Diamonds worth their weight in blood

The film "Blood Diamond," which debuted last month and is set in Sierra Leone in the 1990s, takes its title from diamonds mined by forced laborers to benefit murderous rebels. The profits from the "blood" or "conflict" diamond trade--a small but significant fraction of the world market--have been used to finance dictatorial regimes and terrorist organizations, proclaims Barak Richman, professor of law at Duke University, Durham, N.C.

In response to the film, the diamond industry has mounted a campaign to reassure retailers and consumers that their gems are "clean," touting the implementation of a certification procedure known as the "Kimberly Process." However sincere the effort, the process potentially has crippling limitations, Richman insists. "The inherent features of diamonds--portability, untraceability, and universal value--make them the perfect currency for rebels and brutal dictators," he explains. "But they also pose many other legal problems, such as contract enforcement. Even a basic credit sale is beyond the reach of the legal system. So, to operate a functional market with effective contracts, the diamond industry has effectively erected its own legal system."

Though this private legal system operates successfully in downstream markets, such as New York's 47th Street, Richman asserts that it remains to be seen whether the Kimberly Process--another of the industry's instruments of self-governance--substantially can reduce the conflict diamond trade. Sparked by concerned nongovernmental organizations and sanctioned by the United Nations, the Kimberly Process is a private certification system governing the import and export of diamonds among member countries. Members do not import or export diamonds with nonmember states.

Warns Richman: "There is a real danger that this process that is intended to stop conflict diamonds can instead allow a monopolist like De Beers to strengthen its control over the global supply. To be sure, conflict diamonds are responsible for horrendous crimes, and the industry--in conjunction with the UN and the World Trade Organization--is correct to try to stem their flow, but it also is a paradigmatic coalition of 'Baptists and bootleggers,' where an industry leader capitalizes on social politics to secure market power. The Kimberly Process just might stifle competition in an already concentrated industry, even as it fails to discharge its original duties.

"The great irony of this, and what concerns the industry most," concludes Richman, "is that the item is being sold as a part of a romantic, everlasting, and pure relationship, but there are a lot of ugly shadows that have contributed to the industry's success."

COPYRIGHT 2007 Society for the Advancement of Education
COPYRIGHT 2008 Gale, Cengage Learning