Global Policy Forum

De Beers: Come Clean to Be Clean

Print

Editorial

Mail & Guardian
March 24, 2000

Transparency and ethical dealings are essential to the diamond trade, which knowingly or not, has in the past helped fund wars.


Johannesburg, South Africa - De Beers has recently declared that its Central Selling Organisation (CSO) can guarantee, from March 26, that no diamonds from rebel-held zones will contaminate its sales. This is laudable, if late, but the diamond giant also seems to be trying to airbrush history and tell us that it has no idea how it is that billions of dollars of rough diamonds mined by Unita ended up in the CSO vaults before sanctions were imposed by the United Nations in 1997. No one, including the UN, is suggesting that De Beers broke the sanctions, but we have to remember that the sanctions were imposed because Unita had been selling diamonds to make war, an exercise from which De Beers profited by being the end buyer for smuggled gems, which were then sold on to world diamond markets.

Last week's article on sanctions-busters in the Mail & Guardian raised new issues. A diamond company well known to De Beers, De Decker diamonds, admitted trading large parcels of diamonds from Unita to a De Beers subsidiary in Antwerp and Tel Aviv, raising the question of whether De Beers knowingly bought diamonds from a Unita broker, in contradiction of its claims that it had never bought diamonds from Unita. Publication of the admission provoked a strong response. De Beers representative Tom Tweedy called the M&G article "absolute rubbish" in another newspaper, for suggesting De Decker's claim was the closest tie yet established between Unita's trade and De Beers.

As recently as last month, De Beers in Johannesburg, commenting on a report that suggested that De Beers's stockpile could have held Unita diamonds until last year, said: "We have never bought diamonds directly from Unita. Our stockpile would not contain Unita diamonds because we have never bought diamonds from Unita." A week later, De Decker made its admission. We had contacted De Decker for its comments on the UN Expert Panel's report on Unita's sanctions-busting activities, naming it as both arms and diamond dealer working with Unita between 1993 and 1997. Although denying any involvement in arms smuggling, the De Decker brothers said in a statement: "We brokered diamonds from Unita, and were also involved in mining activities." They were mining in the Unita-held Cuango Valley until Unita left.

It is certainly the first time a diamond dealer and miner, working illegally in Angola, has admitted selling large quantities of smuggled Unita gems -- worth $4-5-million at a time -- to De Beers. How is it possible that De Beers can describe this as business as usual? We are being told diamonds from a Unita broker are not Unita diamonds, a piece of sophistry that has successfully confused some of our colleagues in the media. De Beers has always defended its open-market purchases on the basis that the Lusaka peace protocols were in operation. De Decker's statement now means De Beers bought diamonds from one of Unita's brokers at the height of the last war, and long before the Lusaka peace protocols at the end of 1994.

De Beers is asking us to believe it did not recognise a highly privileged client, nor take any interest in large and regular sales of Angolan gems to its offices in Antwerp and Tel Aviv, at a time when it knew Unita controlled at least three-quarters of Angola's diamonds. Even if we accept this as possible, in 1992, a few months before De Decker began trading, De Beers was able to recognise and complain about the vast quantities of Russian and Angolan smuggled gems that threatened the cartel's stability.

We are asked to believe that a year later, De Beers could not recognise even larger quantities of Angolan diamonds mined by Unita mainly in the Cuango, even though the diamond giant held the most recent sample parcels for the mines -- the diamond equivalent of a signature held by a bank to verify a cheque. Unita diamonds were, at the height of the trade in the mid-Nineties, being sold in quantities of up to $800-million a year, equivalent to 20% of De Beers's entire diamond supply for one year. De Beers admitted publicly in 1999 that it could identify parcels of diamonds, saying that it could recognise diamonds from Angola with a 90% degree of certainty. Now it is trying to backtrack and suggest that it could not be expected to know where De Decker's diamonds came from, or that De Decker's sales to it creates a link to Unita's diamonds. Nor does De Beers's rather fraught relationship with the Angolan government, referred to as a proof of good faith by Tweedy, have bearing on the question of how Unita's diamonds ended up at the CSO. Unita was only a part of the government from April 1997, eight months before it left the Cuango. And even the Angolan government said Unita was mining illegally in the Cuango.

As investigations into diamond sanctions-busters proceed, are we going to hear that other brokers working with Unita, also well known to De Beers, took the diamonds to De Beers's subsidiaries for sale? Romancing the stone is not an option any more, as the diamond industry is discovering. The realities of diamonds smuggled from war zones -- mined amid the monstrosities committed by the RUF in Sierra Leone, or gems received in vast quantities from the Unita rebels in Angola, committed to denying democracy in a 25-year-long war -- have profoundly dented the carefully nurtured fictions, and will bring about worldwide government interventions to control the trade.

Andy Lamont of De Beers told an American publication: "De Beers sees itself as something akin to Robin Hood. We persuade those people who can afford luxury goods to purchase those goods to help build schools in Africa." There are certainly no schools in Angola funded from the profits De Beers made from the world's second-best diamonds, smuggled by Unita, though there are certainly many desperate children fleeing the effects of a diamond-funded war. What is being asked of the diamond trade is transparency and ethical dealings, not the rewriting of history and the rubbishing of well-founded stories to protect past business methods that have funded wars, knowingly or not.


More Information on Transnational Corporations
More Information on Sanctions in Angola

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C íŸ 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.


 

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C ß 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.