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Why Gemstone Bans Work, Even When They Don’t

UN flagsBack in 2005, a civil war in Côte d’Ivoire was tearing the country apart. The country’s richest diamond mining zones were controlled by rebel forces. To prevent the rebels from financing themselves using diamonds, the United Nations (UN) placed an embargo on Ivorian diamonds. The Kimberley Process (KP), the international diamond certification scheme, did the same.


It’s been eight nears now since that ban has taken effect, making it the longest running global diamond ban ever enacted. The UN and the KP have had plenty of time to figure out how to tighten it. But so far, eight years later, the ban still doesn’t work very well. Rebels don’t pay attention to it. They simply smuggle diamonds into neighboring countries. Every year, they earn about $20 million from diamond sales and probably use some of this money to buy weapons. About two weeks ago, a UN group of experts issued a report confirming what everyone has long known: the ban on Ivorian diamonds still isn’t working.


And yet, although the diamond ban hasn’t worked as hoped, the UN dutifully has renewed it every year—mostly recently in April. That raises a question: why even try to impose an export ban if it’s going to have as many holes as Swiss cheese? Are bans on gems just a knee-jerk reaction to civil wars and human rights abuses, or do they have any practical purpose?


The Landscape of Gemstone Bans


These questions are important to consider given all the gemstone banning—and lifting of gemstone bans—going on lately, not just in Côte d’Ivoire.


In June, for example, the KP imposed a new ban on diamond exports from the Central African Republic, following the takeover of that country by rebels accused of serious atrocities.  Under the ban, all KP member countries (a group that includes most of the world) are prohibited from importing diamonds from the Central African Republic. But it would be unrealistic to expect the KP ban will be any stronger than the one in Côte d’Ivoire. Borders are just too porous, diamonds are just too small, and the KP is just too weak, to stop all diamonds from exiting the Central African Republic.


Over the past few years, questions about the effectiveness of export bans also have arisen with respect to Zimbabwe.  Violence and corruption in Zimbabwe’s Marange diamond fields prompted the KP to impose a ban on Zimbabwean diamond exports in 2009, similar to the ones now in the Côte d’Ivoire and the Central African Republic. But surprise—that ban didn’t stop diamond exports. Cronies of President Robert Mugabe just smuggled diamonds in violation of the KP’s mandate. It is estimated that Mugabe and his friends have stolen $2 billion in diamonds since 2008 and used the money to enrich themselves and fund Mugabe’s repressive security state.


When the KP lifted its diamond ban in 2011, the United States and the European Union decided to continue their own import bans. But in September of this year, the European Union voted to lift its ban on Zimbabwean diamonds.  The United States has become the last holdout. So far, it has elected to continue sanctions, pointing to irregularities in Zimbabwe’s election last summer. Meanwhile, the U.S. ban doesn’t even prevent all Zimbabwean diamonds from reaching U.S. jewelry shops. Diamonds from all over the world get mixed together in cutting and polishing centers; it is likely that many of the polished diamonds imported to the U.S. from countries such as India actually originated in Zimbabwe.


A fourth context in which these issues have been playing out is Burma, also known as Myanmar. Ruby and jade mines in Burma are riddled with abuses like forced labor and child labor. Profits from the mines also are lining the pockets of Burma’s military generals, who for years ruled Burma with an iron fist. In 2003, to try to cut off funding for the regime and reduce human rights abuses, the U.S. placed sanctions on Burma, including sanctions on Burmese gems. Congress followed up in 2008 with a law specifically targeting Burmese jade and rubies.


But Burma’s government lately has become more democratic. To mark the change, President Obama visited Burma last year and has eased some trade restrictions. However, he decided in August to maintain the jade and ruby import ban. Two factors were behind the decision: ongoing rights abuses in the mines, as well as the risk that gem profits could strengthen the hand of Burma’s generals and undermine democratic reform.


The truth, however, is that the American ban on Burmese jade and rubies has never presented too much of an obstacle to Burma’s generals. Since 2003, Burma has had no problem selling most of its jade and rubies in China and Thailand.


Why Weak Bans Can Still Help


All these examples show how hard it is to starve rights abusers of gemstone funding. The political situations in Côte d’Ivoire, the Central African Republic, Zimbabwe, and Burma are all unique, but they all bring up the same issue: whether trying to ban the trade in gems makes any sense, if a complete ban can’t be enacted or enforced.


The answer, I think, is yes.


First, even bans that look ineffective because they don’t cut off most funding to rebel groups or repressive governments can still sometimes cut off some funding. A committee in Zimbabwe’s Parliament estimated that European and American economic sanctions on Zimbabwean diamonds together reduced the price of those diamonds by about 25 percent. The ban on Ivorian diamonds may not have stopped most diamond exports from Cote d’Ivoire. But it may have reduced exports somewhat, or driven down the price of Ivorian diamonds, thus reducing funding for the rebels.


Second, gemstone bans aren’t just about cutting off funding to violent rebel groups and repressive governments. They are also a way to create political and economic leverage. That leverage can be used to convince governments to better regulate their mines, reduce human rights abuses, and eliminate violence.


The KP ban on Zimbabwean diamonds between 2009 and 2011 didn’t force Zimbabwe to clean up its diamond trade completely. Violence and corruption remain an unfortunate part of diamond mining there. But the ban did get Zimbabwe to take some positive steps, like ending the army’s mass enslavement of local adults and children. The main problem with the KP ban wasn’t that it was porous; it was that it didn’t last long enough, and that the KP didn’t use the leverage it had to demand greater change. Even alone, the U.S. could use its bans on Zimbabwean diamonds and Burmese jade and ruby to encourage reforms in the mining sectors of both countries. Access to the U.S. jewelry market, one of the world’s largest, could be a powerful incentive for reform.


There is a third way that gemstone bans can help. They are a decent way of alerting consumers about unethical gems that have entered the supply chain, as well as protecting them from buying those gems. Many Zimbabwean diamonds are probably sitting in U.S. jewelers’ inventories anyway, having arrived by way of India. But there would be many more such diamonds in the U.S. if diamond imports were allowed directly from Zimbabwe.


Finally, banning gems is one of the strongest statements that a government, or group of governments, can make. It is a way of condemning rights abuses that goes beyond verbal gestures. Strong disapproval by the international community can help establish norms that will make certain practices, like slave labor, less attractive to rights abusers.


The Transparency Alternative


None of this is to say that banning gems is the only, or even the best, way to stop unethical gemstone mining. A lot can be accomplished using other strategies. Those strategies include bringing human rights abusers to justice, supporting non-profit groups, educating consumers, and creating more transparency in the jewelry trade.


As to transparency, one intriguing alternative to banning gems would be for the U.S. government to require U.S. jewelers and other gem suppliers to disclose where their gems were mined. A new law relying on this approach is already starting to take effect for certain “conflict minerals,” including gold, from the Democratic Republic of Congo. A similar approach with gems could revolutionize the jewelry trade. With increased transparency, gem suppliers and jewelry consumers would be empowered to choose ethical gems.


But gemstone bans and transparency measures aren’t necessarily alternatives. They potentially could work hand-in-hand. One of the main reasons why the UN and KP bans don’t work that well is that most gems are not traceable to a mine or country or origin. This makes it easy for smugglers to introduce gems with unverified histories into the supply chain at any point. When diamonds and colored gemstones are all traceable to their source, smuggling will become harder and gemstone bans will become more effective.


In the meantime, gemstone bans already serve some very important functions. Even if they don’t work completely, they work well enough to remain a vital and necessary option.


Sarah C Says:
November 8th, 2013 at 2:47 am

Good to know and keep working on . Lately, I’d been more interested in fair-trade as well . Also, am buying clothes where manufacturers pay fairer wages to their workers . E.g. just bought from Forever 21 ( made in US ) and turned away from Cotton On ( outsourced to China ) . I’m Asian .

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