Global Policy Forum

Diamond Economy Under Threat


By Prof Malema

Mmegi/The Reporter (Gaborone)
April 10, 2000

Gaborone - Botswana's economy may get a battering as a result of a concerted campaign by the United Kingdom's non-governmental organisation, Global Witness, against the diamond industry. Global Witness, believed to be sponsored by George Soros, who is largely blamed for the Asian economic crisis, has called for consumer action against the industry as a result of the on-going civil wars in Angola, the Democratic Republic of Congo and Sierra Leone which are financed from diamond sales.

"We saw what was going on in Angola and this was not acceptable. And December 1998 there was failure of the United Nations sanctions," Global Witness' Alex Yearsley said. The consumer action is likely to hurt the producers, selling organisations, cutting and polishing industries and may lead to losses of thousands of jobs. "I am disappointed that the NGOs throw the issue at us and they want something to be done and they are not sure as to what has to be done. We have fears that eventually there will be a consumer boycott of all diamonds because they will be associated with wars," the De Beers' London-based Central Selling Organisation (CSO) executive director, Mike Farmiloe said. His organisation handles 65 percent of the world's diamond production.

The diamonds which are mined by Debswana Diamond Company - a 50/50 joint venture between De Beers and Botswana government - accounts for 33 percent of the Gross Domestic Product (GDP), 80 percent of the countries merchandise trade. Debswana's three mines of Jwaneng, Orapa and Letlhakane account for 40 percent of the diamonds which are sold to the CSO. At least 96 percent of world production is from the non-conflict countries of Australia, Botswana, Brazil, Canada, Namibia, Russia and South Africa and it is sold through the CSO, Telaviv in Israel and Antwerp in Belgium.

Major players in the industry, De Beers and Antwerp centres are taking measures to restore confidence in the market, moving away from conflict diamonds. As part of De Beers' attempts to restore confidence in the diamond industry, it introduced a guarantee certificate of the origins of their consignments starting with the last sight which took place end of March. However, Yearsley said although the move was in the right direction, it still fell short of expectations. "We need a greater independent verification which will include co-operation between governments, the diamond industry and the NGOs," he said.

Yearsley's comments were dismissed as being unfair by the Diamond High Council in Antwerp where diamond dealer Mark Van Bockstael said the campaign may even punish non-conflict countries which are producers. "This is all rubbish," referring to the Global Witness campaign, "it makes a big deal easier, if we can discount Botswana, Australia, South Africa, Canada, Russia and South America. We have to separate legal trade from that of rogues," Bockstael said. "One thing we have to be honest with, if the system is penetrable, then we cannot do anything from outside. The bleeding is inside and we will not be able to stamp the illegal trading of diamonds easily," he said referring to corrupt officials in the warring diamond producing areas.

"Even the Global Witness said in its report that the documents (certificate of origins) were being faked. I think their campaign is wrong. Why should we look at Botswana?" he asked. Bockstael's organisation blames arms dealers for the on-going wars in central and west African countries and is presently working closely with the Belgian government to set-up a trading office in Angola. The move is aimed at keeping diamonds from UNITA-controlled areas out of the market. The development comes on the heels of the new initiatives from the Luanda administration to introduce a new certificate of origin to counter the use of the old certificate which has been widely faked.

More Articles on the Conflict in Angola

More Information on Sierra Leone

More Information on the DR of Congo


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