resources to fund war.

Antwerp, Belgium, the world's main diamond trading center, "is starting to turn down conflict diamonds," says Alex Yearsley of Global Witness.

Diamond traders are "scared of the police, of UN and NGO investigations, of being reported on," Mr. Yearsley says.

The campaign against the sullied stones is uniting the UN, activists, government officials, and the diamond industry in a rare marriage of humanitarian concerns and profit motives.

Falling prices on the blood diamonds are viewed by many as a timely bonanza for DeBeers, the South African company that controls about 60 percent of the world diamond market.

"The stock markets have told DeBeers to get rid of its stockpile, which doesn't earn it any money if it's just sitting in the vault, and along comes this conflict-diamond campaign at just the right moment," says a manager of a large state-owned diamond mine in southern Africa, who asked not to be named.

According to Hilton Ashton, a diamond market analyst in Johannesburg, DeBeers has reduced its stockpile from $4.8 billion in late 1998 to $2.7 billion at mid-2000.

While DeBeers denies that the conflict-diamond issue has been a factor in its stockpile reduction, Global Witness' Yearsley says "it is true that DeBeers has used the conflict-diamond issue to their commercial advantage.... But if that is what it takes to get the issue sorted out, then so be it."

Next month, South Africa is expected to introduce a UN General Assembly resolution to initiate a global treaty that would govern the diamond trade.

Depending on which estimates are used, blood diamonds represent 4 to 15 percent of the world's $6.8 billion annual diamond production. The stones are mined by rebel groups to buy guns and fund wars against democratically elected, internationally recognized governments.

For the campaign against blood diamonds to be truly effective, reliable, internationally accepted tracking standards must replace country-by-country approaches led by industry working with weak governments, Yearsley and other activists say.

But is there a practical, crook-proof way of tagging and tracking diamonds?

Such a system would have to engage staff and systems in mines, in government diamond evaluators' offices, in customs offices, in diamond polishing and jewelry manufacture, and in jewelry stores - a web reaching all the way from gem lodes in the earth to the counters of Wal-Mart, the biggest diamond buyer in the US.

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