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Tue 12 Jan 2010 04:00 AM

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Diamond values shine

In November 2002, a unique alliance of 50 countries, the United Nations, a number of leading non-governmental organisations and the diamond industry came together to tackle the scourge of conflict diamonds.

Diamond values shine

In November 2002, a unique alliance of 50 countries, the United Nations, a number of leading non-governmental organisations and the diamond industry came together to tackle the scourge of conflict diamonds.

For those not familiar with the issue of conflict diamonds, they originate from areas controlled by forces opposed to the legitimate governments and are used to fund the opposition.

The clear focus and determination of these players led to the creation of the Kimberley Process — an agreement of unparalleled scope in the natural-resources sector. Importers, exporters and the diamond industry accomplished something many thought impossible — we virtually eliminated conflict diamonds from the global supply chain, and to this day, 99.8 percent of all diamonds come from conflict-free sources.

The industry took these steps in order to protect the integrity of a highly desirable product. Whether you like diamonds or not, few would dispute that they hold special meaning for millions of people around the world. Unlike the latest flat-screen TV or designer handbag, the diamond has an enduring value that transcends generations and geography.

As consumers contemplate their holiday shopping choices, we are gratified to see that jewellery remains high on the list of gifts. Initial Black Friday weekend retail figures from the US — the world’s largest diamond buying market — bear this out.

In unsettled times, diamonds have historically held their financial value, but they also hold an emotional relevance to those that give and receive them — often marking new love or old memories. Providing confidence about the source of these symbols, which mark such important moments in our lives, is integral to their enduring value. Consumers who purchase from reputable jewellers have no reason to doubt that their diamonds are conflict free.

For those that recover, cut, polish and sell them, our ability to live up to diamonds is an inherent part of their value, which is why we are deeply concerned by the situation at the Marange diamond fields in Zimbabwe.

Over the past year, a number of reports from courageous journalists, NGOs and the Kimberley Process itself have detailed a distressing situation in which the diamond deposits in the Marange region were commandeered by the Zimbabwe military. While this occurred before the new government of national unity was formed, it has nonetheless drawn the attention of the international community. The Kimberley Process ensures that every diamond exported from a diamond producing country and imported into a diamond manufacturing country is accompanied by a certificate verifying that the diamond hasn’t been used by a rebel force to fund conflict, and that it is fully compliant with the requirements.

While the details about the situation in Zimbabwe may be less than clear, the country’s responsibility to live up to diamonds is perfectly clear. De Beers supports the Kimberley Process’s recent decision to place diamonds from Marange under an intensive 12-month monitoring and auditing programme.

While De Beers would have preferred more decisive action — including temporary suspension from the Kimberley Process, which would have effectively halted the country’s export of diamonds until the issues in question were fully addressed — we also recognise the framework of governments, civil society and industry that the Kimberley Process represents, and the commitment by Zimbabwe not to export from Marange until the monitoring programme is in place.

While we do no business in Zimbabwe, and while it is true that the diamonds originating from Marange represent only a tiny fraction of global supply, De Beers, along with the rest of the world, will nevertheless be watching the monitoring programme closely.

We will provide any expertise that is asked of us, and we fully expect the Kimberley Process to take the further action it stipulated should no change in the situation on the ground be forthcoming by the end of the 12-month programme. In the end, diamonds, or any natural resource for that matter, can be a country’s greatest source of prosperity or paucity.

It is the leaders who must chose the path, which is why good governance is the key in turning natural resources into shared national wealth. For example, just next door to Zimbabwe is Botswana. Since its independence from Britain in 1966, Botswana has enjoyed good, democratic leadership and has prudently managed its diamond resources — Botswana is the world’s leading diamond producer — to move from one of the world’s poorest to a middle-income country with consistent economic growth, sound infrastructure and little corruption.

Nicky Oppenheimer is the chairman of De Beers. The opinions expressed are his own.

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