What is a Conflict-Free Diamond?

You’ve definitely heard about the diamond 4Cs, but there’s a fifth C that is less talked about in the industry - conflict free. This term to describe diamonds emerged in 1998 in connection with the use of diamonds to finance violence. The resulting efforts to bring more attention and transparency to the diamond trade have given much more transparency about their diamond purchase for consumers.

The History of Conflict-Free Diamonds

Conflict diamonds, also known as blood diamonds, have been in existence for decades. These terms describe diamonds that are illegally traded to fund civil wars and insurgencies mainly in areas of Africa. The regular use of the terms gained international exposure with the Sierra Leone civil war. The war lasted from 1991-2002 with deaths reaching 50,000, over two million people displaced, and countless human rights violations.

During this war, rebel groups and warlords attempted to solidify power and financed their activities by smuggling and selling diamonds. In Sierra Leone, the rebel group Revolutionary United Front (RUF) actually occupied diamond mines throughout the country to completely control every aspect of production and trade. During the time of the war, the RUF mined up to $125 million in diamonds per year.

As more attention was paid to this subject, the practice was revealed in several other African nations, notably Angola. Canadian ambassador Robert Fowler was sent to investigate the National Union for the Total Independence of Angola (UNITA) for using conflict diamonds to finance their war efforts within the country.

With the Fowler Report from his investigation, the United Nations issued embargos against UNITA and pushed for additional measures to end the trade of conflict diamonds. In May of 2000, representatives from the major diamond producing African countries met in Kimberley, South Africa to determine a plan. The start of the Kimberley Process was the result of this meeting, and highlighted a global endeavor working to address transparent practices and building of organizations to adhere to strict standards.

International efforts over several years built the adoption and expansion of the Kimberley Process. In July of 2000, the World Diamond Congress halted the trade of conflict diamonds and began work to establish guidelines and rules for the ethical export and import of diamonds.

Six months later, the World Diamond Council was formed with the task of creating regulations and processes for how diamond rough could be certified as coming from a non-conflict source. Following another year of negotiations between governments, diamond producers, and humanitarian organizations, the Kimberley Process Certification Scheme (KPCS) was adopted.

The certificate system helps guarantee that requirements and regulations are being followed, ensuring diamonds are mined and shipped humanely, and not being used for criminal activity. The system of warranties it lays out monitors a diamond from the time it's mined up to the final sale. Kimberley Process certificates are issued to each shipment of diamonds, and diamonds cannot move through ports of transit or sale without certificates.

The Kimberley Process in Action

Today, 82 countries have adopted the Kimberley Process and adhere to its process as members. The organization shares that it is responsible for stemming 99.8% of the global production of conflict diamonds.

An important element of the Kimberley Process dictates that members must establish their own legislation, institutions, and import/export controls as part of their allegiance to keeping conflict diamonds out of the market. From these processes, member nations then share transparent practices and statistical data, shining a spotlight on ethical practices.

In the United States, Presidents Bill Clinton and George W. Bush both issued Executive Orders banning the importation of diamonds from the African countries of Sierra Leone and Liberia. Following those actions, Congress enacted the Clean Diamond Trade Act (CDTA) implementing the KPCS as law.

The adoption of the KPCS as law within the United States greatly impacted the diamond trade as the United States is consistently the largest consumer of diamonds. It also helped lead to the greater success of the KPCS and widespread adoption by countries and organizations including the European Union.

Choosing a Conflict-Free Diamond  

Since it is illegal in the United States to sell and trade conflict diamonds, the majority of jewelers offer conflict-free diamonds and are transparent about their diamond sources. The diamond supply chain is a long one, so tracking each diamond from source to final sale is very challenging. Also, while the KPCS has drastically decreased the presence of conflict diamonds in the market, the illicit trade of these diamonds still exists on much smaller scales.

In reality, this paper trail happens at the batch level, which means that the Kimberley certificate will say something along the lines of "‘these 1245 carats of diamonds were imported from Botswana" which may contain more than 1,000 stones, and it does not provide a unique certificate for each diamond.

Further, these stones are pre-graded, which means that none of them have gone through the GIA for certification. This is a problem because for example when a client wants to buy a 1.06ct F VS2 diamond, what they want ideally is that there is a Kimberley certificate stating that this 1.06ct F VS2 was sourced from xyz. This is unfortunately not the case.

The diamond supply chain works as follows: Diamond miners such as DeBeers sell their diamond roughs exclusively to "sightholders" of their choosing (a company authorized to buy diamonds from De Beers). Every sightholder must buy a minimum quantity every month in order to maintain their sightholder status. These sightholders in turn cut and polish the rough diamonds at various diamond centers around the world (notably Antwerp & India), and then sell them to dealers, who in turn sell and market them to retailers (such as ourselves). Sometimes we buy from sightholders, but dealers serve a big function too because they hold a lot of goods on their inventory for memo basis.

To make a long story short, when we ask for origin information, the best that we can hope for is that the sightholder and dealer keep a detailed paper trail of the diamond's journey, and we rely on their reputation and credibility to tell us where the diamond came from. There is unfortunately no direct link between each individual diamond and the original Kimberley certificate. In the end, most participants in this supply chain play by the book and incidents of illicit trade have diminished vastly since the early 2000.

The market participants at the top have too much to lose, so the largest diamond companies such no longer buy rough diamonds from auction (which is how origin becomes obscured), and nowadays they maintain vertical manufacturing, and only mines from non-conflict and friendly governments. For Ken & Dana Design, it is very important for us to work only with the best suppliers; the ones with a long history and play only by the book.

When looking for a diamond, current best guidance indicates to avoid diamonds from Zimbabwe and Angola as human rights violations at mining sites are still occurring. But, your diamond purchase from any other African country as the source helps the countries funnel resources to mining endeavors there, helping to improve the industries and the lives of the miners.

At Ken & Dana Design, we adhere to all the protocols of the Kimberley Process and have developed long-standing relationships with our diamond suppliers. We take due diligence very seriously in regards to choosing the diamonds we recommend to our clients, and uphold the highest ethical and conflict-free standards in our selection.

Have questions? We're happy to help.