De Beers chairman, Nicky Oppenheimer, says some diamond traders are still buying uncertified diamonds from conflict areas in West Africa and many jewellery stores were not tracing their source.
Oppenheimer said in a speech at the World Diamond Congress in Tel Aviv, where he expressed concern that stones that helped finance civil wars in Sierra Leone, Liberia and elsewhere, giving rise to the terms “blood diamonds” or “conflict diamonds”, are being sneaked into the legal market through the back door.
“We, as an industry, are failing to live up to our commitments. That is unacceptable,” Oppenheimer said, in the speech given on Wednesday and circulated by De Beers on the internet.
Oppenheimer said the Kimberley Process, launched in 2000 to certify rough diamonds, had been largely successful, but said a review by the United Nations (UN) and the US government, later this year, would highlight shortcomings.
“These include some failure of intergovernmental systems, discrepancies in official import-export statistics and the illegal shipment of rough diamonds from no participant countries,” Oppenheimer said.
While these were mostly issues for governments, the diamond cutting and retail sectors had also largely failed to trace the origins of these gems, he said.
Under the Kimberley Process, participating governments provide certificates for exports of rough diamonds to show they were mined from legitimate operations.
Oppenheimer cited a survey by nongovernmental organisations that showed many shops in the US and Britain did not follow a voluntary warranty system.
“Their survey showed an ignorance of the system of warranties by jewellers’ store personnel and an appalling low level of compliance by many of the companies themselves,” he said.
“Research carried out by the Diamond Trading Company (DTC) demonstrated the findings of the nongovernmental organisations were largely correct.”
The DTC, De Beers’ marketing arm, accounts for sales of about half of the world’s diamonds. The Oppenheimer family owns 40% of De Beers, mining group, Anglo American, 45% and the government of Botswana 15%.
Oppenheimer warned of severe penalties for any DTC client caught buying uncertified diamonds, especially from troubled African countries, Liberia and C├┤te d’Ivoire, which remain under UN sanctions.
“How can any decent member of the diamond industry allow themselves to gain from the misery of others, or turn a blind eye and pretend that they are unaware?, he said. “We owe it to Africa, from whence we have derived so much of our wealth and our comfortable lives.”