Peter Hain’s Speech at the World Diamond Congress

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The following is the full text of a speech by the British Minister of State, Peter Hain, at the International Diamond Manufacturers’ Association in Antwerp, July 17, 2000

To anyone expecting me to ‘name and shame’ those responsible for using illicit diamonds to fuel wars in Africa, I am sorry to disappoint you. Today I come not to ‘name and shame’ but to ‘name and praise’. To praise the International Diamond Manufacturers Association (IDMA) for the leadership it is giving to the industry to tackle the problem. To praise De Beers for the steps it has already taken to block diamonds from conflict zones.

To praise Antwerp’s leading diamond banks: ABN-AMRO, the Antwerp Diamond bank and Artesia Bank for deciding to terminate relations with any client dealing in ‘conflict diamonds’. Other banks may have made similar moves: all should do so. To praise recent moves taken by the Belgian, Indian and Israeli trade associations to clamp down on the small minority of rogue traders in conflict diamonds who discredit the vast majority.

I hope we can all join together to find workable solutions and agree concrete ways forward. Because this will make all the difference in reassuring increasingly worried consumers. Everyone wants to be sure that that diamond ring for the finger of their loved one has helped create prosperity not war.

It is vital that we take urgent action to stop this. Vital because that will help block the money that finances brutal rebellions in those countries. Vital because we must safeguard the prosperity and jobs of tens of thousands of people worldwide dependent upon the legitimate diamond trade.

Breaking the War-Diamonds Link

We can – and we must – work together to break the link between war and diamonds in Africa and deny these ‘conflict diamonds’ access to world markets.

We have all been shocked by the brutality of the RUF rebels in Sierra Leone. They, like the UNITA rebels in Angola, finance their murder and mayhem with diamonds. Angola is the worst place in the world to be a child, yet it has the mineral and agricultural wealth to be the most prosperous place in Africa. We have a moral obligation to act. We also have a commercial obligation to protect the reputation of the industry.

Because there is no necessary link between diamonds and war in Africa. Diamonds can, and should, mean prosperity for Africa. Botswana – with one of the highest growth rates in the world last year – is a shining example of the benefits that diamond wealth can bring.

I was born in Africa and was involved in the anti-apartheid struggle. As Britain’s Minister of State for Africa I am determined that the resolution of the ‘conflict diamonds’ problem must in no way harm post-apartheid South Africa and Namibia.

What we all want are prosperity diamonds: for Africa’s people to experience the prosperity that diamonds can bring. But to do so, we must first bloc the ‘conflict diamonds’ which fuel the suffering of people whose lives are being decimated by war in Angola, Sierra Leone and the Democratic Republic of Congo.

I know that many of you feel it is unfair that politicians like me, and NGOs, have been vocal on the issue of ‘conflict diamonds’. And unfair in getting a strong media spotlight on ‘conflict diamonds’. After all it is not the diamonds that cause the wars, but the men who start them; who illicitly mine and trade diamonds in order to buy arms.

And you are right that it would be unfair, if we focused solely on diamonds. But we are not. The British Government is actively supporting the United Nations in stopping those who break sanctions on the supply of weapons and fuel. And we are very actively involved in international efforts to stop the proliferation of small arms and leverage up standards on arms export controls. We would like the international community to go further and stop the supply of weapons to non-state actors.

But this issue just cannot be wished away. The African producer countries had the wisdom to see that by launching the Kimberley process, in which Britain is an active member.

The British Government has done the right thing in galvanizing action on ‘conflict diamonds’. With the Americans, we have got the issue high on the agenda of the G8 countries, which represent the bulk of your market.

We have engaged with the leading producers: Russia, Botswana, South Africa, Namibia, Canada and the war-afflicted states. We have supported the unprecedented activism of Canada’s Ambassador to the United Nations, Robert Fowler, in making sanctions against UNITA bite.

A few weeks ago we convened a meeting of the importing countries in the British Foreign Office. I was able to welcome representatives of the trade from Antwerp, Tel Aviv, Bombay, Russia, the USA and Canada to discuss how to move forward together. Most recently we have led the way in the UN Security Council to get a ban on all uncertified diamonds from Sierra Leone, with the adoption of Resolution 1306 on July 5.

The proactive stance which IDMA, and others in the industry, are now taking can only work to the long-term benefit of the legitimate trade. And I wish to pay tribute to the leadership of individuals in this room who have acted as the catalysts for change.

I am struck by how the mood now contrasts to nine months ago. Then, I was told by some in the industry that the there was little prospect of a new approach, of promoting greater transparency and accountability, of starving the illicit diamond trade of its pickings. But look where we are today.

The newly agreed UN Security Council resolution 1306 on Sierra Leone requires both governments and the industry worldwide to enforce the ban on all uncertified diamonds. I am very keen to explore with representatives of the national associations and companies here how we best work together to enact this.

How can we learn from the experience of imposing sanctions on UNITA diamonds? What can we do better this time and do more quickly to help deprive the Sierra Leone rebel RUF of the means to wage war?

What can we do together to address the wider problem of ‘conflict diamonds’? I very much agree with your President, Sean Cohen, that it’s unrealistic to expect your members – the manufacturers down the supply chain – to resolve the problem by themselves. It is clear that you can not. You need action ‘upstream’ and you need governments to be prepared to introduce the necessary controls. I think you are right that we need to strengthen the ‘front line’ of the problem by tackling the trade in ‘roughs’.

Diamond Certification

That is why my government is actively backing attempts to introduce a certification scheme for rough diamonds. I hope the G8 Heads of Government will endorse work on this at their summit later this week.

We are active in the Kimberley process, where industry, governments of producing and importing states and representatives of civil society are developing proposals to stop the import of all uncertified roughs.

I am delighted to learn that leaders of the IDMA have formulated their own proposals that closely follow our thinking on the need for controls on the import and export of roughs from the producer countries. I am impressed by what you propose and I hope we can work together to achieve workable and pragmatic controls. And avoid unnecessary bureaucracies, or loading unnecessary burdens on producing countries and industry. Let’s make it simple and effective and get it in place urgently.

You are right to challenge governments to go beyond stating their concerns to taking action. Just as we are right to say that governments cannot crack this one alone. We need the industry. You need governments. Together we can work to get the best blend of government controls and industry self-regulation.

Our thinking on how best to take forward a certification scheme is that:

– Producer countries would agree not to export rough diamonds without a

proper certificate of origin;

– Importing countries would only agree to import roughs with such a

document

– A credible monitoring system – simple, effective, but not overly

bureaucratic.

I believe this is achievable and will ensure consumer confidence in the diamond industry. But we need to move fast. Building on the work done in the Kimberley Working group, we need to get agreement to an inter-governmental process to work out what such a scheme might look like and whether we are all willing to commit to it.

I can assure that the British Government will be active in putting its best efforts into making this happen. Working with other key actors – IDMA, the African producers (led by South Africa), fellow G8 members: Canada, Russia and the USA and Belgium and other EU partners.

I am delighted that IDMA is also pointing the way forward on what more the industry itself can do. The proposal that every diamond organization adopts a binding code of conduct on conflict diamonds, labor practices and good business practices is excellent. Especially the proposal that the codes be given teeth, through the expulsion of any member who fails to comply.

I very much hope that the diamond bourses are thinking along similar lines and that the World Federation of Diamond Bourses will act in concert with IDMA this week. To make this week’s Antwerp World Diamond Congress an even bigger success story for the diamond industry.

A Credible and Effective Code of Conduct

Might I suggest some pre-requisites for a credible and effective code of conduct, to build on what has been proposed in the industry?

Firstly, expulsion from a manufacturing association, or diamond bourse, has little meaning if you can carry on trading regardless. I think the industry needs to decide that only licensed manufacturers and dealers can trade. In that way the threat of expulsion can be given meaning.

I suggest you also need to benchmark clear minimum standards and encourage best practice. On the latter, I am encouraged by the move of companies, such as De Beers, to make affirmative statements on all sales invoices that they are not dealing in ‘conflict diamonds’. If we can get meaningful controls in place to allow only certified roughs into the leading and bona fide diamond trading centers which you represent, consumers will surely demand that the trade gives them confidence through a voluntary ‘chain of warranties’. I would welcome discussion on how this might best be taken forward, with the onus on the seller to make an affirmative statement to the buyer.

It makes no sense to disrupt the normal pattern of the trade and the way that companies add value by mixing and selling on between the different marketing centers and traders. So we must go for workable ways forward.

But the 21st century consumer increasingly demands the right to know. The voice of civil society cannot be ignored. If NGO’s are demanding greater transparency and accountability, we should all welcome their wake up call. And, like IDMA, not act defensively, but engage to get the best outcome for the industry and the consumer.

I believe that NGO’s like Global Witness have earned their place at the table. Because they have been prepared to listen and learn. And because they have networked effectively and helped bring the different actors together. The Foreign Office has been happy to contribute funding to their research into identification and certification. But that does not mean we agree with all their conclusions. We do not.

So, I welcome forward-looking thinking in the IDMA suggesting that if an international diamond council is to be considered, it should be a tripartite body with industry, government and civil society representation. But let us avoid heavy bureaucracies, inter-governmental procrastination and look instead to light and effective models of industry self-regulation backed by both full transparency and the support of government legislation.

I am pleased to have been able to join you at what I’m sure will prove to be a successful conference for IDMA. I hope it will be an important milestone in our efforts to give a clean bill of health to the industry by eradicating the minority of war diamonds which discredit the overwhelming preponderance of prosperity diamonds.

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