The Diamond Dilemma

Blood Diamond has gem industry execs running scared.

Halfway through Blood Diamond, the new action-movie-with-a-conscience set in Sierra Leone during the brutal, diamond-funded civil war of the 1990s, a mercenary on the hunt for a priceless pink diamond asks a reporter to help a local miner. As the reporter surveys the bloodshed and carnage around them, she asks, What difference will it make, to help just one? Moments later, her cynicism giving way to idealism, she answers her own question, I can’t believe I just said that.

Released in movie theaters just as the holiday shopping season hits its peak, Blood Diamond asks Western consumers to confront the very same moral dilemma: Do our purchases bring misery to the developing countries in which many of our products originate? And if we stop buying, will it even make a difference?

In the case of diamonds, it is a difficult question to answer. Conflict, or blood diamonds first gained international attention in the late 1990s when Angola, the Democratic Republic of the Congo (DRC), and Sierra Leone were all engaged in violent civil wars. Soldiers on all sides used their nations’ diamond riches to buy weapons. Human rights groups such as Global Witness (as well as this movie) place much of the blame on consumers, whose lust for diamonds allegedly funded these wars and prolonged the slaughter of innocent civilians. The remedy they propose is that consumers refuse to buy diamonds whose origins are in any way unclear.

While the intentions behind this proposal are noble, the solution fails to take into account the economic devastation such a practice would unleash on the legitimate diamond industry in Africa. Botswana, Namibia, and South Africa together take in $5.5 billion annually from diamonds, accounting for 42 percent of the world’s production and dwarfing that of the conflict-afflicted areas. In Botswana, the world’s largest producer, diamonds account for nearly 80 percent of the country’s export income and have single-handedly transformed one of the developing world’s poorest nations into one of its fastest growing economies.

Unlike the conflict-prone diamond fields of western Africa, the mining operations in southern Africa have always been highly regulated. There are historical and geological reasons for this. Most of the diamonds in these areas are located in volcanic pipes deep beneath the surface of the earth, which require excavation equipment and sophisticated expertise to uncover.

In western Africa, however, most of the diamonds are scattered in shallow river beds and streams that stretch for thousands of miles through dense jungles. The only equipment needed is a shovel and a pan, so the holders of mining concessions in these areas are virtually powerless to stop unauthorized diggers from finding stones and smuggling them out of the country. To prevent these stones from disrupting its careful management of the world’s supply, South African diamond company De Beers used to operate its Outside Buying Office in Angola, the DRC, and Sierra Leone. Employees purchased rough diamonds on the black market and sent them to the company’s Central Selling Organization in London, where they were mixed with diamonds from around the world and stockpiled. In 2000, when the public furor over conflict diamonds first surfaced, De Beers closed the Outside Buying Office and, according to the company, ceased buying diamonds in these areas. (That didnt stop Blood Diamond from portraying an executive from Van de Kaap, a fictional stand-in for De Beers, as the film’s ultimate villain.)

Back then, the $60 billion industry was slow to respond to public concerns over conflict diamonds. But with the release of Blood Diamondan Oscar contender linking diamonds with images of child soldiers and severed limbsthe industry has gone on the offensive, reportedly spending $15 million for a massive public relations and advertising campaign. More than anyone, the diamond industry recognizes the power of images to shape consumer demand. After all, it has already spent billions successfully promoting diamonds as the ultimate symbol of everlasting love.

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The diamond trade has responded on a practical level as wellalbeit belatedly. In 2003, it implemented the Kimberley Process, a system of warrants for certifying that diamonds from troubled regions were conflict free. As a result, the industry claims that blood diamonds now make up less than 1 percent of world production. (By comparison, conflict diamonds constituted between 4 and 15 percent of global production at the height of the violence.) Critics have countered that the process is far from perfect. After all, diamonds are ideal for smuggling: a single, easily concealed stone can fetch tens or hundreds of thousands of dollars. When a diamond is in its natural, rough state, only a handful of experts can distinguish its origin. But once a diamond is cut, it becomes indistinguishable from any other, making it easy for unscrupulous dealers to blend conflict stones with diamonds from Canada or Russia.

Ironically, the furor over blood diamonds comes at a time when many of those conflicts have run their course. Rather than fueling war, diamonds today may represent the only real means that these devastated, largely undeveloped nations have to rebuild their shattered communities. That’s why Martin Rapaport, the publisher of the influential diamond trade magazine, The Rapaport Diamond Report, is partnering with Global Witness to create a Fair Trade system for diamonds so that purchases are monitored and diggers receive reasonable prices.

Blood Diamond may educate otherwise ignorant audience members about some of the negative ramifications of globalization. But its focus on diamonds over other rare and ethically-charged commodities may also be misplaced. Indeed, near the end of the movie, one Sierra Leonean turns to one of his equally dazed brethren and says, Imagine how bad it would be if we had oil. In Angolas 30-year civil war, the government troopslike soldiers in countless other conflictsfunded their weapons purchases with the countrys extensive oil reserves. And in the capital city of Luanda, the only buildings untouched by the carnage were those belonging to oil companies. Yet, it has taken 9/11 and $3-a-gallon gasoline to spur Americans into merely thinking of weaning themselves off foreign oil. Perhaps Leonardo DiCaprios next starring vehicle should be called Thicker than Blood.