The first time I heard the term ‘blood diamonds’ was in Namibia, during a trip to Angola. Let me first tell you how I came across blood diamonds there and then I will explain what exactly they are.
Anyway, we were on our way to the Himba tribe, who live in northern Namibia. The road there is terribly bad, a long drive full of, bumpy bumps, and scrambled roads. Eventually, we arrived at the Himba village and were welcomed by our guide Franciscus.
He explained that especially the women rub themselves with a kind of red clay as a sunburn cream and against insects. And by rub in, I mean that from the utmost tip of their hair to the smallest toe was plastered with that red clay.
They did not wash because that clay not only made that impossible but also unnecessary, according to the ladies.
When we were pretty much done looking, Franciscus suggested we go to Angola. My question that we didn’t need a visa for that was met with laughter. Well, I like an adventure, so off we went.
Walking to the border river, watching carefully to make sure we didn’t see any Angolan border guards (that could have been a play because there really wasn’t anybody in sight). Then we had to get into a bathtub (a real one, yes), the water filler cap of which was briefly closed.
We rowed to the other side and, lo and behold, there stood a small hut, which was supposed to be the local pub. I did not trust the offered brew (I am not that adventurous anymore) but Franciscus gloriously lapped up my drink.
Meanwhile, the two gentlemen were fiddling a bit with a bag and money. Apparently, they came to a sale because Franciscus and the pub owner looked happy. On the way back, the bathtub turned out to be not quite watertight after all, but we made it back in one piece.
Still, I couldn’t contain my curiosity, so upon returning to Namibia, I asked our guide what exactly he had bought. Very mysteriously, he opened the grubby little bag, and out came unsightly black pebbles. Shit… I knew immediately, this was wrong. Those were blood diamonds.
Blood diamonds are also called conflict minerals because a lot of violence was used in their extraction, or people died while extracting these gems. In the 1990s, these diamonds in particular played an important role in financing conflicts in the south and west of the African continent.
Between 1975 and 2002, Angola was experiencing a civil war. The government army (MPLA: Popular Movement for the Liberation of Angola), UNITA (National Union for the Total Independence of Angola), and the FNLA (National Liberation Front of Angola) all fought to gain control of the diamond mines.
With the proceeds from those diamonds, they could buy weapons, ammunition, and supplies, and they could pay their soldiers. The United Nations has calculated that the warring factions in Angola earned four billion dollars from the sale of diamonds between 1992 and 1998.
These blood diamonds were also the reason why the civil wars in Liberia (West Africa, 1989-2003) and Sierra Leone (1991-2002) went on and on, despite the lack of popular support.
Local farmers were forced to work in the mines, so insufficient food was grown. And if they did not work hard enough or diamond yields were disappointing, people were regularly executed.
By the late 1990s, it became clear to the international world that diamond mining was financing and thus perpetuating wars. In 1998, the NGO Global Witness published a report on these practices and the United Nations quickly adopted the conclusion.
This resulted in the Kimberley Process Certification Scheme (2003), which aimed to stop the trade in blood diamonds. This resolution forced diamond traders and the countries where diamonds were mined to indicate where the diamonds came from through certificates. So that diamond buyers could avoid blood diamonds.
This abuse also became known to the general public through the 2006 film ‘blood diamond’ starring Leonardo DiCaprio.
It was a step in the right direction, but not the end of this evil practice. In Ivory Coast/West Africa, diamonds are still smuggled out of the country without certificates. This system also lives on in Rwanda and Congo.
And other minerals such as coltan, tungsten, and gold, used to manufacture electronic devices are taking over the position that blood diamonds once had.
And then Zimbabwe! The diamonds mined here are not considered blood diamonds, according to their literal definition. But President Mugabe and his ministers have enriched themselves from diamond mining. The finance minister complained that revenue from the diamond mines was only $35 million, while he had counted on $450 million. Guess where the difference went.
Recently, a report came out in Canada (from the PAC) stating that ministers and senior military officers in Zimbabwe have been stealing at least a million and a half dollars worth of diamonds over the past 4 years. No blood diamonds perhaps, but the population has been robbed.
And now there is another ongoing conflict where the proceeds of diamonds also play a role. The size of that role is not entirely clear, but still, a role through which you may say that the system of blood diamonds is re-emerging, or still continuing.
The conflict I am talking about is the war between Ukraine and Russia, with the trade in Russian diamonds having a nasty smell to it.
According to the definition of ‘blood diamonds’, these must be diamonds whose profits end up in the pockets of local warlords and rebels. And by this definition, Russian diamonds cannot be called blood diamonds.
While the war between Ukraine and Russia is nevertheless financed in part (albeit small) by the profits from Russian diamonds. As far as I am concerned, they can be called blood diamonds!
Just a few figures to put things in perspective:
About 30% of the world’s diamonds are produced in Russia, and most of them are by the company Alrosa, which has very close ties to the Kremlin and to Putin through its CEO Sergey Ivanov. This Ivanov and the Alrosa company are on the sanctions list of the United States, Canada, and the United Kingdom, but not of Europe!
In the first four months after the Russian invasion of Ukraine, Belgium, where the largest diamond trade in Europe is based in Antwerp, imported $870 million worth of diamonds. And that rose to $1.8 billion worth of diamonds by 2022. That is 25 percent of the total world trade in diamonds.
Through Antwerp, about 80 percent of the world’s diamonds are traded, as well as cleaved and polished. The other part is processed in Mumbai/India, Dubai, and a small part in Amsterdam.
Those diamonds are purchased from the Russian state-owned company Alrosa, and the revenue largely flows into the state coffers, which funds the war, according to a recent survey. There is even an Alrosa branch in Antwerp.
Moving on to the Kremlin’s influence on the Russian mining company Alrosa. The Russian state is 2/3 owned by Alrosa and has a close relationship with the military. This can be seen in a Russian submarine called Alrosa. CEO Sergey Ivanov’s father holds a high position in the Kremlin.
You might rightly say… yes but, surely the Kimberley Process Certification Scheme has been in force since 2003. Surely then you know where those diamonds come from and you don’t buy those Russian diamonds, right? You’re not buying blood diamonds then, are you?
Enne… another point, why does Belgium, or rather the dealers in Antwerp continue to buy those Russian diamonds?
You are absolutely right, but there are some snags.
Under the Kimberly Process Certification Scheme, every diamond must come with a certificate of origin. However, if Russian diamonds are traded to Mumbai/India or Dubai, cleaved, and cut there, then those diamonds get an Indian or Dubai certificate of origin. The fact that these gems were mined in Russia is then no longer reflected.
And the Antwerp traders use that argument too. They feel that a boycott of Russian diamonds makes no sense at all. In a short time, these gems would not pass through Antwerp, but through India or Dubai, with Antwerp losing a lot of money. And the customer, who does not want to buy blood diamonds, no longer knows which diamonds are “good” and which are not.
The Belgian government has no intention of sanctioning the trading of diamonds from Russia by itself, neither the bank account of CEO Sergey Ivanov nor his company Alrosa. And Europe has so far failed to do so.
General international sanctions do make trading with Russia much more difficult, for instance, because payment traffic between Europe and Russia has been restricted. But importing blood diamonds is still legal.
Then there is an ethical aspect, though, that seriously affects diamond trading in Antwerp, in addition to the sanctions policy on payments. Some major diamond buyers refuse to buy Russian diamonds and demand proof of where the diamonds originally came from, i.e. where they were mined.
For example, Tiffany’s from the USA demands a guarantee before buying diamonds. On the day of the raid on 24 February 2022, Richemont/Cartier declared they would no longer buy Russian diamonds. And over time, Chopard, Signet, and Pandora have followed suit.
The buying and trading of Russian diamonds also caused a stir in the international Responsible Jewellery Council, which is supposed to watch over ethics in the international diamond trade. Also because Alrosa remained a member of this body and was allowed to continue carrying the ‘responsible’ certificate. Many leading brands withdrew from this organization, the CEO resigned and eventually Alrosa itself left.
Some Antwerp traders have already stopped buying Russian rough diamonds of their own accord because they do not want their actions to finance the war between Ukraine and Russia.
But why doesn’t the Belgian government want to introduce a sanction against the trade in Russian blood diamonds, surely that’s what you can call them.
The argument is that this would cost many jobs in Antwerp. However banning Russian oil, gas, and oil has also cost a lot of jobs in the rest of Europe and has plunged a large part of the population into a financial crisis because they can no longer pay the energy bill and inflation has increased the cost of living by about 10%. Yet people continue to support Ukraine and comply with sanctions.
And that while at the moment 80% of the trade in Russian diamonds has already disappeared, one might wonder if the remaining 20% is worth opposing a sanction on this trade. The Belgian argument against it is that it is not that Russian diamonds are no longer being sold at all. No, they are now traded to India and Dubai and come to Europe with a good certificate. So this does not generate any profit.
Another argument is that the profit of the diamond trade for Russia is only 1% of the total gross product. And that the impact of that profit on financing arms and ammunition is very small. That may be true, but explain that to the mother whose son has just been killed by that one bullet financed by profits from blood diamonds. Surely we have a conscience too, ladies and gentlemen of the Belgian government!
A third argument is that instead of going to Antwerp, Russian diamonds are traded to Mumbai/India and Dubai, and can then be traded around the world with a certificate without any problems. While Antwerp will suffer as a result.
However, the Belgian government will not vote against a proposal in the European Union to ban the trade of Russian diamonds with a sanction. Incidentally, it also has another idea that is now being worked out.
The Belgian government wants a modification of the Kimberley Process Certification Scheme. Not only should every diamond carry a certificate of where the gemstone was last worked, but also where the stone was mined. That way, you know exactly where the diamond comes from and buyers and customers can make their own choice not to buy Russian blood diamonds.
Another trump card is a ban on Russian diamond trade in the G7 (Canada, USA, Germany, France, Italy, Japan, and the UK), which will close 70% of the Russian diamond shortcut via India and Dubai. Indeed, the G7 countries control 70% of the global diamond trade.
The fact is that if Antwerp wants to keep its profile as the ‘ethical diamond city’ where you cannot buy blood diamonds. The city contributed to the fact that African blood diamonds can no longer be traded internationally. Then they will have to loudly and clearly turn away from trading Russian diamonds. Otherwise, their ‘ethical’ label can no longer be taken seriously and they will be seen as untrustworthy. A mortal sin in the diamond trade built on trust.
To put some pressure on the European Union to put Alrosa, Sergey Ivanov, and the trade in Russian diamonds on the sanctions list, President Zelensky has called for it. He says peace is more important than diamonds. And as far as I am concerned, he has a point there.
If you think about it, there are three types of diamonds: ‘good diamonds’, which are known not to have been mined in Russia. There are bad diamonds mined in Russia and ‘unknown diamonds’.
Of these unknown diamonds, it is not clear what their original origin is. They are often diamonds in jewelry, which have been in someone’s possession for a long time and whose origin is unknown. Or diamonds, which have gone from one diamond dealer to another and often mixed with other unknown diamonds. So it is not clear whether they are ‘good’ or ‘bad’ diamonds.
However, it is now becoming clear that buyers of diamond jewelry are willing to pay more money for diamonds that are certain not to come from Russia, or for which it is clear and proven where the diamonds were mined and further processed.
In February 2023, it was announced that the Russian diamond trade will not be put on a European sanctions list, but that a sound tracking system is being worked on, allowing diamond traders and customers to make their own trade-offs. Unfortunately, it is not clear when that system could be functional.
It appears from research that the market in diamonds and their customers can indeed make a difference in preventing these blood diamonds from entering our market.
Research has shown (by analyst Paul Zimnisky) that by 2022, Alrosa’s sales of Russian diamonds will have fallen to $3.2 billion, down from $4.2 billion in 2021. De Beers, the world’s largest diamond seller, and miner saw sales rise from $4.8 billion to $5.8 billion. So the diamond trade has found other ways to get good diamonds.
This analyst believes that Alrosa can currently supply only 10 to 15 large Indian companies with offices in Dubai and that they pay in Euros to circumvent the sanction on payments with Russia.
In short… if you want to do your bit for a happy ending to the war in Ukraine, only buy a diamond with a certificate showing that its origin is not in Russia. Ask around! Not only the processing but also the mining may not be Russian.
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