The Diamond Curse

By Clara Tipper

Almost nineteen years ago, the Kimberley Process was put in place in an attempt to halt the financing of violence through diamond sales. Although natural resources such as oil, minerals, and coal have typically been associated with economic wealth, diamonds have been known to devastate African communities. Conflict diamonds, more commonly known as ‘blood diamonds’, are used to fund conflict and civil war. During the twentieth and twenty-first centuries, conflict diamonds were rife in African countries that were experiencing civil unrest, such as Sierra Leone, the Democratic Republic of Congo, and Angola. In the 1980s and 1990s, diamonds were mined in Angola and Sierra Leone in order to fund weapons for armed rebels, often resulting in destructive consequences for surrounding communities. Since its establishment in 2003, the Kimberley Process has reduced the number of known conflict diamonds in the market; however, it has not stopped the mining of diamonds in warzones or in other brutal conditions. The majority of diamond mines in Africa are foreign-owned, primarily by the Anglo-American firm, De Beers. Although some of these mines, such as in Botswana, are 50:50 owned by the nation’s government and by De Beers, a significant amount of revenue is repatriated to the firm’s Western home. In other countries where the foreign firm owns a larger portion of the diamond mine, the extraction of wealth from Africa negatively affects mining communities and whole African economies. 

Sierra Leone

De Beers, the world’s largest supplier of diamonds, first took control of Sierra Leone’s diamond mines in 1935. However, after the country gained independence from Britain in 1961, the diamond mines were nationalised, which resulted in their diamond trade plummeting and De Beers officially removing themselves from Sierra Leone. Several decades later, civil war broke out in March 1991, when the Revolutionary United Front (RUF) with Charles Taylor’s National Patriotic Front of Liberia (NPFL) attempted to overthrow the government of Joseph Momoh. The RUF occupied the Eastern and Southern districts of Sierra Leone, which were rich in alluvial diamonds, which are easily extracted using shovels and sieves. The rebels used the funds from the diamond-rich mines to obtain weaponry and ammunition. This reliance on diamonds to finance their criminal behaviour also led to communities being displaced, in order to secure the mines and the nearby area. The fight over diamond control has had detrimental social and economic consequences for Sierra Leone; it is estimated that 50,000 people were killed during the civil war, and thousands more subject to rape and mutilation. Millions of Sierra Leone citizens fled as a result, and the abduction of women and girls into sex trafficking became systematic. Amputation of limbs was a well-known fear tactic used by the RUF to discourage people from trying to extract the alluvial diamonds themselves. It has been estimated that the rebel forces profited 125 million dollars annually from diamonds during the eleven year civil war. The serious human rights violations, combined with the millions of dollars lost to illegal smuggling of diamonds, devastated the Sierra Leone economy and population. Although diamond revenues increased from around $10 million in 2000 to around $130 million in 2004, around half of Sierra Leone’s diamond mines remain unlicensedIllicit diamond mining occurs in many diamond-rich countries, and can cost billions in lost sales and lost tax revenue, as well as exploiting vulnerable employees within their criminal organisations.

Democratic Republic of Congo

Diamonds are amongst the Republic of Congo’s most valuable natural resources, and in its quest for economic and political stability, diamonds have proved to be both a blessing and a curse. Although much of its population relies on diamond mining as a source of income, civil unrest and political violence has been fuelled by the fight for diamonds. The DRC formed agreements with several other African, diamond-rich countries to sell more diamonds than it was able to produce alone. However, following decades of corruption after their independence from Belgium in 1960, the vast majority of citizens gain little economic benefit from their country’s natural wealth. Much like in Sierra Leone, the DRC experienced several years of civil war between 1998 and 2003, known as Africa’s Great War. It is suspected that a staggering four million people died during this period of civil unrest. The war was funded by the selling of diamonds, and was further fuelled by disputes over ownership of natural resources. However, even after the end of the civil war and the implementation of the Transitional Government in July 2003, diamond mining remains inadequately regulated. To the millions working in small artisanal mines in the DRC, diamonds are their only hope of livelihood, yet they are subject to harmful and unfair working conditions. Testimonies from diamond miners within the DRC and other diamond mining countries reflect the shortcomings of the Kimberley Process; although it may address the buying and selling of blood diamonds, it does not confront the extreme hardships faced by those at the bottom of the supply chain. Having said this, boycotting Congolese diamonds altogether would have disastrous effects. Congolese mining officials have reported that one million artisanal miners are dependent on the Western demand for diamonds. Evidently, supply-chain management is in need of serious reform that can ensure traceability for the consumer and for the sellers of diamond products, such as Tiffany & Co and De Beers.

Botswana 

Unlike the Democratic Republic of Congo and Sierra Leone, Botswana has harboured political and economic stability, whilst maintaining its status as the world’s largest diamond producer. Botswana gained independence from Britain in 1966, shortly after Sierra Leone, and has since enjoyed political stability, marked by democracy rather than corruption. Today, its diamond mines are owned half by the government and half by De Beers, as a result, strict regulation and surveillance has meant that smuggling is rarely a problem. However, this is also due to Botswana’s geography. Whereas in Sierra Leone and the DRC diamonds are alluvial, and therefore easily extracted using minimal equipment, Botswana’s diamonds are embedded in deep kimberlite pipes. Thus, extraction requires fewer miners and high-tech, expensive equipment, making diamonds difficult to smuggle. The 50:50 ownership of the Botswana mines has allowed the revenue from diamond mines to be put back into the Botswana economy by supporting schools, hospitals and infrastructure. Botswana now has a rapidly developing economy, with one of the fastest growth rates per capita in the world.

In the age of supply-chain transparency, luxury sellers of diamonds face consumer expectations of sustainability and fair-trade; however, the Kimberley Process does not guarantee the safe production of diamonds. Countries in the West constitute the majority of the demand for diamonds found in these African countries, and, thus, have played a major part by elevating the value of these precious stones. Responsibility must be taken, on behalf of the multinational corporations, such as De Beers, and on behalf of the consumers, to ensure the ethical provenance of their diamonds. This will require increased levels of traceability, human rights due diligence, and regulation under a reformed Kimberley Process. 

The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist.

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