By Paul Ames
The Gazette (Montreal)April 12, 2000
The diamond trade has always had its dark side, with smugglers and gunrunners too often lurking behind the sparkle and glitter. Now, revelations that gem sales are feeding some of Africa's nastiest civil wars have forced change at the heart of the global diamond business.
Antwerp's diamond trade stands accused of allowing rebels from Angola and Sierra Leone to sell billions of dollars of gems on the international market to pay for arms. ''Extremely lax controls and regulations governing the Antwerp market facilitate and perhaps even encourage illegal activity,'' said a stinging report presented to the United Nations last month by Canadian diplomat Robert Fowler.
The report on how Angolan warlord Jonas Savimbi defies UN sanctions to fund his guerrillas reads like a post-Cold War thriller, with a cast of shadowy South African arms dealers, Ukrainian mercenaries, eastern Mediterranean gem traffickers and African leaders bribed with packets of diamonds.
According to the report, many of the strands in this web lead to Antwerp, where 85 per cent of the world's rough diamonds are traded. The diamond district hugging Antwerp's railroad tracks registered revenue of almost $18 billion in the first nine months of last year. Trading is cosmopolitan. Hasidic Jews in black coats and hats mingle with sharp-suited dealers from Bombay to Beirut. Little jewelry stores on the neighbourhood's fringes are run by newcomers from Georgia. There are Kosher delis, Lebanese cafes and Bollywood movie posters.
At Antwerp's High Diamond Council, the UN report was met with consternation and claims the city is being made a scapegoat for an illicit trade that's impossible to control. Mark Van Bockstael heads the Angolan task force set up by the Diamond Council after the UN banned trade in Savimbi's diamonds in 1998. He insists Antwerp has stricter controls than rival centres, such as Bombay or Tel Aviv. Every batch of diamonds coming into the city is double-checked. Certificates of origin are scrutinized. Close co-operation with the Angolan government seeks to verify all diamonds from there are legitimate.
However, Van Bockstael acknowledged, diamonds are a smuggler's delight. ''They are small, they are high value and they are very hard to detect,'' he said, pointing at pin- covered maps tracing suspected clandestine routes out of Angola through Africa, the Middle East and former Soviet republics.
Although some diamonds can be recognized as coming from particular mines, Van Bockstael said the high-quality gems panned from the rivers of Angola's remote northeast are indistinguishable from those of neighbouring Congo and similar to Canadian gems. ''A lot of production is simply not identifiable,'' Van Bockstael said. ''We are trying to develop a technology, (but) it's going to take at least another five years before we have a reliable instrument.''
Meanwhile, Savimbi can easily circumvent controls by forging certificates or shipping stones through nations where he has friends or officials are easily bribed. Once cut and polished, Van Bockstael said, the diamonds are impossible to track.
Diamond-marketing colossus De Beers responded to the outrage by banning all sales from Angola. Van Bockstael said that's giving the same treatment to victims and their tormentors. He's trying to get agreement from other diamond centres for a joint pledge to buy Angola's diamonds only from official channels. ''The flourishing diamond industry can be utilized by the legal Angolan government to rebuild their war-torn cities and infrastructure,'' the statement says. Van Bockstael pointed to Botswana and Namibia, where legitimate diamond sales underpin local economies.
Although 40 years of unbroken warfare have left Angola's citizens desperately poor, the country's official diamond sales last year reached $600 million, making it the fourth-largest producer - behind Botswana, Russia and South Africa.
Nobody knows how many more diamonds are smuggled out of Angola. The human-rights group Global Witness estimated Savimbi earned $3.72 billion from diamond sales from 1992 to 1998. With such riches at stake, campaigners recognize the difficulties in imposing controls. ''The illicit diamond trade is never going to be stopped,'' said Alex Vines from Human Rights Watch in London. ''But the costs (of smuggling) can be raised. There needs to be more tightening.''
Van Bockstael said international concern is changing attitudes in an industry that paid scant regard to ethical questions. Despite fears of scaring away an industry that provides 7 per cent of the country's exports, the Belgian government is introducing tighter controls. Antwerp's Diamond Council is petitioning dealers ''not to accept the blood money'' that comes from trading rebel gems. ''This is the end of the diamond business as we knew it and the start of a new, more ethical business, '' Van Bockstael said.
