13 September 2000
Text: Diamond Industry Spokesman Speaks Out on Conflict Diamonds
(Urges lawmakers to consider industry suggestions) (1060) A representative of the world diamond industry on September 13 asked lawmakers in the House of Representatives to consider incorporating proposals by the World Diamond Council into legislation that aims to control the import of diamonds from Africa's conflict zones. In testimony before the House Subcommittee on Trade, Jeffrey Fischer of the Diamond Manufacturers and Importers Association of America said the place "for effective, administrable import/export control of diamonds "is at the rough level" -- before stones are cut and polished. "We believe that the system of proposed controls adopted at the World Diamond Congress in July, and now being brought forward by the World Diamond Council, is the most practical and most effective means to filter out from the pipeline the less than 4 percent of worldwide rough production which is being misused to fund conflict," said Fischer, president of the association. "By effectively placing this 'filter' at the rough level, all resulting polished [diamonds] will comply with 'conflict-free' status. "We do anticipate seeking assistance from Congress in severing the link between diamonds and brutality without delay -- but not simply legislation -- the best possible legislation," he said. "Legislation that will be most effective and enforceable, that will not do serious damage to the legitimate southern African economies so dependent on diamonds, that will not wreak havoc with U.S. Customs procedures, and will not harm the livelihoods of millions of people worldwide directly employed by or benefiting from the diamond industry. This legislation must be fully consistent with an international intergovernmental agreement backed by industry." Conflict diamonds are mined in so-called conflict zones in Africa, such as Sierra Leone or Angola. Their illegal export is being used to fuel the continuing conflicts in Sierra Leone and the Democratic Republic of Congo. Following is the text of Fischer's testimony as prepared for delivery: (begin text) Statement of Jeffrey Fischer, President, Diamond Manufacturers and Importers Association of America Testimony Before the Subcommittee on Trade of the House Committee on Ways and Means Hearing on Trade in African Diamonds September 13, 2000 Mr. Chairman and members of the subcommittee, my name is Jeffrey Fischer and I thank you for inviting me to address you today in my capacity as president of the Diamond Manufacturers and Importers Association of America. Our association includes within its membership virtually all of the United States' major diamond cutting firms. Our membership is unanimous in its revulsion of any connection between diamonds and human suffering, and is dedicated to helping solve the problems which we address today. I also serve on the steering committee of the Would Diamond Council and have been actively involved in its creation. I have been invited to give a brief overview of how diamonds flow from mine to consumer through what we refer to as the Diamond Pipeline and how diamonds are merchandised along the way. Please refer to the chart we have provided, titled "Simplified Schematic of Diamond Pipeline." A single diamond can be sold and re-sold numerous times before it ultimately adorns a retail consumer. Diamonds are frequently traded "upstream" and "downstream" between dealers at marginal price differences in the normal course of business. As the diagram illustrates, while it is not a significant part of the picture, even the consumer can eventually become the seller -- after all, the diamond "is forever." From the outside, the diamond market may appear confusing, fragmented, perhaps even inefficient, but it exemplifies the free market ideals that our American economic system extols. What is most important to note from the diagram is the line drawn between rough and polished diamonds. Most of the polished dealing, jewelry manufacturing, and retailing is done by people who have had no more exposure to rough diamonds than the typical member of Congress. All polished diamonds start as rough, and once polished, remain polished forever. That transformation is the only irreversible "transaction" in our pipeline. A single rough stone is commonly polished into two polished diamonds. Often, a piece of rough yields only one stone, sometimes it yields multiple stones, or it may never be polished and sold for industrial purposes. As we proceed down the pipeline, the frequency of transactions and the number of small businesses involved increase dramatically, while the average size of a typical transaction diminishes in monetary terms. Throughout the pipeline diamonds are constantly assorted, mixed and re-assorted to fit differing commercial requirements. To complicate matters further, already polished diamonds are frequently "re-cut" for improvement or repair, altering their characteristics to varying degrees. Moreover, polished diamonds are frequently unset and re-set in different jewelry, sometimes alone, sometimes with other diamonds. The place for effective, administrable import/export controls is at the rough level. We believe that the system of proposed controls adopted at the World Diamond Congress in July and now being brought forward by the World Diamond Council is the most practical and most effective means to filter out from the pipeline the less than four percent of worldwide rough production which is being misused to fund conflict. By effectively placing this "filter" at the rough level, all resulting polished will comply with "conflict-free" status. We are practical, realistic, business people and as such are tackling the conflict diamond problem with idealism strengthened by realism. We do anticipate seeking assistance from Congress in severing the link between diamonds and brutality without delay -- but not simply legislation -- the best possible legislation. Legislation that will be most effective and enforceable, that will not do serious damage to the legitimate southern African economies so dependent on diamonds, that will not wreak havoc with U.S. Customs procedures, and will not harm the livelihoods of millions of people worldwide directly employed by or benefiting from the diamond industry. This legislation must be fully consistent with an international inter-governmental agreement backed by industry. It would be a shame if this precedent-setting constructive collaboration of government, the United Nations, private industry, and the non-governmental organizations results in anything less than the best possible solution. We implore Congress to consider the World Diamond Council's proposal before taking action. We reiterate our desire to contribute whatever assistance and expertise we can provide. Thank you. (end text) (Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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