Broken vows

This report details the results of Global Witness' survey and investigations into the implementation of a system of self-regulation to support the Kimberley Process, an international governmental certification scheme aimed at preventing the trade in conflict diamonds.

In January 2003, the diamond industry agreed to implement a system of self-regulation as part of the Kimberley Process, to prevent conflict diamonds from entering the legitimate diamond trade and to give consumers assurances that diamonds are conflict free.

All sectors of the diamond industry made three promises:

• To implement a code of conduct to prevent buying or selling conflict diamonds
• To implement a system of warranties requiring that all invoices for the sale of diamonds and jewellery containing diamonds must contain a written guarantee that diamonds are conflict free
• To inform company employees about the industry’s policies and government regulations to combat the trade in conflict diamonds

The system of self-regulation was agreed to as a result of an NGO campaign launched by Global Witness in 1998 to eliminate the trade in conflict diamonds and the international publicity surrounding it.

The diamond industry, through its representative bodies, has repeatedly stated its commitment to combating the trade in conflict diamonds and supporting the Kimberley Process. Yet, to date the diamond industry has not systematically monitored and assessed how self-regulation is working in practice throughout all sectors of the industry.

Five years after the conflict diamond issue came to the forefront, a large proportion of the industry is still not taking the issue seriously and has instead focused its attention on a public relations campaign to try and make the issue go away.

Some in the trade have demonstrated leadership on this issue and have made important contributions to creating and strengthening the Kimberley Process. However, they are in the minority.

One year after the industry agreed to implement self-regulation, Global Witness carried out an investigation in January 2004 to evaluate whether the industry was keeping its promises.

The US diamond jewellery retail sector was chosen as a focus of the investigations because it accounts for more than a half of global diamond jewellery retail sales and therefore has a vital role to play in implementing the self-regulation and pressuring its suppliers to comply with it.

The retail sector was chosen because it is the public face of the industry and has a special responsibility to ensure that it can provide consumers with guarantees that diamonds are not from conflict sources.

Thirty retailers selling diamond jewellery in four cities on the east and west coasts of the United States were surveyed, ranging from independent shops to department stores to international luxury jewellery chains.

The companies included some of the largest national and international jewellery retailers. At each store, two undercover investigators posed as shoppers and asked salespeople questions in order to ascertain whether the company was living up to the three promises given above.

In the majority of cases, for each company, one store was visited once, except in three cases: for two national chains, two stores were visited for each of those chains; for one national department store, two salespeople were visited at two different jewellery counters.

A formal letter from Global Witness was faxed and sent by mail to each company visited requesting information on its conflict diamond policy. Each letter was followed up with a telephone call. It should be noted that the results of this survey cannot be extrapolated to the diamond industry or to the diamond jewellery retail sector as a whole. Instead, they provide an important insight into how the self-regulation is working and whether the industry is giving consumers valid assurances that diamonds are not coming from conflict sources.

The results present an abysmal picture of the US diamond jewellery sector’s implementation of the self-regulation.