Diamond dealers move to end trade in misery

Confronted by the stark threat of a consumer backlash, the diamond industry yesterday agreed measures to end the trade in illicit gems which has fuelled conflicts including the savage war in Sierra Leone.

Confronted by the stark threat of a consumer backlash, the diamond industry yesterday agreed measures to end the trade in illicit gems which has fuelled conflicts including the savage war in Sierra Leone.

At the end of a meeting which heard dramatic warnings that the diamond business could suffer the same fate as the fur trade, manufacturers and traders buried their differences in an attempt to allay customers' anxieties.

Human rights campaigners welcomed the decision to set up a system to regulate the global trade in diamonds but called for it to "have teeth", and demanded concrete progress by September.

They also said they were worried that the industry may wait for government legislation rather than pressing ahead quickly with reforms.

The trade in illicit diamonds first came to public attention during the war in Angola during the 1990s as it became clear that diamonds were being used to fund war.

However it was the link between illegal gems and the bloody activities of rebels in Sierra Leone which galvanised public concern.

During the three-day World Diamond Congress in Antwerp, Robert Fowler, Canada's ambassador to the United Nations, warned the biggest names in the diamond business that they faced "commercial catastrophe".

Likening their predicament to that of the fur trade, Mr Fowler reminded them that: "A vibrant, 400-year-old industry was all but annihilated by an extremely deft manipulation of consumer consciousness.

"I believe that within your industry it is becoming received wisdom that diamonds will not be forever unless you are able to demonstrate to governments and, above all, to consumers worldwide, that your product in no way contributes to misery and death in Africa."

The industry has been under growing international pressure following UN resolutions banning the import of conflict diamonds, a G8 initiative and work by a task force of concerned governments, business and non-governmental organisations (NGOs) which is due to meet in London today.

Yesterday the two biggest diamond issued a joint statement arguing that finding a "solution to the conflict diamonds problem is a moral imperative above all others".

Their plan would create a system where rough diamonds can only be traded if they are in sealed packages certified in a "universally-standardised manner by an accredited export authority from the exporting country." The scheme, endorsed at all levels of the industry (including De Beers, the firm that controls 60 per cent of the world's supply of diamonds) would be monitored by a new International Diamond Council made up of manufacturers, producers, traders, governments and "relevant international organisations".

Peter Meeus, managing director of Belgium's Diamond High Council, which oversees the Antwerp trading centre, said that "anyone who breaks the embargo on these diamonds ... will have to leave the business - the sooner the better. Once a decision is taken on misbehaviour, [the trader's] picture is published on a billboard of bourses."

NGOs queried Mr Cohen's claim that the next step was for governments to introduce legislation to govern the harmonisation of certification systems. Ian Smillie, diamond project coordinator for Partnership Africa-Canada, said "it is easy enough to pass resolutions. We are concerned that this new system have teeth".

Sections of the diamond industry feel they have been singled out for criticism, but campaigners have been careful not to call for a consumer boycott, aware that such indiscriminate action could cripple the economies of countries such as Botswana and Namibia which conduct a legitimate trade.

Indeed NGOs have been restraining their supporters. Rory Anderson, government relations manager of the US-based World Vision, said that a group of 38,000 churches had been persuaded not to mount a campaign against the purchase of diamonds for wedding rings.