Diamonds in the Rough

As the world becomes increasingly aware of how the illicit diamond trade funds international terrorism and bloody war in West Africa, Canada's diamond industry is coming out shining. Many consumers are demanding that diamond sellers be up-front about the geographic origin of the diamonds they are buying.

Conflict diamonds—or blood diamonds, as they're sometimes called—are diamonds that are typically mined in war zones controlled by rebel or terrorist groups, and are then sold clandestinely to finance these groups' military objectives.

"Conflict diamonds are definitely becoming more of an issue, and that's why I think Canadian diamonds are taking off, not only because of the higher quality—because they're mined in Canada—but also it's really the only diamond in the world that you'll know exactly where it came from," says Stephanie Stoch, sales manager with Canadian Diamonds Wholesale. She estimates that half of her customers insist on Canadian diamonds because they know they're "clean."

While Canada entered the diamond trade only as recently as 1991, it now produces 15% of the world's supply of diamonds, making it the world's third largest producer after Botswana and Russia.

All diamonds coming out of the Northwest Territories, where the vast majority of Canadian diamonds originate, are certified by the territorial government, with each diamond laser-engraved with a unique marker that can identify it to authorities if the need arises. This is in stark contrast to countries like Liberia, which currently has no certification system. Rights groups allege that the vast majority of stones coming out of Liberia are actually conflict diamonds.

Thanks to a "pretty good system of control," Canada has less of a problem with illicit diamond trading than the U.S. and Europe, says Corinna Gilfillan, spokesperson for Global Witness, an international human rights organization dedicated to exposing links among natural resources, conflict and corruption.

Diamonds Still Funding Rebels

Global Witness and Amnesty International released a report last week that says conflict diamonds from Liberia and Ivory Coast are being smuggled into neighbouring countries for export and ending up on the international market.

Global Witness investigations discovered that terrorist groups such as Al Qaeda have infiltrated the illegal diamond trade in Liberia and are using it to raise funds and launder massive amounts of money. Many of the diamonds that ended up in the hands of Al Qaeda were bought during the war in Sierra Leone from the Rebel United Front, whose trademark terror tactic was to hack off the limbs of their victims, including small children. In all, an estimated 3.7 million people have died in Liberia, Angola, Congo and Sierra Leone in conflicts fed by diamonds.

Both groups were calling on the public to protest the trade in conflict diamonds and have launched a shopping guide urging all "romantic shoppers" who might be considering buying a diamond for their Valentine to ask sales staff whether their diamonds originated from conflict-free areas.

"What we found in our survey was that not enough jewellers were taking adequate action to make sure that they were not dealing in conflict diamonds and they weren't able to communicate to their customers about what their policies were," says Gilfillan.

Certification System Not Fool-Proof

In 2003, a voluntary international system called the Kimberly Process was set up to certify the trade in rough diamonds, making a big dent in illegal diamond trading, especially in Sierra Leone and Angola, where the majority of the diamonds mined are now being exported through legitimate channels. However, even retailers who take the extra steps to make sure their diamonds are bought from legitimate, certified sellers may still be handling conflict diamonds.

"We found that diamonds are fuelling an ongoing conflict in Ivory Coast and some diamonds from Ivory Coast are getting into the legitimate market. So, in spite of the Kimberly Process, conflict diamonds still exist today. There are still some serious loopholes in the Kimberly Process that are enabling that to happen," says Gilfillan.

Ian Smillie, research coordinator with Partnership Africa Canada, a coalition of Canadian and African NGOs working for human rights, believes it's up to law enforcement agencies in all the countries that are members of the Kimberly Process to make sure conflict diamonds do not enter the system. The UN recently put an embargo on all diamonds coming out of Ivory Coast, making it illegal to buy Ivory Coast diamonds outside the Kimberly Process, says Smillie.

A 2004 Global Witness survey of 30 U.S. jewellery chains found that staff at only four knew their company's policies for preventing the sale of conflict diamonds. Of those, Tiffany & Co. was unique in that it had taken extra measures to avoid dealing in illicit stones. Most of the larger international companies such as Cartier, Bulgari and Harry Winston failed to respond to the survey. But some companies, such as People's Jewellers and Tiffany & Co., have put in place policies to prevent knowingly dealing in blood diamonds.

"These efforts to prevent conflict diamonds…[are] really all linked," says Gilfillan. "We want to hold the diamond industry more accountable for their actions. We want them to be more transparent and to be able to provide adequate assurances that they aren't fuelling conflicts and aren't fuelling terrorism."

Canada Gets Thumbs-Up

Canada remains committed to efforts to reduce trade in conflict diamonds. "Canada has diamond legislation that's specific to the Kimberly Process," says Smillie. "What that means is that if you try to import diamonds into Canada without a certificate they will be seized. Canada has had two or three diamond seizures since this system has started."

The high quality of Canada's own diamonds, coupled with the unique fingerprinting system used to identify each diamond as Canadian, has prompted Henry Birks & Sons Inc. to feature Canadian diamonds starting at the beginning of 2006.

Soon to be married Calgary resident Laura Pellerine would support their move. Her fiancé did extensive research on diamonds before deciding that Canadian was the only way to go.

"I think it would ruin the specialness of it, it would feel tainted," she said of owning a conflict diamond. "I would feel guilty every time I looked at it."