Tuesday, September 2, 2014
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Clarity about Diamonds

PRINCETON – Diamonds have an image of purity and light. They are given as a pledge of love and worn as a symbol of commitment. Yet diamonds have led to gruesome murders, as well as widespread rapes and amputations.

Charles Taylor, a former president of Liberia currently facing war crimes charges at a special court in The Hague, is alleged to have used diamonds to fund rebels in Sierra Leone’s civil war.  The case against Taylor represents only one of several examples in which diamonds have facilitated widespread human rights violations.

When diamonds’ role in fueling violent conflict in Africa gained worldwide attention, the diamond industry established the Kimberley Process in order to keep “blood diamonds” out of international trade. The initiative has met with some success, although it has not completely halted trade in diamonds from conflict-torn countries like the Democratic Republic of Congo.

Recently, however, concern has been expressed – from within the diamond trade – that the scope of the Kimberley Process is too limited, and that consumers have thus been lulled into believing that there are no longer any ethical problems with diamonds. That is far from the truth.

The problem came to a head this year when the Kimberley Process began to certify diamonds from Marange, in Zimbabwe. The Marange diamond field, discovered in 2006, is one of the richest ever found.

According to Diamonds and Clubs, a recent report from Partnership Africa Canada, soldiers have press-ganged peasant farmers into working in mining syndicates at Marange. The soldiers then take half the proceeds. There have also been extensive beatings and arbitrary detentions. When Farai Maguwu, a Zimbabwean human rights activist, disseminated information about the abuses, he was arrested (he has since been released).

Zimbabwean authorities claim that the violent human rights abuses have stopped, but the ethical problem with Marange diamonds goes much deeper. Soon after the field was discovered, the Zimbabwean military took control of the area. According to the Zimbabwean finance minister, Tendai Biti, four years after the military took over the diamond fields, the national treasury has received not one penny of royalties from the sale of Marange diamonds. Zimbabwe’s military and political elite has appropriated the diamond field’s immense wealth for itself, with no benefits for the millions of desperately poor Zimbabweans who need the kind of services that the country has the resources to provide.

This is not, of course, the first time that the discovery of resources in an undeveloped country has led to riches for a few rather than greater prosperity for all. Teodoro Obiang, the dictator of tiny, oil-rich Equatorial Guinea, has an official salary of $60,000, but owns six private jets and a $35 million house in Malibu, as well as other houses in Maryland and Capetown and a fleet of Lamborghinis, Ferraris, and Bentleys.

Most of the people over whom Obiang rules live in extreme poverty, with an average life expectancy of 49 years and an infant mortality rate of 87 per 1,000 live births (in other words, more than one child in twelve dies before its first birthday). Nigeria and Angola are other glaring examples of countries that have failed to use their oil wealth for the benefit of their people.

Paradoxically, resource-rich developing countries are often worse off than comparable countries that lack those resources. One reason for this is that large resource endowments provide a huge financial incentive for attempts to overthrow the government and seize power. Rebels know that if they succeed, they will gain immense personal wealth, be able to reward those who backed their coup, and have enough arms to keep themselves in power, no matter how badly they rule. Unless, of course, some of those whom they arm are themselves tempted by the prospect of controlling all that wealth.

Thus, the resources that should benefit developing countries instead become a curse that brings corruption, coups, and civil wars. If we use goods made from raw materials that are obtained from a poor country without the proceeds being used to benefit the people of that country, we become complicit in a particularly iniquitous form of grand larceny.

It is therefore encouraging that concerns about Zimbabwean diamonds are being raised within the diamond trade itself. The Rapaport Group, an international network of companies providing services to the diamond industry, refuses to list Marange diamonds on its diamond-trading platform, RapNet. Martin Rapaport, chairman of the group, has called for free access to the diamond fields by non-governmental organizations and industry representatives to monitor the human rights situation. More significantly, in a speech in Mumbai earlier this year, he laid out requirements for legitimizing Marange diamonds that included some assurance that “the revenues from the diamond sales are distributed legally and in a way that reasonably and fairly benefits the people of Zimbabwe.”

There is a need for higher standards than those set by the Kimberley Process. If consumers insist on buying only ethical diamonds, traders might be able to push the demand back to their sources. And, if the diamond industry can put itself on an ethical footing, it might send a message to other industries that deal in resources that are effectively being stolen from some of the world’s poorest people.

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