Thousands Of Carats Of Blood Diamonds May Be Set To Hit World Markets

Stockpiled diamonds from the Central African Republic are set to be sold when an export ban is lifted, but Amnesty International has said separating conflict diamonds will likely be impossible.

Millions of dollars' worth of conflict diamonds could make it on to the world market under new rules allowing the export of stockpiled gems from the Central African Republic, Amnesty International has warned.

Following a coup, the export trade — previously one of the country's major industries — was banned in 2013 under international rules preventing the trade of "conflict" or "blood" diamonds. The bloody internal conflict that followed the coup led to thousands of deaths and saw the forced takeover of several mining regions.

The group of militias, collectively known as Séléka, was ousted the following year and a new interim administration took over — CAR is scheduled to have elections next month. But during the conflict, and the pillaging, killing, raping, and looting by militias following their fall has been linked to an estimated 5,000 deaths and the displacement of tens of thousands of families.

The international ban didn't affect buying or selling of diamonds within CAR, meaning the country's two major buying houses — the only bodies licensed to export diamonds — have stockpiled tens of thousands of carats of diamonds, ready to sell.

By international agreement, the export ban on diamonds from CAR is in the process of being partially lifted, allowing diamonds from these stockpiles to be sold into the USA, Europe, India, and China — the major markets for diamonds.

However, both U.N. investigators and Amnesty field researchers have concluded that in many cases middlemen for the two diamond houses were unable to ensure their stock had not originated from mines operated directly by militias, or from mines in militia-controlled areas, whose owners were being extorted for proceeds by the violent gangs.

"The main diamond collectors in Berberati, Hassan Ali Fawaz and Bassem

Bahim, told the Panel that they could not give assurances that their diamond

purchases did not benefit armed groups," the U.N. Expert Panel report states.

"Another collector in Berberati, Ahmed Adnan, told the Panel he never visited any mining site to verify the security conditions," it continues.

The panel report noted several of the middlemen who said they bought from militias told investigators they sold to Sodiam, one of the two major dealers in CAR who have licenses to export diamonds.

"The Panel believes that Sodiam's purchases have incidentally financed anti-balaka [militia] members," the report concluded, "but that the risk of such financing is now being mitigated by the company with the implementation of due diligence procedures."

Sodiam, through the UK law firm Carter Ruck, strongly disputed any such suggestion in a letter to Amnesty International.

Sodiam, they said, had ceased trading with at least one of the middlemen named in the report, and had never "purchased anything that could reasonably be described as a conflict diamond."

Additionally, Carter Ruck told Amnesty the trading house had brought in a third party to conduct an audit of the diamonds it had stockpiled, "double-checking the efficacy of its due diligence procedures", which found Sodiam had "taken effective measures to ensure that all goods the company has purchased in the east of CAR have been kept separate from those goods it has purchased in the west."

CAR's other buying house, Badica, was more firmly criticised in the U.N. experts' report, which concluded that:

"Badica's legal and illegal purchases ... provided sustainable financial support for the former Séléka, in violation of the United Nations sanctions regime.

"Already in April 2014, the Panel had endeavoured to discuss Badica's purchasing policy with its managing director in Bangui, who dismissed the Panel's queries, claiming that the company had ceased purchasing diamonds."

Last month Badica was added to the U.N.'s sanctions list, for providing "support for armed groups in the Central African Republic ... through the illicit exploitation and trade of natural resources, including diamonds."

The Kimberly Process partially lifted the export bans for diamonds from CAR for certain regions of the country not controlled by militias, currently being agreed and approved. The rules will then allow for stockpiled diamonds to be sold, subject to "audit."

However, the Amnesty report concluded "it is likely that some of the stockpiled diamonds have contributed to funding armed groups."

"They would therefore constitute 'conflict diamonds' under the terms of the Kimberley Process...the President of the World Diamond Council, which represents the diamond industry within the Kimberley Process, has said that any diamonds bought during the ban should not be exported as they are 'contaminated goods'."

The report also said that millions of dollars' worth of conflict diamonds are believed to have been smuggled out of CAR through neighbouring countries, and warned that current due diligence procedures may not be enough to prevent some of these arriving in major diamond markets.

It also highlighted the conditions in CAR's diamond mines, which are often small-scale affairs operated independently. Quoting an International Crisis Group report, it says:

"The hard physical labour causes hernias and exhaustion, and injuries are common. Miners die under collapsed pit walls, and divers sometimes do not resurface. Many miners and their families leave their villages to live in makeshift camps near the mines, where they are even more vulnerable to malaria and often contract parasites by drinking from streams dirtied by their own excrement ... Education suffers, because parents encourage their children as young as eleven to dig or sieve instead of going to school."

Amnesty International called on the government of CAR as well as bigger players in the diamond trade to make sure no company could profit from conflict diamonds, as well as addressing other concerns through the supply chain in the diamond industry.

"If companies have bought blood diamonds, they must not be allowed to profit from them," said Amnesty legal adviser Lucy Graham. "The government should confiscate any blood diamonds, sell them, and use the money for the public benefit.

"International diamond companies need to look closely at the abuses along their supply chain, from child labour to tax abuse."

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