Russia’s Diamond Industry Under Pressure of Stricter Sanctions

Since May 2013 the Central African Republic has been suspended from the Kimberly Process (KP) – a measure maintained by the mechanism’s annual plenary in Guangzhou, China, this November. The CAR’s transitional authorities have been seeking at least a partial lifting of this export ban so that the country might benefit from the much needed revenues its diamonds can generate.1 However, the authorities in this beleaguered state have thus far failed to secure control over both the security situation and the country’s diamond trade: a recent UN expert report estimates that the CAR has lost US$24 million worth of diamonds to smuggling since May 2013.2 Indeed, IPIS’ own investigations – the findings of which are outlined in a report released end November 2014 – have found that large tracts of diamond producing areas in eastern CAR remain under ex-Seleka control, with stones continuing to access international markets. This IPIS Insight will elaborate on IPIS’ findings in its recent report, Mapping Conflict Motives: the Central African Republic – the latest in our conflict mapping series. It gives some insight into the modes of exploitation used by armed groups in the CAR to profit from diamonds and the role these stones have played in the complex and shifting dynamics that characterise the on-going crisis, both in the east and west of the country. It will then briefly consider the KP’s role in this context.

Financial Nigeria Journal, 2014

In Steinbeck’s poignant novel The Pearl, a poor Mexican fisherman, Kino, discovers to his dreadful cost the devastating power of natural wealth. He finds a huge pearl and begins to ponder how wide his horizons have broadened, as he would now be able to have a better life and send his son to school. Nonetheless, instead of wealth and prosperity, his treasure ultimately brings him much evil. Quoting the book, “all manner of people grew interested in Kino— people with things to sell and people with favors to ask. Every man suddenly became related to Kino’s pearl, and Kino’s pearl went into the dreams, the speculations, the schemes, the plans, the futures, the wishes, the needs, the lusts, the hungers of everyone, and only one person stood in the way and that was Kino.” In the quote above, if we were to replace “Kino” with “Africa” and “pearl” with “mineral resources,” Steinbeck’s story suddenly points to an all too familiar and distressing reality in Africa. As the story goes, the local pearl buyers conspire to cheat him, pretending that its value was insignificant, causing him to leave town to go to the big city to sell the pearl himself. En route, however, robbers follow him and while hounding him for the pearl, kill his son. Kino’s newfound treasure is unique and irreplaceable, becoming more important than life, but in the end it becomes worth less than nothing. Many African countries, being blessed with rare and precious minerals, often find themselves worse off for having found them. Like Kino’s pearl, the discovery of oil or diamonds in the African continent has induced envy and greed. It has turned international (and local!) traders into robbers and corporate executives into bounty hunters, encouraging rivalry over cooperation, and often causes more harm than good to the finder.

The title of this compilation is a tad misleading insofar as it includes works on additional mineral resources found in more than a few countries on the African continent, as well as oil and gas (hydrocarbon) exploration and production (hence the 'minerals-energy complex'), all by way of placing the mining of diamonds within a comparative context and the proverbial big picture (or 'pictures'), one painted within the frame and on the canvas of industrialization and political economy in African nations (this includes parts played by unorganized and organized workers, both urban and rural). I have therefore also included titles that serve more or less as introductions to the continent's modern history, politics, and environment in the wake of colonialism and post-colonialism. Finally, I have appended a list of bibliographies with weak to strong family resemblance to this one.

This IPIS Insight will elaborate on IPIS’ findings in its recent report, Mapping Conflict Motives: the Central African Republic – the latest in our conflict mapping series. It gives some insight into the modes of exploitation used by armed groups in the CAR to profit from diamonds and the role these stones have played in the complex and shifting dynamics that characterise the on-going crisis, both in the east and west of the country. It will then briefly consider the KP’s role in this context.

Environmental Management and Health, 2000

The Republic of Sakha (Yakutia) in eastern Siberia is geographically the largest territorial unit in the Russian Federation. Yakutia has a rich diversity of mineral resources and produces 99% of Russia's diamonds, worth annually 1.5 billion US dollars and amounting to between 20-25% of the world's output. During the period 1974 to 1987, ten "peaceful" underground nuclear explosions were made in the diamond province. One of these directly supported the diamond mining operations, but it "back-fired", contaminating the surface with radionuclides such as caesium-137, strontium-90, plutonium-239, and 240, and americium-241.

Gems & Gemology, 2005

The Kimberley Process Certification Scheme was born out of international security concerns triggered by rebel groups that were using the proceeds of rough diamonds to fund conflict. Rebel groups used rough diamonds, acquired through gross human rights abuses, to fund conflicts aimed at overthrowing legitimate governments. The situation was particularly calamitous and ruinous in Angola, Sierra Leone, Liberia and the Democratic Republic of the Congo. In response to this situation a unique coalition of governments, civil society groups and stakeholders in the diamond industry, came together with the support of the United Nations and established a scheme to separate illicitly acquired diamonds from legally traded diamonds. The historical situation at the time allowed the KPCS to define conflict diamonds as "rough diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments". However, the exploitation of Marange diamonds in Zimbabwe shows that the use of the proceeds of so-called conflict in diamonds is not limited to rebel movements aiming to wield power but such conflict can be political, economic and military in nature. In Zimbabwe, there was a link between human rights abuses and the ZANU PF led government. ZANU PF financed terror using Marange diamonds. There was international dissatisfaction with the way the KPCS scheme certified Marange diamonds. The USA maintained sanctions on Zimbabwe and Global Witness withdrew from the scheme in protest over the refusal of the scheme to evolve. On the other hand, some participant countries applauded the scheme for its work in certifying Marange diamonds. This study evaluates the efficacy of the scheme in curbing conflict diamonds brought into legal trade by legitimate governments. The study concludes that there is need for reform in the KPCS to successfully separate conflict diamonds from clean diamonds in the face of changing forms of conflict. In meeting its objective, the KPCS applies an exclusion mechanism where participants of the scheme do not trade with non-participants. The World Trade Organisation (WTO) rules prohibit discrimination amongst participants and the KPCS clearly violated this ii rule. Scholars have debated human rights exceptions in the General Agreement on Tariffs and Trade (GATT). There is strong legal support for the idea that the KPCS is justified under GATT article XX and XI. The KPCS is presently operating under a waiver granted from by the WTO under article IX (3) and (4). Another challenge the scheme faces is the legal nature of the scheme. Scholars do not agree on whether to classify the scheme as hard law or soft law. There is a need for clarity on the legal nature of the scheme. Key words: conflict diamonds, blood diamonds, clean diamonds, human rights abuses, Kimberley Process Certification Scheme