Mon, Jan 22, 2007 page5

• Blood diamonds: A stain on India's glittering trade

  DEADLY GEM The black market trade in smuggled diamonds has continued to fund Africa's deadliest conflicts, despite all of the international campaigns

  • THE OBSERVER
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  Such is its standing in the international diamond industry that India is expected to be chosen by the UN to take over the Kimberley Process -- an initiative to stop the trade in African blood diamonds -- from the EU.

  If you buy a diamond on any street, it has most likely passed through the abominably polluted Indian port of Surat. As the center of the diamond polishing trade, this industrial inferno processes 92 percent of the world's stones in foul sweatshops and state-of-the-art factories.

  India's diamond industry is the fastest growing in the world, employing more than 1 million people and turning over some US$8 billion a year.

  But there is plenty of evidence of the sale of blood diamonds on the black market from the Ivory Coast and Liberia, both banned from trading by the UN.

  In a thriving corner of Surat's bazaar, Samir Shah's fat Rolex and impressive girth testify to his flourishing business.

  "These stones are from Africa," he said, holding up two knuckle-sized murky brown diamonds. "We can't always tell where they are from, but they aren't legitimate. But here business is done with cash and no questions."

  Around Shah, sitting on the cracked pavements, handkerchiefs pressed hard against their faces to protect them from the foul air, rows of gem traders trickle rough diamonds into ancient brass scales. Behind them, in the winding medieval alleyways, hundreds of black-market dealers huddle over briefcases full of illegal raw and polished stones.

  "Look at this diamond," Shah said. "It's not small, but is easy to smuggle. What can be done to stop that being smuggled to India? I will get a buyer, an agent for a polisher, who will give me a good price, and then sell it out of a reputable firm for export. There is no way it can ever be traced."

  The stones brought in by fishing boats through the shallow waters of Gujarat's ungovernable west coast make a laughing stock of attempts to stem the global flow of blood diamonds. In 2000, the UN responded to outrage over the trade with the Kimberley Process Certification Scheme requiring all exporters to register diamonds with their governments to get them certified before shipping them.

  Since then, largely through clever marketing by the industry, the issue has fallen off the political agenda. But concerns have been revived following the release of the film Blood Diamond, starring Leonardo DiCaprio as a diamond smuggler in 1990s Sierra Leone. The World Diamond Council, representing De Beers among others, hired Sitrick and Co, a leading Hollywood image consultant. So far, it seems to have worked.

  Alex Yearsley, a founder of Global Witness, the UK charity leading the campaign against blood diamonds, said: "Many within the diamond industry are paying little more than lip-service to the Kimberley Process. Despite this, power brokers are more concerned about the bad publicity that could stem from the DiCaprio film."

  Amnesty International agrees that the industry is funding bloody conflicts in Africa.

  "The sparkle of diamonds still comes at a heavy price," an Amnesty spokeswoman said. "The Kimberley Process is being systematically bypassed and the reality is that conflict diamonds from Liberia are being smuggled into neighboring countries for export, and stones from strife-torn Ivory Coast are also finding their way to the Middle East, to India for processing and ultimately into European markets."
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