conflict diamonds 001 · opinion on the issue of conflict diamonds, which in itself is a new term....

ConflictDiamonds

P O S S I B I L I T I E S F O R T H E I D E N T I F I C A T I O N ,C E R T I F I C A T I O N A N D C O N T R O L O F D I A M O N D S

a working document by global witness. 10 may 2000

This working report has been produced by Global Witness.Partial funding for this report was kindly received from theUN department of the UK Foreign and CommenwealthOffice (FCO), without which this report would not havebeen possible. The views expressed within are solely those ofGlobal Witness. There are many individuals, companiesand countries (too many to list) that kindly cooperated withthe production of this report and we are grateful for theirtime, patience and genorsity without which the report couldnot have been produced.

Global Witness is a British based non-governmentalorganisation which focuses on the links between environ-mental and human rights abuses, especially the impacts ofnatural resource exploitation upon countries and their peo-ple. Using pioneering investigative techniques Global Wit-ness compiles information and evidence to be used inlobbying and to raise awareness. Global Witness’ informa-tion is used to brief governments, inter-governmentalorganisations, NGOs and the media. Global Witness has nopolitical affiliation.

© Global Witness LtdP O Box 6042,London N19 5WP,United KingdomTelephone: + 44 (0)20 7272 6731 Fax: + 44 (0)20 7272 9425e-mail: [email protected]://www.oneworld.org/globalwitness/

c o n f l i c t d i a m o n d s 1

Introduction

This report seeks toexamine the possibilities for controlling the entry ofconflict diamonds into the legitimate diamond industryand to establish a basis of understanding about whetherdiamonds can be identified by country of origin.

The basic debate is that several of the most desta-bilising and destructive conflicts in Africa are partlyfunded through the mining and marketing of highquality gem diamonds. These diamonds end up for salein jewellery shops around the world as beautifullycrafted gifts of love, a paradox that the internationalconsumer is beginning to feel increasingly consciousand wary of.

Currently the diamond trade, as a unified whole,have failed to put recognisable or verifiable controls inplace that will render the certification of diamonds asbeing conflict free. If any of these diamond funded con-flicts in Africa are to have a chance of peaceful conclu-sion and if the threat to the international market is tobe negated, then the international community, throughthe G8, G77, UN, SADC and EU must act swiftly anddecisively to prohibit the sale and marketing of these‘blood diamonds’.

Since late 1998 there has been a shift in worldopinion on the issue of conflict diamonds, which initself is a new term. No longer is the ‘soaking up’ of‘open market goods’ from areas of conflict deemed to bean inevitable consequence of the need to stabilize theworld price of diamonds. Governments have ceased toaccept this as an argument for non-interference, as haveconsumers. Indeed, perhaps most importantly, in termsof long-term change, the commercial part of the dia-mond industry has itself begun to change its positionon this issue. There have been encouraging actions andstatements but these have been in response to pressurefrom governments, the United Nations and from asmall number of non-governmental organisationsincluding the Fatal Transactions campaign, comprisingGlobal Witness, Niza, Medico International andNovib, which is seeking to encourage consumers toinsist upon conflict free diamonds.

It is vital that a long-term solution to this verycomplex problem be found, and that can only work ifsome of the underlying structures are addressed ratherthan the commercial sector of the industry dealing witheach problem country on a case-by-case basis. This isno way to deal with the atrocities and horrors inflictedupon the peoples of affected countries nor protect thelegitimate diamond economies. It is clear that there is aneed to create a ‘chain of custody’ within the diamondtrade – an auditable trail from the mine to the con-sumer that can work with existing structures and pat-terns of trade. The initiative of the South AfricaGovernment on bringing together government and

industry in a Technical Forum, for the 11–12th May2000, to work on ways to address the problem is to bewelcomed and should be widely supported. It is thefirst meeting of government and industry and shouldbe a starting point for coordinated reform by govern-ment and industry.

Global Witness, in this report, has a number ofkey recommendations, building towards a system ofcontrol that we believe is implementable and necessary.These recommendations need much debate and are notintended to be exhaustive. We look to governments andthe commercial sectors of the industry to use this reportas a building block towards controls that will severelyreduce the flow of conflict goods and enable a diamondto once again be “A girl’s best friend.” Initial research,which was not exhaustive, has identified applicabaletechnology that is either developed, or is being devel-oped. Global Witness advocates that trade and govern-ments consider the following existing possibilities.Currently there are systems that can: calculate andrecord the individual surface profiles of rough dia-monds; confirm the identity of a parcel of stones thathas been registered using this method; mark rough dia-monds with individual bar codes or other readableinscriptions; mark cut diamonds with codes, bar codesand logos; identify and verify the identity of cut orrough diamonds that have been coded; record and ver-ify the individual optical signature that a cut diamondexhibits using laser refraction.

A system using elements of these coupled withimproved regimes in exporting countries, and the intro-duction of relatively low technology identificationtechniques including work on surface features and pro-filing of run of mine production could be used as a basisfor reform by both governments and trade.

CONFLICT DIAMONDS

What exactly are conflict diamonds and why do theyhave such an impact? There is much debate as to whatconstitutes a conflict diamond and it will requiredetailed discussion before an exact definition is con-cluded. The extremely high profile role that this com-modity is having in funding some of Africa’s civil wars itmakes it logical that we should start there. However thedefinition of conflict diamonds should not be restrictedjust to Africa and could feasibly cover any country.

In Africa it is possible to be clear as to what con-stitutes conflict diamonds. Diamonds that originatefrom areas under the control of forces that are in oppo-sition to elected and internationally recognized govern-ments, or are in any way connected to those groupsshould be considered as conflict diamonds. Drawing ontheir considerable experience in this area De Beers hasrecently defined conflict diamonds to be, as ‘ diamondswhich originate from areas in Africa controlled byforces fighting the legitimate and internationally recog-nized government of the relevant country.’ This is, infact, a working definition.


Diamonds are one of the most concentrated formsof wealth known to man and as a result they offerpotentially huge financial returns. In addition they aresmall and easily concealed. They occur in many coun-tries across the globe – many in Africa. They can bemined using sophisticated equipment and techniquesor they can be manually dragged from the earth byhand often in terrible and unsafe conditions. TragicallyAngola, Sierra Leone, Liberia and the DemocraticRepublic of the Congo are beset with a terrible paradox– enormous mineral wealth and devastating civil con-flict.

Rebel armies need financing to buy arms andmunitions, to pay and feed troops and to keep strategicallegiances alive. Since the end of the Cold War theprotagonists in these wars have not had access to thefunds needed to maintain the apparatus of a military ora political regime. Instead they have turned to any com-modity that has a fiscal worth and a readily accessibleand consumable market such as timber, animal tro-phies, gold or diamonds. The wars in Angola, SierraLeone and the Democratic Republic of the Congo arecurrently the most notable examples of where rebelshave used diamonds in this way. However diamondsand the wealth they generate are not sensitive to bor-ders and the profits have been used to finance conflictabroad as in the case of Liberia.

This can be readily seen by the staggering amountof revenue that Unita were able to generate during the1990s – over a 6 year period they amassed US$3.7 bil-lion, which was far more than they ever received duringthe period of the cold war. Due to this funding theywere able to maintain a sophisticated military operationwhich effectively ensured that no peace process inAngola would work. In Sierra Leone the RevolutionaryUnited Front were transformed into a well equippedand lethal fighting force due to the control and sale ofhigh value gem diamonds. The UN urgently needs totackle the problems of the RUF generating continuedrevenue from diamonds. Despite deploying the largestforce in its history as of February 2000, it did not havea single member of staff responsible for monitoringdiamonds. Current work by the international commu-nity to strengthen the official diamond sector are verypositive but action must be taken over rebel diamondsales. The current crisis in Sierra Leone is also a chanceto for the diamond industry to prove to the seriousnessof its intent to deal with conflict goods. It should usethe opportunity of the South African technical forumon conflict diamonds to take immediate steps to endthe purchase of RUF origin diamonds. The strategiccontrol of the diamond producing areas in the DRC isone of the key driving forces in the conflict and thecontrol of them will be critical to a lasting negotiatedpeace settlement.

This report is divided into six sections:

Section 1 ‘The Structure of the Diamond Industry’seeks to provide those who are not diamond-

industry experts with a grasp of the scale of theindustry and how the different parts of the dia-mond pipeline relate to each other; providing out-line information on the most significant diamondproducers, the main polishing countries and thefinal end markets.

Section 2 ‘Diamond Identification Methodologies’examines the different ways in which diamondshave been studied to aid exploration, mine devel-opment and geological understanding. However itcan be seen that a number of these techniqueshave resulted in the ability to identify the produc-tion from a diamond mine and in some cases indi-vidual diamonds.

Section 3 ‘Legislative Overview’ identifies the loop-holes in the international diamond trade from acustoms perspective and looks at import andexport regulations for a number of key countries,and briefly looks at trade and consumer issues.

Section 4 ‘ Technologies and Control Systems in Use inthe Diamond Industry’ describes some of thenewer technologies used in working with dia-monds which could be applied to diamond con-trols and looks at current control systems in thetrade.

Section 5 ‘Certification Systems for Other Products’gives examples of verification schemes in opera-tion in other industry sectors.

Section 6 ‘Recommendations for a Control System’draws upon the rest of the report to make a seriesof recommendations regarding controls to addressthe problem of conflict goods.


1

The Structure of theDiamond Industry

This section seeks toprovide those who are not diamond industry expertswith a grasp of the scale of the industry and the way inwhich the different parts of the diamond pipeline relateto each other; it provides some outline information onthe most significant diamond producers, the main pol-ishing countries and the final end markets.

The total world production of diamonds for 1999is estimated at $6.8 billion1. Of this total $3.8 billionwas from countries that are well regulated, namelySouth Africa, Namibia, Botswana, Canada and Aus-tralia. Rusia produced US$1.6 billion, but it is difficultto assess regulatory capacity due to lack of information.The remaining US$2.4 billion came from Angola(US$600 million), which appears to be attempting toreform controls, and also smaller production from awide range of countries, which accounts for $800 mil-lion (Democratic Republic of Congo would account fora significant proportion of this). In other words, justover half of the world’s production by value came fromfive countries with tightly controlled diamond produc-tion, and just a small number of mines. If one includesRussia that would total approximately 70% of worldproduction.

Diamonds are mined in a total of approx. 26 coun-tries. The overwhelming majority of diamonds aremined under government control and about 80% of alldiamonds mined are used for industrial purposes2.Working of diamonds takes place in about 30 countriesworldwide3.

Polished production in 1998 amounted to approx.860 million stones3. India polished the vast majority ofthese stones, at an average size of 2.3 points3. This is avery small average size, given that there are 100 pointsto a carat and does point to considerable difficulties inan individualised product audit trail. Worldwide about600,000 diamonds of half a carat or more were pol-ished. Interestingly the value of these two different cat-egories of diamond were roughly equal3. StandardEquities, using 1996 data, gives a country and mineanalysis that points to 4.195 million carats of roughgem diamonds of over 2 carats with an average value of$560 per carat and a total value of $2.352 billion, orapprox. one third of the market4. This is detailed in

their 1998/1999 report “De Beers/Centenary and theglobal diamond industry” in which they note “Esti-mates such as this are highly complex and the latestavailable data we have is for 1996.” 4

In 1999, $13 billion worth of diamonds were soldin jewellery worldwide with a wholesale value ofapprox. $27 billion, which in turn was worth $56 bil-lion in retail sales. The diamond content of jewelleryvaries widely and an accepted average is that 23% ofdiamond jewellery retail value is actual diamond value.The wholesale market breaks down as follows: the USAwas the largest market with $6.24 billion (48%); Japanthe second largest with $1.82 billion (14%); Asia Ara-bia $1.43 billion (11%); Europe $1.56 billion (10%);Asia Pacific $1.3 billion (10%); the remainder was$0.65 billion (5%). In terms of retail sales of jewellerywhich included diamonds the percentages are very sim-ilar, although the values are much higher: the USAaccounted for 44% of sales ($24.6 billion); Japan for19% ($10.6 billion); Europe 14% ($7.8 billion); AsiaPacific 5% ($2.8 billion); and Asia Arabia 4% ($2.2 bil-lion). De Beers has estimated that the value of diamondjewellery at wholesale terms was $27 billion in 1999. 5,6

The diamond industry is a major player in theeconomies of a number of countries. In Africa it is asignificant contributor to the South African economy,the Guinean economy and to others, and is the domi-nant revenue source in Botswana and Namibia. In Rus-sia the picture is less clear but the country producesabout $1.6 billion of diamonds. In Canada the impor-tance of diamonds is growing fast, with a projected 12%share of total world production within the next fewyears7. Belgium is the world’s biggest market for roughdiamonds, with an estimated 80% of rough and morethan 50% of polished diamonds passing throughAntwerp8, although tax income to government is verylow. Switzerland is important because it is the countrythrough which large quantities of diamonds are trans-ferred by De Beers’ London based Central SellingOrganisation (CSO) for, it seems, tax purposes. Britainplays a unique role as it is the country from which DeBeers, through its sightholder system, sells its dia-monds, which alone account for approx. 70% of all dia-monds mined.

EXTRACTION

The majority of the world’s diamonds are mined by ahandful of companies:

De Beers which mines approx. 50% of world pro-duction, some of which is in partnership with govern-ments; Debswana which is equally jointly owned by theGovernment of Botswana and De Beers; Namdebwhich is also equally jointly owned by the Governmentof Namibia and De Beers; Alrosa which accounts for allofficial Russian production, with the Udachny minealone producing approx. 75% by value and 68% by out-put in 1998, although this is due to change in the verynear future as another mine increases output9; Argyle of


Australia, which includes a 60% holding by RioTinto10, and 40% by Ashton Mining11; BHP DiamondsInc. (a wholly owned subsidiary of Broken Hill Propri-etry Company Ltd), in a joint venture with Dia MetMinerals Ltd and two geologists, is currently mining allthe production from Canada’s North West Territoriesunder the Ekati name12. The mine produces circa 3 mil-lion carats per year, about 5% of world diamond pro-duction12; MIBA (80% shares held by Government ofDRC and 20% by the Belgian Sibeka), which controlsthe mines at Mbuji Mayi in DRC13. There are also asignificant number of medium-sized companies.

About $300 million is spent on exploration annu-ally, of which about $145 million is spent by De Beers4.Standard Equities forecast that world rough productionwill increase by about 2– 3% per year4. Tacy Ltd haspointed out the astonishing returns that are possiblefrom mining; “It is not unusual for diamond mines torecover their capital expenditure within two years. Thecapital expenditure of the new small Marsfontein mine[in South Africa] was recovered in five days.”14

TRADING AND MOVEMENT OFDIAMONDS

Trading of diamonds falls into several broad categories:diamonds traded by large companies that have beeninvolved in the mining of the stones; government bod-ies selling official production; companies licensed tobuy diamonds mined by others; small scale miningcompanies selling their own production; licensed buy-ers; unlicensed buyers buying unlicensed production;extensive trading in diamond bourses and betweencompanies/individuals.

Whilst there is definitely some intra-Africa trad-ing of rough diamonds, the majority of diamondsbought on the open market are flown directly toAntwerp or other trading centers such as Tel Aviv, NewYork and Bombay. It has been claimed that most of thediamonds are mixed whilst in Africa and then importedto Belgium as mixed goods, thus rendering identifica-tion of the stones impossible. This seems initially plau-sible, and was an argument put forward by De Beers inearly 1999. However, profit on trading of rough isbased upon swift turnover of capital, the faster a deal isturned around the quicker a trader can move onto thenext parcel of goods and hence build overall profits on apercentage basis. It does not make commercial sense tohold up goods, away from the market place whilst wait-ing to put together a suitable mixed parcel. Addition-ally, security is an important issue, as the moving ofstones across national borders in Africa may call foreither smuggling or for paying-off officials15. This notonly increases costs but raises risk. Furthermore, cur-rent implementation of country of origin and countryof provenance is very lax, resulting in no real need tomix parcels overseas to disguise true country of extrac-tion. It is, of course, true to say that mixing does occurbefore entry to the key markets, as does some sorting of

goods. This involves sorting goods from an area by sizeor value. Once the original export from country ofextraction has been made, a process of sorting, mixingand trading-on does take place. It has not been possibleto ascertain what percentage of the annual productionis traded in this way, and what percentage has a muchmore direct trading history up to being set in jewelleryand sold to the public. Global Witness recommendsthat this work be carried out, hopefully with the co-operation of key industry players including De Beers,sightholders, traders and manufacturers and invitesinformation from any of these groups to complete thisanalysis.

De Beers holds it diamond stocks in the 100%owned Diamond Corporation (Dicor) apart from thoseheld at the mines, and those held by “…the variousCSO trading companies to the point of sale by the Dia-mond Trading Company (gem) at the ten sights peryear, and through regular sales by the various industrialdiamond companies.”4 Diamond brokers have tradi-tionally played an important role in the sightholder sys-tem. There are only a small number of brokers and theirrole is to liaise between the client and the CSO and tointroduce new sightholders. They are paid a one percent commission by the client on an ongoing basis16.

The polished goods are traded and sold on to jew-ellery manufacturers, or are set in jewellery by the pol-ishing company. The total timeframe from point ofextraction to the final sale to the consumer is known asthe pipeline. This appears to be shrinking from approx.two and a half years to about two years and may shrinkfurther17.

CUTTING CENTRES

There are around thirty countries worldwide wherediamonds are cut, polished and processed into jew-ellery. Details are given below of a number of the maincountries to give an indication of the scale of the busi-ness. It is not meant to be an exhaustive list.

india

India overwhelmingly dominates the polished diamondmarket with exports worth over $6 billion and about50% by value of the world market share of polished dia-monds (approx. 90% by weight). The industry providesan estimated 700,000 jobs18,19. An estimated 95% of allthose employed in cutting diamonds work in India20. Itis said that “Nine out of ten diamonds set in jewelleryare cut and polished in India.” 18 India has a polishedproduction of 820 million stones3.

belgium

More than half of the world’s rough and polished dia-monds are traded in Belgium through over 1,500 com-panies. There are approx. 60 De Beers sightholders,some of whom are also manufacturers, which total


about 320 companies. Most of the companies employ asmall workforce of less than 20 people, and in 1998there were only 40 companies whose workforce wasmore than 40 people. There are a small number of com-panies employing very large numbers of people.21 In1998 the total workforce was estimated at 3,000 butthere are a number of figures from different sources21.The High Diamond Council (known by its Flemishinitials HRD) states that 30,000 people are directly andindirectly employed in the diamond sector8. The HRDalso states that the industry accounts for 8% of Belgianexport activities8.

israel

Israel exports approximately half of its diamonds to theUSA. In 1999 it exported more polished diamonds, byvalue, than India and Belgium combined. This wasworth a total of $4.2 billion, which is 46.5% of theUSA import market.22 India was the second largestexporter with $2.2 billion which formed 24.9% of theUSA import market and Belgium was the third largestwith $1.8 billion of exports forming 20% of the importmarket.22 Israel was initially affected by the Asian crisis,and the workforce decreased to an estimated 4,000people. There has since been some recovery, and theworkforce has begun to increase.21 23 In addition thereare an estimated 2,000 workers employed by Israelicompanies overseas, in countries with lower labourcosts.24 Israel processes about 75% of the annual pro-duction of higher value gem diamonds, and so is verysignificant in terms of any control system3.

thailand

The diamond cutting industry of Thailand was badlyaffected by the Asian financial crisis of 1997. Diamondexports are an important part of gemstone exports andthe country is ranked as the world’s ninth largest dia-mond exporter. There are about 30 companies that pol-ish or provide services to manufacturers and about 70%of these are foreign owned. There are approx. three DeBeers sightholders, and another 16 that are described ashaving direct access to CSO goods. The industryemploys about 5,000 people21.

the usa

The USA is also a very important cutting centre, seesection immediately below for further information.

KEY CONSUMER MARKETS

The world diamond jewellery retail market was worth$56 billion in 1999, and the figure is on a continuousgrowth curve5, with the major market being the USA.Diamond jewellery sales worldwide are dominated bysales of rings, which account for 79% of sales, followed

by pendants with 8% of sales (a very fast growing sec-tor), and earrings with 7% of sales.25

the usa

The USA is the world’s biggest diamond market21.New York has about 1,800 licensed dealers suppliedmainly through 25 De Beers sightholders and there islong-running concern about obtaining sufficient sup-plies of rough diamonds to meet demand. It is oftendescribed as the most skilled cutting centre because itpolishes many of the larger very high quality diamonds,usually specialising in stones of 2 carats and over. Thereare about 100 manufacturers employing about 600 cut-ters. The industry tends towards companies employingsmall numbers of polishers, with only a few companieshaving more than 20 polishers. Also, a lot of the work issub-contracted out to independent polishers. Somepolishing is also carried out in other countries includ-ing Thailand and Mauritius as well as Israel andAntwerp. Although this tends to be for smaller stonesof less than half a carat polished 21,23.

The structure of the industry has altered some-what in recent years with middlemen being forced outof business and diamond manufacturers working moreclosely with retailers, and increasingly being involved inselling finished jewellery to retailers directly23.

In 1999 American jewellery sales (not just dia-mond), as noted by Gemkey Magazine, accounted forapprox. 25% of all consumer sales including clothing,consumer electronics, toys and sporting goods. Thistrend looks set to continue. In 1998, 33 million piecesof diamond jewellery were sold in the USA with anaverage price of $655 per item, worth $22 billion.26

However the market is dominated in quantity terms bydiamonds of half a carat or less, which in 1999accounted for 78% of imports22.

The importance of the American market can beunderstood by the fact that diamond exports form thelargest product export category by value from Israel,India and Belgium.

asia and saudi arabia

Asia and Arabia tend to prefer large diamonds of goodquality, as does the US market and Japan4. Many suchstones have potentially come from conflict areas, hencethe need for all importing countries to get involved. Ofparticular concern are developments in the UnitedArab Emirates about which there is credible informa-tion of factories having been to set up to polish Unitaand other conflict goods for which Indian cutters havebeen sought27.

The following diagram from Terraconsult/Dia-mond International, although dating from 1997, gives auseful breakdown of the flow of goods and the increasein value along the pipeline from mining to sale of fin-ished item to the consumer 28.


BANKS

A small number of banks specialise in diamond financ-ing which requires very fast and short-term loans; themost well known is the specialist banking arm of theDutch ABN Amro Bank. In Antwerp, just two bankshandle about 90% of the financing29. ABN has esti-mated that the Israeli diamond industry puts up $1.5 ofits own capital for every $1 borrowed4. The banks areclosely involved in the financing of the diamond indus-try and this gives them a unique perspective on theactual flows of diamonds and a responsibility to ensurethat their financing does not support the trading ofconflict diamonds. To date, they have been very reluc-tant to take any actual measures on conflict goods,although recently this does appear to be changing30,31.

CHANGING STRUCTURE OF THEINDUSTRY AND NEED FOR REFORM

Charting the changes in the worldwide diamondindustry is a never-ending task. The industry seems tobe permanently in the throes of some crisis or majorchange. The latest of these is the much talked aboutand reported review undertaken by Bain & Co. for DeBeers, which has resulted in some seemingly majorshifts in the way the company plans to operate in thefuture. The details of this review have been extensivelycovered in the media and the long-term implicationswill doubtless become clear in due course.

It is, however, true to say that this current period isa time of real change within the trade, and specialistobservers are noting some changes which do seem to beof long-term importance and impact on the structure ofthe industry. They point to the fact that the diamondtrade is dynamic and responsive to change even if ittakes a while to come to terms with the need forchange.

In August 1999, B. Janowski, a diamond industryconsultant, was quoted on the Tacy Ltd websitedescribing how “The search for profits and marketposition has produced a multi-level market, with eachsegment seeking viable profits through a variety oftechniques – consolidation, product differentiation,exclusivity, disinter mediation, technology, geographicexpansion and both lateral and vertical alliances andacquisitions. The evolution of the industry, most visiblyat the retail level, has accelerated to such a point thatentire segments are at risk, often without the principalsbeing adequately aware of changes afoot.” Janowskipoints to about 40 shopping mall jewellery operationsthat have disappeared in the last seven to eight years asan indication of the speed of change32. HSBC, report-ing on the 2nd International Rough Diamond Confer-ence in Tel Aviv in March 2000, states “It is clearplayers in the rough diamond industry have to adapt ordie.”31 And pointing to the rough industry it notes that,“in coming years, [it will face] significant levels ofthreats to consumer confidence, market equilibrium

and price stability, and from a shorter pipeline. Theseare as a result of social and technological change and,most importantly, De Beers’ strategic review…Ashake-up is imminent. Maybe it has already begun? Allcomponents of the pipeline will be impacted.” Addi-tional reasons for changes in the diamond pipeline are“The ‘Just in Time’ supply method, production effi-ciencies and faster store turnovers.” 16

Linked to these changes are growing concernswithin the industry about the impact that synthetic dia-monds and sophisticated treatments such as heat treat-ments and laser infilling of imperfections, could haveupon consumer confidence. The industry has begundebates about how to tackle these problems because ofthe threat they pose to consumer confidence in theintegrity of the industry and to the perceived value ofnatural diamonds. The GIA has already talked of apassport for diamonds, and many have raised the needto find a way to ensure consumer confidence in theproduct. It would seem clear that these business con-siderations overlap with the ethical considerations overconflict diamonds and together form an overwhelmingcase for the industry to institute reforms to addressthese issues.


2

DiamondIdentificationMethodologies

This section examinessome of the current ways in which diamonds have beenstudied. These studies have primarily been carried outto increase understanding about the formation of dia-monds as an aid to exploration and geological under-standing, and not as a way of determining whetherdiamonds originated from one country or another aspotential conflict goods. It clearly shows that it is possi-ble to identify diamonds and that more research focus-ing on product audits and conflict diamonds is needed.The first two methods described, studying surface fea-tures and profiling of mine production, are clearly ofuse and could be developed immediately to assist in anycontrol scheme. Some of the more technical method-ologies, including mass spectrometry, need furtherresearch.

Kimberlite and alluvial diamonds have the samecrystalline structure but they have different surfacecharacteristics. The most well known is that many allu-vial diamonds have a frosted surface as a result of abra-sion during transport from the volcanic pipe. There areother surface features such as differing patterns of chipsand scratches.

“The locations of diamond deposits are deter-mined by the geologic fact that diamonds are foundprimarily in two rare types of rocks – kimberlite andlamproite. These rocks occur as ‘pipes’ (cone structurespushed to the surface by volcanic activity) only in cra-tons; those portions of the earth’s crust that have beenstable for long periods of time. When a diamond-bear-ing kimberlite or lamproite pipe reaches the surface ofthe Earth, it is subject to weathering and erosion,which results in the release of its diamonds. The dia-monds thus released can be transported for varying dis-tances before they become concentrated into any one ofa variety of secondary deposits. Such concentrationscan remain close to the primary source and formdeposits referred to as eluvial (above a pipe) or colluvial(adjacent to a pipe), as at Mbuji-Mayi in DRC. Whengreater distances are involved, alluvial (stream-trans-ported) deposits are formed, such as those found in

India, Brazil and Angola. When diamonds are trans-ported for even greater distances, to a marine environ-ment, either onshore or offshore marine deposits canform, such as those in Namibia.” 33

THE ISSUE OF DIAMONDIDENTIFICATION

Why has the question of whether one can identify adiamond’s country of extraction become so central tothe debate over conflict goods? The importance can bejudged from the comment by George Burne, recentlyretired president of De Beers’ Canada Corporation “It’svery evident to our buyers what a parcel of Sierra Leonegoods looks like. It’s not rocket science.”29 IndeedP.Wagner writing in 1914 noted “The leading SouthAfrican experts are agreed that, between the diamondsof the mines of certain definite areas, there exists amore or less pronounced family resemblance, clearlyimplying community of origin. This holds good forexample, with regard to the various occurrences in thevicinity of Kimberley, notwithstanding the fact thatparcels from the principal mines may be distinguishedeven by a novice.”

Identification and Security

In “The Diamond Fields of Southern Africa” (pub-lished in 1914) P. Wagner described

“Precautions against Illicit Traffic:

As a precaution against illicit traffic, all dia-monds purchased on the River Diggings have tobe submitted to the experts of the DetectiveDepartment at Kimberley, whose powers of dis-crimination have come as an unpleasant surpriseto quite a number of adepts in the gentle art ofgem trans-plantation. Thus, to a certain gentle-man who would persist in finding typical Damar-aland stones in his claim at Bloemhof; and toanother bright individual who, in direct defianceof the fundamental law of hydrostatics whichteaches us that water flows from a higher to alower level, succeeded in extracting from Klipdamgravels quite a number of Koffyfontein diamonds.Happily for the peace of mind of South Africangeologists the lining of the digger’s coat was exam-ined!” 34

However it is possible that that the issue of single stoneidentification (the word here is used in terms of coun-try of extraction rather than whether synthetic ortreated) has become a red herring; an attempt by someplayers in the diamond industry to divert attentionaway from the broader issue of controls on conflictgoods and the well-established principle that a parcel ofdiamonds can, in many circumstances, be identified tocountry of extraction, or at the very least provide good


grounds for doubt in cases of intentional mis-declara-tion of origin of goods. It is of course true to say that amixed parcel would be very difficult to identify,although this would depend on the nature of the dia-monds being mixed and the rigour of the examinationto which the parcel were subjected. The majority ofsuch problem parcels would be alluvial goods from asmall number of countries such as Sierra Leone,Angola, DRC, Liberia and would tend to be thehigher-value goods.

In the last 16 months there has been a radical shiftin international attitudes to conflict diamonds. Eventhe term is new. Prior to this point, it was well known,and widely reported, that diamonds from conflict areassuch as Angola, Sierra Leone and Liberia were beingsold on the open market and were being purchased by awide range of companies. Not only was this acceptedbusiness practice but it was actively promoted by DeBeers, the world’s largest diamond company, who in itsliterature and press relations promoted its role as thestabilizing force on world diamond prices throughoutthe 1990s. De Beers’ 1995 Annual Report stated, typi-cally, “Our outside buying operations are a vital ingredi-ent of our management of the world market for roughgem diamonds.” 35 In 1996 Julian Ogilvie Thompson inhis Chairman’s Statement in the Annual Report wrote,“Outside Buying. The CSO buys diamonds in substan-tial volumes on the open market, both in Africa and inthe diamond centres, through its extensive network ofbuying offices, staffed by young diamond buyers oftenworking in difficult conditions. Purchases in 1996reached record levels largely owing to the increasedAngolan production. Angolan diamonds tend to be inthe categories that are in demand, although in the mainthese buying activities are a mechanism to support themarket.” 36 A clear illustration of just how far the issuehas shifted is the statement from a De Beers director, ina letter to The Times in August 1999, “The fact thatthe sale of diamonds by UNITA has helped to fund thecontinuing civil war is without question.” 37 It is to bewelcomed that De Beers is including a guarantee not tosupply conflict goods on all its sight holder boxes,beginning with the March 27th sight. This is the firstformal recognition that conflict goods are not accept-able to the end consumer, and a move that the rest ofthe trade need to make. However, to be credible, DeBeers needs to show how the guarantee will be inde-pendently audited. The initial press announcement of29th February 2000 and subsequent press statementsdid not commit to never buying such goods again,however following a rigorous interview on BBC Radio4’s Today Programme the Chief Executive, Gary Ralfe,made an on-air commitment on this issue.38

Perhaps not surprisingly, governments movedbefore the commercial diamond industry began toshift. There was a fairly immediate understanding froma number of governments that the humanitarian andeconomic impacts of conflict funded or perpetuated bydiamonds was simply too high a price. Within thecommercial trade there was initially considerable reluc-

tance to face up to the scale or nature of the problem,however an increasing range of players have acceptedthe issue and are looking at ways forward.

DE BEERS AND UNITA DIAMONDS: ACASE OF CORPORATE AMNESIA?

In October 1997 Gary Ralfe, De Beers’ CEO, during apress conference in Russia stated, “You are absolutelyright to say that in fact it is Unita that has over therecent few years been responsible for most of the pro-duction in Angola. One of the essential jobs that we DeBeers [sic] carry out worldwide is to ensure that dia-monds coming onto the markets do not threaten theoverall price structure and therefore although we haveno direct relationship with Unita, there is no doubt thatwe buy many of those diamonds that emanate from theUnita-held areas in Angola, second-hand on the mar-kets of Antwerp and Tel Aviv. And as the diamondmarkets have weakened recently (inaudible)...in buyingup this Angolan production which otherwise will bethreatening the overall price structure has increased.”39

On June 20th 1999, in a letter to the UK Observernewspaper, Tim Capon, a director of De Beers, statedunequivocally “We have never purchased diamondsfrom Unita.”40 And again on August 22nd 1999 “Con-trary to your assertion, we have never purchased dia-monds from Unita…” 37 This assertion was repeatedfollowing the publication of the UN Expert Panelsreport on Angola in March 2000.

The South African Mail & Guardian article of17th March 2000, “Unita gems went to De Beers”points out “Before then [UN diamond sanction of1998], the situation was murkier – the company said itdid not knowingly buy Unita diamonds with the quali-fier that it could not identify where the diamonds camefrom.” 41

Whilst it is repeatedly stated by De Beers thatthey may never have directly purchased diamonds fromUnita, this is a complete abdication of corporateresponsibility, and it further raises the question ofwhom exactly the De Beers staff, who were based inDRC along the Angolan border, thought they werepaying for the diamonds that flooded across that borderup until the fall of Mobutu in 1997. Perhaps the answeris contained in their monthly field reports that detaileddiamonds bought and monies spent?

WHAT TRADERS SAY ABOUT THEIDENTIFICATION OF ROUGHDIAMONDS

Diamond traders, especially when talking off therecord, are open about the fact that they can identifythe country of origin of diamonds. Parcels of run ofmine production are described as being relatively easyto identify, as are distinctive diamonds, especially inlarger sizes. One trader noted that mixing diamonds


does make it difficult to be certain of origin, again,depending on the stones mixed, but that it would nor-mally be likely to raise a question as to the origin of thediamonds. Even De Beers has admitted that it canidentify specific production. In October 1998, JimMcCluskie of De Beers admitted to a journalist “wecan identify Angolan production with 90% accuracyand 50% of certainty [to] Unita production.”42

DIAMOND EXPERTS

Worldwide there are a small number of academicexperts studying diamonds. Several of the leadingexperts work for, or are consultants to, De Beers. Theirexpertise could be brought to bear upon the issue ofidentification in regard to conflict goods. De Beersitself has a GeoScience department that looks at arange of identification methodologies, mostly in termsof exploration, but also mine security43. The depart-ment, despite its obvious expertise and knowledge, doesnot seem to have been briefed to look at ways to bringthis to bear upon the issue of identification. Indeed, thedetailed briefing given to Global Witness, in February2000, though very interesting in itself, was all the moreso for what it did not say. The team raised legitimateconcerns about some of the methodology currentlybeing used (see section below) but were clearly verysceptical about any possibilities for identification. Theydid not appear to have looked at the issue from a con-structive point of view and this would seem to be adirect result of management policy.

One independent expert is Dr. Jeff Harris of Glas-gow University, who also works as a consultant for DeBeers and has carried out detailed research on the sur-face features of diamonds, and on run-of-mine output.His work on statistical analysis of such output for sizeand shape produces interestingly individual graphs (seecase study below). Doctor Harris has concluded that itis entirely possible to identify run of mine productionusing a combination of these techniques, and has fur-ther noted that many surface features are unique to par-ticular production44. Indeed, he has noted thepossibility of combining such techniques to help build amethodology for identification, and feels there wouldbe potential to use detailed analysis of surface featuresas a way of checking parcels - as part of a regulatoryframework. He notes that this is a slow process, andcould take one to two weeks to check a parcel limitingits usefulness if used in this way. Nevertheless, possibil-ities of combining human expertise with ‘intelligent’computer software to speed up the process should beexplored.

Detailed below are a number of different identifi-cation techniques which point to the ability to identifythe provenance of diamonds to a fairly significant level.

I. SURFACE FEATURES

There is a wide variety of surface features, some ofwhich are the result of the growth of the crystal, e.g.terracing, and others which are the result of externalfactors such as distinctive patterns of scratches causedby abrasion from other diamonds or stones due to thebrittle nature of the diamond44.

In 1994 Swash, Whiley, Nqidi, Mzobe andNcube, noted that “Over seventy distinct diamond sur-face textures exist and allow for the quantification andcharacterization of diamond populations. In SouthernAfrica numerous localities have one or more distinctsurface textural feature or morphological peculiaritywhich allows them to be characterized.” 45 However,they point out that “Problems in diamond studies arethat few real differences exist betweenpopulations…The use of provenance studies is thatthey provide an extra piece of information to the explo-ration jigsaw…” 45

It is clear that the numerous, and in many cases,individualistic surface features of different diamondscould be of immense use in identifying country andeven mine of origin. For example, Dr. Jeff Harris notesthat there are 44 surface features for the octahedron,which, when coupled with statistical analysis of run-of-mine production and known colour characteristics,could lead to a practical and relatively low-techmethodology to assist identification. This coupled withan audit system that involved producer and importingcountries would provide a practical and fairly immedi-ate system of controls. Some interesting work has beendone on surface features which clearly indicates thepotential importance of such information. It is not clearwhat work has been done by De Beers but it would besurprising if it had not looked at this issue.

case study 1: southern africa

This is taken from “The Genesis of the Diamond” byAlpheus F Williams, General Manager of De BeersConsolidated Mines, Ltd which dates from 1932.46 Thebook gives a very detailed analysis of diamonds fromthe production of different mines in South Africa, anumber of which are no longer operational, and itclearly demonstrates the level of detailed informationthat can be gathered on surface features which could beof use in providing a comprehensive understanding ofthe production of different countries. The author notesthat “As pointed out elsewhere, every diamond mineproduces a diamond characteristic of it...” 46.

Williams describes the capacity of diamondsorters to identify individual diamond production:“The term ‘sorter’ is applied to an expert who classifiesparcels of diamonds from the economic aspect – that is,according to purity, colour, size, shape, etc. An expertdiamond sorter can nearly always allocate any diamondput before him as coming from a particular mine orfield, as there are peculiarities which definitely place astone. In every production there are stones which per-

c o n f l i c t d i a m o n d s 1 0

haps would not be considered typical of a particularmine, but there is almost always some peculiarity inmarking or colour which helps the sorter to decide. Itis, of course, sometimes difficult to decide about a sin-gle stone, but an average parcel of, say, 100 carats fromany mine or field would not present any difficulty to anexpert to decide where it came from.”

Williams describes alluvial diamonds, noting“This [sic] should be subdivided, as different areas havetheir peculiarities.” And he goes on to differentiatebetween eight areas across South Africa and modernday Namibia. “Lichtenburg production has its owncharacteristics and is like no other alluvial production.Diamonds from this area differ according to the farmsfrom which they are produced…Blue-white stonesfrom Uitgevonden were distinct, having a roughenedsurface as though made by filling, but this marking isalso distinct from the water wear of the diamonds fromthe Lower River”; He notes that several areas producealluvial goods that do not show signs of wear, thisincludes the stones from Lichtenburg and from UpperRiver; of the latter he writes “These diamonds have alustre or sheen which is very distinct, but they seldomshow signs of wear.”

Williams also looks at the issue of drainage sys-tems and associated gravel-bearing deposits. Hedescribes the Congo River as draining the whole of theDRC, the north-eastern part of Angola and a large partof the Cameroons. In West Africa he notes that“…there are a number of smaller rivers that run directto the sea, and it is on this drainage area that the dia-mond-bearing gravels are found.” He goes on to write“It will thus be seen that each of these great drainageareas may have derived its diamonds from quite differ-ent formations than those in the Union of SouthAfrica, and the character of some of the diamonds indi-cates this. For example, in the Congo the diamondsfound in Bushimaie [Mbuyi Mayii] gravels are quitedifferent in appearance from any other diamonds foundin any other part of the world…In other parts of theCongo and Angola the diamonds, although smaller,could have been derived from kimberlite formationssimilar to those in the Union.”

case study 2: sierra leone

This case study is included to give people who are notfamiliar with studies on surface features an understand-ing of the detailed level of research carried out on thissubject.

In 1960 D. R. Grantham and J.B. Allen’s paper“Kimberlite in Sierra Leone”47 under the auspices ofthe Geological Survey Department of Sierra Leonedescribed the results of a detailed morphological analy-sis on a representative sample of diamonds from a kim-berlite dyke in Sefadou in the north east of the country.The analysis of surface features was carried out byGrantham, who was a consulting geologist to SierraLeone Selection Trust Ltd. This case study gives a clear

indication of the potential value of detailed analysis ofthe surface features of diamonds.

The paper notes “While the types of diamondsshow some variation in individual dykes, an immediatedistinction can be made between the clear diamonds ofwhich a large proportion is of good quality, and thecoated diamonds which belong to the industrial gradesor crushing boart…The octahedron with related modi-fications is the dominant morphological type and crys-tallographically perfect octahedral with splendid facesoccur throughout the whole size range. Cubic crystalsare restricted to coated stones, and the dodecahedroidsare relatively rare.” 47

It notes “The clear diamonds not only occur withcompletely plane faces or with faces slightly curvededges, but may have the following topographic modifi-cations or growth features:

1. Layers: plane-surfaced layers extending nearly tothe crystal edges, usually very thin but sometimesstepped up abruptly in a series of terraces.

2. Plates: similar to above but not extending to thecrystal edges. The triangular plates may be single ormultiple, and can be symmetrically or irregularlyplaced.

3. Shields: similar to plates, but with curved edgesand often with curved surfaces roughly triangular inoutline. A ‘crinkled’ surface is produced by a mass ofsmall shields, irregularly placed, building up the facesso that the octahedron becomes ovoid.

The above growth features, which are depicted inText-fig. 2 (not included here), grade into each otherwithout sharp distinction and they may build up faceswithout adding to the original edges so that re-entrantangles are produced along these edges. Trigons are tri-angular pits, either pyramidal or flat bottomed, andoccur where growth plates have not covered the wholesurface. Rhombic dodecahedral faces invariably have acrêpe-like pattern parallel to the longer diagonal of therhomb. None of the above growth features occurs onfully-coated stones.The great majority of the stones arecolourless, although some variation is recognized in thetrade. A slightly yellow tinge is common in plane-facedand layered stones; the plated and crinkled are usuallypure white, but other colours are pearly white, yellow,pale brown, deep clove-brown and brownish black.Striking lemon-coloured, curved-faced dodecahedroidsoccur occasionally. A small proportion of the diamonds,invariably good octahedral, have a pale leaf-greencolour of unknown origin. More numerous are stoneswith occasional tiny green or dark-green spots immedi-ately below the surface.”

The paper also describes inclusions (see iii below,in this section): “Although the inclusions in the SierraLeone diamonds have not been studied intensively, fourmain types may be distinguished: highly refractivegrains, irregular blocks, black plates, and black dust.Brilliant colourless inclusions in the diamonds have ahigh refractive index and often show crystal forms, butx-ray investigations are required to establish their iden-tity. The black blocks are angular and may be granular


or very irregular; exposed portions suggest they mayconsist of magnesium ilmenite.”

The paper goes on to note “The results of a precisestudy of the stones from one particular kimberlitesource in Sierra Leone are here recorded as a matter ofscientific interest, but although the source containsmost of the types known, their proportions and sizescannot be regarded as necessarily characteristic of anyother source, or of the field as a whole…The parcel onwhich these observations were made weighed 285carats, comprising 422 clear stones and 196 coated of+2 mm. size, together with an estimated number of 910of both clear and coated stones of –2 mm. size.”

Patches, or particulate spots, are another surface featurethat is a subject of study. They are found in a range ofcolours including yellowish-brown and dark brown aswell as green. Green and brown patches sometimesoccur on the same diamond, 48 and are a distinguishingfeature44. Diamonds from kimberlite deposits havebeen found with green patches, and diamonds fromplacers in areas such as the Urals, the Lena region inYakutiya and in Brazil48 .

II. PROFILING OF MINE PRODUCTION

This process involves building up profiles of a mine’sproduction using a variety of classifications. The infor-mation gathered can be used to analyse whether thediamonds originated from the same mantle source andit can also be used to try to understand the forces anddynamics involved after this point. The measurementstaken build up a statistical profile of the diamond pro-duction. The paper, which is quoted extensively below,points to a useful technique for identification of mineproduction if one focuses upon events that happened tothe diamonds after they were first formed. This wouldinclude the study of the varying shape characteristics ofthe diamonds and of levels of plastic deformation. Doc-tor Jeff Harris notes that profiling of production hasalready been carried out for some official mines, includ-ing South Africa, Botswana, Australia and someunpublished data on Namibia.44 Russian productionhas been profiled but using different sieve sizes whichwould make comparative checks difficult. Thus, itwould appear that work has already been carried out forwell over half the world’s production by volume. Thisleaves Angola (for which some profiling may have beendone44 ), DRC and Brazil – which are very significantproducers (although DRC is predominantly industrialgrade goods). In addition to this is the comparativelysmall volume percentage of production from the otherdiamond producing countries that would need to bedone. It would seem probable that De Beers has pro-filed the production from its Williamson mine in Tan-zania.44

case study

In 1984 J Harris, J Hawthorne and M Oosterveld pub-lished a paper, “A comparison of diamond characteris-tics from the De Beers pool mines, Kimberley, SouthAfrica”49, which describes how mine output varies on astatistical basis and the paper includes graphs thatclearly demonstrate this.

“Two diamond valuation parcels from each of thefour mines at Kimberley have been examined using aclassification scheme which determines physical prop-erties of diamond as a function of their size.”

“Diamonds from the four Kimberley mines ( theso-called De Beers Pool Mines – comprising Bult-fontein, De Beers, Dutoitspan and Wesselton) havebeen recovered for over 100 years, but little recentinformation is known about the diamond characteris-tics from these sources. In part, this dearth of knowl-edge arises because a single recovery plant serves allfour mines and therefore diamonds from individualmines cannot generally be obtained. In recent years,however, samples of diamonds have been recovered andaccumulated from the individual mines for the pur-poses of mine valuations [an interesting pointertowards the need for mining companies to profile pro-duction] and it is from such samples that the compar-isons of diamond characteristics reported here arecompiled.

Valuation parcels from each of the four mines havebeen classified according to the scheme devised byHarris et al. (1975, 1979) With the first set of parcels,crystal habit, colour, UV fluorescence and plastic defor-mation levels were determined for at least 1500 stones,or the total number of diamonds, in each of ten sievesize classes covering all but the smallest diamonds…Inaddition the relative abundances of syngenetic inclu-sions within the diamonds in the smallest sieve sizeclass (-6+5 maximum diamond diameter 1.83mm)were determined.

With the second set of valuation parcels, the clas-sification procedure only included variations of crystalhabit and colour with diamond size, but this allowedcomparisons to be made with the first set. However, inaddition, a detailed shape breakdown of the irregulardiamonds from this set was completed. This workdetermined the primary shape characteristics of thediamonds from Kimberley (see Harris et al. 1975) andfrom a comparison of these and other characteristics,allowed some conclusions to be drawn as to whetherthe diamonds at Kimberley could have a commonupper mantle source.”

“The results from the six studies completed on thediamonds from De Beers Pool mines fall into twogroups. Inclusion abundances, primary crystal shapes,colours and UV variations provide information perti-nent to the original growth environments of the Kim-berley diamonds. The levels of plastic deformation anddiamond shape characteristics, where irregular dia-monds are a major category, provide insights intoevents which have affected the diamonds after their


formation. If diamonds from Kimberley are derivedfrom a common source, results for the first group ofstudies should show close similarity. Excluding colourfrom further consideration because of the problems ofreproducibility, the results from the three remainingstudies all indicate a strong uniformity in characteristicbetween mines. The growth environment is over-whelmingly ‘peridotitic’ in its mineralogy, with octahe-dral diamonds, which exhibit similar UVcharacteristics, dominant over other primary crystalhabits.

In the second group of studies, similaritiesbetween the mines are not necessarily to be expected,because these results relate to events which may influ-ence each of the four kimberlites differently. For exam-ple, if plastic deformation of the Kimberley diamonds iscaused by the dynamics associated with the separationof four kimberlites from a common reservoir in theupper mantle, then the stresses associated with such anevent may well be different for the four kimberlitesinvolved; hence, distinctive plastic deformation levelsamongst the diamonds recovered from these kimber-lites. Similarly, differences in the rates at which theindividual kimberlites move upwards or the number ofmagma pulses involved, could determine the final pro-portions of dodecahedral crystals derived from octahe-dra in a particular kimberlite. Also, the percentages ofirregular (usually broken) diamonds at each of themines will be strongly influenced by such factors as 1)differential expansion of syngenetic inclusions whichmay break the diamond, or 2) whether the kimberlitewas associated with internal explosive brecciation dur-ing uplift, or 3) near the surface, whether the kimberliteeruption was phreatic.

From the results of these studies the bulk of thediamonds from the four Kimberley mines could well bederived from a single source. The primary characteris-tics of the diamonds are very similar. Major differencesin diamond characteristics between the mines relate toprocesses acting on the diamonds once they haveformed, and these most probably occur in response todifferences in the dynamics of the individual kimberliteeruptions.”

III. MINERAL INCLUSIONS

In brief, inclusions are normally impurities of micro-scopic minerals and have been the subject of a consider-able amount of study as they throw light upon theformation of the diamond and factors subsequent tothis50. These are analysed using a number of techniquesincluding x-ray diffraction, electron microprobe, neu-tron activation analysis and a specially designed massspectrometer. Harris and Gurney50 describe a study thatlooked at the occurrence of a number of mineral inclu-sions from the mines of Premier, Finsch and Kaffie-fontein and found that there “… are marked differencesin the relative abundances of inclusions in the dia-monds from these three sources.”50 However, mineral

inclusions can occur in diamonds from very differentgeographical areas and geological times. Harris andGurney note that work on inclusions is being carriedout at the mines listed above and elsewhere. GlobalWitness invites the various experts in this area to bringtheir collective expertise and knowledge to this issue,and perhaps to help build a database of such informa-tion. This could be linked to the academic and com-mercial DIAKIM database currently underconstruction, which will compile information on worlddiamond occurrences and production from a very widerange of sources51.

IV. SURFACE SCANNING

The concept of profiling the surface of a diamond usingeither x-rays or optical scanning as a way to fingerprinta diamond, relies on the principle that each diamondhas unique characteristics and that the technologyexists to record this. If there exists a technology thatcan fingerprint a diamond in its rough stage, and thisfingerprint can be stored in a database to be recalled forcomparison, then there exists a method by which totrack the movement of rough diamonds, without theneed to tag or otherwise mark them. Surface profilingtends to be done as part of the process of evaluatingrough diamonds. The aim of the evaluation process isto build a very detailed model of the rough diamondthat becomes the basis on which a computer will calcu-late the different cutting options for the diamond.

Issues to bear in mind is the minimum size of dia-monds that can be scanned, the speeds at which surfaceprofiling can be done, and the transfer of the profile asstored information. This would require the movementof large amounts of data across computer networks.However, with the current advancements in data pro-cessing and transfer speeds, as witnessed in informationtechnology industries everywhere, this does not seem tobe an insurmountable barrier.

Sarin is an Israeli diamond technology companythat has been a pioneer in the field of precise diamondmeasurements and grading, which changed themethodology for analysing the proportions of a dia-mond in preparation for cutting.52Using Sarin’s evalua-tion technology, it is possible to map rough and cutdiamonds. The system is based on image processing,with the diamond being placed on a revolving disc inthe path of a parallel beam of light. A silhouette of theobject is created and captured as an image on a com-puter. The diamond is continuously sampled in thisway until the system using triangulation geometry soft-ware can recreate the 3D structure of the diamond.53

Currently, the system profiles a single stone at a time,taking approx. 25 seconds to do so, though this doesdepend on the size of the stone.54 With specific devel-opment, the company expects the time could bereduced to approx. 15 seconds per stone.55 This systemcould also quite conceivably be designed into a work-station that could scan more than one stone at a time. It


was suggested by Global Witness, and agreed by a rep-resentative from Sarin, that designing such a worksta-tion was a feasible option.55

verification / matching corresponding stones

Information derived from surface profiling must bestored on a database for the subsequent verification ofstones. Repeating the profiling scan allows the identifi-cation of diamonds by matching corresponding infor-mation held on a database. To overcome the issue ofrecognising the stones at different angles, softwaredevelopment would be necessary, though again this wasdiscussed and was not considered to present a prob-lem.54 It is important to note that the amount of infor-mation that is produced by profiling can be somewherein the region of one megabyte of computer memory.This information could also accompany parcels of dia-monds in a CD-ROM format which could address thisproblem. The information could easily be encryptedand thus could not be read by anyone other than theintended recipient, such as customs, using widely avail-able but secure encryption software.

V. OCTONUS

OctoNus is a Moscow State University-based companythat develops software for the diamond industry at thestage of diamond manufacturing. Its systems includethose similar in purpose and methodology to the Sarinrough evaluation machines mentioned above. Since1997, and using a system known as PaCor, OctoNusdeveloped what it describes as “Electronic Passports”for rough and polished diamonds. The developer of thisapplication stated that the idea of the electronic pass-port for the diamond was raised from the problem ofcorrespondence between a regular diamond certificateand the actual diamond. According to the designer ofthe system, Sergei Sivovolenko, there is no reliable andfast way to decide if the certificate corresponds to agiven diamond. Again, this is a technology that has thepotential to be applied to a chain of custody.56

VI. MICROTOMOGRAPHY

Tomography is defined as ‘a technique for displaying across section through the human body or other solidsusing X-rays or ultrasound’ 57 Computer Tomography(CT) scanners can be used to visualize the 3D internalstructure of objects in a non-destructive way and with-out any special preparation. CT scanning is currentlyapplied widely in medicine to diagnose the internalpathology of organs. Micro Tomography is principallythe same technique as CT scans but is far more power-ful, scanning with resolutions up to 8 microns.58 MicroTomography is widely used to perform non-destructivetesting, and representation of a variety of solids – suchas bones, fossils, and metals and of course diamonds.

The relevance of microtomography, in this instance, isnot so much its internal analytical capacity, but becauseit can also be used to create a unique external profile ofa diamond.

Two scientists at the University of Antwerp havedeveloped a miniaturized version of the medical CTscanner. They claim that their microtomograph is theonly scanner that can be used to scan the external con-tour of a diamond at such a high resolution. It may bethat such a high resolution is not needed though thisneeds to be examined in practice. As yet, microtomog-raphy has not been optimised for surface scanning andfurther research and development would incur a reengi-neering to increase processing capabilities of themachines. In any case the developers of this applicationbelieve that their technology can be applied. Howeverthey raise the important issue of speed being central toapplications being considered for use in an industrywhich works with very high units of goods. “We areconfident that we can realize a system that can be usedto fingerprint rough diamonds in a unique way, but themarket needs to decide what measuring time is accept-able”.59

VII. INDUCTIVELY COUPLEDPLASMA/MASS SPECTROMETRYLASER ABLATION ICP - MS

Any method to reliably determine the origin of dia-monds would be an important tool for diamondprospecting, industry security (identifying stolen dia-monds by mine) and for helping to identify diamondsthat have originated in conflict zones.

“Determining the provenance of diamonds”60 a1998 article in Diamond International, described howrecent developments in analytical techniques are mak-ing it possible to identify the source pipe of individualdiamonds. The article described the work of JohnWatling, associate professor in the School of AppliedChemistry, Curtin University, Western Australia.

In a 1994 paper 61 based upon Watling’s limitedstudy, it was concluded that;

“Studies so far have shown that it is possible toidentify the provenance of different diamonds on thebasis of their unique trace element association pat-terns…[and that]….it is hoped that the identificationof a particular diamond will be achieved using a com-puterised database of mass spectra.”62

The pursuit of quantitative chemical data for thepresence of trace elements within the diamond is notthe intention of the fingerprinting technique describedby Watling and his workers, it relies entirely upon therelationship between prescribed elements within thediamond.63

The reliability of such a qualitative approach hasbeen questioned, and it was stated by a leading expertin this field, Professor W.L. Griffin, who conductsanalyses of diamonds using the same technology, thathe would regard the qualitative approach as invalid and


probably misleading.64 From recent research carried outusing a quantitative method Professor Griffin con-cluded that it was unlikely that individual diamondsfrom different sources could be identified using thismethod.65,66 However it was also agreed that moreresearch on other pipes was needed and that resultsfrom certain pipes did suggest that some pipes mayprove to be identifiable.

The technique also rests on the existence of a rep-resentative database which has yet to be established.One projected cost of doing this was $2 million andthat it would take three years67; another estimate wasthat this would take five years68, but it is not clear howeither of these were arrived at (nor is it clear how muchalready exists, or what samples exist ready for analysis).

An attempt to clarify the situation was made bythe HRD Institute of Gemmology, who tried to bringtogether several current researchers working on thisissue, for an ‘origin determination conference’.69 Theconference was planned for January 2000, but accord-ing to one source at the HRD, there was insufficientresponse by the organisations and individualsapproached to attend, and the conference never tookplace.70 The HRD also conducted its own research atthe University of Leuven, Belgium; this failed to pro-vide any conclusive results.71

It is likely that current research using LA ICP-MS will throw up more information in the near future.The Royal Canadian Mounted Police, (as part of awider plan to address the law and order implications ofhaving a diamond industry), is involved in researchusing LA ICP-MS technology. The RCMP are mak-ing contact with producing companies worldwide toseek their participation through the collection of dataon the unique identifying feature characteristics of dia-monds from their mines.72

However, the RCMP remains cautious in itsapproach in terms of its expectations of what this tech-nology might be able to offer. With regard to deter-mining the provenance of an individual diamond, asource from the RCMP stated that; “All indications arethat this would be difficult to accomplish. The ability ofthe science involved hinges on a representative databasethat has yet to be established. Validating the profilingprocess needs to be accomplished through applicationand not conjecture. The application is very complex,just as comparing the chemical signature of diamondsis very complex. While it would be very optimistic tothink that the science will provide for a 100% certaintyof source, it may support other existing circumstancesthat are indicative of source. Of equal importance, itmay be more conclusive that a sample did not comefrom a specific location.”73

Also of relevance to the future prospects for thistechnology is that there is a major initiative currentlyunderway at Curtin University, Australia, to establish aCooperative Research Centre (CRC) in Forensic Sci-ence.74

Inductively Coupled Plasma Mass Spectrometry(LA ICP-MS) involves vaporising a small sample of

matter (in this case a diamond) with a laser, then subse-quently analysing the trace impurities present in a dia-mond. The ablated sample is carried in a stream of inertgas, usually argon, into a high-temperature field. Thiscauses the dissociation of molecules and the ionisationof the resultant atoms. The ions are finally passed to amass spectrometer detector where the ions are identi-fied and quantified in terms of their mass and chargesuch that the relative intensities of the elements presentare recorded.75/76 The system is so sensitive that thepresence of 65 elements can be determined at concen-trations down to a few parts per billion.77


3

LegislativeOverview on theExport and Importof Diamonds

This section presentsa brief overview of customs procedures for countrieswith significant diamond interests. It is intended tohighlight the failures and loopholes of the global trad-ing system which is partly a result of the increasedderegulation of trade through the World Trade Organ-isation (WTO) and partly due to various country’s leg-islative oversights, the weakness of informationprovision about diamond trade patterns and interest incustoms enforcement – except for tariff provision. Theoverriding conclusion is that international legislativechange is needed regarding the country of origin decla-rations for rough diamonds. Global Witness believesthat the true country of extraction must be declared andnot just the last country it was exported from if theissue of conflict diamonds is to be resolved. Thereneeds to be a comprehensive and detailed review ofnational and international legislation and trade agree-ments to determine a legislative basis for requiringcountry of extraction on import documents. Such areview is a major undertaking and is beyond the scopeof this report. It is also not clear which is the best wayto achieve such legislative change, for example it mightbe best done via a UN Security Council resolution thatwould oblige member states to take action. Alternativesto the UN would include the EU-ACP, the WTO, G8and G77. Consideration should also be given to whichgovernment body should implement controls. Cur-rently there is a lack of international mechanisms todeal with diamond trade from countries such as SierraLeone where there are diamonds from both rebel andofficial sources.

Global Witness asked the major exporters andimporters of diamonds to clarify their procedures andrequirements for the trading of diamonds. The picturethat emerges, overall, is one of few requirements forCertificates of Origin (CO) relating to diamonds.Although import and export documents require

exporter, importer and origin information as standard,there are various loopholes in the system with regard todefining the ‘origin’ of goods.

It should be noted that Global Witness hasincluded information about the WTO, but this shouldnot be read as an indication of support of the WTOframework.

THE EUROPEAN UNION

All diamonds entering the EU are zero rated for dutyand do not require COs unless they are Angolan dia-monds (UNSC RES.1173), in which case they must becontrolled through the Certificate of Origin schemeoperated by the Government of Unity and NationalReconciliation of Angola (GURN).

Under Council Regulation (EEC) No.2913/9278,the origin of diamonds is determined by the countryfrom which they were extracted. This is the originwhich should, where known to the importer, bedeclared to Customs. This information is for trade sta-tistics purposes under Council Regulation No (EEC)1172/9579 Article 10. At present there is no require-ment to give the country of origin, but this could bechanged by the EU. For manufactured goods, where nopreferential rate of duty is involved, country of origin isbased on the last substantial processing under CouncilRegulation No (EEC) 2913/92.80 In cases where theimporter does not know the country of origin, Com-mission Regulation No (EC) 840/9681 requires thecountry of consignment to be shown where the countryof origin is not known.

IMPORTERS

the european union

Europe is a key player in the international trading ofdiamonds. Antwerp and London are major funnels fordiamonds reaching the world market. Most of theworld’s rough diamonds are sent to the London CSOfor sorting while Antwerp’s main business is the tradingand re-routing of diamonds.

belgium

Diamonds imported or exported from Belgium mustgo through the Diamond Office in Antwerp whichtakes care of all import and export formalities on behalfof the Government of Belgium. Customs officers anddiamond experts are present at the Diamond Officeand all parcels entering or leaving Belgium are openedand checked by sworn-in experts under the supervisionof an officer of the Ministry of Economic Affairs.

In the case of diamonds coming from outside theEU from ‘developing countries’, the importer has to pay‘Social Funds’ i.e. one-third of the value of the goods,


on the import of rough diamonds (valued at more than300 Bf/ct, return shipments excluded).82

switzerland

Diamonds arriving at the Swiss border have to bedeclared at a Customs Office. Again, parcels areopened on a discretionary basis. This is determined byhow clear the information on the standard import doc-uments is and whether there is any doubt as to itsveracity. Not all parcels will be opened – only thosewhere information is deemed insufficient or suspect.83

usa

When importing diamonds to the USA no special doc-umentation requirements and no special proceduresmust be followed. Diamonds imported to the USA arefree of duty, and basic Customs documentation andprocedures apply under Part 177 of Customs Regula-tions (19 C.F.R. 177)84

canadaCanada’s Trade Policy and Interpretation Direc-

torate confirmed to Global Witness that diamondsimported to Canada are free of duty and there is no cer-tification requirement on imports of diamonds. TheDirectorate states that the origin of the diamonds mustbe declared on the import documents at time of impor-tation.85

israel

Israel’s Diamond Controller confirmed that standarddocumentation should accompany imports of dia-monds except for Angolan diamonds where a Certifi-cate of Origin is required. The Diamond Controlleralso stated that all imported shipments of diamonds areopened and inspected by diamond evaluators – withoutexception.86

india

Diamonds imported to India are free of duty. Certifi-cates of Origin are not, in general, required documents.However, they may be requested from time to time byimporters or banks. Imports to India are made underlicences obtained from the Director General of ForeignTrade. India is an adherant to the ‘Standards Code’negotiated under GATT and now assumed by theWTO and has also taken up the implementation ofISO 9000 quality systems standards.

asia-pacific / other

The Asia-Pacific Region is the largest retail market forcut and polished diamonds and diamond jewellery nextto the United States.

thailand

For imports to Thailand, Certificates of Origin aregenerally not required documents. Most goods can befreely imported. Import licenses are still required foritems including certain raw materials. Although unableto obtain detailed information from Thai customs, ‘ADiamond Imprest Licence’ may be issued, in advance,for the import of rough diamonds from any source.’87

According to Thai customs notice No. 2/2514 of 1971it requires the country from which goods were pur-chased and the consigning country, as well as the coun-try of origin of imported goods to be stated.

japan

Diamonds imported to Japan are free of duty and onlyrequire Certificates of Origin if they are Angolan.Japan also determines the origin of goods according to“wholly produced criterion” and “substantial transfor-mation criterion”. Wholly produced criterion meansthat the origin of the goods is the country where thegoods have been wholly obtained, whereas substantialtransformation criterion are used when more than onecountry is involved in production of the goods; the ori-gin of the goods to be the country where the last sub-stantial transformation has been carried out. Japandescribes its policy as to the opening of parcels and thecarrying out of physical examinations as being when itdeems necessary. These rules originate from the Direc-tor-General of the Customs and Tariff bureau, and arebased on the WTO Agreement on Rules of Origin.88

EXPORTERS

russia

In the Russian Federation, processing and trading firmsmust obtain a special licence from the local governmen-tal power. The export of both rough and polished dia-monds is under the control of the federal governmentwhich maintains a list of approved exporting firms. Forrough gem diamonds there are two exporters: Alrosaand Almazyuvelirexport. Every processing firm canexport its polished diamonds directly. The Presidentregulates by decree the export of special size rough(over 10.8 carats) and diamonds with special proper-ties.89

AFRICA

south africa

Diamonds exported from South Africa are packed andsealed in standardised containers by the South AfricanDiamond Board. The Export Permits issued by theDepartment of Trade and Industry include the har-monisation code, weight, carat, value, description,exporter’s name and client’s name and address. Cus-


toms in South Africa operates in an administrativecapacity to verify and perform final checks on theSouth African Diamond Board procedures. It alsoworks in conjunction with the South African Policeservice which has a diamond and gold squad. In caseswhere Customs is unsure about a parcel or procedurerelating to diamond exports they refer it to the SA Dia-mond Board.90

namibia

There are only three companies that export diamondsfrom Namibia - Namco, Namdeb and Namgem.Namgem, a 100% owned subsidiary of De Beers, is theonly company which imports diamonds to Namibia.Namibian diamonds are mined on and offshore andtransferred directly to Windhoek, arriving sealed atGovernment offices. Diamonds are then evaluated withrepresentatives from the Minerals and Energy depart-ment present at all times. In the final stages, a Govern-ment Diamond Valuation (GDV) takes place and anexport certificate is produced.

botswana

Diamonds from Botswana are entirely under the super-vision of one company, Debswana, and all diamonds goto the CSO in London. Goods are exported with anaccompanying barcode that contains pertinent infor-mation: consignment number, weight, value, shippingdate, and which mine the diamonds came from. Thisinformation is computerized and can be checked at thepoint of export and import. Remarkably, Botswana cus-toms and police do not have the power to open pack-ages of diamonds being shipped out. Diamonds mayonly be exported from Botswana under and in accor-dance with an export permit issued by the MiningCommissioner.91

sierra leone

To export diamonds from Sierra Leone, applicationsfor Export Licences must be approved by the Ministerof Mineral Resources on the recommendation of theDirector of Mines. An Exporter’s Licence is issued fora year. Each exporter is allowed to employ buyingagents approved by the Director of Mines. Diamondparcels are sealed at the Government Gold and Dia-mond Office (GGDO) in the presence of Customs andother security personnel. Thereafter the exporter is freeto leave Sierra Leone without further checking or theparcel being opened again at the airport.92 This is thetheory, in reality exporters openly flout the GGDO andofficial exports have reduced to an all time low in 1999of approx. $1.2 million.

EXISTING INFRASTRUCTURES TOBUILD ON

The infrastructure to support a Certificate of Originscheme for all diamonds already exists. Most majortrading countries are parties to the International Con-vention on the Simplification of Customs Formalities1923, under which they have agreed to accept Certifi-cates of Origin issued by official authorities. Under theConvention, Customs officials in various countries cancheck the reliability of Certificates of Origin by refer-ring to a list of authorized organizations officially des-ignated by their respective Governments.93

The formulation and application of origin rules issupported by the Harmonised System, the interna-tional classification tool administered by the WorldCustoms Organization (WCO). Under the Har-monised System, imported and exported goods have tobe declared under nomenclature subheadings. Thisdetermines what rate of customs duty applies and howthe goods are treated for statistical purposes. Effectivelyeverything depends on this classification, as all trademeasures use the nomenclature to describe which treat-ment is to be given to what goods. This instrument iscrucial when the precise description of goods and clas-sification has to be used for trade legislation. It is alsoused in formulating and applying origin rules, as theyare based, to a large extent, on the end product being ina different tariff heading than the imported productsused in manufacture.94

The EU’s single market has generated the legalframework for all its members, but there needs to begreater cooperation and integration if smuggling is tobe combated.

Every country has technical requirements for theimport and export of goods and services. In the mainthese laws aim to protect the health, safety and welfareof citizens; protect the environment and national secu-rity, and guard against fraud. However, with the grow-ing international acceptance that some naturalresources in international trade are responsible forfunding conflict, (re: timber in Cambodia and dia-monds from Angola and Sierra Leone) there is anurgent requirement of governments, policy makers andtrade bodies to monitor and regulate the trade in theseassociated industries to ensure that they do not con-tribute to the funding of conflict.

The expansion of world trade has meant that gov-ernments have looked at ways to reduce so called tech-nical barriers so that goods can move across borderswithout delay or added cost – this has often been to thedetriment of social, economic and environmental con-siderations. Most trading nations are members of theWorld Trade Organisation (WTO) which dictatesworld trade policies, through the General Agreementon Tariffs and Trade (GATT) and the General Agree-ment on Trade in Services (GATS). Most WTO mem-bers use the internationally recognized standards of theInternational Organisation for Standardisation (ISO).Currently, trade requirements generally consist of the


following components. Regulations, which are manda-tory and cover labelling, country or origin, packaging,product characteristics and environmental protection.Standards, which are voluntary technical specificationsfor products and are developed in conjunction with therelevant industry. Standards may become mandatorywhen included in a regulation. And, ConformityAssessment, which is the process of qualifying whethera product meets a standard or complies with a regula-tion.

Regulations relating to the declaration of a prod-uct’s country of origin has become a contentious area,as for many products there are serious environmental,social and welfare issues to be considered. With theharmonization of rules of origin in the 1980s, anincreased number of origin disputes and a surge in theuse of anti-dumping laws occurred. This led to the issueof country of origin being included in the UruguayRound of trade talks during which the principles gov-erning the application of rules of origin were estab-lished. In fact there is work to simplify the rules oncountry of origin.

country of origin: wto definition

‘Rules of Origin can be defined as the criteria needed todetermine the territorial origin of a product. TheAgreement on Rules of Origin is concerned primarilywith those used in non-preferential commercial policyinstruments, such as in the application of most-favoured- nation treatment, anti-dumping and coun-tervailing duties, safeguard measures, markingrequirements and any discriminatory quantitativerestrictions or quotas. By definition, each good can onlyoriginate in one territory. In a world where more andmore goods are produced from parts coming from otherorigins, conferring origin to a product is not always aneasy task.’95

In 1998, the WTO Committee on Rules of Ori-gin harmonised the rules of origin. Due to WTOmembers having differing rules of origin there werebarriers for exporters, particularly for those from devel-oping countries. In 1998 the Committee examined the‘substantial transformation’ test which would determineitem-by-item where a product originates. Thisapproach has allowed products to carry certificates oforigin according to where the ‘substantial trans-forma-tion’ from raw materials to finished or semi-finishedgoods has taken place. Agreement has been made ongranting country of origin status to some product cate-gories according to this criteria. Examples include furs,lubricants and concentrates from metal ores.96

Recent labelling disputes between the US and theEU over textile rules of origin and hormone treatedbeef highlight how important rules of origin are totrade and, indeed, international relations. In the case ofthe EU-US textile dispute under the USA 1996 rulesof origin, the USA considered for labelling purposesthe country of origin for a finished product as the coun-try which produced the raw material used in the textile

product.97 The dispute was finally settled in July 1999,when it was agreed that European textile imports couldbear ‘Made In Europe’ labels for products transformedin Europe from fabric produced in third countries. Thecountry of origin textile issue is considered so impor-tant that a Textile Monitoring Body is in operation.More recently in 1999 the US offered to label US beefexports with its country-of-origin in order to end anEU. ban on US beef products. The EU did not acceptthe offer stating that the US did not include crucialinformation on the label which was the central issue ofthe EU ban.98

There has been draft agreement that the countryof origin for rough diamonds should be the “country inwhich the goods of this substance are obtained in theirnatural or unprocessed state.” This means where theywere extracted. However this only applies to unsortedrough diamonds and as diamonds are routinely sortedbefore the first export takes place, for exampleBotswana’s production, it excludes most of the roughdiamonds in trade. There needs to be clarificationabout how the term ‘unsorted’ is applied.

the european community: consumer affairs

It is established that consumers have a legitimate rightto information regarding products they are buying.This can range from sufficient labeling of ingredientson food to stating which country a particular garmentwas made in. As a consumer product, diamonds are inthe same category for information provision. As DeBeers Director Tim Capon said, ‘ The consumer ismuch more aware, and the diamond industry has torespond to that consumer awareness and interest inwhat it is that they are buying, and I think that is not abad thing.’99

The European Community has a fully functioningand very active consumer policy action plan for 1999-2001. Within this plan, the protection of the consumerwith regard to safety, disclosure of information andquality guarantees is set to gain momentum. Indeed,the French and Belgian delegations to the EU on 7th

December 1998 put forward a recommendation to theCouncil ‘requesting the Commission to lay down alegal framework for establishing a “social label” for con-sumer products and for enterprises that respect thebasic social rights, as determined in the ILO Conven-tion, in their production.’ 100 This is clear evidence thatthere is a political will to have labelling for consumerproducts that are based on social and ethical considera-tions. At this same meeting the Council approved a res-olution on consumer policy action plan for 1999-2001which contained the following points:

‘whereas under certain circumstances self-regula-tion by business or voluntary agreements betweenconsumer organizations and business can be anappropriate complement or, in specific cases, analternative to legislation in particular as they allowfor faster reactions to market developments;


whereas such self-regulation and agreements mustmeet the objective of a high level of consumer pro-tection, safeguard consumers’ rights to informa-tion and not restrict competition; whereas theproper enforcement and monitoring of self-regu-lation and voluntary agreements are essential fortheir effectiveness and whereas failure of self-reg-ulation and voluntary agreements may require theadoption of binding rules.’101

carat act

A significant recent development for the diamondindustry occurred on November 1st 1999 when UnitedStates democrat congressman Tony Hall of Ohio intro-duced the Consumer Access to a Responsible Account-ing of Trade Act or CARAT act. He has recently beenjoined by a co-sponsor of the bill, Republican FrankWoolf. The bill intends to introduce legislation thatwill require that the rough source of all gem qualitypolished diamonds and gem diamond products sold inAmerica should be certified with a label indicatingtheir country of origin (extraction). Strict penalties fornon-compliance are also legislated for with violatorsfacing fines of upto $250,000 or one year in prison. Theproponants state that purpose of the carat act is to giveAmerican consumers information about diamonds thatthey have about other products they buy. It is proposedthat this will in turn put pressure on the diamondindustry to not deal in conflict diamonds as the Ameri-can diamond buying consumers will not want to buydiamonds that have financed conflict in Africa butrather economic development and democracy. It doesnot intend to block the import of diamonds from anyconflict zone, but it would force fairly extensivechanges in industry practice.


4

Technologies andControl Systems inUse in theDiamond Trade

This section profilessome of the current technology and control systemsused within the diamond industry to show how thecontrol systems are already in wide use within theindustry, particularly where the profitability of theindustry is concerned. The case study below givesdetails of the chain of custody that is in the process ofbeing implemented in Canada’s North West Territo-ries.

The diamond industry is certainly no stranger totechnology, indeed it has welcomed it with open arms.Since the 1970s technology has significantly changedmany of the processes that take the diamond from itsnatural state to deliver it to the consumer as a finisheditem. It is fair to say that all the technologies, as well asthe procedures needed to introduce a successful chainof custody into the supply chain of diamonds, alreadyexist in some form within the diamond industry. It isnot a valid argument that the current scale and per-formance of some technologies disqualifies them frombeing considered for use as part of a larger industry-wide chain of custody.

The technologies in the diamond industry thatcould theoretically be applied to a chain of custody cur-rently exist for the evaluation of rough diamonds, thebranding and grading of cut diamonds, assisting inmanufacturers’ inventories and the tracing of lost andstolen cut diamonds. These all rely on either samplingand recording the properties of individual diamonds, orcreating some form of tag, in the form of a code or alogo, that is used to identify the diamond. By combin-ing the sampling and marking, by the application of acode or a bar code, it will be possible to quickly verifythe identity of a diamond by checking on a database.The creation, cost and administration of a database tostore the details of the diamonds will need to beaddressed.

Initial research, which was not exhaustive, hasidentified technology that is either developed, or isbeing developed that can: calculate and record the indi-vidual surface profiles of rough diamonds; confirm theidentity of a parcel of stones that has been registeredusing this method; mark rough diamonds with individ-ual bar codes or other readable inscriptions; mark cutdiamonds with codes, bar codes and logos; identify andverify the identity of cut or rough diamonds that havebeen coded; record and verify the individual optical sig-nature that a cut diamond exhibits using laser refrac-tion.

Global Witness believes that the adoption of someor all of these processes, along with corresponding pro-cedural methods, could play an important part in anychain of custody system. It is recommended that exten-sive further research and information-sharing is estab-lished. Below are brief descriptions of some existingtechnologies that could be applied to a chain of cus-tody, although there are issues of concern around thedominance of northern based technologies.

I. CREATING A RECORD OF APOLISHED DIAMOND

This is currently being done by one company underpatent, the Gemprint corporation, based in Canada,and is known as the Gemprint system. The companyprovides equipment to perform a non-invasive exami-nation of a cut diamond, and the computer systems andback-up that store the results of the examination on asecure database to be recalled on demand. The Gem-print corporation has also been chosen to establish andadminister the GNWT ‘chain of custody’ programme,which monitors the flow of diamonds from the Ekatimine in Canada’s North West Territories to local cut-ters and on the retail market. Gemprint has been mar-keted in areas where authenticating the identity of asingle stone is needed. It has, for example, been used asa means of recovering diamonds that have been stolen,it is also used by manufacturers and cutters for inven-tory identification and comparison.

Drawing on technology developed in Israel duringthe 1970s, Gemprint uses laser refraction to produce animage that is the ‘unique optical signature’ of a cut dia-mond and other gemstones that possess a high degreeof brilliance such as sapphires and topaz102. A low-pow-ered laser is directed into the diamond perpendicular tothe centre of the table. The light that is reflected is pro-jected onto a screen to form a scattered image. Fromhere the image is captured, digitised, and becomes theunique fingerprint of that diamond. The informationcan be sent via a modem to a database to be recalledwhenever the need to verify the details of that diamondarises.

The method can be used on any suitable gemabove 5 points, but is usually used on stones over 25points. Usually a diamond is Gemprinted at the pointof purchase. An incentive is that various insurance


companies offer reduced premiums typically in theregion of 10%. Diamond owners may also be temptedto use this technology when diamond-containing jew-ellery is sent for repair and where the practice of swap-ping diamonds for an inferior one is not unheard of.

To recognise a Gemprinted diamond, the initialprocedure is repeated. This is known as a verificationscan. Again, light is passed through the diamonds inthe same manner to form a scattered image, once digi-tised, the image is matched to a corresponding partnerin the Gemprint database. Any relevant informationheld about this stone can then be checked.

The strength of the Gemprint system relies on thefact that every polished diamond is unique regardless ofhow similar its characteristics are to another. This hasbeen proven by testing against examples of standard cutdiamonds and has been confirmed by the HRD.103

Technological progress in the diamond industryincluding computerised evaluation of rough stones andlaser cutting mean that standardised cut diamonds havebeen made possible and are demanded. Gemprints havebeen tested against stones that expert gemmologistshave claimed to be identical.

Importantly, the optical signature of a diamond, ascaptured by Gemprint has been accepted as evidence ofa criminal standard in a ruling in a Californian courtcase. The case, ‘People Vs MAKI 1984’104 accepted thatGemprint evidence, on the identity of two stolen dia-monds and criminal liability befell Maki et al.

II. LASER TECHNOLOGY

As in other industry sectors, the introduction of lasersinto diamond manufacturing has transformed theindustry, particularly the diamond-cutting process.Lasers have opened up the possibility to mark dia-monds, in either their rough, or their cut stage, with acode, or a bar code that can help to identify that dia-mond whenever verification is required. If this technol-ogy could be applied widely then there seems to be noreason why each diamond could not be traced back tothe point that it was coded as rough and back furtherstill, as far as the chain of custody, and the records thatgo with it, will allow.

Importantly, it has allowed diamond companies tobrand their diamonds with logos, taking advantage ofthe value added whilst also helping to increase con-sumer confidence. This has become increasingly preva-lent as branding develops in the industry.

In the 1970s, it was discovered that laser beamscould be used to burn out black inclusions and improvegreatly the appearance of diamonds that were otherwiseunwanted. Later that decade, lasers were used toinscribe diamonds and in 1983 Lazare Kaplan Interna-tional (LKI) developed an internationally patentedlaser engraving system. LKI inscribed its entire ‘ideal’cut diamonds (those with optimum reflection andrefraction of light) with a serial number and logo thatidentify the stone. By this, Lazare Kaplan can recall

from their database the characteristics of any stone theyhave inscribed.105.

Recently, another company in the United States,3Beams Technologies, has been working on developinghigher speed, lower cost and more accurate laserinscription for both rough and cut diamonds; this is stillat the developmental stage. 3Beams aims to create sim-ilar inscriptions to its Focused Ion Beam technology(see section 4, iii) but at much lower cost.

The lower size range of these laser inscriptions iscurrently set at two microns, which is .002mm, and issmaller than early versions of the De Beers ‘Marque’ –De Beers’ branding inscription. Interestingly, it is thecost of a microscope needed to see any smaller than twomicrons that sets this. Two microns would not be con-sidered to affect the grade of a stone up to and includ-ing internally flawless.

bar codes on diamonds

Using existing bar code examples but on a muchsmaller scale,3Beams technologies expects to be able tobar code rough diamonds at the rate of one every 15seconds106. This higher speed of inscription, is possiblebecause the minute inscriptions on cut diamonds arenot necessary, as the bar code will be polished off. Thereis of course the issue of a larger bar code affecting thegrading process of a rough diamond, but this needs tobe established in practice. The expected cost of bar cod-ing a rough diamond is under $6. If this technology isapplied on a high-volume basis the prices will lower.107

Another advantage of the larger bar codes that mightbe applied to rough is that they can be read using a dig-ital video method, which is a newer method of readingbar codes.108 3Beams is currently working on adapting avideo-based scanning system which works by taking avideo snapshot of the diamond to capture the image ofthe bar code. The reader then uses a sophisticated digi-tal image processing technique to decode the bar code.In practice this means that the actual orientation of thebar code is irrelevant, and that as long as the wholeimage of the bar code is available to the camera thenthe bar code can be read .107 By overcoming the prob-lem of orienting the bar code of the diamond to the barcode reader the system should become more easilyautomated.

The costs of the laser bar code generator would bein the region of $60, 000 to $210, 000, with the lowerend of the price range being for rough diamonds. Thebar code scanners would be priced somewhere in theregion of $800107

the database

Any bar code system would need to have the support ofa database. It is not only the presence of the bar code onthe diamond but the related information about thatdiamond, held on a database that is needed. The infor-mation about the diamond checked at any point wouldneed to correspond with all the other information held


on it. The worth of the database will be related to itsaccessibility, in terms of authorities and the industrybeing able to access it speedily and easily from any loca-tion at different points of the manufacturing process.Large volumes of data would need to be transferred ahigh speeds. All measurements would need to be stan-dardized and machines calibrated.

At the end of the process, once the diamond is cut,it should, in theory, be possible to obtain the entire his-tory of the diamond, which would include its countryof origin, its original weight and where it was cut.

the future

3Beams is currently working on a system whereby a barcode could be embedded within a diamond. Removal ofthis would prove to be very difficult without alteringthe diamond, which is not thought to be much of aproblem with normal laser inscription. It has been sug-gested, and subsequently agreed, that it may be possibleto insert a hologram into a diamond.109 It has also beensuggested that embedding magnetic materials of a spe-cific signature may be of some use.

III. FOCUSED ION BEAM TECHNOLOGY

In September 1998, De Beers announced its use of anew technological application to the branding of dia-monds. In collaboration with a chain of jewellers inManchester, England, De Beers unveiled what theydescribed as a ‘unique customer service’, a new methodof branding diamonds, called the ‘Marque’. The Mar-que is a De Beers logo and an eight-digit serial number,which their publicity describes as representing to thecustomer “a confidence and knowledge that [any dia-mond bearing it] represents one of the world’s finestdiamonds, unique and personal to the buyer.”110

While the diamond press was examining theprospects for the concept and its uses which “may proverevolutionary to the trade”, De Beers was intent on notdisclosing the method that was being used to brand itsdiamonds.111 Even today, the De Beers ‘Marque’method is not disclosed.”The hallmarking technologyis a proprietary secret of the De Beers company. Due toits unique nature, the hallmark appears to be three-dimensional. It is unlike any other inscription in that itis not carved into the diamond with a laser but is actu-ally a part of the diamond itself. It is microscopic andboth transparent and invisible under normal viewingstandards. However, utilizing the special De Beersviewer your select prestige jeweller will make the invis-ible hallmark appear before your eyes.” 112

In fact, a company called Norsam Technologiesholds the patent for this application, which it devel-oped in conjunction with Los Alamos National Labo-ratories. Norsam Focused Ion Beam technology worksby directing a beam of gallium ions onto a diamond’ssurface; the high-energy beam converts the very densecrystalline structure of diamond into the less dense

form of carbon i.e. graphite. Graphite has a greater vol-ume, and it is this that creates a bulging effect, beingseen as puffed or raised letters on the surface of the dia-mond.113 Graphite, because of its conductive propertiesappears to glow under infrared, is visible under infraredradiation, making detection easier.

Alternatively, the softer graphite can be etchedfrom the diamond leaving an extremely shallow inden-tation that again can only be seen by a special micro-scope.

Focused Ion Beam technology can be used toimplant ions, but for the branding of diamonds it is setto deliver a low dose of ions, enough to transform thediamond to graphite, yet not enough to leave a trace ofthe ions. In a telephone call Global Witness made toretailers of De Beers ‘Marque’ diamonds, the retailerwas unaware of how the ‘Marque’ was made, claimingthat the method is kept secret to all but a few people atDe Beers114. In reality, the mystery is not the technol-ogy but perhaps why De Beers tries to maintain theperception of uniqueness. Though this becomes clearerwhen taking into account the premium that stones withthe ‘Marque’ are sold at compared to stones of a similargrade. It is now clear that De Beers has used two meth-ods to brand its diamonds with the ‘Marque’.115 Thefirst, ‘electron beam lithography’, is a time-consumingand expensive method. The other method uses‘Focused Ion Beam’ technology and is a faster, moreprecise method. De Beers currently uses this methodand along with several large diamond manufacturers inthe USA will use this in the future for the inscription oflogos and serial numbers on some of its diamonds.

Unlike the cruder laser inscriptions of the past,Focused Ion Beams are extremely precise, creatinginscriptions that are sub-micron, that is, they are lessthan 0.0001 mm. Norsam can direct a beam of ionsleaving lettering on a diamond that is 20 nanometres –equivalent to the width of a human hair. The drawbackof this method is the cost. Focused Ion workstationscost in the region of $800, 000. However, once the ini-tial outlay for the machine has been made, the unitcosts do not appear to be very high. It is expected that itwill be applied to brand all diamonds 0.3ct and higherwith both a logo and a serial number.116

The Focused Ion Beam technique, can effectivelybe used as a printer. Images and text can be etched ontosurfaces as shown in the example above. Using thismethod, the entire Genealogical record of the MormonChurch is being inscribed onto a series of 2 inch nickeldiscs, each disc capable of holding 200,000 (8 Ω x 11inch) pages at 200– 300 dpi resolution. More recentlythis has been increased to 350, 000 pages per disc.

IV. INDEPENDENT GRADING REPORTSFOR POLISHED DIAMONDS

It is now accepted diamond industry practice that dia-mond grading reports are needed for diamond jewellerywith almost every valuable stone receiving a gemmo-


logical report. The International Gemmological Insti-tute states that, “these reports have created a linkbetween the jeweller and the client. They make it mucheasier for the jeweller to explain the characteristics ofthe item and give a feeling of security to the client”.117

The reports are essentially statements attesting to theauthenticity of a polished diamond and provide a reli-able and accurate statement of its identity and gradebased on an internationally recognized system. Thereare several competing trade bodies and firms that offerthese grading reports and the methodology used is thesame. Each diamond is studied by gemmologists whoproduce descriptions of the characteristics of the dia-mond and the quality of its cut based on the 4C’s: CaratWeight, Color, Clarity and Cut.

There are five major laboratories that issuedetailed grading reports. They are: the GemmologicalInstitute of America (GIA), the European Gemmolog-ical Institute (EGL), the International GemmologicalInstitute (IGI); the American Gem Society (AGS) andthe High Diamond Council (HRD). The laboratoriesdo not actually certify diamonds as many jewelleryretailers claim, they simply grade the diamonds accord-ing to agreed industry standards. The importance ofsuch reports to the retail trade is illustrated by the IGI,which states; “Jewellers now consider supplying suchinformation as an integral part of any sale and modernretail training programmes stress the importance ofproviding independent gemmological reports for gemsand jewelry in addition to educating the consumer.”118

There is considerable concern within the industryabout issues such as the creation of synthetic diamonds,the practice of fracture filling and the proliferation ofcolour treatment enhancements upon rough diamonds.These have made certification within the industry a keyissue, indeed the President of the GIA, William Boya-jian, has stated of colour enhanced diamonds “Thesediamonds must be disclosed at every level of thepipeline.”119 In 1999, diamonds, treated with colourenhancement techniques by US diamond companyLazare Kaplan (LKI) and General Electric entered intothe market with the diamonds being marketed by theLKI company Pegasus Overseas Limited (GE-POL).It is now possible to take a specific brownish type ofrough diamond, (known by geologists as Type IIA,mostly found in De Beers’ Premier Mine in SouthAfrica, in De Beers’ Orapa mine in Botswana and inRussia)120 and turn them into pure white stones,enhancing their brilliance and brightness. The dia-mond industry sees this as a very real threat to the con-fidence of the diamond buying consumer as can be seenagain from comments made by the President of theGIA, “The trade insists that if diamonds are treated inany way, then the trade has a right to know and ulti-mately so does the consumer. The integrity of theindustry is at stake.” This concern has led to all Pegasustreated diamonds being laser inscribed on the girdleand to be GIA certified as having been processed ortreated by this method.

V. THE GEM DEFENSIVE METHOD

As part of the De Beers ‘gem-defensive’ against theproliferation of synthetic diamonds, fracture filling andcolour enhancements (as mentioned in section ivabove) they have implemented a trial run branding ini-tiative that is intended to ensure consumer confidenceand promote brand loyalty. Promotional statementsdeclare that ‘the provision of a service for the inscrip-tion of selected polished stones with the De Beersname and an individual security number will give con-sumers greater confidence when purchasing dia-monds.’121 This has several possibilities relating to theissue of conflict diamonds. As Chaim Even-Zohar, theeditor of Diamond Intelligence Briefs has noted “…ifenvironmental or child labour issues would come up atany time in the future, it will become easier to defendthe diamond industry by showing that all labour prac-tices from the mine to consumer pipeline of De Beersbranded diamonds are well defined and controlled, andretailers can guarantee that these problems don’t applyto their diamonds. No branding would ever be appliedto diamonds produced by child labour, the brandingbecomes an incentive for the pipeline to behave accord-ingly.’122 This was written before the issue of conflictdiamonds became a key issue for the industry, but obvi-ously applies equally.

case study: north west territories programme– the first chain of custody for the diamond

industry?

In what appears to be a first123 for the diamond indus-try, the Government of the Northwest Territories(GNWT) has devised a chain of custody system that iscurrently in the early stages of implementation. It is fordiamonds mined from the Ekati mine and subse-quently manufactured in the North West Territories. Itis an audit trail from the mine to the manufacturers anddownstream to the consumer, i.e. a chain of custody.

The Ekati mine in the North West Territories ofCanada has been in production since October 1998.The largest stakeholder and operator of the mine, BHP,has agreed to provide up to ten per cent in value terms,or approx. 7,000 carats, of higher-end quality diamondsto the producers currently operating in the NWT.124 In2003, the Diavik mine will come on stream and there isa similar agreement to sell ten per cent of production.The GNWT chain of custody scheme ensures that theowner of a diamond from one of the three manufactur-ers operating in this programme may easily verify thattheir diamond corresponds with what is written on itsaccompanying certificate of origin. Speaking of thescheme, the GNWT describes tracking diamondsthrough an auditing and monitoring system as ‘a rela-tively simple process’.125

Conceived to protect the GNWT’s investment inthe diamond manufacturing industry, and at the sametime protect the delicate market for Canadian-pro-duced diamonds, the programme has been developed


through the collaboration of the GNWT, the RoyalCanadian Mounted Police (RCMP), Broken Hill Pro-prietary (BHP), Gemprint Corporation and currentand future diamond manufacturers in the NWT.

choosing the technology and procedures

The GNWT chose the Gemprint corporation todesign and administer the audit trail for its chain ofcustody programme. Gemprint’s optical signature sys-tem was chosen as the method by which the finishedstones could be identified as NWT stones and henceauthenticated. A security-printed certificate of originalso accompanies GNWT diamonds.

The GNWT worked to the local RCMP detach-ment which reviewed technologies and procedures thatcould be applied to tracking diamonds. Laser inscrip-tion and the optical signature method of Gemprintwere both considered, but it was decided to use Gem-print because laser inscription had the weakness ofbeing visible and erasable.126 For branding purposesthough, it is believed that all the manufacturers willalso user laser inscription.

In the GNWT programme, Gemprint’s role com-prises the following:127 Establishing a secure local data-base and specific software; fingerprinting every stonethat is produced by manufacturers in the territory; cor-responding grading data of each diamond to the Gem-print registration number, including the laserinscription number of the diamond (if it has one) onthe certificate of origin and adding it to thedatabase;designing, producing and maintaining controlover a certificate of origin; passing the certificate of ori-gin downstream with the diamond along with its grad-ing certificate and providing for subsequent verificationon demand, by a check facility on the central database.

Diamonds leaving the Ekati mine have beenreclaimed by x-ray sorting machines that pick out thediamonds from the crushed rock. They are then trans-ferred to the BHP sorting and valuation office in Yel-lowknife. All diamonds must be valued by GNWT inaccordance with Federal Mining Regulation. After val-uation, a proportion of the diamonds are shippeddirectly to the CSO in London, and the remainder areshipped to the BHP offices in Antwerp. After sortingin Antwerp, the stones are shipped back to Yellowknife,to the BHP sorting and valuation facility. Custody ofthe diamonds is transferred here. When the manufac-turer, Sirius Diamonds, which is currently the onlymanufacturer in operation, receives its parcel of rough,an invoice provided by BHP accompanies it. Thisinvoice lists the stones with the following: number ofstones and weight – precise to three decimal points andvalue. A copy of this invoice is also provided to theGNWT.

Once the rough stones are received in the cuttingfacility they are registered to the local database which isused to record the history of all stones that are pur-chased by the NWT manufacturers whilst these stonesremain in the NWT. Detailed information on the

stones is entered directly onto computers networkedwith the local database. The user interface uses speciallydesigned software and the cutter is presented with aninput screen with various blank fields that are subse-quently filled. The stones are registered by weight (tothree decimal points), shape, colour and clarity. As thisis done, the software assigns each stone a trackingnumber. Once the stones have been registered on thelocal database the registration details are made availableto the GNWT. This is done on a monthly basis and thedetailed inventory of the rough received by the manu-facturers will be consolidated with the listing on theoriginal BHP invoice.

The manufacturing stage: from the point that thestone is logged and given a tracking number it can betraced until it reaches the consumer. Also at this stagethe stone is assigned a number which will stay with itand will appear on the Certificate of Origin. Ensuringthat the registered rough stone corresponds with thecut stone is done through what is known as ‘forecast-ing’. Forecasting is standard practice and relates to theaccurate prediction of the yield that the rough stonewill make as a diamond. This is a standard procedure,carried out as part of the evaluation of a rough stone.128

Forecasting has been made easier and more accuratethrough commonly used rough-evaluation computertechnologies such as the Sarin Dia-Scan. Such amachine will scan the rough diamond and then allocatecutting shapes and also forecast the weight of the stonewhen it is cut. One estimate of how closely related theforecast is to the actual weight of the cut stone is that in80-90% of cases the stone will match the forecastexactly. This rises to 95% when laser cutting methodsare used.129

Hence, once a stone is cut, though it will have lostsome of its original identifying weight and shape prop-erties, it conforms closely to what has been forecast ofit. This is important in the chain of custody because iteffectively bridges a weak link in the chain. When astone has been cut the cutter returns the new dimen-sions, the 4 C’s of the stone, to the database usingsophisticated technology that is both accurate andobjective. Details on the database are made available tothe GNWT on a monthly basis, providing the GNWTwith an effective audit trail. At this stage the stone isalso recorded with the Gemprint optical signaturetechnique (see Gemprint section). This uses a low-levellaser refraction technique to capture the unique opticalsignature of a diamond. This optical signature, alongwith the full description of the stone, is then transferredto the main Gemprint Database in Toronto.

After cutting, but before the stone leaves the man-ufacturer, the stone is issued with a certificate ofauthenticity. As well as containing a miniature Gem-print scatter pattern, the certificate has numerousinbuilt security features. Each certificate has a runningnumber, as well as the tracking number of the stonethat was assigned to it while still a rough stone. In addi-tion, the certificate has numerous security features,similar to banknotes, to deter counterfeiting. This


ensures that it is extremely unlikely that any non-bonafide diamond could be passed off as a genuine NWTstone.

certificates of origin for diamonds fromangola :

The problem of counterfeit country of origin certifi-cates can begin to be addressed by applying the mostcurrent features that have been developed to protect theauthenticity of certificates and banknotes. There doeshowever continue to be serious problems with counter-feiting especially with the advent of high quality colourcopiers and scanners. However, if individual countriesadopt what is considered to be best practice for theissuing of certificates then they have bridged anotherweak point in the supply chain.

Ideally certificates should be printed with a uniquenumber and should incorporate features such as fluo-rescent inks and watermarked sensitized paper. Print-ing itself can incorporate both lithographic and intaglio(raised) printing, thus with specifications similar tomany banknotes.130 In late 1999, the Angolan parastataldiamond company, ENDIAMA, took delivery of alarge batch of security printed certificates from theBritish company De La Rue. Since then, other dia-mond-producing countries have approached De LaRue with similar motives.131

The strength of a certificate is no stronger thanthe ability to recognise the difference between a gen-uine certificate and a counterfeit one, which is an issueto be worked out by the relevant authorities. Standard-isation would seem to be able go some way to address-ing this problem. Equally important is the integrity ofthe systems of diamond control that lead up to theissuance of the certificate. For example if the Angolangovernment is unable to demonstrate how it is ensuringthat no Unita diamonds are able to leak into the officialsystem then the new certificates will be meaningless.

In December 1998, Global Witness produced thereport ‘A Rough Trade’, which highlighted some of thesignificant loopholes that existed on the first Countryof Origin certificates for Angolan diamonds. Theseincluded: no printed name under the signature;repeated failure to supply lists of names of officialsauthorised to sign to importing countries or the UnitedNations; easily forgeable documents; conflicting officialstamps and failure to provide authorised examples ofstamps to importing authorities.


5

CertificationSystems for OtherProducts

This section givesexamples of existing certification systems for equallychallenging products.

certification schemes

The increase in the access to information on productsbased on ethical and quality control provisions hasincreased substantially in the last decade, largelythrough consumer pressure. Increased globalisationcoupled with lax regulation of industries, preventablepublic health scandals and environmental disasters hasled to consumers demanding their legitimate right toknow detailed information on how their product hasbeen created, extracted, fed, shipped or manufactured.With this increase in right to information, comes anobvious need to independently verify companies’claims, which have often been deliberately fraudulent.Certification can be broadly split into two categories –products that need independent quality-control testingand verification if they pose a serious hazard or healthrisk if manufactured to poor standards, and productsthat need to meet certain ethical, social or environmen-tal criteria due to consumer pressure. Outlined beloware two, of many, of recent examples of certificationschemes currently in operation. They were chosen tooutline how a chain of custody scheme can work forproducts with a very complicated lifecycle history con-taining many chains and also with significant quantitiesof the product.

I. FOREST STEWARDSHIP COUNCIL –FSC.

Growing public awareness of forest destruction in the1980s led to consumers demanding that their purchasesof wood and other forest products did not contribute tothis destruction. As a result, certification programmesof wood products proliferated in the marketplace, oftenwith misleading and fraudulent claims. In response, the

Forest Stewardship Council (FSC) was formed in 1994to provide consumers with reliable information aboutforest products. The FSC is an independent, non-profit, non-governmental organisation comprising rep-resentatives from environmental and social groups, thetimber trade and the forestry industry, which accreditscertification organizations in order to guarantee theauthenticity of the claims. 132

How does the FSC work: The basis of an effectivecertification system is the involvement of an independ-ent certifier and the establishment of a chain of custodyfor the product from source to end product. The inde-pendent certifier establishes the chain of custody forthe product by monitoring all the processes in the life-cycle of the product. The certifier would establish thatharvesting was being conducted according to therequired FSC standards and the establishment of achain of custody by the certifier (product audit trail/on-site inspection etc.) then guarantees that the timberfrom the well-managed sources actually ends up in thefinished product, without being mixed with timberfrom other non-certified sources. Currently 20% of UKtimber products are FSC certified with similar percent-ages for European countries. Verification is onlyachievable with compliance with FSC criteria, whichare based on agreed social and environmental princi-ples. Only products that are certified are legally author-ized to carry the FSC Trademark. This provides anincentive in the marketplace for good forestry practice,as a premium can be charged for FSC certified prod-ucts and provides the consumer with a guarantee.

II. MARINE STEWARDSHIP COUNCIL(MSC)

The Marine Stewardship Council (MSC) was estab-lished in February 1997 with the objective of promot-ing sustainable and responsible fisheries and fishingpractices worldwide. Chronic over-fishing on certainstocks has driven staple species almost close to com-mercial extinction in some areas, resulting in the loss ofthousands of jobs in regions dependent on these fish-eries for a livelihood. Some fisheries that have sustainedcoastal communities throughout the world for genera-tions have suffered catastrophic declines over recentyears.

In developing a third-party, independent standardthat will facilitate the assessment of marine resourcesustainability, the MSC aims to promote responsible,environmentally appropriate, socially beneficial andeconomically viable fisheries practices, while maintain-ing the biodiversity, productivity and ecologicalprocesses of the marine environment. Its principles andcriteria are implemented through a standardised certifi-cation scheme whereby certification of products isawarded subject to an assessment, carried out by inde-pendent certification bodies. When a fishery under-takes the Certifier Selection Process and chooses itsaccredited Certifier, it then undergoes a Gap Analysis


against the requirements of the MSC Fisheries Stan-dard. If the results of the gap analysis are acceptable,the Certifier then undertakes a pre-assessment visit.Following a review of the pre-assessment results, thefishery management team decides whether or not toproceed. If it chooses to proceed, the Certifier under-takes a full assessment of the fishery to the MSC stan-dard. The Certification team will decide whether or notto award Certification according to the outcome of theassessment. Should a fishery determine that the resultsof the initial gap analysis are not acceptable, then thefishery may opt to implement corrective action and thepre-assessment process begins again. A governancestructure that ensures that all stakeholders’ views andopinions are heard and debated and where no singleinterest predominates also underpins this process. Con-sumers buying products bearing the MSC logo knowthat those fish products have been derived from sus-tainable, well-managed sources.133

case study: the use of bar codes forestablishing a chain of custody for the timber

trade:

SGS Forestry deploys a system of field inspection,together with the capacity to store large quantities ofdata using a unique system of bar codes, which areattributed to each harvested tree, as a method of main-taining a chain of custody from harvest to end product.All harvested logs are allocated a bar code tag, whichtogether with detailed information about their species,date of harvest etc., are entered on a hand-held palmreader, and the data is subsequently forwarded, usingsatellite technology, to a central computer for storage.At each stage in the journey of the log from harvestthrough to processing, and even following the manu-factured product through to the point of sale, themovement of the log and its products is monitored,with the data being forwarded to the central computer.

This means that at any stage during this journey, itis possible to obtain a detailed history for the whole lifeof the product in question. On an inspection of anyparticular site on the audit trail, if logs are discoveredwhich do not possess a bar code tag, they must by defi-nition have been laundered into the system, and musttherefore be illegal. This system also removes the possi-bility of the smuggler being able to launder logs using afraudulent bar code, because on inspection, the data-base indicates that the log in question does not have achain of custody audit trail – once again, the log wouldbe clearly illegal. Using such systems allows for rela-tively inexpensive and easily portable field equipment.The unique bar code, which is allocated for each item(in this case, say a parcel of diamonds), allows for com-plex details to be rapidly recorded and stored at a cen-tral database, which further removes the possibility oflaundering illegal stones through the system.

III. IMMUNOASSAY TECHNIQUES

BioCode Ltd, is a UK and USA-based company, whichthrough its product, also called BioCode, makes use oftechniques first used in medicine. It is currently appliedto a wide range of products that include edible andpotable goods, car parts, CD-ROMs, pharmaceuticalsand tape cassettes. The marking of rough diamondswith an invisible, indelible compound could be a usefulmethod of covertly detecting the movement of dia-monds at certain points in the supply chain. This wouldbe useful for determining a number of things, includingthe presence of illicit (uncertified) diamonds alongsidecertified diamonds.

BioCode has been identified as one method capa-ble of being applied to marking diamonds. It is thecommercial application of immunoassay, a methodol-ogy that is widely used in medicine. It is used in theform of BioCode for the covert marking of productsthat suffer from counterfeiting, and diversion fromtheir intended markets. The marker agent is a custom-made chemical compound and is normally applied tothe product in an aqueous solution, and in quantities ofparts per billion. Detection of the marker relies upon asimilarly custom detector kit. Without this detector kit,the marker is virtually undetectable. BioCode’sImmunoassay method of detection involves the inter-action between the marker chemical, which is an anti-gen, and an antibody, which is the specific proteinpresent within the test kit. The antibody binds specifi-cally to the antigen’s binding site. In other words, theremust be an exact match (binding of the antibody to theantigen) for an antibody/antigen reaction to take place.The concept is often explained using the example of alock and key. If the key fits the lock, then the lockopens.

The company stresses that the identity of themarker would need to be kept secret – if it could notthen the process could be forged and would becomeuseless.134 Verifying the presence of the marker wouldrequire dissolving the marker that is present on therough diamond and going through a process wherebythe marker was held in aqueous solution that could betested with one of the kits. The company has similarsystems in place to test for its markers in fuels.

The company that markets BioCode ‘suspects’that it could apply it to the marking of rough dia-monds.135 This would be done with the use of anorganic solvent, so that once applied, the marker wouldbe resistant to moisture encountered during handlingetc. To actually determine the marker stability on thediamond in the various conditions that diamondswould encounter, there would need to be a testingperiod lasting somewhere in region of 4 to 6 months.Cost for these trials would be in the range of $50,000to $100,000.

BioCode is licensed to users on yearly terms.Under these annual licences customers are suppliedwith the consumables – markers and test kits – on afree-of-charge basis within the agreement. The licences


are related to the overall value of the product that isbeing marked, number of test kits required. The mini-mum annual licence fees, for other applications, areusually in the region of $100,000, yet in this case differ-ent agreements would need to apply. Market inspectionand product testing is usually arranged through agree-ments with marketing partners, one of which is SGSwith whom the company currently works in the EastAfrican fuels sector.

IV.TAGGING

Tagging is a methodology employed when an object isrequired to yield more information, or a specific type ofinformation, that it cannot otherwise do. It may also bethat the tag is used to derive information more quickly,securely and more accurately than by other means. Thetag, in the case of a simple logo, provides no moreinformation than the associations made with that logo– in the case of a branding scheme the logo is adver-tised so that the logo becomes associated with a set ofconstructed images and beliefs. If the logo, like a secu-rity hologram, cannot be reproduced, then the logo rep-resents a genuine article, an easily reproduced logo doesnot have the same level of protection, if counterfeitingis a problem. In the case of diamonds tagging/ brand-ing methods have been applied primarily to brand andtrack diamonds. The laser inscriptions as applied by theretailer have been used to verify the ownership and his-tory of a stone. Lazare Kaplan International have adatabase of all the diamonds that have been laserinscribed on their premises.136 The important pointhere is that anybody buying a stone that has beeninscribed with the LKI logo and serial number can ver-ify the authenticity of the stone, because of the infor-mation held on the LKI database.

If a serial number relates to a particular stone of2.3 carats, but has been illicitly inscribed on a stone of 1carat this will be deduced. The important point here isthe following; the tag is only the medium throughwhich information about an object can be reconciledwith that same object. It creates an identity that thestone does not otherwise have. It is when this otherwiseintangible information, (information about the historyof the stone, its country of origin) is required that a tagmay be needed. In this sense the tag is the ‘key’ tounlock a specific information about a diamond. The tagitself has no further significance unless it correspondswith information held somewhere else – the database.

There is currently a situation in the diamondindustry that illustrate the weakness of tagging, yet atthe same time is useful to explain the differencebetween logos put on to increase the liquidity andworth of a diamond and those put on to reduce the liq-uidity and worth of a diamond. GE POL diamondshave been put through an artificial process that resultsin a higher grading for the diamond when it is evalu-ated. The process has outraged many in the diamondindustry because it is a difficult to detect artificial treat-

ments. The result is that the purchaser is unaware if heor she is paying a premium for a stone which prior totreatment was worth less. The result is a loss in confi-dence in diamonds as a whole, because it is difficult todiscriminate against those which have been treated.GE POL diamonds have been inscribed on the girdleof the stone and so it is not hard for the inscription tobe polished off and this is seen as a problem in theindustry.

For diamonds that have been tagged to indicatetheir legitimacy the problem is not so much from thetag being deleted but from the counterfeiting of tags.The problem can be overcome by the control of tags forexample by making each tag unique to the object that itis on. By definition a tag unique to a single stone can-not exist on two stones. Determining which stone islegitimate are determined either by circumstantial evi-dence, or by checking on a database the details, such asthe precise weight etc of the stone that was legitimatelyregistered.

For the tracking of parcels of goods tracking tech-nologies which lend to automation, and non counter-feiting exist. Secure barcodes on tamper proof packagesare one method, another method is by the use of a tech-nology commonly known as RFID. This allows the‘smart’ tracking and identification of goods which mayplay an important role in administering and auditing achain of custody.

Radio frequency identification (RFID) is a rela-tively new technology that first appeared in trackingand access applications during the 1980s. These wire-less systems allow for non-contact reading and are usedin manufacturing hostile environments where barcodescannot be used. RFID is used for example in livestockidentification and in tracking moving vehicles. Thistechnology is used widely in automated data collection,identification, and analysis systems worldwide. RFIDtags work using radio frequencies and do not need to beseen to be read, they can placed inside parcels of goods.

The tagging of diamonds on an individual basis isclearly possible using the similar methods currentlyemployed in the diamond industry that are usedinscribe messages, serial numbers and logos. De Beers,Lazare Kaplan and other significant diamond produc-ers already have schemes in place to track diamondsthat have been inscribed by them. The tagging of roughdiamonds is also possible using similar methods ofinscribing, but this is apparently less established.

It is clear that the tracking of parcels of stones beaccomplished with more accuracy with the use ofsecure tagging devices. RFID offers the chance toembed information about a package of goods withinthe package. Combined with tamper proof packagingthis represent and important method for assuring theintegrity and monitoring the transit of diamonds whilstin transit.


V. OTHER VERIFICATION SCHEMES

There are a growing number of certification and verifi-cation schemes in operation and in development thathave mainly been created through environmental,health or consumer safety concerns. Global safety stan-dards for genetically modified foods are being set upand a European food agency is to be created to tracefood throughout the chain due to recent food scares inEurope. The UK Ministry of Agriculture Fisheries andFood has a Cattle Tracing System (CTS) and has justannounced the creation of a similar system for sheep.These are comprehensive systems for identification andregistration of livestock due to the BSE crisis. The ani-mals are given a unique number and records are kept byfarmers, they have passports and there is a databasemonitoring the animals within the United Kingdom.


6

Recommendationsfor a ControlSystemINTRODUCTION

This section, drawing upon the rest of the report,makes a series of recommendations aimed at develop-ing both a regulatory framework by governments and aself-regulatory system for the trade. It should beemphasised that these are recommendations and areintended to frame the terms of a debate for reformrather than be a set of finalised instructions. Initialresearch, which was not exhaustive, has identifiedapplicabale technology that is either developed, or isbeing developed. Global Witness advocates that tradeand governments consider the following existing possi-bilities. Currently there are systems that can: calculateand record the individual surface profiles of rough dia-monds; confirm the identity of a parcel of stones thathas been registered using this method; mark rough dia-monds with individual bar codes or other readableinscriptions; mark cut diamonds with codes, bar codesand logos; identify and verify the identity of cut orrough diamonds that have been coded; record and ver-ify the individual optical signature that a cut diamondexhibits using laser refraction.

A system using elements of these coupled withimproved regimes in exporting countries, and the intro-duction of relatively low technology identificationtechniques including work on surface features and pro-filing of run of mine production could be used as a basisfor reform by both governments and trade.

Governments and the trade must finally accept itis their responsibility to ensure that diamonds are notinvolved in the funding of conflict, and take actionaccordingly. The key point is that government andindustry whilst having different responsibilities do needto work together and produce a co-ordinated systemthat comprises both regulation and self-regulation. Therecommendations are more detailed for governmentsthan for trade. This reflects work already undertaken bygovernments and their national trade bodies, particu-larly those that have recently come under severe criti-cism. The recommendations for the trade provide astructure but do not go into the same level of detailbecause Global Witness believes a different approach is

needed for the trade. The complexities of developingmeaningful self-regulation within an industry that doesnot have a co-ordinating body that can act as a focalpoint for all the different parts of the industry meanthat for Global Witness to develop a series of detailedrecommendations at this stage in the process would notbe particularly productive. Instead this section givessome outline recommendations to give the trade anindication of what are minimal acceptable standards forcontrols. An important and urgent first step would befor the diamond trade to set up an industry taskforce orreform committee to immediately begin working onthe issue. The taskforce should be representative of theindustry and able to reflect the views of the differentparts of the diamond pipeline (see Recommendationsbelow for more detail). This would be an importantforum for the trade, enabling the different parts,traders, polishers, retailers and so on, to ensure thatthey are working in concert rather than producing con-tradictory initiatives and reforms. It will also ensurethat different sectors of the diamond industry can befully involved at every stage in developing a self-regula-tory framework. The taskforce should be small andcomprised of representatives of different sections of theindustry that have a real, and perhaps already proven,interest in reform and controls.

Global Witness would be happy to co-operatewith such a taskforce, and recommends that it seeks co-operation from government representatives to ensurethat the self-regulatory measures can work in tandemwith government regulations.

This taskforce sould be a short term one, and partof its’ mandate should be to work with governmentsand ngo’s to set up a permanent International DiamondCommittee (the name is a suggested working title)which would oversee the implementation of self-regu-latory measures developed by the taskforce. It mayseem initially confusing to have two bodies but theywould serve quite distinct functions, the first being ashortlived initiative to get the reform process moving,the second would be focused on implementation andregulation (see recommendations below for moredetail). The membership of this committee needs to becarefully and equally balanced between different partsof the trade, government importers and producers,labour representatives and non-governmental organisa-tions.

It is preferable that the industry be fully involvedin the developing of solutions as the alternative sce-nario would be for governments to impose a stringentseries of measures upon the trade, which is likely tomake implementation of controls far more difficult..

Global Witness is proposing that governments ofdiamond producing and importing countries shouldplay a central role in setting a regulatory frameworkwithin which industry self-regulation can be a mean-ingful part of the process of controls. It is clear thatgovernments and the commercial trade are looking toaddress the problem of conflict goods. If this is to bedone effectively both parties will need to significantly


address the core problems within the trade as a whole.These include lack of infrastructure, and corruption insome producing countries, a willingness by someimporting countries to accept the flow of conflict dia-monds, lack of transparency within the commercialtrade and the complexities of the movement of roughand polished diamonds.

Unfortunately, due to the high value and fungibil-ity of these goods, a system based solely on the trademaking unverifiable declarations of self-regulation, isunlikely to significantly address these core problems,and may even lead to consumer cynicism about claimsmade by the diamond trade. The trade is well aware ofthe importance of consumer confidence and has alreadybegun to look at how to maintain industry integrity andconsumer confidence on issues such as synthetic dia-monds and value enhancing treatments. If these issuesare not properly addressed they pose a serious threat toall diamond producing countries. It is clearly time forradical changes within the diamond sector, about howit operates and about the need for an ethical basis to itsoperations linked to greater transparency. Global Wit-ness believes that a strength of the industry is theimportance placed on trust – there are very few indus-tries where a deal worth perhaps a million dollars ormore can be agreed with a handshake, and in somecountries, the phrase “Mazel U’bracha,” without theinvolvement of corporate advisors, lawyers or even con-tracts. This is possible because although the diamondtrade is a truly international and far-flung network it isalso one in which the majority of the people one tradeswith are known quantities and are in a pattern of repeatbusiness. This will be an important factor in the reformprocess.

The HRD stated recently “The diamond sectorneeds a transparent, consistent and responsible struc-ture with strong, efficient self-regulating mechanisms.”A key part of such controls will be the rigour withwhich they are implemented by the industry. As BritishForeign Secretary, Robin Cook noted in December1999 “If the [diamond] industry could do it itself byself-regulation and by other proposals, that would bevery welcome and I think the more we are seen to bepursuing this earnestly, the more it is likely they will doso.” Indeed while the mystique of the diamond willdoubtless always continue, the mystique of the dia-mond companies is an anachronism that has to change.

The key issue at stake within the industry that hasto date made it possible for companies and importingcountries to evade their responsibilities and claimingeniously, and often incorrectly, that either they couldnot identify the origin of their goods, or that even ifthey could, and knew them to be from a conflict area, ifthey didn’t buy them someone else would. True countryof origin, i.e. of extraction, has never been made animportant part of the business. However this has tochange, and indeed, for different reasons already has, asAustralian and Canadian producers have begun to usecountry of origin as part of their marketing strategy.This is not to say that overnight ‘Country’ is going to

become the fifth ‘C’ (joining the current four ‘Cs’ -colour, clarity, carat and cut), but it does point to a needto be clearer about product history.

GLOBAL WITNESSRECOMMENDATIONS

I. PRODUCER GOVERNMENTS

overview

A certain amount of responsibility for the success ofany proposed control system unquestionably lies withthe countries that actually produce the diamonds. Anumber of these countries, such as Namibia, Botswana,South Africa, Australia, Russia and Canada are alreadyoperating systems that are well controlled or that havethe potential to easily be developed as part of a widercontrol system. Other producer countries face problemswith infrastructure and capacity, others again with thewill to improve regulation and with deep-rooted cor-ruption. Despite the wide variations in the type andscale of mining, as well as the security situation in dif-ferent diamond producing countries, there needs to bea degree of uniformity to controls. This will form animportant basis for tightening up import regimes andfor developing meaningful self-regulation. If producercountries operate widely differing control systems (ifany) and differing export regimes then it will be diffi-cult to develop controls further down the diamondpipeline. As a minimum there needs to be agreementon some underlying principles.

This is an issue of such importance to a number ofcountries across Africa in terms of revenue, and aresource that can help reconstruction and development,that regional bodies including SADEC, ECOWASand the Organisation of African Unity (OAU) needs tobe looking more closely at protecting its members’interests on this issue. The initiative by a number ofAfrican diamond producing countries includingNamibia, Botswana, Angola and led by South Africa,to seek ways to control conflict diamonds is an impor-tant and welcome development. It is hoped that thetechnical forum on the issue of conflict diamonds“African diamond industry – challenges in the 21st

Century” which is being held by the South AfricanGovernment on 11th and 12th May 2000 will produce aserious start to the process of reform.

Global Witness believes that producer countriesare the first point of any effective control system and assuch, importing countries and the international com-munity need to look at how they can assist producergovernments to develop and improve existing systemsor to introduce controls and security where none exists.An important benefit of any such work would be thestrengthening of a country’s revenue and of fiscal trans-parency around what is often a key potential revenueprovider. The scale of the issue varies greatly from


country to country, and this does make the introductionof workable systems more complex. For example, com-pare the scale and complexity of the trade in DRC withthe US$5 million of production from Guyana.

The need for a meaningful system is well exempli-fied in the “Report of the Panel of Experts on Viola-tions of security Council Sanctions Against Unita” (10th

March 2000). The report describes how the funding ofUnita was facilitated by the ease with which the trueorigin of diamonds can be obscured under current trad-ing and import-export regimes. The report states “ThePanel’s investigations confirm that diamonds have beenand continue to be the main source of Unita’s wealthand the primary source of its funding.” (The reportgoes on to note that Unita also raised significant fundsfrom charging landing fees to supply aircrafts). The waydocumentation and import procedures operate hasfacilitated the funding of other rebel groups. This cur-rently includes the Revolutionary United Front.

proposal

A system is needed that can encompass the differingtypes of production and controls possible in differentcountries. It needs to include the development ofexpertise to enable governments and their diamondcontrol bodies to be able to guarantee that the goodsthat they are certifying for export are from a knownpoint of origin. It needs to be adaptable to the infra-structure, scale and type of production in individualcountries but to have an underlying set of principlesthat will make it possible to verify where diamondshave been mined. There should be a special focus onthe problems faced in controlling alluvial production. Acombination of financial incentives and penalties areneeded to encourage better controls and to improvetransparency around alluvial production, particularlysmall-scale local mining. An important benefit of thiswould be localised wealth generation and increased rev-enue to governments. Some buyers will undoubtedlylose out, but they will be the ones, such as those inSierra Leone that are paying very low prices to dia-mond miners and smuggling the goods out.

Surprisingly Angola and Sierra Leone, two coun-tries facing massive challenges within their diamondsectors, do point the way forward for possible reforms.The Angolan government in an attempt to addressinternational criticism has put forward detailed plansthat if fully implemented could have a positive impactwithin the country’s corrupt diamond sector. GlobalWitness is extremely cautious about the possibilities fortrue reform in Angola but it is important that the gov-ernment should be given the chance to prove whetheror not it is seriously trying to reform its diamond sectorand as a necessary part of that, what level of trans-parency it will achieve. Indeed there is understandablyan almost overwhelming amount of international scep-ticism about the possibility of such controls actuallyworking in Angola, due to well known and deep rootedcorruption within the country. These reforms will be an

important test case for the Angolan government, and itneeds to accept that there will be intense cynicismwithin the international community about the pro-posed control measures. Equally the international com-munity needs to find (non-financial) ways to help theAngolan government, because if the government doesnot manage to bring in greater controls and trans-parency to the diamond sector, then its’ continuedexports must be seriously questioned. Transparency isneeded both in operations to demonstrate that dia-monds are not being purchased from Unita, and alsofiscally. Some of the reform measures, developed withthe Belgian HRD, could also be used as a basis for thedevelopment of reforms within other countries. SierraLeone, also a country with longterm problems in thediamond sector, does in fact have the remnants of sim-pler system of controls that with assistance from theinternational community to build capacity and infra-structure could be made to work.137 The systems involvelocal expertise about alluvial mines capacity and pro-duction and could be linked through to the officialexport office. Many people will, understandably, behighly sceptical that either Angola or Sierra Leonecould offer solutions to the problems of dealing withconflict diamonds. However those involved in trying todevelop reforms need to approach the process with anopen mind.

recommendations

a. The producer countries, with sovereign govern-ment oversight, verify their control over the pro-duction of goods within their territory. Thisapplies to government mining, joint ventures orprivate production under government license.

b. All goods extracted, bought or exported are routedthrough a government-run Diamond Office orequivalent structure.

c. A licence is required for all extraction whether it isa large company, an alluvial digger or a village co-operative.

d. Countercheck paperwork is required on extractionlicences and applications for export. This systemexists in Sierra Leone, but without infrastruc-ture.138 This would enable production of an exportdocument on which the date and place of extrac-tion could be verified. If queried by importingauthorities, the product trail could be accessed.There needs to be a careful assessment of whatinformation issuing authorities, i.e. producer gov-ernments, could provide to importing authoritiesboth routinely and in the case of queried parcels.

e. A government-run Diamond Office or equivalentstructure should be responsible for registering andquantifying the traders active in the informal buy-ing market. Only those officially registered would


be legally authorized to possess rough diamonds.All buyers would be obligated to record andreceipt purchases, including maintaining recordsof whom goods were purchased from, and thenumber of carats. The purchase records wouldthen be cross referenced against applications forexport.

f. Seized goods. This needs further consideration.For example, the current Angolan proposals couldprovide a loophole for confiscated goods becausethe reward system provides the finder with 60% ofthe value of found goods and the remainder goesto government. Care will need to be exercised toensure that this doesn’t become a way of launder-ing large quantities of illegally mined goods possi-bly with some official involvement. The quantitiesinvolved will be a useful indicator of this, particu-larly when compared against other countries thatare currently operating such schemes. These coun-tries include South Africa and Botswana and theyuse a lower finder’s fee, also because the more eas-ily secured kimberlite mining predominates onewould expect lower amounts of found goods.

g. Dealing with corruption. This is requires furtherresearch. One possibility would be to excludeholders of government office, the military and thepolice, as well as close family members of theaforementioned from being registered to mine ortrade in diamonds.

II. TRADING AND IMPORTINGCOUNTRIES

overview

In the same way that producer countries are needing to,in some cases, radically alter or improve their controlsystems, it is clear that importing countries will have tomake some equally important changes in import proce-dures if there are to be meaningful controls on conflictgoods.

Importing countries can be broadly divided intotwo types: countries where diamonds are predomi-nantly legitimately traded, and this would includecountries such as Belgium, Israel, the UK and else-where; and secondly, countries where trading of dia-monds is carried out with the express purpose of hidingthe original country of extraction because the diamondsare conflict goods, or because they are smuggled orstolen. An outstanding example of such a countrywould be Liberia. DRC has also been, up until 1997,another striking example of a route for laundering dia-monds. This was well documented as a Unita route asearly as 1993.139 Other countries tend to be shorterterm staging posts, including the Central AfricanRepublic, Congo Brazzaville, and countries such asRwanda. 140 Such countries that are not willing to

implement reforms need to be excluded from tradingsystems. This does not mean excluding African coun-tries from the possibility of becoming important roughdiamond trading centres, it simply means that thereneeds to be a uniformity of import and export proce-dures for diamonds. Any country that wants to benefitfrom trading diamonds should not be able to do so atthe expense of its neighbours or other more far-flungcountries. Thus, importing procedures need some sim-ple but radical improvements to address this problem.

One of the main reasons that the last decade hasseen such a growth in conflict diamonds is because get-ting access to world markets has been so tragically easy.This has been partly due to the appalling laissez faireattitude of a small number of importing countries. TheEuropean Union, in particular, has to shoulder respon-sibility for the billions of dollars’ worth of conflictgoods that entered the EU during the 1990s becausecustoms and import procedures are an EU matter.Liberia, for example has been a conduit for diamondsfrom Sierra Leone and elsewhere. The partnershipAfrica Canada report ‘The Heart of the Matter: SierraLeone, Diamonds and Human Security’ details dis-crepancies between actual mining output and exportfigures. “While the estimates of Liberian diamondmining output are between 100,000 and 150,000carats, the HRD records Liberian imports into Bel-gium of over 31 million carats between 1994 and 1998– an average of over six million carats a year”. The IvoryCoast is another example, as their “…small diamondindustry was essentially closed in the mid 1980s, [yet it]exported an average of more than 1.5 million caratsbetween 1995 and 1997.”

The UN Expert Panel’s report notes that “…theease with which illegal diamonds can be sold andtraded on major diamond markets, particularly in thelargest diamond market – Antwerp” is one of the facili-tating factors, and goes on to recommend that “a con-ference of experts convene for the purpose ofdetermining a system of controls that would allowincreased transparency and accountability in the con-trol of diamonds from the source or origin to thebourses.” Such a system could also be used to addressthe increasing concerns about the development of suchproblems as money laundering and the involvement ofvarious mafias, as well as age-old problems of smug-gling and the ‘grey’ and ‘black’ markets.

proposal

Importing countries need to urgently review andamend their legislation to close the loophole on coun-try of origin. There should be a requirement to detailthe country of extraction on import documentation.Further, there needs to be a significant improvement inenforcement regimes linked to a system to adequatelyverify the true country of extraction of imported dia-monds. Major diamond importing countries shouldlook at what technical assistance they can provide toproducer countries seeking to develop and improve


controls. The importing countries also need to look atways to require their diamond trade sectors to imple-ment meaningful and measurable self-regulation.

recommendations

a. Importation regulations should be amended toinsist on the country of extraction appearing onimport documents. Further work is required todetermine what is the best way to achieve suchlegislative change, for example it might be bestdone via a UN Security Council resolution whichwould oblige member states to take action.

b. The country of import would require the exportdocuments for rough diamonds as already recom-mended. All documentation would be checkedagainst forwarded information of import. Furtherwork needs to be done to ascertain the quantitiesof mixed parcels of rough, and how to developdocumentation to handle the informationrequired.

c. There should physical inspection of parcels, eitheron a basis of all parcels or a system of randomsampling of parcels. The former is the Belgianmodel in which every parcel is opened, and appar-ently the Israeli model. The importer governmentsneed to ensure that their customs are fully imple-menting control measures. If random sampling isused it should be set for a fairly high percentagefor the initial phase of the new system, and betruly random so that findings are not biased. Forexample, parcels containing a high percentage ofstones over one carat could be subject to a highersampling percentage than smaller and lower valuegoods. Diamond expertise needs to be improvedamongst those countries that operate a policy ofparcel inspection.

d. Countries should look at developing a centralisedDiamond Office that handles all import andexport formalities, this could be similar to the Bel-gian HRD.

e. Customs should have access to an internationaldatabase that details the production capacity ofdiamond countries and profiles each country’s dif-ferent goods, possibly with images. This databasewould also profile the activity of diamond tradingcountries to assist in risk assessment. For example,if a country that hitherto has not been signifi-cantly involved in trading diamonds suddenlyexperiences a large increase in exports, the docu-mentation and parcels would need to receive rig-orous scrutiny.

f. There needs to be a detailed review of nationaland international legislation and trade agreementsto determine a legislative basis for requiring coun-

try of extraction on import documents. Such areview is a major undertaking and is beyond thescope of this report.

III. DIAMOND TRADERS, POLISHERS,MANUFACTURERS AND RETAILERSOVERVIEW

The diamond industry is currently facing one of themost serious crises in its history. It has to face up to thefact that its current systems of trading are having devas-tating impacts on people, economies and regional secu-rity in Africa, as well as damaging the internationalimage of diamonds with implicitly worrying implica-tions for diamond producers and affecting perceptionsabout the integrity of the industry. Some sectors of thediamond industry are slowly realising this and recentdevelopments are encouraging.

In March 2000 Sean Cohen, President of theInternational Diamond Manufacturers Association in aspeech to an international diamond conference in Indiastated, “Recently we have also seen the advent of con-sumer issues affecting the diamond industry, such asthose of ‘conflict diamonds’. I know that many in ourtrade feel that if we ignore these issues or talk aboutthem less, that they will go away. The reality is that noconsumer will want to buy a product symbolizing loveand emotion if it is seen to be tainted with the blood ofinnocent lives...If we are silent, we will find that partic-ularly in consumer markets, governments will imposelaws and regulations, while they may be ineffective, willcertainly be costly to us as an industry…the test to us asa global industry is to see whether we can standtogether as a global industry and deal with the issue.”

As described elsewhere in this report, the dia-mond industry is already discussing the need to buildconsumer confidence in diamonds, particularly due tothreats posed by synthetic and treated diamonds. But itmust also consider the ethics of a business beinginvolved in funding rebel conflict and diamonds fromthese areas pose a similar threat to public perceptionsabout the integrity of the industry.

proposal

The industry has to aim to be able to verifiably demon-strate that its diamonds are conflict free. It has todevelop a system that can encompass all diamondstraded. This will require the setting up of a productaudit trail for all gem diamonds. For diamonds above acertain size a system for individual marking should beseriously considered. The product audit must be carriedout by accredited and independent product certifierswhich report to the International Diamond Commit-tee. There are a range of companies that have the skillsto carry out such work, and similar accreditation is thenorm within international business. The aim of theproduct audit would be to establish a chain of custodyfor diamonds. Self-regulation will need to include secu-


rity measures and penalties to ensure that unscrupulouscompanies or individuals do not undermine the effortsof the legitimate players.

RECOMMENDATIONS: ACROSS THEINDUSTRY

a. The industry needs to set up a diamond taskforceor reform committee, as briefly noted in the intro-duction to this section. The purpose of this task-force would be to bring the industry together, toco-ordinate the various statements of generalintent that have been made by different sectors ofthe industry and turn them, rapidly, into a series ofmeasures to develop self-regulation, includingindependent monitoring. It should co-ordinatethe interests and concerns of the different sectors,enabling them to be involved in every stage of thereform process. Membership should include thosewho have already proved themselves active on theissue of conflict goods and trade associations thatcan represent a wide range of interests, as well asexperts from within the industry. The taskforceshould not be dominated by one or two large com-panies but should have a balanced membershipand operate transparently. This taskforce shouldliaise with those government bodies seeking todevelop regulation within the industry to ensurethat self-regulatory systems fit into the regulatorycontext developed by governments. The taskforceneeds to begin work urgently and the Interna-tional Diamond Manufacturer’s AssociationWorld Diamond Congress on 16-17th July 2000would be the latest date to start such a process.

b. The taskforce, once set up should work with gov-ernments, labour representatives and ngo’s to setup a permanent International Diamond Commit-tee to oversee the trade’s implementation of con-trol measures, and ensure independent productauditing and enforcement of penalties. To be cred-ible this committee must have a membershipequally balanced between governments, industry,labour representatives and non-governmentalorganisations. The South African Governmentdiamond conference of 11th and 12th May 2000 isan important opportunity to start discussion’sabout the format and membership of the Com-mittee. Funding of such a committee should bethrough the industry, but the formula needs to beagreed upon.

c. The industry should only trade in rough and pol-ished diamonds with a provable product audittrail. This would extend throughout the diamondpipeline from extraction through to final end saleto the consumer. The different sectors of the tradeshould undertake only to use product audit trail

goods, and would also be subject to random spotchecks and penalties if found in contravention.

d. The diamond taskforce needs to make a detailedstudy of how to ensure an effective product audittrail beyond the first point of import. What is notclear at present is what percentage of goods areworked after being traded only a few times andwhat percentage are sold on many times. Forexample diamonds from Argyle mine in Australiabeing sold by the Argyle office in Antwerp toleading Indian companies who export the goodsdirectly to their factories in India where they areworked. Another example would be the CSOsight holders that buy and then manufacture a sig-nificant proportion of the goods. A better under-standing of this is needed to developself-regulatory measures. Global Witness will becarrying out more research on this but notes thatthe industry has unique access to such informa-tion.

e. The taskforce needs to give serious considerationto and carry out research on existing markingtechnologies that can be applied to both polishedand rough stones. It might be feasible to beginwith marking all goods over a certain size andextending this as technology improves.

f. There needs to be a register of legitimate compa-nies and individuals involved in the diamondtrade. What needs to be decided is whether such aregister should be held by governments or by thepermanent committee responsible for oversight ofcontrols

g. A rigorous system of penalties needs to be devel-oped. This could include any polisher, trader ormanufacturer found to be trying to launder inother goods temporarily forfeiting their ability toimport and export goods. Although this would notaddress goods polished and sold in one country. Inaddition goods could be confiscated and heldupon appeal, and the company or individual couldtemporarily lose the right to assert that theirgoods are certified. World Federation of DiamondBourses, which has approx. 13,000 traders ofrough and polished diamonds worldwide, cur-rently punishes serious transgressions such asdefaulting on payment by withdrawing a mem-ber’s access to the 21 member bourses worldwide,effectively ending a trader’s ability to trade legiti-mately. This could be a useful precedent that otherparts of the industry could develop.


IV. TRADERS

a. Traders should be required to keep track of thediamonds that they trade, and be able to provideverifiable information to the international dia-mond committee upon request within an agreedtimeframe. The actual information required needsto be agreed as this is not meant to be a back-doorroute for fiscal controls, thus the informationwould focus on country of extraction and quanti-ties of goods. This is information that could becross-referenced with export and import docu-ments if required.

b. Diamonds would only be bought and sold onthrough companies and individuals registeredwith national governments and the internationaldiamond committee. Purchase of diamonds on theso-called ‘grey market’ would result in the samepenalties.

c. All transactions, whether for initial import or forgoods that have been sorted and mixed wouldneed to meet the verification requirements of theInternational Diamond Committee. This is acomplicated requirement and requires the co-operation of the diamond trade working with theinternational diamond council and the input ofexpertise from product accreditation bodies.

V. POLISHERS

a. The product audit trail would continue throughthe polishing process, and could link in with exist-ing software used by many manufacturers to max-imize yield on polishing which involves individualrecords being created for the diamonds processed,and provides records of all the goods processed.Companies that polish diamonds already have tokeep track of stock, and to analyse and plan themaximum yield from their diamonds. Most alsokeep a close check on the results from individualpolishers against the instructions they are given.Companies that outsource large amounts of pol-ishing work also ensure that they can keep track oftheir goods.

VI. MANUFACTURERS

Manufacturers of jewellery should undertake to pur-chase supplies from polishers and traders of polishedthat were registered with the international diamondcommittee. And should ensure that their goods have averifiable product audit trail.

VII. RETAILERS

a. Retailers should undertake that they will insist ona supply chain from certified, conflict-free sources.A product audit trail would provide the additionalsignificant benefit of a guarantee to the consumerthat the goods are untreated and are not synthetic.

b. Retailers are the public face of the diamond indus-try as far as consumers are concerned. This placesa special responsibility upon them and they mustensure that they co-operate fully with the rest ofthe industry.


7

Conclusion

The aim of this reportis to try and provide an overview of the issues involvedin conflict diamonds, to outline some of the technologythat could be applied to diamond controls, to delineatethe scale and complexity of the business and to pointthe way forward. This edition was produced as a work-ing document to be made use of at the technical forumon the issue of conflict diamonds hosted by the SouthAfrican Government on the 11th and 12th of May. Afinal version will be printed and widely distributedimmediately after the conference which will detail andanalyse the results of the forum.

Global Witness urges individual governments,regional groupings the international community, andequally the trade to take urgent action. Recent events inSierra Leone, including the murder and kidnapping ofUN troops and increasing instability should be areminder of just how fragile peace is and how easy thepotential to undermine it. To date the UN has still nottackled the issue of diamond revenue continuing tofund the RUF. The role of diamond revenue inAngola’s continued conflict shows what a dangerousmistake it is to ignore the funding of rebel groups.

The issue of conflict diamonds has, since Decem-ber 1998, come to the fore on international agendas injust 16 months. By some measures this is a remarkablyshort period of time for the issue to be understood andestablished, governments begin to move, UN initiativesto happen, and for the trade to begin to accept it is aproblem and to begin to address the issue. And creditshuld go to many people for this. However when setagainst the suffering and devastation caused by conflict,and the impact day by day on the lives of people inaffected countries this issue is moving far too slowly. Itis now time for all those involved in the industry towork urgently towards practical and measurable con-trols to combat conflict and strengthen legitimate pro-ducers and markets.


GlossaryAlluvial: The name of a type of diamond and the type of shal-

low mine it is extracted from, with diamonds found in riverbeds and in shallow deposits. A form of mine that can beexploited by artisanel techniques.

Boart: A general term for diamonds that are suitable only forindustrial purposes.

Carat: Unit of diamond measurement; one carat is equivalentto 0.2 gram (200 milligrammes).

Points: A smaller unit of measurement than the carat. Thereare 100 points to a carat.

Colour: Diamonds come in a wide range of hues, tints andcolours; they can be described as whitish, yellowish, green-ish, brownish, pinkish, bluish and so on. Stones from differ-ent countries can vary in colour.

Comptoir: Small-scale diamond buyers, who act as middlemen.

Craton: A large stable block of the earths crust, forming thenucleus of a continent.

CSO: Central Selling Organisation – De Beers marketingarm.

ECOWAS: Economic Community Of West African States.

Fluorescence: The visible glow of light that is produced when adiamond is irradiated with light sources.

Focused Ion Beam: A method of directing ions into a materialto change the nature of that material. Directing Galliumions onto the surface of a diamond can change it tographite, which can be used to mark diamonds.

Four 4c’s-Colour, clarity, cut and carat: These four factors areconsidered when valuing a stone.

Fancies: A “fancy” diamond is a natural diamond of color –such as red, green, purple, violet, orange, blue and pink –not be confused with a “fancy cut”, that refers to shape.Fancy colors vary from faint to intense.

Garimpeiros: Illegal miners; usuallly artisanal.

Gem quality: The highest quality of diamond, which is nor-mally in high demand and commands top prices.

GURN: The Angolan Government of Unity and NationalReconciliation.

HRD:The Belgian Diamond High Council usually known byits Flemish initials.

Peridotite: a dense, dark-green rock that forms the earths man-tle and that is composed mainly of the silicate mineralolivine.

Peridotitic: A term used to describe diamonds that haveformed in peridotite in the upper mantle. Determined byperidotite inclusions.

Lamproite: An unusual diamond bearing igneous rock (formedfrom molten rock material) Relatively unstudied before the1970s when large concentrations of diamonds were foundin Lamproite in North Western Australia.

Inclusions: Pristine mineral samples contained inside a dia-mond. A single mineral inclusion rarely defines a specificrock, but two or more minerals may enable interpretation ofrock associations and origin. Some inclusion minerals arevirtually unique to diamond sources and are thus sought inthe exploration for diamonds.

Ion: a molecule or an atom with a net electrical chargeachieved through the loss or gain of electrons. This can beeither positive (cation) or negative charge (anion).

Inductively coupled plasma / mass spectrometry (ICP-MS): Atechnique to analyse materials by measuring the atomicweights of a sample.

Mixed parcel: This is parcel of rough diamonds from more thanone country.

Parcel: This is a quantity of diamonds, and can vary from 10carats up to thousands of carats.

Placers: Deposit of sand or gravel in the bed of a river or lakecontaining heavy particles of valuable minerals such as dia-monds and gold.

Polished: The term used to describe stones when they havebeen worked. Up to fifty per cent of the diamond can belost when polished, depending on the shape of the stone.

Sights: Approximately ten sights a year are held by the CSO atwhich Sightholders are allocated a quota of diamonds forpurchase at a price determined by De Beers. Sightholdersare chosen by De Beers and numbers are strictly limited;there are less than 150 sightholders worldwide.

Run of mine: All the diamonds are from the same mine.

RUF: Revolutionary United Front: rebel forces in SierraLeone

SADC: Southern African Development Community

Surface Features: A large number of distinct diamond surfacefeatures exist. These include features such as pits, plates,and coloured patches, and can be used to help located theorigin of a diamond.

Tomography: is defined as ‘a technique for displaying a crosssection through the human body or other solids using X-rays or ultrasound’

Outside market: The market in which rough diamonds, notunder official control are sold.

UNITA: National Union for the Total Independence ofAngola

UNSC: United Nations Security Council

X-Ray Diffraction: A commonly used, chemical analysis tech-nique. Every element gives off a unique spectrum of charac-teristic electromagnetic waves. It is possible to Identify theelements by matching wavelengths with known values


References1 Alfred Levinson, ‘Diamond sources and their Discovery’, p72.2 George Harlow, ‘From the Earth to the Fashioned Objects: Process-ing Diamonds’ American Museum of Natural History, in associationwith Cambridge University Press, 1998.3 Tacy Ltd, ‘A breakdown of the World’s Rough output and thedemand for Rough from the cutting centres: an overview’, June 25,1998.4 Standard Equities ‘Marching towards the Millennium’ DeBeers/Centenary and the Global Diamond Industry’, 1998-995 Tacy Ltd ‘1999 Diamond Retail Jewellery’ March 20, 20006 Tacy Ltd Miners and Manufacturers: an era of alliances’ March20,2000.7 Tacy Ltd. ‘India’s Diamond Industry’ August 15, 1997.8 Peter Meeus, Gen Director HRD ‘A new structure for worldwidetransparency in the Diamond Sectors.’9 Dr. Luc Rombouts, Terraconsult.10 G. Gilchrist, MD, Argyle Diamonds, GJEPC, March 20, 2000.Conference paper.11 M. Hooper, Chief Financial officer, Ashton Mining, March 2000.GJEPC Conference paper.12 W. Zimmerman, VP Marketing, BHP Diamonds Inc, March20,2000. GJEPC conference paper.13 Mr. Jean-Pierre Moritz, General Manager, MIBA – Zaire. Miningand Marketing Strategies, March 20, 2000, GJEPC14 Chaim Even-Zohar, DIB/Tacy Ltd, ‘Rough Supply: Trends andprospects’. GJEPC conference, Bombay, March 21, 2000.15 Discussion with various traders in Antwerp, 1998 & 199916 Tacy Ltd ‘Outsourcing for Quality Materials: ‘The Visag Option’.March 20, 1999.17 Chaim Even-Zohar, paper ‘Rough supply trends and prospects’GJEPC, March 21, 2000.18 P.S. Pandya, Chairman GJEPC, ‘Mines to Markets’ GJEPC, March20, 200019 Tacy Ltd ‘Trading Rough in India’ March 20, 2000.20 John Lawrance ‘Technological Developments in the DiamondIndustry’, GJEPC, March 20, 2000.21 World Diamond Industry Directory & Yearbook 1996 &1997, page44.22 Tacy Ltd ‘Israel: principle Diamond Suppliers to United States’,March 20, 2000.23 World Diamond Industry Directory & Yearbook 1998 &1999, page3224 Tacy Ltd. IDMA President ‘Don’t manufacture on Low Profitabil-ity’, February 1999,25 UK Jewellery & Timepieces Report 1997, London: Retail Jeweller& British Jeweller/Emap fashion 1998.26 Tacy Ltd. ‘Diamond jewellery consumers in the USA’27 Global Witness research trip, India March 2000.28 ‘The Diamond Pipeline’ Diamond International Terraconsult; 1997in World Diamond Industry Directory & Yearbook 1998 &1999; asCS1029 PAC ‘The Heart of the Matter’, January 2000.30 Peter Gross, Senior Vice President, General Manager, InternationalDiamond Division, ABN AMRO meeting with Global Witness,March 2000.31 HSBC ‘Industry report: Diamond Conference Adapt or die’ March23, 200032 Tacy Ltd. Ben Janowski ‘Changing perspectives in the Communica-tion Age’, August 13, 1999

33 Alfred Levinson, Diamond Sources & their Discovery, p22.34 P.A. Wagner, ‘The Diamond Fields of South Africa’, 1914. p28035 De Beers Annual Report, 199536 Julian Olgivie Thompson, The Chairman’s Statement, De BeersAnnual Report, 199637 Tim Capon, Director De Beers, Letter to the Times, August 22,1999.38 BBC Radio 4, Today programme. March 27, 2000.39 Joint press conference with Alrosa company in Russia, transcript,October 21,1997.40 Tim Capon, Director, De Beers. Letter to the Observer newspaper,June 20, 1999.41 South African Manil & Gurdian, March 17, 2000.42 Jim McCluskie, meeting with journalists. October 1998.43 Global Witness meeting with G. Science team, February 7, 2000.44 Dr. J. Harris, meeting with him, January 28, 200045 P.Swash. M.Whitely, J.Nqidi, Mzobe and Ncube46 Alpheus F Williams, ‘The Genesis of the Diamond’, publishedLondon, 1932. Vol 2.47 D.R. Grantham, PhD, and V.B. Allen, PhD, ‘Kimberlite in SierraLeone, HMSO, 196048 Orlov , ‘Mineralogy of Diamonds’ chapter ‘Properties of Diamonds’p127.49 J.Harris, J Hawthorne, M.Oosterveld, “A Comparison of diamondcharachteristics from the De Beers pool mines, Kimberley, SouthAfrica. Ann.Sci. Univ. Claremont Fd II (1984) 74: 1-13.50 J. Harris & J Gurney, ‘Inclusions in diamond’ chap 1851 DiaKim database info from Gemoc website.52 Tzipora Templeman, Who’s Who in Israeli Diamond Technology.53 Telephone conversation with Global Witness to Sarin, Raman Gat,Israel. April 2, 2000.54 Telephone conversation with Global Witness to Aerodiam (Sarin)March 3, 2000.55 Meeting between Global Witness and Aerodiam (Sarin) Belgium.March 16, 2000.56 Sergei Sivovlenko, Octonus, email correspondence.57 Oxford English Dictionary 1999 edition.58 Email University of Antwerp to Global Witness. March 1, 2000.59 Email University of Antwerp to Global Witness March 17, 200060 “Determining the provenance of diamond” in Diamond Interna-tional July/August 1998.61 Paper presented at Geoanalysis 94: An international Symposium onthe analysis of geological and environmental materialsa. AmblesideEngland, Sept 18th – 22nd , 1994.62 Watling, R.J., et al (1994) Analysis of diamonds and Indicator Min-erals for Diamond Exploration by Laser Ablation Inductively CoupledPlasma Mass Spectrometry. Analyst, Vol 120, May pp.1357-1364.63 Email from Peter Walsh PhD to Global Witness. March 28, 2000.64 Email from Professor Bill Griffin to Global Witness. January 17,2000.65 Ibid66 Jackson, S.E., et al. 1999.Quantitative LAM-ICPMS Analysis oftrace elements in diamonds.67 “Determining the provenance of diamond” in Diamond Interna-tional July/August 199868 Presentation 28/02/00 Origin determination of rough diamonds LA–ICP MS. HRD Institute of Gemmology.69 Telephone conversation to Global Witness to Mark Van Bockstael,HRD Institute of Gemmology. April 2, 2000.70 Telephone conversation with Mark Van Bockstael Institute of Gem-mology, HRD to Global Witness. February 28, 2000.


71 Ibid.72 Alan Harman “Diamonds a threat to Canada” in Law and Order,Vol. 47 No. 3; p.37.73 Email Sgt Ray Halwas NCO in Charge, ‘G’ Division Diamond Pro-ject (RCMP).74 Email from HRD Gemmological Institute to Global Witness.March 27, 2000.75 John Lawrence “Determining the provenance of diamond” in Dia-mond International July/August 199876 Email 28/03/00 Peter Walsh PhD to Global Witness.77 Curtin University press releasehttp://www.curtin.edu.au/curtin/announce/release98/intdiamond.htmlAccessed March 17, 2000.78 Council Regulation (EEC) No 2913/92, Official Journal L 302,Article 23.79 Council Regulation No (EEC) 1172/95, Official Journal L 118,Article 10.80 Council Regulation (EEC) No 2913/92, Official Journal L 302,Article 24.81 Commission Regulation No (EC) 840/96, Article 782 HRD correspondence.83 Customs Enquiries, Bern, Switzerland .84 Lawrence Mushinske, National Import Specialist, US Customs Ser-vice.85 Andre Maheu, Canada Customs.86 Udi Sheintal, Diamond Controller, Ministry of Industry and Trade.87 Fax from HCI com lege, Thai Embassy.88 Ministry of Finance, Japan.89 Vladimir Teslenko, Rapaport News.90 South Africa Customs.91 Botswana Precious and Semi-Precious Stones legislation.92 Ministry of Mineral Resources, Freetown.93 Croner’s Import and Export Guides.94 The Customs Policy of the European Union.95 http://www.wto.org/wto/eol/e/wto03/wto3_66.htm.96 http://ictsd.org/html/review6.3.htm.97 http://ictsd.org/html/6997f.htm.98 http://ictsd.org/html/story3.22-02-99.htm.99 Tim Capon, BBC Radio 4, March 19, 2000100 EU press release April 13, 1999 Nr.7212/99101 Ibid102 Gemprint has the patent on this technology for a further 9 years.Canadian patent number is 2 162 532103 Telephone conversation with HRD to Global Witness. March 31,2000.104 People vs MAKI , 1984. Seehttp://www.gemprint.com/articles.htm105 Sheldon Ginsburg, of Lazare Kaplan International quoted inNational Jeweller, [TechNews] July 16 1997106 Telephones coversation 3Beams Technologies to GlobalWitness.[recorded] March 31, 2000.107 Email 3Beams Technologies to Global Witness. March 30, 2000.108 Email 3Beams Technologies to Global Witness. March 28, 2000.109 First suggested to Global Witness by Scientific Generics, Cambs.U.K. February 1 2000. Subsequently agreed by 3Beams technologiesMarch 31, 2000.110 De Beers Press Release, September 1998. http://www.diamondcon-sult.com/TACY-Articles/SEP18981.HTM - “De Beers Makes ItsMarque”. Accessed March 31, 2000.

111 See discussion onhttp://www.jckgroup.com/jck_news/newsroom/newsroom.html#mar-que accessed March 21, 2000.112 http://www.brandeddiamonds.com/limitededition.html113 Ibid http://www.diamondregistry.com/donorsam.htm114 Telephone call to Boodle and Dunthorne (Manchester Jewellers)March 21, 2000.115 Email from 3Beams technologies to Global Witness. April 4, 2000.116 Email from Norsam Technologies to Global Witness. March 28,2000.117 IGI promotional leaflet,118 http://www.igiworldwide.com/company.htm119 William Boyajian, President, GIA, The Loupe magazine, vol8, no3,Summer 1999,120 Gemkey Magazine. Jan/Feb 2000.121 Tacy Ltd, February 19, 1998,122 http://www.diamondconsult.com/TACY-Articles/FEB1998.HTM,123 Email from Hermann Wallner, Gemprint Corporation to GlobalWitness. March 11, 2000.124 http://www.nnsl.com/ops/manufact.html Cutting and Polishingadd shine to economy.125 Email from GNWT to Global Witness. March 28, 2000.126 Email from John Shepherd, Chairman Gemprint Corporation.March 20, 2000.127 Letter from John Shpeherd, Gemprint Corporation to Global Wit-ness. November 5, 2000.128 Email from Aerodiam (Sarin) Belgium to Global Witness. March20, 2000.129 Ibid 130 Email from De La Rue Security Print to Global Witness. March27, 2000.131 Ibid,132 FSC UK Working Group.133 From MSC website.134 Email from Robin Jenkins, Biocode to Global Witness. February21, 2000.135 Email from Biocode Ltd. to Global Witness. February 21, 2000.136 Sheldon Ginsburg, of Lazare Kaplan International quoted inNational Jeweller, [TechNews] July 16,1997,137 GW Research trip, Sierra Leone, February 2000.138 P.A Wagner, ‘The Diamond Fields of South Africa’, 1914. p159,139 Chris McCreal, The Guardian, 4 March 1993.140 GW Investigations, various, 1998 & 1999.

conflict diamonds 001 · opinion on the issue of conflict diamonds, which in itself is a new term....

Documents