Transparency of Diamond

Attempts to convince some of the world's major diamond producing countries to submit to an independent audit of their national diamond control systems were scuppered on Wednesday by a handful of governments, who argued that calls for an impartial review system went beyond the scope of the Kimberley certification process. Representatives from governments, the diamond industry and NGOs gathered for the Kimberley Process plenary meeting in South Africa this week, to decide whether or not to adopt a South African-backed peer review proposal.

---

But Global Witness, the British-based lobby group, told IRIN that progress towards reaching consensus on the peer review mechanism was slow. "It is really disappointing, especially since the peer review system has the backing of the major diamond producer countries, international NGOs and the World Diamond Council. However, despite this strong support there has been resistance from some countries, including Zimbabwe and India. It is ironic that there should be any objections, especially since it's a voluntary system," Global Witness campaigner, Alex Yearsley, told IRIN.

Global Witness dismissed arguments that setting up an impartial auditing system had not been part of the Kimberley agreement. "Independent monitoring is crucial to the credibility of the scheme and, therefore, part of the certification process. The peer review system is a constructive mechanism to ensure compliance," Yearsley said.

Under the Kimberley scheme, chaired by South Africa, diamond producer countries are obliged to issue certificates proving that gems come from legitimate mines. Exporting countries that failed to respect the deal would be prevented from selling diamonds, and could face international sanctions.

Although the scheme was widely seen a positive step in curbing the trade in "blood" diamonds, advocacy groups have argued since its inception that the process was flawed, because of the failure to develop strong verification and monitoring measures. They have called for regular, impartial monitoring to ensure the certification system is transparent.

Another concern was the lack of progress in the collection and analysis of statistics, which are seen as an important tool for detecting trade in "conflict" diamonds. "There are a significant number of governments that have failed to submit the required statistics, calling into question their commitment to the Kimberley Process," Yearsley said.

Congo Suspended

A U.N.-backed body barred the Republic of Congo from the legitimate world diamond trade, accusing it of blatantly sending millions of dollars in smuggled gems onto the global market. Suspending the west African country was "necessary to safeguard the credibility and integrity" of international efforts to block black-market conflict diamonds from the $60 billion annual diamond business, said the group.

---

The suspension was imposed after a May 31-June 4 mission to Republic of Congo that concluded the country had smuggled in from surrounding nations virtually all of the reported 5.2 million carats Republic of Congo had been putting into the market each year through Europe and the Middle East. Republic of Congo's officials trafficked the gems through the lesser diamond centers of Switzerland and the United Arab Emirates to evade more rigorous controls at the world's diamond hub, Antwerp, Belgium, investigators said, in confidential findings first reported Friday by The Associated Press.

The Canada-based Kimberley Process Certification Scheme announced the ban in a statement released on its web site late Friday in Ottawa. "The findings of the review mission are clear. The Republic of Congo cannot account for the origin of large quantities of rough diamonds that it is officially exporting," Tim Martin, the Kimberley Process chairman, said in the statement. Kimberley Process dealers "must have complete confidence that conflict diamonds are not entering the legitimate trade," Martin said.

The Kimberley Process was established with diamond industry backing in late 2002. The effort came in response to growing world concern about "blood diamonds" that fueled and funded 1990s insurgencies that killed millions of people in Angola, Congo, Sierra Leone and Liberia. The process is meant to track diamonds from mines to jewelry display cases, certifying their origins so as to keep conflict diamonds out of the system. Forty-five countries have signed on to the process, representing 98 percent of the world diamond trade, Kimberley officials say.

Suspension closes legitimate diamond-trading channels to the Republic of Congo, barring the gems from Kimberley Process signatories including Belgium, the world's diamond-trading center, and the United States, which buys two-thirds of the world's diamonds.

Republic of Congo, which has little or no actual diamond production of its own, long has stood accused of dealing in smuggled diamonds from two diamond-rich, unstable neighbors — the similarly named Congo, and the Central African Republic. Investigators, in their report, found Republic of Congo was exporting diamonds at a rate "approximately 100 times greater than its estimated production." Republic of Congo authorities subsequently were unable to account to Kimberley Process officials for the "massive discrepancy" of their large-scale exports "in the absence of any reported production or imports," Martin said in his statement.

Republic of Congo officials — apparently seeking to evade taxes and hide revenues — also were formally declaring the gem-quality stones in Switzerland at far less than their market price, investigators concluded: just 98 U.S. cents a carat on average, compared to the average market price of US$75.90 a carat for uncut, unset stones.

Republic of Congo denied all the allegations. It denounced the suspension, calling it "arbitrary."

South Africa Shines in Diamond

South Africa has apparently stolen a march on the Kimberley Process by inviting a delegation to ensure it is fully compliant and has the controls in place to ensure no trade in conflict diamonds can take place. The delegation, led by Denis Lagacé, Canada's natural resources director, was in South Africa for two days and visited various facilities, including government offices where documentation and licensing issues were checked, and various production sites. Seller and buyer details were also verified using the certificates which are required under the process.

---

Delegates were not available for comment on their visit, and a spokesman at the SA Diamond Board said information would be released only once the chairman of the process, Tim Martin of Canada, had been briefed. However, the spokesman emphasised that the delegation had been invited and therefore did not constitute a review mission, which is called if there is a suspicion of noncompliance by any of the process's 43 members.

A De Beers spokesman confirmed the world's biggest diamond producer had met the delegates. "We had an open and frank exchange of views and we're definitely on the same page [as the Kimberley Process]," the spokesman said. "The delegation is executing its responsibilities with vigour and obviously De Beers is 100% supportive in word and deed. It is imperative for the natural diamond industry that the Kimberley Process succeeds." The process is a joint initiative by governments, the international diamond industry and civil society to stem the flow of conflict or rough diamonds that are used by rebel movements to finance wars against legitimate governments.

Earlier this year the Republic of Congo (Brazzaville) was suspended from the process after a review mission from South Africa, headed by SA Diamond Board chairman Abbey Chikane, established discrepancies in Congo's annual diamond exports of about 5.2 million carats and its geological potential of just 55 000 carats a year. The move was welcomed by Global Witness, a nongovernmental organisation that has been one of the diamond industry's most strident critics for its lack of action on the illicit diamond trade. Chikane said the decision demonstrated the diamond industry's will and ability to combat the trade in conflict diamonds.

Diamond Jewelry

A diamond has long been idolized as the ultimate symbol of lasting love because of it’s purity and ageless beauty.

As an admirer of diamonds for engagement rings, whether past, present or future, one may wonder why there is such variation in price from store to store. What characteristics constitute a $5,000 diamond versus one that costs only $500?

The grading system for diamonds is based upon four different elements. Firstly, size will play a large role in the price. This is referred to as the “carat weight,” and it is determined on a 100 point scale. The larger the carat weight, the higher the value.

Carat size may push the price up, but only slightly if there is no clarity. Several facets determine clarity on both an internal and external basis. Internal aspects, dubbed inclusions, and external aspects, dubbed blemishes, all contribute to the overall clarity score.

The clarity of a diamond can vary from ‘pure’ to heavily included. This designation is arrived at after anaylyzing the how many inclusions are found as well where the inclusions are located, whether they are tinted, and how large they are.

Therefore the more severely included a diamond is with crystals, feathers, or other types of internal and external flaws, the lower its value. These deformities are due to the cooling process of the diamonds against other materials. Clarity is highly prized, especially in larger carat diamonds where the imperfections are more detectable.

Color is the next element that affects price. Although clarity is important, there are special cases where under certain conditions underground a diamond may have taken on a certain coloration that actually increases its value.

Diamonds range in color from a designation of “D” to “Z”, with “D” being no color at all, and “Z” being a diamond with a color that is deep enough to be very noticeable to the human eye.

Cut is the final factor in diamond grading. This is an often forgotten element of diamonds, but it is extremely important, as it gives this remarkable stone its ability to come alive.

To view a diamond from the point of view of the cut is to investigate whether or not it has any ‘fire’. Like the other criteria for grading, the cut has it’s own grading scale that goes from excellent to irregular. If the diamond doesn’t knock your socks off then it likely has not been cut very well.

So there you have it, the 4 C’s of choosing a diamond: carat, clarity, color and cut. Understanding these basic concepts before you enter a diamond store will go a long way towards making a good purchase decision.