Global Policy Forum

By Andrew Osborn

The illicit trade in "conflict diamonds" - which is known to be funding at least three African wars - is likely to be regulated out of existence by the diamond industry which signalled its readiness yesterday to introduce tough new rules later this year. The industry admitted that the time had come to clean up its act, a resolve which is likely to cut off one of the biggest sources of funding for the Revolutionary United Front in Sierra Leone and the Unita rebels in Angola.

The notoriously secretive industry, which is holdings its biannual congress in the Belgian city of Antwerp, is expected to endorse a new set of rules tomorrow. The impetus for change is a radical set of proposals from the International Diamond Manufacturers' Association, which represents the world's 10 biggest manufacturing centres. The proposals envisage every parcel of diamonds being accompanied by a detailed certificate of origin, and anyone caught dealing in conflict diamonds being banned from trading for life.

The industry has been under enormous pressure from non-governmental organisations and governments such as Britain's to end the trade in diamonds from rebel groups to help restore peace and human rights in Africa. The threat of a possible consumer boycott of diamonds and a media campaign against the trade has persuaded the industry that it is now in its in terests to tackle the problem.

Robert Fowler, the Canadian ambassador to the United Nations, who supports sanctions against Unita, hailed the industry's change of heart. "What is so exciting for all of us today is that this is the first time we're talking about a comprehensive approach," he said.

Peter Hain, the Foreign Office minister with responsibility for Africa, warned that the change would come too late for hundreds of thousands of Angolans and Sierra Leoneans who have suffered in wars financed by diamonds, but said that industry action was exactly what was needed.

"We now have the basis to form an international accreditation system and all diamonds exported will have to have a proper certificate. We've now got consensus on that within the industry and we'll have to work very hard to implement it," he said. He urged diamond buyers not to buy any stones from Sierra Leone, Angola or the Democratic Republic of Congo since the situation was, he argued, too confused.

Peter Meeus, general manager of Antwerp's Diamond High Council, which oversees the world's biggest trading centre, stressed that the industry should not be made a scapegoat for Africa's ills, adding that only 4% of diamonds came from conflict areas.

"It is unfair and dishonest to put the blame on the industry, because it's small and employs a small number of people" he said. "We are ethical people and we want to help, but the diamond industry should not stand alone in taking the blame for all that goes wrong in Africa." "We have a responsibility, but at a certain moment our responsibility ends and we are not the international police. He was optimistic that an industry-wide agreement was close and that an upbeat resolution was likely to be adopted on the final day of the congress tomorrow.

Gary Ralfe, managing director of South African diamond giants De Beers, said: "It's a question of self-policing leading to the ostracisation of those who debase our trade."

The diamond industry produces £4.5bn-worth of diamonds each year, which feed into a jewellery market worth £37bn.