For much of last year, the diamond industry was rocked by a wave of bad publicity concerning "conflict diamonds"--smuggled gems whose sale allows African governments and rebel groups to finance their wars. In addition to several United Nations reports and hearings in the US Congress on conflict diamonds, the media devoted considerable space to the topic. Particularly damaging was a PrimeTime Live segment that included dramatic footage from Sierra Leone, where rebels known as the Revolutionary United Front--best known for cutting off the limbs of civilians who oppose it--fund themselves primarily through diamond sales. Meanwhile, groups such as Global Witness, World Vision, Physicians for Human Rights and Amnesty International threatened to launch a consumer boycott until the industry changed its buying practices so as to insure that conflict diamonds are eliminated from international markets.
Fearful that diamonds might become to this decade what fur was to the last, industry leaders in the United States (such as Lazare Kaplan International) and abroad (especially De Beers of South Africa) vowed to take action. To address the issue of conflict diamonds--which account for 4 percent of the world's $7-billion-a-year trade according to industry and at least 15 percent according to human rights groups--the companies formed the World Diamond Council last July. The WDC pledged to support the campaign for reform, including efforts to halt imports of conflict diamonds into the critical US market, where about two-thirds of diamonds are sold.
Instead, diamond companies and trade groups have launched a lavishly funded lobbying and public relations campaign aimed at burnishing the industry's reputation while protecting its profits. The centerpiece of the industry effort is a bill called the Conflict Diamonds Act of 2001, which was written by one of the Beltway's most well-connected lobby shops. Representative Tony Hall, an Ohio Democrat who has spoken at rallies against conflict diamonds at jewelry stores in New York City and Chevy Chase, Maryland, calls the act "mushy, fishy and full of loopholes." "The industry is completely untrustworthy," says Hall, who along with Republican Representative Frank Wolf and Democratic Representative Cynthia McKinney has introduced an opposing bill to crack down on conflict diamonds. "The fact that they've hired so many of the top lobbyists in town shows that they don't want any serious legislation to get passed."
During the cold war, dictators and guerrillas in Africa could turn to one of the superpowers for financial support. Now rebel groups need to raise their own money to buy weapons and pay for their wars. In Africa the source of that money is invariably diamonds, which are small, easy to smuggle and hugely lucrative. The three primary sources of conflict diamonds are Angola, Sierra Leone and the Democratic Republic of Congo (formerly Zaire). In the first, Jonas Savimbi's UNITA rebels, supported until the early 1990s by cash and materiel from the CIA, have raised almost $4 billion from diamond sales during the past decade. In Sierra Leone, the Revolutionary United Front has smuggled out at least $630 million in diamonds through Liberia, in exchange for support and weaponry from Charles Taylor, the corrupt warlord who heads that nation. To pay for its war against rebel groups and their foreign allies, the government of the Democratic Republic of Congo formed a diamond joint venture with the armed forces in neighboring Zimbabwe. The combined death toll from fighting in the countries named above is more than 2 million. About a quarter of the casualties are in Angola, where four-fifths of the country's population lives in poverty, average life expectancy is 42 and more than 2 million people are internal refugees.
Countries that launder diamonds smuggled out of war zones also profit from the conflict diamond trade. The big players here, in addition to Liberia, …