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Conflict-diamond rules will stabilize gem trade Last month representatives from over 50
countries gathered in Interlaken, Sweden, to finalize certification guidelines
for the diamond industry. Named the Kimberley Process Scheme, the guidelines
will attempt to bolster the integrity of international diamond trading
and put an end to the trade of so-called “conflict diamonds.”
That term refers to diamonds and proceeds from diamonds that are used
to support armed conflict in countries such as Angola and Sierra Leone.
While consumers may not care where the diamonds
come from, or what organizations are funded by the revenue from diamond
sales, this issue has been a big thorn in the side of the jewelry industry
for the past few years. The controversy has been fueled in large part
by non-governmental organizations drawing attention to the issue. Under the Kimberley agreement, which takes
effect January 1, batches of rough diamonds must be accompanied by government
certification that the gems don’t come from territory held by rebels.
The onus is then on the importing nation to acknowledge the receipt and
reject shipments that do not meet requirements. The regulations will have the biggest impact
on 3 percent of the world’s rough diamonds that are mined and traded
illegally—often in exchange for arms. Conflict diamonds are estimated
to account for about 3 percent of the annual global production of rough
diamonds, which totaled close to $8 billion last year. The other 97 percent
of diamonds are understood by the industry to be conflict-free. Matt Runci, president of Jewelers of America,
said the new regulations are beneficial since jewelers can now offer complete
assurance to their customers that all diamonds they sell after January
1 have come from “clean” sources. “It’s not just the
jewelers’ word anymore, it’s backed by the U.S. government,”
Runci said. “That adds legitimacy and stability jewelers can feel
good about.” Andrew Coxon, executive vice president of De Beers LV, the retail joint venture formed last year by De Beers Group and LVMH Moet Hennessy Louis Vuitton, said: “The Kimberley Process will ensure that legitimate diamonds will be sold through all retail chains with more confidence than ever before. Even though the civil wars in the African diamond areas have now ended, the diamond industry has acted to ensure that the consumer can always be protected from conflict diamonds.”
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While
diamond industry executives and governments, including the U.S. and Britain,
are cheering the new regulations, it is still unclear how much impact
they will have on the minds of consumers. While visibility on the subject
of conflict diamonds has increased due to exposure in newspapers and television
shows like “Dateline NBC” and “60 Minutes,” reports
show that consumers don’t typically ask questions about illegal diamond
trading.