December 15, 2006
Diamonds Are a Terrorist’s Best Friend
A new movie, Blood Diamond, starring Jennifer Connelly, Leonardo DiCaprio and Djimon Hounsou has Americans looking at bling in a whole new light.
The movie looks at how rebel groups have used proceeds from illegally traded diamond sales to finance wars in central and western Africa.
These gems, known as conflict or blood diamonds, have been defined by the United Nations (UN) as those “that originate from areas controlled by forces or factions opposed to legitimate and internationally recognized governments, and are used to fund military action in opposition to those governments, or in contravention of the decisions of the Security Council.”
The human cost of the blood diamond trade has been immense. During the late nineties, it was estimated that as much of five percent of diamond revenues were generated through the illegal sale of blood diamonds. Conflicts in Sierra Leone, Angola, Liberia, Cote d’Ivoire, and the Democratic Republic of Congo where thousands have been killed and millions displaced have been financed largely on the blood diamond trade.
The global diamond industry uses the Kimberly Process Certification System to track diamonds sold around the globe. The voluntary system now has 71 governments participating and industry sources say 99 percent of diamonds sold are from legitimate sources. Three African countries have been designated as traders in conflict diamonds. These are the Republic of Congo, Liberia and Cote d’Ivoire.
Critics of the present system say its voluntary nature means no independent verification takes place. This, they say, brings into question whether the system is working as effectively as advertised.
Human rights groups such as Amnesty International and Global Witness contend the system has problems. The groups point to a Sep. 2006 Government Accountability Office report that found problems with the enforcement of the Kimberly Process in the U.S.
“It’s unconscionable for us for the sake of vanity to contribute to the destruction of a country,” Ms. Connelly told The New York Times. “So I think trying to make more effective the system of warranties is a pretty clear choice.”
The movie has evidently gotten the attention of consumers. According to Carley Roney, editor in chief of the theknot.com, “There’s extensive discussion going on our message boards. Many women are saying, ‘This is supposed to be a symbol of all things good and I don’t want to look down on my finger and think of women and children being killed.’ It undermines the entire meaning of that ring.”
While many may becoming aware, the majority of consumers in a poll by Ms. Roney’s site did not know what a blood or conflict diamond was.
Most jewelers may know what a blood diamond is but that doesn’t mean they have any idea if the product they receive is legal or illegal. Some don’t care.
“I’m not here to save the world. I’m here to make life beautiful,” said Raymond Moutran, a jeweler in Los Angeles.
“One guy wanted to know if the diamond was from Africa and whether it was from an area where people are tortured,” Mr. Moutran said. “I said, ‘I don’t know.’ He didn’t buy. I don’t need to lie to make a living.”
Russ Varon, the chief financial officer of Morgan’s Jewelers, said his company began receiving invoices from suppliers two years ago that said the diamonds purchased by his company were conflict free.
Discussion Questions: Will the movie Blood Diamond affect how consumers buy diamond jewelry? How do retailers deal with an issue that is, in this
case, clearly beyond their ability to control? Do they watch business walk away as did Raymond Moutran or do they take other steps?
- Conflict Diamonds: Agency Actions Needed to Enhance Implementation of the Clean Diamond Trade Act – United
States Government Accountability Office (GAO) - Countries Participating in the Kimberly Process – DiamondFacts.org/World
Diamond Council - Diamonds Are for Never? – The New York Times (free reg. required)
- Conflict Diamonds: Sanctions and War – United Nations (U.N.)
- Diamonds in Conflict – Global Policy Forum/U.N. Security Council
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Having spent the afternoon seeing the film, I have to agree with most of the previous comments. What I do think is important is that it raises awareness amongst consumers and this, in its turn, may encourage (and I do use the term very loosely indeed) some of the bigger companies to increase their better activities to show that they are at least to some extent compensating for the bad practices that they may not be able to totally trace and eradicate. I also hope that the film raises awareness amongst American and European consumers about the charmed and very lucky lives that we lead. I know that I am grateful most days for living how and where I do. (PS to those who think that all women love diamonds more than most of their other possessions – not true. Nor do I value gold more than most of my other possessions but the ways in which that is mined are a discussion for another day.)
No, most diamond buyers will prove themselves to be totally apolitical. It’s the bling that’s the thing. And, for those with a hint of guilt there are guys like Russell Simmons popping up talking about Botswana and making it seem like it’s your humanitarian duty to buy those diamond studs you’ve always wanted. The diamond industry was built on a foundation of African blood long before the concepts of “conflict stones” or “blood diamonds” were created. Sure, the diamond you buy might be conflict free, but what about all those diamonds in the DeBoers’ vaults? The entire diamond industry rests on a foundation of exploitation and abuse. Their hands may or may not be “clean” now, but how did they make their money in the first place? Once a stone is cut how can you tell where it came from? What can you know about the history of an older stone other than the person who mined it probably lived on less a year than most of us spend on gas in a month. Consumers only care about these things on a superficial level. If they didn’t, what would happen to the soft goods industry; the ivory and diamond businesses; the exotic wood market; etc., etc.? It’s just a shame we have to go to the movies to have our awareness of the world heightened.
Since it is very difficult to identify a blood diamond, this movie will have little effect on the purchasing behavior of consumers. This especially applies to American consumers who are less concerned about a far-away conflict which has nothing to do with the USA. This movie was a great educational experience, but will have little effect on purchasing behavior for diamonds.
Zel is right. This is a variation of the Russell Simmons’ argument. Yes, diamonds do some good today (and Zel is also right — not enough) but it is an industry that has only recently developed a heart. This is like saying strip coal mining is good for the environment because NOW the coal companies are building parks. Or arguing that the tobacco industry donates millions a year to youth anti-smoking programs. That’s true also. But they are still hiring rock and roll poster artists to design cigarette packs — and I don’t think they are targeting Boomers waxing nostalgic. Does a little good late in the game mean your corporate conscience is clean? I hope not for the sakes of all those kids in the emerging world that are sewing our clothes, making our shoes and living on land destroyed by the exploitation of natural resources.
It will effect how consumers shop for diamonds, as they may ask more questions about their origin, but they will still buy. Retailers — or better yet the diamond industry — should try to educate consumers about the facts, such as:
1. Diamond revenues enable every child in Botswana to receive free education up to the age of 13.
2.The charity Jewelers for Children funds a community based care program for orphaned children in South Africa.
3. The diamond mining industry generates over 40% of Namibia’s annual export earnings.
4. Approximately $8.4 billion worth of diamonds a year come from African countries.
5. The revenues from diamonds is instrumental in the fight against the HIV/AIDS pandemic.
There are more facts when you dig down under the hype, like An estimated 5 million people have access to appropriate healthcare globally thanks to revenues from diamonds. Is it enough? Probably not, but not buying diamonds this holdiay season will not help the people that need it most.
Jewelers, just like other retailers, want comp sales increases. It takes only a few customers to earn a comp sales increase or to lose it. Why risk losing the comp sales increase if you can certify that your diamonds were acquired appropriately? Even if 97% of your customers don’t care, the remaining 3% might represent your entire comp sales increase for the year.
Blood diamonds may be news to most Americans, but the link between them and vicious conflicts in Africa is a long-running tragedy. The new Hollywood movie may deserve critical acclaim, but its message is unfortunately at least a decade late.
My consciousness was raised on this subject many years ago by an outstanding trade journalist named Russell Shor, who was a senior editor for Jeweler’s Circular Keystone magazine in the 80s and 90s. In about 1992 (my memory is fuzzy on the exact date) he published an investigative series on the financial links between militias in in Liberia and Sierra Leone and the diamond dealers of Antwerp and New York. At the time, I was a board member in the New York Business Press Editors (sadly, now defunct) and we handed Shor top honors in our annual Editorial Awards. The articles still stand out in my memory as possibly the finest example of investigative trade journalism I’ve ever seen.
Shor’s work may have been the real consciousness-raiser for the world diamond industry, and I believe it would be accurate to attribute the term “blood diamond” to him, although he may have heard it on one of his trips to Belgium and Africa. His work no doubt helped promote the Kimberly Process by shining a light into the shameful events of that era in the diamond trade. Shor continues to earn accolades today, through his work for the Gemological Institute of America and various publications.
This new film will help dramatize this tale for the masses, and it may contribute to some change in consumer behavior. I’ve seen a few ads recently designating jewelry as “conflict free.” I think the large chains will have no choice but to insist on a chain of custody for every stone they sell, or face a consumer backlash. Diamonds may be beautiful, but they are not scarce and there are many places to buy them. I believe that if consumers have a choice, many will opt for stones that are free of the taint of murder. Avoiding the taint of greed, however, may be less possible.
Fur coats sales may have declined since the exposure of man’s cruelty to animals. But not all baubles and beads are so sacred. As for diamonds, the bloody reference notwithstanding, if there is a woman who would not take disgraced furs or gold jewelry, she likely would take sparkling diamonds. The movie makes its point, but Zel makes an important counterpoint, and more billions of dollars are involved in financial commerce of diamonds than their involvement with political intrigue. Thus, diamonds will still rate high as a girl’s best friend.
The movie will have a minimal impact on sales, and a slightly larger impact on the buying process (more questions). The movie does tie into a greater trend of consumers caring about the products they buy and the ethics of the companies and industries with which they do business. Whether it is organic, environmental impact, labor practices or blood diamonds, the movie highlights the trend that companies are receiving much more attention about how they do business in a global world.
On a micro level, it can affect buying decisions; on a macro level, it will move more companies to greater social responsibility.
Diamonds may be in the movies, but there have been other blood revenues that have been little talked about and one is Coltan (colombo-tantalite ore). Coltan is a critical ore used in the production of electrical components in devices such as cell phones.
At one point in the early 2000’s the price of Coltan outstripped that of diamonds. The DR of Congo has immense resources, and it is unfortunate that it can be exploited and blood money derived in ways that the average person will know nothing about.
I had the privilege of working and living in Copenhagen during the 1980s and, during that time, I worked with a British engineer who had worked for Debeers and their diamond mines in Africa during the 70s. The stories he would convey were incredible. The complete devaluation of human life in the name of a diamond was evident then. A Hollywood movie will do nothing to change the course of events that define our valuation of a stone. Even deBeers’ brand line is ‘A diamond is forever’ – and so is their stranglehold on the controlled flow of this precious stone.
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Having spent the afternoon seeing the film, I have to agree with most of the previous comments. What I do think is important is that it raises awareness amongst consumers and this, in its turn, may encourage (and I do use the term very loosely indeed) some of the bigger companies to increase their better activities to show that they are at least to some extent compensating for the bad practices that they may not be able to totally trace and eradicate. I also hope that the film raises awareness amongst American and European consumers about the charmed and very lucky lives that we lead. I know that I am grateful most days for living how and where I do. (PS to those who think that all women love diamonds more than most of their other possessions – not true. Nor do I value gold more than most of my other possessions but the ways in which that is mined are a discussion for another day.)
No, most diamond buyers will prove themselves to be totally apolitical. It’s the bling that’s the thing. And, for those with a hint of guilt there are guys like Russell Simmons popping up talking about Botswana and making it seem like it’s your humanitarian duty to buy those diamond studs you’ve always wanted. The diamond industry was built on a foundation of African blood long before the concepts of “conflict stones” or “blood diamonds” were created. Sure, the diamond you buy might be conflict free, but what about all those diamonds in the DeBoers’ vaults? The entire diamond industry rests on a foundation of exploitation and abuse. Their hands may or may not be “clean” now, but how did they make their money in the first place? Once a stone is cut how can you tell where it came from? What can you know about the history of an older stone other than the person who mined it probably lived on less a year than most of us spend on gas in a month. Consumers only care about these things on a superficial level. If they didn’t, what would happen to the soft goods industry; the ivory and diamond businesses; the exotic wood market; etc., etc.? It’s just a shame we have to go to the movies to have our awareness of the world heightened.
Since it is very difficult to identify a blood diamond, this movie will have little effect on the purchasing behavior of consumers. This especially applies to American consumers who are less concerned about a far-away conflict which has nothing to do with the USA. This movie was a great educational experience, but will have little effect on purchasing behavior for diamonds.
Zel is right. This is a variation of the Russell Simmons’ argument. Yes, diamonds do some good today (and Zel is also right — not enough) but it is an industry that has only recently developed a heart. This is like saying strip coal mining is good for the environment because NOW the coal companies are building parks. Or arguing that the tobacco industry donates millions a year to youth anti-smoking programs. That’s true also. But they are still hiring rock and roll poster artists to design cigarette packs — and I don’t think they are targeting Boomers waxing nostalgic. Does a little good late in the game mean your corporate conscience is clean? I hope not for the sakes of all those kids in the emerging world that are sewing our clothes, making our shoes and living on land destroyed by the exploitation of natural resources.
It will effect how consumers shop for diamonds, as they may ask more questions about their origin, but they will still buy. Retailers — or better yet the diamond industry — should try to educate consumers about the facts, such as:
1. Diamond revenues enable every child in Botswana to receive free education up to the age of 13.
2.The charity Jewelers for Children funds a community based care program for orphaned children in South Africa.
3. The diamond mining industry generates over 40% of Namibia’s annual export earnings.
4. Approximately $8.4 billion worth of diamonds a year come from African countries.
5. The revenues from diamonds is instrumental in the fight against the HIV/AIDS pandemic.
There are more facts when you dig down under the hype, like An estimated 5 million people have access to appropriate healthcare globally thanks to revenues from diamonds. Is it enough? Probably not, but not buying diamonds this holdiay season will not help the people that need it most.
Jewelers, just like other retailers, want comp sales increases. It takes only a few customers to earn a comp sales increase or to lose it. Why risk losing the comp sales increase if you can certify that your diamonds were acquired appropriately? Even if 97% of your customers don’t care, the remaining 3% might represent your entire comp sales increase for the year.
Blood diamonds may be news to most Americans, but the link between them and vicious conflicts in Africa is a long-running tragedy. The new Hollywood movie may deserve critical acclaim, but its message is unfortunately at least a decade late.
My consciousness was raised on this subject many years ago by an outstanding trade journalist named Russell Shor, who was a senior editor for Jeweler’s Circular Keystone magazine in the 80s and 90s. In about 1992 (my memory is fuzzy on the exact date) he published an investigative series on the financial links between militias in in Liberia and Sierra Leone and the diamond dealers of Antwerp and New York. At the time, I was a board member in the New York Business Press Editors (sadly, now defunct) and we handed Shor top honors in our annual Editorial Awards. The articles still stand out in my memory as possibly the finest example of investigative trade journalism I’ve ever seen.
Shor’s work may have been the real consciousness-raiser for the world diamond industry, and I believe it would be accurate to attribute the term “blood diamond” to him, although he may have heard it on one of his trips to Belgium and Africa. His work no doubt helped promote the Kimberly Process by shining a light into the shameful events of that era in the diamond trade. Shor continues to earn accolades today, through his work for the Gemological Institute of America and various publications.
This new film will help dramatize this tale for the masses, and it may contribute to some change in consumer behavior. I’ve seen a few ads recently designating jewelry as “conflict free.” I think the large chains will have no choice but to insist on a chain of custody for every stone they sell, or face a consumer backlash. Diamonds may be beautiful, but they are not scarce and there are many places to buy them. I believe that if consumers have a choice, many will opt for stones that are free of the taint of murder. Avoiding the taint of greed, however, may be less possible.
Fur coats sales may have declined since the exposure of man’s cruelty to animals. But not all baubles and beads are so sacred. As for diamonds, the bloody reference notwithstanding, if there is a woman who would not take disgraced furs or gold jewelry, she likely would take sparkling diamonds. The movie makes its point, but Zel makes an important counterpoint, and more billions of dollars are involved in financial commerce of diamonds than their involvement with political intrigue. Thus, diamonds will still rate high as a girl’s best friend.
The movie will have a minimal impact on sales, and a slightly larger impact on the buying process (more questions). The movie does tie into a greater trend of consumers caring about the products they buy and the ethics of the companies and industries with which they do business. Whether it is organic, environmental impact, labor practices or blood diamonds, the movie highlights the trend that companies are receiving much more attention about how they do business in a global world.
On a micro level, it can affect buying decisions; on a macro level, it will move more companies to greater social responsibility.
Diamonds may be in the movies, but there have been other blood revenues that have been little talked about and one is Coltan (colombo-tantalite ore). Coltan is a critical ore used in the production of electrical components in devices such as cell phones.
At one point in the early 2000’s the price of Coltan outstripped that of diamonds. The DR of Congo has immense resources, and it is unfortunate that it can be exploited and blood money derived in ways that the average person will know nothing about.
I had the privilege of working and living in Copenhagen during the 1980s and, during that time, I worked with a British engineer who had worked for Debeers and their diamond mines in Africa during the 70s. The stories he would convey were incredible. The complete devaluation of human life in the name of a diamond was evident then. A Hollywood movie will do nothing to change the course of events that define our valuation of a stone. Even deBeers’ brand line is ‘A diamond is forever’ – and so is their stranglehold on the controlled flow of this precious stone.