Conflicted about Diamonds

I love diamonds.  If I’m honest, they’re my favorite gemstone.  For me, nothing sparkles quite like a diamond.  As a gemologist, of course I appreciate many gemstone varieties and I am fascinated by the complex chemistries of many gem species. But the simple way that one atom, Carbon, combines in a simple cubic structure to make the hardest gemstone on earth; one that breathes fire and casts rainbows across the room, just gets me every time.  A diamond seems like a simple thing, it seems pure, but the route that a diamond takes from mine to market is anything but.  Many of us were first exposed to the complexities surrounding a diamonds journey when we watched the movie Blood Diamond.  That movie sparked consumer outrage when it was released in 2006, however six years earlier diamond producing countries had started working to establish the Kimberley Process (KP).  The KP is carried out by a group of member states with the expressed goal of stopping the trade of diamonds ‘used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments’.  For many years, jewelers have reassured clients that the diamonds they offer for sale are conflict-free by saying they are KP certified.  While that may be true, the reality is that the very narrow scope used to define “conflict diamonds”, does little to reflect the serious ethical implications associated with mining diamonds to meet jewelry demand.

Conflict Free ≠ Everything All Good   

I had the opportunity last week to participate in a webinar organized by the Chicago Responsible Jewelry Council related to the Kimberley Process and some of the human rights concerns documented by the Kimberley Process Civil Society Commission (KPCSC).  The KPCSC is made up of non-governmental organizations (NGO’s) that observe the conditions at mines located in member countries and try to ensure that work practices align with responsible corporate conduct.  As recently as September 2019, the KPCSC put together an excellent report detailing documented human rights violations occurring at diamond mines across Africa.  The incidents ranged from the murder of Artisinal Small-scale Miners (ASM’s) who had trespassed onto the mine site, to demanding bribes from villagers who lived within the mine concession just so that they could pass through the checkpoints to get to and from their own homes.  They also related details of an active lawsuit filed by villagers downstream of the Letseng Mine in Lesotho against the mine owners.  The 19 villagers are requesting to be relocated because their drinking water has been contaminated by the mine, and they live in fear that the dams used to contain runoff from the mining operation could burst and overflow into the village.  Access to clean drinking water is a basic human right, and I find it disturbing that in August of this year, the industry was celebrating the discovery of a 442-carat rough diamond from the Letseng mine that is estimated to be worth $18M, when the local people are clearly not reaping those benefits.

How can these things happen in countries with diamonds that are Kimberley Process certified?  Well, as you can see above, the Kimberley Process is very limited in the scope of abuses that they seek to certify against.  Unless the reported violence is related to diamonds being used ‘to fund rebel groups seeking to overthrow legitimate governments’, many of the member states feel that such occurrences are outside of their responsibility and would be handled by other NGO’s like the United Nations. In order for changes to be made to the scope of KP activities, ALL member states must be in agreement, as they operate by consensus.  There is a process for ethics concerns to be brought to the member states, and they can suspend trading from a particular mine for a period of time.  Such was the case when trading from the Marange mine in Zimbabwe was suspended in 2009.  Ultimately trading was reinstated without any long-standing restrictions being implemented at the mine because the member states could not agree on a path forward.  KP certifications are applied at the country level, not for a particular mine, so revoking the certification for the country as a whole, also penalizes mine sites where workers and the community are treated fairly.

An added complication with restricting diamond exports from a specific location is that there are two types of mining activities that take place in many countries. Large Scale Mining (LSM) operations are run by governments, often in conjunction with multi-national mining companies. These mine sites require huge amounts of capital to operate and are highly mechanized, which may result in less employment opportunities to the local residents than you might think. Alternatively Artisanal Small-scale Mining (ASM) is very labor intensive for the miner but can provide more immediate benefit to families in the area if diamonds are found that can bring in needed income. This competition for scarce resources between LSM’s and ASM’s is a problem that affects mining operations in many sectors. Some of the issues arise because of differences in perception between the two groups on who has “rights” to the land where the resource, be it diamonds or another valuable commodity, is located.  The World Bank in 2009 put together a guide detailing some of the conflicts between LSM’s and ASM’s in an attempt to find ways for both groups to work together.  ASM’s in many sectors account for a significant portion of mine output and therefore their contribution should not be discounted.  The local villager may feel that they have the right to mine land where they live, and perhaps their family has mined in the area for generations. The LSM however, may have gone through the “proper” government channels to obtain the right to mine in the area, regardless of how the land was traditionally used and how the output may have supported families in the area.

In cases where local ASM’s have lost the right to mine land close to their homes, many run the risk of trespassing onto mine property just to try and feed their families.  The KPCSC has documented cases in Angola and Tanzania where ASM’s were either displaced or subject to torture and worse because of trespassing onto land that is now part of a mining concession.  In some cases, the local people are so impoverished that they are willing to risk being caught and punished just for the chance to earn some money for their families.  This seems in sharp contrast to reports from the Natural Diamond Council (NDC) which is comprised of seven mining companies who together account for 75% of the world’s rough diamond production.  In 2017 the NDC hired Trucost to perform a study titled The Socioeconomic and Environmental Impacts of Large-Scale Diamond Mining.  Trucost is a part of S&P Global and is a leader in carbon and environmental data and risk analysis.  The Trucost report concluded that members of the NDC created a net benefit of $16B to the communities in which they operate, citing that wages paid were an average of 66% above the national rate for each country.  The KPCSC however feels that as a whole, the benefit of diamond mining to Africa is negligible at best, stating that due to illicit diamond trading and corruption there is data to support that African countries lose almost $50B annually.

Wait, traders buy diamonds without KP certificates?

One might wonder how illicit trading can occur when the KP Certification is represented so strongly as the only way to get reputable stones in the hands of consumers.  Well, after diamonds are mined, they are sold to manufactures to be cut and polished and then they make their way into finished jewelry.  Manufacturers often prefer to buy parcels of stones that are of similar size and quality.  So, what ultimately happens is that diamonds from different mines, and possibly different countries, are sorted together and then sold.  It is possible for an unscrupulous dealer to purchase stones with cash that may not have a KP certificate and it would be impossible to identify them.  There are reports that when trade from the Marange mine in Zimbabwe was suspended, traders would still purchase the stones, but only at 40-50% below market price due to the absence of the KP certificate.  This effectively robbed the local economy of their profit AND allowed stones from a location with known human rights abuses to enter into the diamond supply chain.

With all of this information, it’s easy to get carried away and say to ourselves that diamonds are just pretty, they’re not necessary for existence and, I just won’t buy any diamond so that I can assure myself that I’m not supporting human rights abuses.  Well, I’m here to tell you that it’s not so simple.  NGO’s track issues with human rights and child labor across industries and most of them have significant issues.  The Organization for Economic Cooperation and Development (OECD) is an international group that works with governments, citizens and other NGO’s to find solutions to a wide range of social problems related to globalization.  In 2019 they published the results of a study they conducted in the Democratic Republic of Congo (DRC) related to cobalt and copper mining.  The DRC produces 60% of the world’s supply of cobalt which is primarily used in rechargeable batteries for everything from cell phones to electric cars.  They found human rights abuses very similar to those occurring in diamond mining areas including; abuse of power by private security firms against ASM’s, instances of child labor and lack of clear chain of custody for mined materials.  So, the decision to purchase an electric car or an iPad has similar human rights implications to purchasing a diamond.  Some would argue that you may purchase diamonds once or twice in your life, but most of us get a new phone or computer device every couple of years, so the implications from your electronics purchases may be worse.  Something to think about.

So, what is a person who loves diamonds, but also loves humanity, supposed to do?  Well, if you need to go out a buy a diamond tomorrow, there are a couple of options.  One would be to buy a Canadian diamond, but many Canadian diamonds are cut in other countries so there are traceability issues there.  I believe there are Canadian jewelers that can ensure that the diamond was mined, cut and polished in Canada, however their production capacity is limited.  Another option is to purchase a Tiffany diamond.  Beginning in October 2020, the company is providing full traceability for their diamonds to provide consumers with confidence that their purchase is completely “conflict free”.  Tiffany & Co is able to do this because they have a vertically integrated supply chain which allows for complete transparency for any diamonds they use in finished jewelry.  My current favorite option is to purchase a reclaimed diamond.  Reclaimed, pre-owned, recycled, vintage; all of these are terms for diamonds that had a previous existence in another piece of jewelry and are now available for you to make your own.  Sure, at some point it is likely that some person or persons were mistreated in the acquisition of the diamond that you are looking to re-purpose, but you are doing your best to end the cycle.  A lab-grown diamond would be another option, but studies have shown that the carbon footprint for a lab grown diamond is larger than for a mined diamond.   

I know this was a lot of information, but I was very appalled, indignant and confused when I started to look more into the current state of the diamond supply chain and I wanted to share it with you.  One of the takeaways from this work is that, this is not a straightforward issue with a clear resolution.  Diamond mining and the associated profits provide economic benefit to many communities around the world.  At the same time, there are specific human right abuses that are known to occur, and with to the lack of traceability in the supply chain and the limited scope of the Kimberley Process, it is next to impossible to be assured that the diamonds in your jewelry are entirely ethically sourced.  Having open discussions with your jeweler or designer is the best thing you can do to feel completely comfortable with your purchase.  This is something that I will continue to talk about and I would love to engage with you about.  Feel free to contact me if you are interested in reading some of the reports referenced above, I am happy to share the links with you.  As always, I welcome your comments and feedback.

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