Why Zimbabwe's New Diamonds Imperil Global Trade

Zimbabwe was suspended from the Kimberley Process in November 2009 over the Mutare killings. But it was allowed the August sale and another in September, with the caveat that the stones sold had to be produced from its two mines — and only after the Kimberley monitor, Abbey Chikane, a South African who helped found Kimberley, determined the mines had complied with the process. Announcing the sales, Kimberley's Israeli chairman, Boaz Hirsch, declared, "If this is a victory for anyone, it is a victory for the Kimberley Process. Not only does the Kimberley Process have teeth. It also is able to achieve results."

Others disagree. African Consolidated Resources, the original owner of the mines, warns that Kimberley is certifying stones stolen from them. The U.S.-based Rapaport Diamond Trading Network, a clearinghouse connecting buyers and sellers, says it will expel any member dealing in Zimbabwean gems, explaining that "there is no assurance that diamonds with [Kimberley] certification are free of human-rights violations." At the Jerusalem meeting, the E.U., U.S. and rights groups opposed granting Zimbabwe full Kimberley certification. Even Chikane, whose report allowed the sales to go forward, admits that the Kimberley Process leaves a lot of questions unanswered. In a speech at the auction, he said, "The issue of human-rights abuses keeps coming up, and it must be addressed." (See "Zimbabwe's Leaders Trade Positions.")

Killing Kimberley
But by whom? The Zimbabwean government knows its own power. When Zimbabwe was first suspended from the Kimberley Process, Mugabe's government threatened to sell its entire diamond stock on the uncertified market — a warning it repeated in Jerusalem. Given the richness of the Marange fields, that would have blown a hole in the regulatory regime and depressed global diamond prices. Zimbabwe's police then arrested Farai Maguwu, head of Mutare's Center for Research and Development, who represented the people of Mutare inside Kimberley. (In July, Maguwu was freed on bail after six weeks in detention, and in October the case against him was dropped.) "Without Zimbabwe, there is no [Kimberley]," Mpofu told TIME. "We are a major player [and] a force to be reckoned with." He says the government earned $30 million from the August sale, and the second authorized sale in September — this one held in secret — would have likely raised tens of millions more. The sales have also boosted illicit trade in places like Manica, where dealers like Ali can now hide illegal Zimbabwean stones among certified ones. But Smillie says those are reasons only to toughen the Kimberley Process and broaden its mandate to include criminals, governments and human rights. That's a view echoed by Zimbabwe's Finance Minister, Tendai Biti, who is from the anti-Mugabe MDC. "The way to address [those issues] is bringing us into the [process] and strengthening it," he says. (See the top 10 contested elections.)

Some in the diamond industry recognize that even a rewritten Kimberley would be insufficient to clean up the trade. De Beers, which controls 35% of the world's diamond trade, has inaugurated a series of additional voluntary initiatives, including the Responsible Jewellery Council, whose members abide by a code of conduct; a best-practices code, which De Beers imposes on itself and its clients; and the Diamond Development Initiative, now run by Smillie, which focuses on spreading the wealth that diamonds bring to their countries of origin. De Beers' latest innovation, the Forevermark, imprints each gemstone with a microscopic number that indicates where and how it was produced. De Beers now sells only diamonds it mines itself, and it hopes to persuade the rest of the industry to follow its example. "Yes, there are still people dealing diamonds who are completely amoral," says Andy Bone, head of international relations at De Beers and its representative on the World Diamond Council, which represents the global trade. "And no, [Kimberley] is not a perfect construct, and there is a way to go. But we will get there. It's in our interest."

It's also in the interest of 1.3 million people employed in informal diamond mines around the world. Back in Mutare, Gamma, 29, is frequently forced to work for Zimbabwe's illegal police and army syndicates, hacking at rock and bare earth. Gamma says he once found a million-dollar stone — 23 carats — but was never paid. I ask him what he thinks of diamonds. "It's very different, what a diamond means to you and what it means here," he says. "Here it means beatings, shootings and trying to get something just to survive."

This article originally appeared in the Nov. 15, 2010, issue of TIME magazine.

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