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Text: More Is Needed to Control Trade in Conflict Diamonds

(Senior U.S. official testifies before Congress) (1680)
Despite "good cooperation" worldwide to eliminate illegal trade in
conflict diamonds, additional efforts are needed to stop the practice,
a State Department official has told House of Representatives
lawmakers.
In testimony before the Ways and Means Subcommittee on Trade on
September 13, William B. Wood, principal deputy assistant secretary of
International Organization Affairs, said the U.S. government is "well
aware that we must next move to a broader intergovernmental forum,
possibly under the auspices of the U.N., which engages all the
countries which trade in diamonds."
Conflict diamonds are mined in so-called conflict zones in West
Africa, including Sierra Leone, the Democratic Republic of Congo, and
Angola, and have "played a particularly pernicious role" in fueling
fighting in those countries and elsewhere in Africa, Wood said.
"Diamonds, like illicit drugs," he added, "frequently are found in
isolated regions, bear little or no evidence of their origin, and
embody a high value in a relatively small and concealable volume." But
unlike the case with illicit narcotics, there "is a large, legitimate
market in diamonds in Africa, Europe, Asia, and the United States."
Wood said that "all of us wish that we had readily available
technology for marking diamonds or determining their origin
geologically, but, unfortunately, that [technology] does not exist" as
yet. So, he added, other methods of prevention, such as certification
(of origin), must be applied.
Wood was called to testify as U.S. lawmakers consider implementing
legislation aimed at eliminating trade in conflict diamonds.
Following is the text of Wood's remarks as prepared for delivery:
(begin text)
Statement of William B. Wood, Principal Deputy Assistant Secretary,
International Organization Affairs, U.S. Department of State
Testimony Before the Subcommittee on Trade of the House Committee on
Ways and Means Hearing on Trade in African Diamonds September 13,
2000.
The Administration has been concerned for some time about the role the
illicit trade in diamonds can play in motivating and fueling conflict,
especially in Africa. Illicit trade in diamonds has played a
particularly pernicious role in the internal conflicts in Angola,
Sierra Leone, Liberia, and elsewhere in Africa. Diamonds, like illicit
drugs, frequently are found in isolated regions, bear little or no
evidence of their origin, and embody a high value in a relatively
small and concealable volume.
Unlike illicit narcotics, there is a large, legitimate market in
diamonds in Africa, Europe, Asia, and the United States. As conflicts
in Africa proliferated in the mid-1990's, and especially following the
breakdown of the Luanda Peace Accord in Angola and the resumption of
fighting there, international attention focused on ways to reduce
these conflicts by eliminating the illicit trade in diamonds which
fueled these insurgent movements. To address this problem, the United
States and the United Kingdom worked together to launch a series of
consultations with leaders from the governments of diamond-trading
nations, legitimate private diamond enterprises, and non-governmental
organizations.
In June, 1998, the United States supported Security Council resolution
1173 which, inter alia, prohibited the direct or indirect import from
Angola of all diamonds not controlled through the Certificate of
Origin regime of the Angolan government. Subsequently, with the
assistance of Canada, Chairman of the UN Sanctions Committee for
Angola, the Security Council explored and approved new steps to reduce
the substantial evasions of sanctions which continued to finance UNITA
operations. This effort still goes on. This year, following the
breakdown of the Lome Agreement, which provided a framework for peace
in Sierra Leone, the Security Council acted again. In July, 2000, the
Security Council in Resolution 1306 placed a mandatory prohibition on
the purchase of diamonds from Sierra Leone not certified by the
government of that country.
Since, at that time, there was no regime for certification of
diamonds, the practical effect was a mandatory boycott on all diamonds
believed to originate in Sierra Leone. Subsequent to the UN
resolution, the United States participated in a mission to Sierra
Leone with the UK and Belgian governments and the Belgian Diamond High
Council and continues to support the government's efforts to design a
credible and effective certification regime. We see the effort in
Sierra Leone to create a certification system for rough diamonds,
based on an improved version of the system used in Angola, as a model
for other diamond exporting countries.
These country-specific certification regimes could then be linked into
a network with key importing and cutting and polishing centers in
Belgium, Israel, India, and elsewhere, forming the basis for an
eventual international certification system for rough diamonds. As you
can see, the effort to halt the illicit use of diamonds to sustain
armed conflict is a serious effort and also quite new. We are working
hard to develop the techniques and mechanisms to put an end to the
misuse of some of nature's most beautiful stones to serve some of
mankind's most hideous purposes.
We are also working hard to ensure that measures to block the illicit
trade in diamonds do not have the unintended effect of damaging the
legitimate diamond industry. Botswana, a democratic nation with one of
the world's highest incidences of HIV/AIDS, is dependent on an active
diamond sector for its economic health.
South Africa relies on its diamond sector. Close allies in Europe,
such as the Belgians and Dutch, rely on a healthy, legitimate trade in
diamonds for part of their national income. Israel is an active
participant in the legitimate international diamond trade. And the
United States, the largest consumer of diamonds in the world, is the
home of a substantial diamond-trading sector. Equally important,
nations in crisis such as Sierra Leone and Angola would benefit
enormously if diamonds, now traded illegitimately by insurgents, could
be rechanneled through legitimate markets to provide employment,
taxable income, and another source of stability for the country. The
Administration is committed to working with governments, private
industry, and non-governmental organizations to end the large-scale
diversion of internationally traded diamonds by unlawful, violent, or
destabilizing elements.
We have seen good cooperation. The diamond industry, both because of
its desire to distance itself from the misuse of its product, and to
avoid being identified with that misuse, has actively participated. I
am pleased to report that the resolution adopted by the Congress of
the World Council of Diamonds in Antwerp in July, which Congressman
Hall addressed, constitutes a very constructive initiative to address
the problem of conflict diamonds. A key element of the evolving U.S.
approach has been cooperation with the concerned diamond-producing
states in southern Africa, spearheaded by South Africa.
Beginning with the convening of a technical forum in Kimberly, South
Africa, in May of this year, the South Africans have led what has come
to be known as the Kimberly process, a series of working group
meetings made up of a wide variety of key governments, industry, and
NGOs, which will culminate in a Ministerial meeting in Pretoria, South
Africa, on September 21. As an active member, the U.S. has worked to
broaden the participation of this group so that it now includes not
only Belgium, but also the other key producing and manufacturing
countries, specifically Canada, Russia, Israel, and India.
The broad proposal which will be discussed at the Ministerial meeting
next week is an international certification system for rough diamonds,
building on the systems in Sierra Leone and Angola. Similar to the
industry's proposal, such a system would require that all rough
diamonds have to be accompanied by a forgery-proof certificate of
origin or legitimacy issued by a state diamond authority. Each country
would be responsible for registering its exports and imports in a
database to enable verification and reconciliation. The key to making
such a system effective is to gain the agreement of all countries
which trade in rough diamonds to participate in and enforce it. This
is where the Kimberly process has played a critical role in bringing
together the major players in the diamond trade.
However, we are well aware that we must next move to a broader
inter-governmental forum, possibly under the auspices of the U.N.,
which engages all the countries which trade in diamonds. Under such a
system, consumers buying a diamond in any jewelry store would have the
assurance that the diamonds they were buying are in fact legitimate,
and are not playing a role in perpetuating devastating wars in Africa.
This approach is in line with our efforts in the Group of 8 which
resulted in a call by the Heads of State and Government this summer
for an "international conference, building on Security Council
Resolution 1306 and the 'Kimberly' process launched by the Government
of South Africa, to consider practical approaches to breaking the link
between the illicit trade in diamonds and armed conflict," including a
possible international agreement on certification for rough diamonds.
More recently, in the declaration adopted last week by the U.N.
Security Council Summit, the Heads of State and Government decided to
take resolute action in areas where illegal exploitation and
trafficking of high-value commodities contributes to the escalation or
continuation of conflict.
I know all of us wish that we had readily available technology for
marking diamonds or determining their origin geologically, but
unfortunately that does not exist. That is why we have turned to a
certification system. Nevertheless, we do believe that such technology
could be available in another few years and will work to encourage and
support these research and development efforts. We have already
achieved a remarkable level of collaboration between governments,
industry and NGOs -- thanks in large part to the efforts of
organizations like Global Witness -- that we would not have dreamed
possible a year ago.
While we have some hurdles ahead of us, particularly in getting
broader international participation and ensuring compatibility with
prevailing international trade obligations, I am confident that we
will overcome the remaining challenges. Thank you for your interest. I
welcome any questions you may have.
(end text)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)