Glasnost for the gem industry

To fight smuggling of nuclear materials and other weapons, there's a global pact for strict safeguards. But a smaller item may soon get the same scrutiny and special handling: "conflict diamonds."

Working under a United Nations mandate, a coalition of diamond-industry experts and envoys from 34 nations agreed last week in Moscow on the basics of a far-reaching certification scheme to control this illicit trade in gems that fuel war in Africa.

The gathering, part of the so-called Kimberley Process, brought participants within range of their fall deadline to present a plan to the UN. If successful, they will produce the first comprehensive international safeguard system to fight the conflict-diamond trade. While it is seen as good for business, the plan will also require an unaccustomed openness to outside scrutiny.

The aim is to convince consumers "that the diamonds they buy for their loved ones continue to be symbols of purity, symbols of love," says Nchakha Moloi, special adviser to South Africa's mine and energy ministry, who chaired the meeting.

Smuggling is a common problem in the diamond industry - a small fortune can be tucked into a shirt pocket - but the Kimberley Process is specifically concerned with diamonds that are sold to fund weapons purchases.

The industry estimates that these "blood diamonds" make up just 4 percent of the rough stones that feed a $7 billion annual market. Independent groups say the figure is as high as 15 percent. Either way, these gems - and the negative publicity surrounding their role in fueling the slow-burn wars in Angola, Sierra Leone, and the Democratic Republic of Congo - have sparked industry fears of a consumer boycott.

Rebel groups in those countries mine their own gems in territory they control, financing their rebellions by selling the uncut stones. For diamond merchants, these gems often come cheaper than those on the legal market.

Current rules only require that diamonds have a certificate showing their last country of export, not their source. This warps statistics, such that some 92 percent of the rough diamonds imported to Israel are shown as coming from England, Belgium, and Switzerland, none of which produce diamonds.

New "certificates of legitimacy" will prove the legal source of stones and convince buyers that conflict diamonds aren't "mixed in," says Ian Smillie, an Ottawa-based diamond expert who co-wrote a UN report on Sierra Leone conflict diamonds last year.

"We got a basic agreement ... that you must have good control from the mine to first export, and then afterwards," he says of the Moscow meeting. "There is a lot of pressure for something to happen, particularly from the industry in the US, where the bulk of the consumers are." But, he adds: "What [diamond players] really want is not a system, but to get the critics ... off their backs."

Those critics charge that Kimberley measures still won't be enough, citing corruption, the frequent abuse of certificates used in the legal-weapons trade, and the simple lure of profits.

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