The Return of the Blood Diamond. (And We Don’t Mean the Movie).

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They say a diamond is forever. From today, and for now, that also includes blood diamonds. On Monday the respected rights and commerce watchdog Global Witness announced it was quitting the international certification scheme set up in 2003 to outlaw blood diamonds due its “refusal to evolve and address the clear links between diamonds, [and] violence and tyranny.” Charmian Gooch, a Founding Director of Global Witness, said: “Nearly nine years after the Kimberley Process was launched, the sad truth is that most consumers still cannot be sure where their diamonds come from, nor whether they are financing armed violence or abusive regimes.” The scheme failed all three big tests it had been set, said Gooch. It did not tackle an alleged trade in conflict diamonds from Côte d’Ivoire. It failed to take serious action in the face of “blatant breaches of the rules” by Venezuela, which has allegedly become a smugglers’ through route for illegal and uncertified stones originating elsewhere.  And it was unwilling to stop the sale of gems from Zimbabwe, whose diamonds fields Robert Mugabe’s regime violently appropriated in 2008, reportedly killing 200 people, and whose proceeds now finance the operation of the isolated authoritarian regime. Gooch added the Kimberley Process, rather than separating out conflict stones from those mined and processed according to best practice and the law, had instead become “an accomplice to diamond laundering – whereby dirty diamonds are mixed in with clean gems.”

The Kimberley Process is a government-led rough diamond certification scheme which requires member states to pass national legislation and set up an import/export control system for diamonds. Among other participants are diamond producers, polishers and dealers and civil society groups such as Global Witness. Crucially, the Process was an attempt at self-regulation. Global Witness’ departure seals what has been apparent for some time: that, as an industry, the diamond business can’t help but be irrevocably dirty.

That does not go for every diamond producer. De Beers, which coined the slogan “a diamond is forever” almost a century ago, has transformed itself in the last decade from a buyer of any and all diamonds, whatever their provenance, to a “sealed pipeline” producer, only selling stones it has mined itself. That decision, De Beers said, was made out of the realization that a diamond is valued almost entirely on the back of its emotional associations – love, marriage – something a blood diamond, with its associations of war and suffering, could shatter. It was a decision that cost the company dearly - De Beers’ global market share went from 70% to 40% – but one it argued was vital for the future of the diamond business.

Sadly, despite its standing in the industry, De Beers was unable to impose its new thinking on its competitors, many of whom saw De Beers’ conversion to more ethical standards as a commercial opportunity. Never was that more apparent than at the auctions of stones that have taken place in the last few years at Harare airport, where diamond dealers from around the world fly in on private jets and bid for stones of whose appalling provenance they are only too aware. (Zimbabwean stones are, after all, sold at a substantial discount for precisely that reason). In economics, this phenomenon of how good behavior is, on a strictly commercial basis, irrational, as it ends up penalizing you, is known as the Prisoner’s Dilemma. For the thousands of opposition activists who have been jailed in Zimbabwe, many of whom remain behind bars, that seems grimly appropriate.

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