World Diamonds Council President Andrey Pokyakov speaks on rare gem trade.

The purchasing of a diamond – thanks to an ingenious marketing campaign by N.W. Ayer on behalf of De Beers Group – is the showcase of one person’s love for another and is often the gem of choice for marriage proposals.

It is odd, however, to think that a diamond, so associated with love and peace, is also associated with a much darker, more sinister history.

As was showcased in the 2006 Hollywood movie Blood Diamond, there is a side to the diamond industry that is worlds apart from the romantic gesture. The events and characters involved in the movie were fictitious, but the principle behind their creation has some basis in fact.

The film looks at the trade of conflict or blood diamonds amidst the civil war in Sierra Leone in the 1990s. Diamonds are referred to as conflict diamonds if the stone is used by a rebel movement or their allies to finance armed conflicts against legitimate governments.

It is estimated conflict diamonds represented approximately 4 per cent of the world’s diamond production during the civil war. Illicit rough diamonds have also been used by rebels to fund conflicts in Angola, Liberia, Ivory Coast, the Democratic Republic of Congo and Congo.

In 2000, the Kimberley Process (KP) was formed by governments, NGOs and the diamond industry to develop the Kimberley Process Certification Scheme (KPCS), which came into effect in 2003.

World Diamond Council (WDC) President Andrey Pokyakov said the main goal of the KP and the WDC was to protect the value of natural diamonds and prevent conflict diamonds from entering the market, and the KPCS was designed to safeguard the supply chain.

“The KPCS established requirements for market access, and the WDC supports its enforcement through the sharing of industry knowledge and technical expertise,” he told National Mining Chronicle following the recent KP Intersessional Meeting held in Perth.

Background

Diamonds have a long and rich history beginning?in India, where diamonds were gathered from the country’s rivers and streams. Some historians estimate India was trading in diamonds as early as the fourth century BC.

India was the main source for the diamond trade for hundreds of years until Brazil emerged as an important source of diamonds in the 1700s and dominated the market for more than 150 years.

The story of the modern diamond market began with the 1866 discovery of diamonds in Kimberley, South Africa. This eventually led to entrepreneur Cecil Rhodes establishing De Beers Consolidated Mines Limited in 1888. By 1900, De Beers, through its mines in South Africa, controlled an estimated 90 per cent of the world’s production of rough diamonds.

The company maintained this dominance for most?of the 20th century, although world diamond mining expanded dramatically with the discovery of new sources in Australia in 1985. This discovery was backed up in the 1990s, as more resources emerged, including in Northern Canada. Half of the world’s largest diamond mines can be found in Russia.

Sparkling future

Despite the hard work and vigilance of the KP and the WDC, conflict diamonds are still a blight on the diamond industry today.

Since its inception in 2000 the KP has eradicated 99 per cent of the world’s conflict diamonds, according to Mr Polyakov, but he said there was still more work to be done.

“The main areas where this is still an issue are regions where conflict and civil war are still ongoing, as well as in countries with a large proportion of small-scale artisanal mining operations, which are less equipped to abide by the regulation and accounting the KPCS requires,” he said.

The annual KP Intersessional Meeting was conducted in May this year, and a statement from the WDC said the meeting took significant steps forward on many issues concerning the rough diamond pipeline.

“To elevate the KP to the next level of effectiveness, we must look beyond administrative issues and make sure responsibility and expertise go hand-in-hand in the coming years,” Mr Polyakov said.

“We took a strong step forward in this regard by rigorously and constructively questioning all aspects related to the origin of the diamond product that consumers ultimately purchase.”

For the second consecutive year, the WDC also held an observers forum alongside the KP Intersessional Meeting, where WDC members, the African Diamond Producers Association, the Civil Society Coalition and the Diamond Development Initiative achieved consensus on proposals to strengthen KP internal controls, establish a policy on conflicts of interest and create a KP permanent secretariat.

“We talked about the fundamentals of our future as we enter the three-year cycle of KPCS review; a process that is vitally important as it will determine not only the future of the Kimberley Process, but also the future of the entire diamond industry for years to come,” Mr Polyakov said.

Picture: World Diamond Council (WDC) President Andrey Pokyakov