Antwerp, 28 January 2000
Preface
This concise brochure wants to suggest a solution for the problems concerning the import of uncut diamonds from Angola and other war-torn African countries. In doing so, it wants to extend a challenge to the diamond industry in Antwerp, Belgium and throughout the world.
The diamond sector needs a transparent, consistent and responsible structure with strong, efficient self-regulating mechanisms.
As official representative of the sector in Belgium, the Diamond High Council (HRD) would like to bring about this structure. The HRD invites you to study how better checks can be combined with safeguarding Antwerp’s position as a world diamond trade centre.
The economical interests of Antwerp as a global centre for diamond trade
Antwerp is rightfully called ‘a Diamond’s Best Friend’. Near enough 80% of all rough diamonds are traded in Antwerp. Besides, more than half of all polished diamonds passes through Antwerp. Antwerp indeed has the best diamond cutters in the world.
The highest international quality mark for polished diamonds is called ‘Cut in Antwerp’.
The diamond trade in Antwerp realises a turnover of 23.7 billion USD. The diamond industry represents 8% of the overall Belgian and 12% of the Flemish regional export activities. The diamond industry also occupies the third place in the BLEU trade balance.
The impact of diamond and diamond-related activities on the Belgian labour market is enormous. The flourishing diamond industry in Antwerp provides a large amount of jobs: 30.000 people are directly and indirectly employed in the sector.
The central geographical and strategic situation of Antwerp is a huge benefit in maintaining its position as world diamond centre. The four diamond markets in Antwerp each contribute in many ways to the development of the trade and the industry. They are an essential component of the commercial infrastructure of the diamond trade.
Antwerp and diamonds. Two concepts on their own. Both are telling their own story in Belgian economical history. But diamonds from Antwerp are also a concept. A concept that immediately evokes a strong but subtle image of exclusivity, dignity and style. Antwerp is undoubtedly the world centre and pivot of the diamond trade and significantly contributes to national economy.
The fact that so far Antwerp has been able to keep its position vis-à-vis the overwhelming competition is clear evidence of the dynamic and energetic approach of its diamond merchants. The metropolis also disposes of the necessary individual know-how and industrial skill to maintain its leadership position. Investments in technology and education are the two other cornerstones Antwerp relies upon to compete with other cutting centres in the world and to meet the ever stricter quality standards for finished products. Last but not least investments are made in the field of new sales techniques.
Diamond is Antwerp, Antwerp is diamond!
A short history of Diamond Office
The Diamond Office started off just after the liberation, end 1944. It was supervised by the Ministry of Economic Affairs, which adopted the role of supervising body and also played an important role in the resurgence of the diamond industry in Antwerp after the war. The exchange control imposed by the Ministry of Finance at the time, called for physical inspection on the production and purchase and sale of diamonds.
The activities of Diamond Office expanded continuously. After all, in Belgium the import and export of diamond remains subject to permits (cf. RD. 23.10.1987, RD. 06.03.1990). Each shipment needs to be expertised. The task of the experts consists in inspecting the imported and exported diamonds by means of the invoices. When inspecting a shipment of diamonds by means of the invoice, the experts need to consider the following matters: no significant deviations between the indicated price and the expertise value, the right weight, accurate indication of the diamond type.
For the Belgian diamond trade and industry Diamond Office has become a service-providing body. Today Diamond Office offers a full package of services. It takes care of all import and export formalities and also houses a customs office and a post office exclusively dedicated to shipping diamonds.
In co-operation with representatives of the Ministry of Economic Affairs and customs services, they make sure import and export take as little time as possible.
The inspection performed by Diamond Office on the import and export of diamonds is the strictest in the world. Belgium is the only country where diamonds are inspected physically — as opposed to the ‘paperwork’ inspection in all other Schengen countries for instance. In Belgium each lot is inspected, i.e. not on the basis of random checks.
The UN embargo against UNITA diamonds
In Angola government and rebels (UNITA) are fighting a war. The UN supports the government of Angola in this battle and proclaimed an embargo (12 June 1998 — sanction 1173 & 24 June 1998 — sanction 1176) against the import of products requiring the rebel’s authorisation. These products include rough diamonds, which are mainly recovered from rivers in Angola. Only diamonds with an official certificate issued by the government in Luanda, the capital of Angola, may be traded. Mr. Robert R. Fowler, UN Ambassador, in charge of the Sanction Committee, supervises the effective compliance with this embargo in the different member states.
In addition expert workgroups of the UN under the authority of Ambassador Mollander were created to make the belligerent parties resume peaceful dialogue.
In practice it is hard to make a distinction between diamond recovery by the government and diamond recovery by the rebels. According to certain sources some government members would be buying diamonds from the rebels. For the worldwide diamond sector and particularly for the diamond sector in Antwerp and Belgium, this embargo has certain consequences. After all Antwerp is the largest importer of rough diamonds. In total about 80% of the rough diamonds are marketed in Antwerp.
Global Witness and others recently put diamond recovery and diamond trade in war zones on the foreground of the public forum. According to Global Witness and others this diamond trade supports the arm trade of the rebels. War in developing countries is not only made possible by minerals, they are often the stake of it. The human rights organisations rightly demand inspections to keep diamond trade from benefiting rebel organisations.
Actions of the HRD as a result of the UN embargo against Angola
The HRD is well aware of the problem situation in Angola, and in case of expansion, in other developing countries. They established the Angola Task Force to improve the efficiency of the sanctions.
On 23 November 1999 the chairmen of the Federation of Belgian Diamond Bourses and Beurs voor Diamanthandel CV, the Antwerp Diamond Club CVBA, the Vrije Diamanthandel NV and the Antwerpsche Diamantkring CVBA undersigned a resolution in which they express their concern with respect to the conflict in Angola and urge their members to comply with the UN resolution.
The HRD organised a public awareness action, a petition addressing the Antwerp diamond merchants, which postulates not to accept diamonds from Angolan rebels. All diamond traders were asked to sign this petition. This is how the HRD works on the ethical awareness in the sector.
In the context of the UN embargo the HRD also implemented a new system of certificates of origin in Angola. When imported in Belgium the legality of the diamonds is checked with the government in Luanda by means of a confirmation document. Such checks will make the transit trade between Angola and Belgium fully transparent by matching Belgian import statistics to Angolan export statistics.
Furthermore the certificate can not be falsified. It is a new technological document, containing a watermark that will be made in Switzerland.
A third check is carried through at customs inspection, where the importer also has to declare officially that no UNITA stones are involved.
The first successes of the actions undertaken have already been reached.
Commentary
In the above context diamond is seen as a negative and destabilising factor. But there is another side to the picture. In countries like South-Africa, Namibia and Botswana — where checks are transparent — the diamond industry and diamond trade contribute positively to economic development and stability.
And, of course, all data should be seen in their proper context. Diamonds from countries like Sierra Leone, Liberia and Ivory Coast constitute only a small part of the overall diamond trade in Antwerp. Diamond imports from Sierra Leone amount to just 0.12% of the total, those from Liberia to 1.17% and the figure for Ivory Coast is 0.34%. In recent years the import of uncut diamonds from these countries has fallen sharply.
On the other hand, the part played by the oil industry in Angola and other areas of conflict should not be underestimated. Whereas the diamond industry accounts for just 10% of Angolan revenue, the oil industry accounts for 60%.
In addition, cruel wars are fought in countries without any diamond industry at all, for instance Uganda and Sudan. In these countries oil is in fact an important source of war. Canada for instance (Tallsman) sponsors a pipeline in Sudan. The heart of the matter is to get to grips with the arms trade.
Finally, we may wonder whose interests are actually being protected in this affair.
Further steps towards a global solution: the implementation of transparent export structures in African diamond-exporting countries
The HRD can and wants to go further than that. Antwerp, being the largest diamond centre in the world, is willing to take on its responsibility. Even more so because the HRD knows the historic role Belgium played in Africa. The HRD proposes Diamond Office as a model for inspections in the diamond trade.
In about twelve large diamond-producing countries in Africa (such as Sierra Leone, Congo, Liberia, Ivory Coast, Guinea,…) the HRD would like to offer its full co-operation in the establishment of diamond checkpoints, which should avoid illegal diamond trade. Together with the Belgian government it wants to organise bilateral talks with and research in these countries aimed at the establishment of such checkpoints.
Both Africa and the Antwerp diamond sector have much to gain. The African countries wish a conclusive control on this profit-making sector. Because the profits obtained from the diamond trade can take the African countries involved to a higher level of prosperity. And, being a world centre of rough diamonds, Antwerp cannot afford to lose part of its market share because of a bad image.
The objective of the HRD is to set up a structure which can check the origin of diamonds in a transparent manner. The HRD together with the Institute of Gemmology disposes of the necessary knowledge to verify the origin of diamonds and to compose a complete database in the future. The LA-ICP-MS technology, available from the Physio-Chemical Section of the Geology Department of the University of Louvain — with whom the HRD signed a collaborative agreement in October 1999 — will, when linked to an extensive database, enable us to provide a scientifically sound answer to questions regarding the determination of origin.
In addition to the diplomatic actions that need to be undertaken to clear the way, there are also customs-technical and diamond-technical actions to be performed.
By means of the latter action the HRD wants to assist the African countries in setting up a solid infrastructure.
In practice that would imply:
This structure has proven its usefulness in Antwerp and can be copied in Africa.
Joint venture with the Belgian government
In view of the importance of diamond export in Belgium, the HRD proposes to engage in a joint venture with the Belgian government to execute this inspection plan. This will enhance the overall credibility of the plan.
The historic role Belgium played in Africa is also significant in this respect. This role has always left its mark on Belgian and African politics. The renewed interest of the Belgian government in African politics is the evidence thereof. Besides there are some humanitarian interests to be defended. The government should contribute to the termination of the ongoing wars.
Conclusion
With the implementation of an efficient control structure in Africa, on the basis of the Diamond Office model at Antwerp, enduring and correct trade relations between Belgium and Africa can be established and maintained.
Only then we can rightfully say: ‘Diamonds become transparent’.