Posted by Sharif Khan on 12th Aug 2015
Conflict Diamonds / Blood Diamonds
Ever since the movie “Blood Diamond” hit theaters there has been a great deal of conjectures about moral values associated with wearing a diamond. Increased consumer awareness about conflict diamonds pushed the industry to embrace ethical standards and practices. This resulted in the formation of the Kimberly Process (a major breakthrough in eliminating conflict diamonds) and more government regulations. However, there is much more work to be done!
In a nutshell, as a consumer our advice to you would be to educate yourselves about conflict and conflict free diamonds, buy diamonds from trusted and ethical business owners, and always procure diamonds that have proper certification or grading reports and paperwork so that if needed you can trace the diamond back to who it came from and how it was obtained. It is a very complicated industry and much care is needed when buying a properly mined and cut diamond. Avoiding buying diamonds is not the solution as it would also hurt developing countries’ economies, but buying diamonds from the right source is.
So what are Conflict Diamonds or Blood Diamonds?
A diamond sold with proper certification is mined from age old mines. Legal diamond mines are either owned by the government of the country or huge private companies. They register the mines as a company asset and sell diamonds found in the mines through a registered organization. Such organizations are obliged to provide proper salary and facilities to their employees who mine, cut and polish their diamonds. The diamonds are then sold in the world market and the jewelry industry use them to create fine jewelry.
On the other hand, conflict diamonds are collected from areas controlled by rebels or warlords/criminals as well as unethical businessmen. There are several conflict prone zones in the world from the well known Sierra Leone to Zimbabwe, Congo, Liberia and Angola where conflict diamonds are mined. Rebel groups fighting against governments in these countries often hold civilians as prisoners. They make the prisoners work in the diamond mines and force them to work in inhuman conditions for long hours without basic rights.
Conflict diamonds are available for nearly 50% less cost than the normal diamonds purchased from the registered mines. Hence, diamond companies engage in shadow activities which keep the rebel groups active to ensure a standard supply of cheap diamonds. Consequently, the vulnerable political and economical environment of the war torn countries are exploited by multinational companies to earn millions of profits. They might even indirectly fund political instability in areas where diamond mines are located to ensure constant havoc.
How it all began?
To understand how conflict diamonds became a social problem, it is important to understand and analyze the history of the traditional diamond market. Antwerp in Belgium was the headquarters of diamonds for centuries. Diamonds were considered as royalty only available to imperials. The industry was highly controlled. Moreover, diamond cutters were hailed as heroes as they created amazing cuts and signature styles. However, World War II changed everything paving the way for other players to enter the diamond market from developing countries.
Africa’s political instability starting from late 1960’s and still persisting in several areas became a thriving ground for the trade of conflict diamonds. The cold was also in a way aided this growth as attention to such small issues amid large wars were not taken seriously.
While the world was busy with wars, it provided a great opportunity for rebels and terrorists in Africa to use blood diamonds and drugs as means to raise funds for buying arms and paying for large armies. Developing countries such as India, which did not have strict regulations for child labor, became a great location for them to process the diamonds. They also invented several mechanical ways to cut diamonds as result diamond cutters are no more celebrated as heroes. Consequently, the expertise of the diamond cutters are no longer as critical as before because for an illegal smuggler a well-trained slave with proper equipment can easily replace a cutter.
Why is the trade of conflict diamonds or blood diamonds so tempting?
When a diamond company purchases a legal diamond, every party pays their fair share of cost and taxes. When a consumer buys such a diamond, s/he are able to garner all details starting from the company where the diamond is purchased to the diamond’s carat, color, weight, warranty and sometimes even proper details about the mines where the diamond was mined. If a company holds stock of 100 diamonds, they have to submit clear proof and transaction details regarding each piece. The profit margin in this trade is limited.
If a jewelry store buys 90 diamonds and mix 10 conflict diamonds with the good lot, they save nearly half the cost on those ten diamonds. There are no taxes for conflict diamonds as it comes from an unregistered source. However, consumers are charged the same price – paving the way for ample profits for the diamond dealer. It is estimated nearly 20% of all diamonds in today’s market are conflict diamonds though official sources limit it to 1 to 4%. A diamond dealer would pay nearly two to three times higher price to get a diamond from an ethical source. Conflict diamonds costing over twice of the regular diamonds price have the same impressive quality and characteristics as any other diamond.
Conflict diamonds are affordable because the rebel groups use prisoners to mine them out. There is no government to control them and hence no taxation. They also do not spend towards maintaining the sustainability of the mines or care about the welfare of the workers. They smuggle these diamonds into the world market. When retailers purchase these diamonds, they come across quality conflict diamonds for unbelievingly low price. Buying 10 such diamonds can easily create tens of thousands profit for the jewelry stores. As a result, all ethical codes and standards of maintaining fair trade policies dissolve before profit.
The indispensable impasse of greed nurtured by companies in their quest to accumulate profit shatters the life of millions of peoples. Families are torn apart, loved ones killed and childhood of several children scarred. Massacres akin to the ones which shook the world in Sierra Leone happen every day in the areas filled with such diamonds in order to make them a breeding ground for cheap diamonds.
How are the Illegal Diamonds Processed?
The Kimberly Diamond Certification Process checks the origin of unpolished diamonds and how they are mined. However, they have limited ability to control how diamonds are polished and processed.
Since there is not much control over polished diamonds, illegal unpolished diamonds are often taken to places like Surat – a thriving seaside city in the state of Gujarat, India for processing. Cities like Surat provides diamond smugglers the means to cut and polish diamonds before they are ready for use in the jewelry industry.
Just to give you an idea, in Surat a typical workday for a 14 year body starts as early as 7 in the morning. These workers have to trudge in day after day polishing and cutting diamonds for 100 hours every week. Tuberculosis, resulting from constant inhalation of diamond powder, death before 19 years and extremely damaged eyesight is common among the workers.
Most of these children polishing and cutting diamonds are orphans or kidnapped kids. They are just given food which accounts to a few cents. For every $1 they earn, they have to produce shiny stones worth over $1,000, and it might take over three days for them to earn a dollar. Gujarat, known as one of the most educated and elite state in India controls these illegal diamond processing companies which spring up in nearly every basement of the city. Decades of the NGO fights to save the children hasn’t achieved much due to the powerful mafia and international interference.
Many children that are saved, relocated and united with parents only make way for another group taking up their place. Conflict diamonds not only affect the areas where they are found, but the life of several innocent children fueling a massive human trafficking industry. Any child from any country no matter how rich or poor, educated or illiterate can fall prey to the kidnappers and end up dying with puss filled eyes working in diamond cutting factories.
Measures taken to Control Conflict Diamonds / Blood Diamonds
The unwavering actions and measures of various NGOs and UN have created massive awareness about conflict diamonds amongst the high paying diamond customers. Consumers have started to question the authenticity of the diamonds and its origin thoroughly and the companies are forced to cross check their inventory and prevent cheap diamonds voluntarily. Nearly 74 governments geared up with the UN to strictly monitor and regulate diamond trading. The Kimberly Process Certification system was introduced in these 74 countries that are the major consumers of diamonds in world. According to the KP process, every diamond ever purchased by a jeweler goes through a series of diamond origin checks to confirm it is bought from a proper registered mine.
The global community is doing its best to close the illegal mines and establish political stability in the war torn areas. Providing aid for people held as prisoners in the mines is taken diligently. The production of the blood diamond is restricted, the demand for the product is declined, and further strict actions are taken regularly to prohibit conflict diamonds from entering the mainstream market. However, this is not the end of the story. More action needs to be taken both on part of governments as well as consumers.
Controversies over Kimberly Diamond Certification
The release of the DiCaprio movie Blood Diamond increased customer awareness and strict regularity policies of governments controlled the flow of conflict diamonds. However, the Kimberly Diamond Certification process itself is now falling into pieces. It usually consists of a committee of over 40 people. Half of them feel the raw diamonds purchased by diamond companies should be monitored while the other half feel merchants should be free to purchase cheaper diamonds to meet competitive markets. The Chairman of Kimberly Diamond Certification process cleared Zimbabwe’s Marange diamond fields known for their human rights violations as a conflict free zone in 2011 raising many controversies. Governments and consumers need to take the lead for ensuring the wellbeing of everyone.
Zimbabwe backed his move arguing that the claims of inhuman working conditions in the Marange mine fields were part of Australia’s economic devastation plot against their economy. Similar claims have been raised by countries like Namibia who highly depend upon diamond exports for a stable economy. These countries claim even legal miners from their countries face serious difficulties in selling their diamonds because western consumers and diamond lovers at large have a negative image about their diamond mines. They claim such a negative media portrayal is harming their economies and is not doing any good in curbing the trade of blood diamonds.
The most effective consumers who can affect diamond sales in terms of price, quality and ethics are ones from western countries. They make once in a life time investments to purchase high quality diamonds. They have ample knowledge regarding the quality of diamonds and the industry in general. If the western consumers are determined not to use conflict diamonds and push the companies further to provide proof of authenticity for every diamond purchases, a huge difference can be made.
Diamonds are associated with luxury for centuries. However, sometimes they are unfortunately also the cause of immense suffering. The luxury is associated with the wearers while the misery is doomed upon the miners who are forced to work in inhuman conditions fearing death for the slightest mistake. Developing countries will benefit enormously from the awareness created among western diamond consumers. Avoiding diamonds is not the solution as it would also hurt their economies, but buying diamonds from the right source is.
There is more work to be done on legalizing the supply chain of diamonds. The Kimberly Process also needs further improvement. Government regulations on corporations is also critical.
As a small business, at Petra Gems we don’t have the means to directly mine diamonds. Therefore, we only buy certified diamonds from trusted/reputable diamond dealers and consumers who are reselling their pre-owned diamonds so that we can always trace it back to the supplier who c ertified/graded the diamond to verify how they obtained it in case of a government inspection.
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