De Beers Urges Reform of 'Blood Diamond' Watchdog

JOHANNESBURG—Diamond giant De Beers called on Wednesday for urgent efforts to stamp out trade in so-called "conflict diamonds" ahead of a new Hollywood movie likely to trigger negative publicity for the jewelry trade.

The industry is nervous about the impact of Blood Diamond, starring Leonardo DiCaprio, especially after criticism of the effectiveness of the Kimberley Process.

This initiative between diamond-producing nations, the industry and civic groups aims to certify diamonds and end trade in conflict diamonds, blamed for fuelling instability by rebel groups in many African countries.

"The Kimberley Process is not a perfect construct and it is necessary now to re-double efforts to address its remaining shortcomings and strengthen its provisions," De Beers Chairman Nicky Oppenheimer said in a statement.

"The NGOs (non-governmental organisations), who alerted the world to conflict diamonds, are correct to call for urgent action at this plenary."

Representatives of 46 governments and the European Union gather in Botswana next week for a yearly meeting about the Kimberley Process.

De Beers, 45 percent owned by mining group Anglo American Plc , accounts for around half of the world's supply of diamonds.

Tepid Response

A recent report by Partnership Africa Canada (PAC), which has observer status in the Kimberley Process, said the system had dramatically cut the trade in illicit diamonds but serious weaknesses have not been addressed.

Investigations by NGOs and the United Nations uncovered massive fraud in certifying diamonds in Brazil and Guyana, and exposed laundering of conflict diamonds from Ivory Coast which has been affected by a civil war, PAC said.

"In each case, the Kimberley Process behaved like a disinterested bystander, its response tepid, late or non-existent," the PAC report said.

In the mid-1990s, conflict diamonds represented as much as 15 percent of the world's total but the Kimberley Process has slashed that to less than 1 percent, it added.

"Conflict diamonds do not represent a huge proportion of the world diamond trade today, but they do exist, and without effective controls, they could erupt again in any one of a dozen places," PAC said.

Under the Kimberley Process certification programme, which came into effect in 2003, participating governments agree to issue a certificate to accompany all exports of rough diamonds.

Blood Diamond is due for release in mid-December.