Conflict Diamonds: The Facts
During the 1990s and into the beginning of this century, rebel armies in Angola, Sierra Leone and the Democratic Republic of the Congo (DRC) exploited the alluvial diamond fields of these countries in order to finance wars of insurgency.
Alluvial diamonds, unlike those mined in the deep kimberlite "pipes" of Botswana, Russia and Canada, are found over vast areas of territory, often only a few inches or feet below the surface of the earth. Alluvial diamonds have proven difficult to manage and to regulate. Because of their high weight-to-value ratio, the ease with which they can be mined and smuggled, and endemic corruption in the global diamond market, alluvial diamonds became a ready target for rebel armies.
The trade in conflict diamonds began in the early 1990s with Jonas Savimbi's National Union for the Total Independence of Angola (UNITA) in Angola, but was quickly copied by the Revolutionary United Front in Sierra Leone, with assistance from Liberia's warlord president, Charles Taylor. It was then taken up by rebel and invading armies in the Democratic Republic of the Congo (DRC) and has affected the diamond industries of Guinea, Liberia and Côte d'Ivoire as well. As much as 15% of the world's $10 billion annual rough diamond production fell into the category of conflict diamonds in the late 1990s. Hundreds of thousands of people died as a direct result of these wars, and many more died of indirect causes. Millions of people were displaced, health and educational infrastructure was destroyed, and development was reversed.
Historically, effective diamond regulation has proven almost impossible, whether in Africa, Europe, Asia or North America. This is partly because of the necessary security issues around such a valuable commodity, but it is also because much of the trade in diamonds, after they have been mined and marketed – in some cases by very large companies – has traditionally been in the hands of small, close-knit family enterprises, the kind of enterprise that defies effective governmental regulation. For example, high taxes have only served to drive diamonds underground, and most governments long ago stopped trying to impose more than minimal duties on rough diamond imports and exports. Even so, a parallel diamond economy, operating in grey and black markets, has always existed. Diamonds have thus proven useful in money laundering, and have been used to finance drugs and other illicit goods.
In Africa, where more than 70% of the world's gem diamonds (by value) were produced throughout most of the 20th century, diamonds were used to hide and export profits and capital, and – as an alternative hard currency – to finance imports in weak economies. Corrupt and predatory governments in Sierra Leone, the DRC and Angola drove the diamond business even further underground. In addition, beyond the largest diamond mining companies, much of the legitimate diamond trade operated largely on a cash basis, without formal contracts or auditable paper trails. Diamonds were almost ideally suited to the purpose for which rebel armies came to use them. This is what the Kimberley Process Certification Scheme sought to end.