Blood Diamonds

Conflict diamonds, sometimes also known as "blood diamonds," are any diamonds that come from places that are controlled by forces who oppose legitimate and internationally recognized governments.

The nature of diamonds and the operations of the international diamond industry create opportunities for illicit trade, including trade in conflict diamonds. Diamonds are mined in remote areas around the world and are virtually untraceable back to their original source--two factors that make monitoring diamond flows difficult.

Diamonds are also a high-value commodity that is easily concealed and transported. These conditions allow diamonds to be used in lieu of currency in arms deals, money laundering, and other crime. Lack of transparency in industry operations also facilitates illegal activity. The movement of diamonds from mine to consumer has no set patterns, diamonds can change hands numerous times, and industry participants often operate on the basis of trust, with relatively limited documentation.

All of these practices reduce information about diamond transactions. The lack of industry information is exacerbated by poor data reporting at the country level, where import, export, and production statistics often contain glaring inconsistencies.

Blood diamonds are primarily associated with four countries: Sierra Leone, Liberia, Angola, and the Democratic Republic of the Congo. In all four countries, the production and/or trade of diamonds have played a role in fueling domestic conflict, or, as is the case with Liberia, fueling conflict in neighboring Sierra Leone through the Revolutionary United Front (RUF).

Today, Sierra Leone is experiencing relative peace with the aid of the United Nations and other efforts. Nonetheless, diamond mining remains one of the only viable economic opportunities for ex-combatants, and thus experts believe the ability to adequately manage this resource will be important for efforts at establishing long-lasting peace. In Angola, the National Union for the Total Independence of Angola (UNITA) retains control of some diamond production areas, as well as unknown quantities of stockpiled diamonds. And in the Democratic Republic of the Congo, diamonds continue to serve as a source of revenue for armed militias fighting in the north of the country.

To date, United Nations sanctions have been targeted solely at rough diamond exports from the RUF in Sierra Leone; Liberia; and UNITA in Angola. Also, both the governments of Sierra Leone and Angola have national diamond certification schemes in which certificates of origin are issued and accompany rough diamonds from their first export to their first import into a foreign country.

Blood diamonds are not just a public-relations problem. About one in every ten gem diamonds is smuggled from four African nations - Liberia, Sierra Leone, the Democratic Republic of Congo, and Angola that feed money to a large black market.

Some of the profits go to criminal gangs, some to brutal ruling regimes, some to outright terrorists. And the stones are mined under oppressive conditions for the smallest of wages, using methods that damage the countryside.

The human part is the diamond market, an ancient secretive business where dealers trade stones back and forth, combine lots from different sources, and sell them across many borders during their trip to the jeweler. American law demands certification only from the last country to export the stone.

The Kimberley Process proposal for an international diamond certification scheme lacks some key elements of accountability. We evaluated the scheme using aspects of established criteria for accountability control environment, risk assessment, control activities, information and communications, and monitoring.

While we do not expect the Kimberley proposal to fully address all these elements, this examination provides insights into its ability to deter trade in conflict diamonds. Our assessment of the scheme showed that it incorporates some elements, such as requiring that Kimberley Process Certificates that designate country of origin for unmixed shipments accompany each shipment of rough diamond exports. Also see avoiding conflict diamonds.