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| Testimony of Rory E. Anderson Government Relations Manager, Africa Policy Specialist World Vision United States Conflict Diamonds: Funding Conflict, Fueling Change Before theTrade Subcommittee of the Committee on Ways and Means U.S. House of Representatives October 10, 2001 Intro/Opening Thank you, Mr. Chairman, for the opportunity to present testimony to the Trade Subcommittee on solutions to the trade in conflict diamonds. My name is Rory Anderson, Government Relations Manager and Africa policy specialist for World Vision, the largest privately-funded international relief and development organization in the U.S. Currently, World Vision implements more than 6,000 relief, rehabilitation and long-term development projects in 95 countries. Mr. Chairman, it is nothing new that natural resources, from diamonds to oil, have often had a significant role in igniting and fueling human conflict. In Africa, the shape of post-Cold War conflict has increasingly been financed and perpetuated by natural resources, which conveniently do not demand any type of ideological loyalty. There has been clear evidence, including on going warfare, in the diamond rich countries of Sierra Leone, Angola and the Democratic Republic of the Congo that diamonds are at the heart of the matter, and access to diamonds and other natural resources have become a primary incentive for war. Definition There are various nuanced definitions of the term conflict diamonds. In this testimony, my definition seeks to address current as well as potential situations where the sale of diamonds could be used to sustain violent conflict. Conflict diamonds are stones which originate from areas under the control of forces that are in opposition to democratically elected and internationally recognized governments; or diamonds used by state institutions or non-state forces to fund campaigns of human rights abuses against civilians. Some argue that diamonds don’t kill people, rather, people and guns kill people. But diamonds are lucrative stones. In 1998 the diamond industry produced an estimated 115 million carats of rough diamonds with a market value of US$6.7 billion. At the end of the diamond pipeline, this was converted into 67.1 million pieces of jewelry worth close to US$50 billion. At both ends of the diamond pipeline—from mine to finger—there are huge financial incentives. Further, diamonds are easily smuggled. To the untrained eye, rough diamonds look like mere pebbles, which can easily be smuggled in a shoe, sock, or any kind of body orifice, and can go undetected through most metal detectors or x-ray machines. The Humanitarian Impact For every conflict diamond sold, there is a corresponding humanitarian crisis. In Angola, the 1990s proved to be the most violent decade and the worst in terms of humanitarian suffering. By November 1999, 3.7 million, one third of the entire population, were classified by the UN as “war affected”, defined as “those who depend on emergency humanitarian assistance due to war and the resultant loss of assets and earning opportunities.” UN Consolidated Appeal for Angola for Jan-Dec 2000, November 1999 Of the 3.7 million, 2.5 million are internally displaced, 65% of whom are children under the age of fourteen, causing UNICEF to declare Angola “the worst place for a child to grow up.” Angola, A Tangled Web: Many Players in a Complex War, World Vision, July 2000, p.10. The denial of basic rights to food, education and health, coupled with an estimated 6-15 million landmines littered throughout the country, claim the lives of 30% of Angola’s children before they reach the age of five. Ibid., p.17. In their August 2001 report, the UN Office for the Coordination of Humanitarian Affairs identified all seventeen Angolan provinces as being insecure and inaccessible because of diamond extraction, mine infestation, and sustained violence. Ranked last on the UN Human Development Index, the war in Sierra Leone has exacted a heavy humanitarian toll on the population. An estimated 70,000 people have been killed since the war started in 1991. Approximately 5,000 were killed in and around Freetown in the January 1999 rebel offensive against the capital. Civilian and child amputations have been a trademark atrocity, with estimates of 1,800 amputees. Currently, almost 1 million Sierra Leonians are internally displaced, in addition to the 470,000 refugees who have fled to neighboring Guinea and Liberia. 30% of Sierra Leone’s population of 4.6 million have been uprooted because of this conflict. Humanitarian response continues to be hampered by the issue of access to war-affected populations trapped in the northern and eastern parts of the country. 55% of the population live in conflict affected areas and are inaccessible by humanitarian aid. Within the current deliberations on conflict diamonds there have been fewer references to the Democratic Republic of the Congo (DRC), yet diamonds from this area are equally problematic. Several warring factions, including the rebel government and multiple international armed forces who all desire access to the DRC’s mineral resources, have wrecked a humanitarian crisis that is quickly outpacing the enormity of the Sudan. This factor, coupled with gross human rights abuses committed among all factions, I believe, warrants the label of conflict diamond for any stone originating from the DRC. In the DRC, it has been found that since August 1998 there has been at least 1.7 million deaths in war-affected areas over and above the 600,000 that would normally be expected. The overwhelming majority of these additional deaths are attributable to preventable diseases and malnutrition –– a tragic consequence of a health care system destroyed by war. On average, some 2,600 people are dying every day, and further research is finding that the first months of the year 2000 were even worse than 1999. Thirty four percent of these deaths have been children under the age of five (over 590,000), and 47% of all violent, war-related deaths are women and children. The highest death rates are among populations displaced by the fighting, and civilians continue to be targeted by all sides in the conflict. As one NGO leader has explained this: “The loss of life in the Congo has been staggering, It’s as if the entire population of Houston was wiped off the face of the earth in a matter of months.” Crime and Terrorism In the wake of the September 11 terrorist attacks, there has been a necessary increased public attention to terrorism. However, terrorism is not a phenomenon that is only rooted in extremist Islamic fundamentalism; terrorism—which is planned, systematic violent attacks against unarmed, non-combatant civilians—has been a central platform to the wars in Sierra Leone, Angola, and the DRC. Terrorism has become a conventional weapon in 21st century warfare, making war more brutal and more costly. Although terrorism has become a conventional method, it is mostly sustained through underground networks of money laundering and weapons smuggling. As an internationally valued commodity, diamonds have become the dollar, particularly in Sierra Leone. Because diamonds can move so easily and quickly, a dealer can buy low, sell high and reap windfall profits, particularly during the height of a war. For the seemingly intractable war in Sierra Leone, the point of the war may not be to actually win it, but to engage in profitable crime under the cover of warfare. Over the years, the informal diamond mining sector, long dominated by what might be called “disorganized crime”, has now become increasingly influenced by organized crime and by the transcontinental smuggling of diamonds, guns, drugs, and vast sums of money in search of a laundry. Each of these smuggled items has become critical components to warfare, and thus, violence becomes central to the advancement of those with vested interests. Smillie et al, p.1. As documented in the UN Panel of Experts report submitted to the UN Security Council in December of 2000, the RUF is able to obtain large quantities of arms, military equipment and related matériel as a result of the following key factors: • the purchasing power it derives from the sale of conflict diamonds; • the willingness of some major arms producing countries to sell weapons with disregard as to the final users; • the willingness of some countries to provide their end-user certificates and/or to facilitate the safe passage of weapons through their territory; • the largely unregulated activity of international arms brokers and their intermediaries; • corruption; • the inability of Sierra Leone and its neighbours to monitor and control their airspace; • Liberia’s interest in destabilizing its neighbours. Solutions/Recommendations An unlikely coalition between NGOs and the diamond industry, calling upon governments to eliminate the trade in conflict diamonds has proven to be an effective catalyst for change. This coalition has been the impetus for refined U.S. legislation that is currently pending before this committee, as well as the current discussions around implementing a global diamond certification system which aims to root out the blood trade while protecting the legitimate trade. These two efforts are solutions that are inextricably linked to accomplishing an end in the trade in conflict diamonds. The U.S. consumes 65% of the world diamond supply. U.S. economic might and political clout obligate us to take real leadership in ending the trade in conflict diamonds, protecting American purchases of love from being a subsidy for terror. The Clean Diamond Trade Act, H.R. 2722 Mr. Chairman, World Vision applauds and welcomes the leadership that this committee has shown by introducing and quickly acting upon the Clean Diamond Trade Act, H.R. 2722. We believe that this bill will make a significant contribution because it sets up a system of transparent controls for the importation of all diamonds, including rough, polished and diamond jewelry. Diamonds are the most concentrated form of wealth known to humanity; they are also the most easily smuggled and, therefore, in need of some amount of reasonable controls. The Clean Diamonds Trade Act specifies certification standards for the importation of diamonds, which will create a “clean stream” of diamonds entering into the US market. The system’s implementation will be monitored by a diverse presidential commission which will consist of representatives from human rights organizations, industry and government. Tough penalties are also specified for those who are dealing in conflict diamonds. Further, we believe that this bill gives the Administration maximum flexibility to implement effective controls. Strong U.S. leadership in the Kimberly Process One of the greatest strengths of the Clean Diamonds Trade Act is that it is explicitly linked to the on-going international global diamond certification system, known as the Kimberly Process. A diamond is an international commodity that requires international cooperation if there is to be proper oversight. Although U.S. legislation is crucial, the only way to effectively root out the trade in conflict diamonds is to have universal standards, packaging and oversight of all diamond producing, polishing and importing countries. A tiered system, prejudiced against African producing countries and lax on importing and polishing countries, creates new loopholes for transshipment of blood diamonds. Soon, conflict diamonds will simply be laundered through Canada, Australia, and other peaceful countries. A global certification system, with standard import packaging and controls, including international independent monitoring of diamond exports from mine to finger, is the only way to effectively end the trade in conflict diamonds, while protecting the legitimate diamond industry. Mr. Chairman, I had the privilege to attend and participate as an NGO representative in the recent Kimberly Process meetings held in London last month. Though progress is slow in getting definitive consensus on workable international standards, certain key governments involved in the diamond trade have made significant progress in contributing towards a viable international system. World Vision, and my many partners in the Campaign to Eliminate Conflict Diamonds encourage the Administration to constructively contribute and engage on this issue at the highest levels, particularly as the process reaches its conclusion in December. The diamond and jewelry industry are important parts of the U.S. economy; constructive U.S. leadership is essential to make the Kimberly Process work. Anything less will not only be an international embarrassment, but it will tacitly prolong the trade in conflict diamonds. Chain of Warranties In the recent round of inter-governmental meetings held in London last month, the World Diamond Council proposed a chain of warranties systems to support producer government export regimes. It was a short proposal, but as described, each industry trader would sign a series of invoices, giving a guarantee that stones which a member of the industry are handling do not contain conflict diamonds. This proposal needs to be further developed, but it is a sound idea, and, if properly developed, has the potential to lend support to governments in their creation of an export certificate regime. A reliable industry chain of warranties, from mine to point of export, can also provide infrastructure for international monitoring, and, with the proper documentation, it can verify official country and international statistics. I encourage the World Diamond Council to seriously develop this idea and submit a lengthier proposal for the Kimberly Process government participants to consider. Eliminate the Root Cause Solutions are also needed to address the structural causes for conflict diamonds. These structural solutions can essentially be categorized in the areas of reinforcement and economic incentives. In this area, I recommend the following solutions: 1. Reinforce support of rough diamond exporting governments to establish viable certificate of origin schemes and systems of regulation over diamond mining areas. This could include capacity building in export licensing systems and establishing appropriate punitive actions for individuals who are found trading in illicit and conflict diamonds. 2. Assist rough diamond exporting countries in the areas of good governance, linking all types of financial assistance to poverty reduction and social reinvestment. 3. Build capacity among grassroot civil society groups to effectively monitor and report on the diamond trade at the local level, while being careful to ensure the safety of local evaluators. Income Generation Along with solutions of to reinforce the international system, there is a foundational need to address the economic reasons why individuals trade in conflict diamonds. Some of these reasons can be addressed at the government level, but many of the solutions have to reach the individual by providing economic alternatives to conflict diamonds and rebel violence. Micro-enterprise loan funds have been successful throughout the world in providing a way out of poverty by providing income choices. Expanded support for proven successful initiatives is important. Operational non-governmental organizations (NGOs) in Angola, DRC and Sierra Leone have to deal with the impact of conflict diamonds every day. In trying to provide structural solutions, World Vision, like many other NGOs, has found that a combined approach of temporary emergency relief coupled with income generation and civil society mobilization, are all important elements toward building long term peace and stability. In Sierra Leone, World Vision is finding success in the following ways: Food Aid. World Vision’s food aid program in Sierra Leone is based on three premises: 1) give the farming population the tools and the best seeds they need to produce again, assist them with the best possible technical assistance and provide food to them so they do not eat their seeds and so they have strength to cultivate and harvest; 2) provide food to those populations who cannot provide for themselves, such as the vulnerable (elderly, institutionalized), the severely malnourished; and 3) give skilled tradesmen food so they can begin to reconstruct homes, clinics and schools. More than 10,000 metric tons of US food will be used. The goal of this project is to significantly improve household food security and sustained productive capacity of the Sierra Leonian war-affected communities in 16 chiefdoms in Bo, Bonthe, and Pujehun and in 11 chiefdoms in the Kono diamond district. This program addresses the acute food needs of 149,000 vulnerable persons through increased availability of, and access to food. It also increases household food security of 10,000 war-affected, returning farm families through increased availability of, and access to food and agricultural inputs (labor, seed rice, etc.). This program will improve organizational, physical, and productive infrastructure in rural areas through food-for-work activities, engaging 70,000 individuals, and it will enhance community interest and participation in the formal and non-formal education of youth via support to 4,500 at-risk youth. This program is funded by USAID, Food for Peace. Transition Initiatives through Civil Society. The World Vision Sierra Leone Transition Initiatives Program was first established in January 1997 to address grassroots reconciliation and peace building issues. Funding was suspended after the May 25, 1997 military coup and was reinstated in 1998 after the return of democracy. This program aims at facilitating the process of raising awareness on civic rights; local capacity building for peace, constructive engagements with combatant and other differing factions; effective consensus building; reconciliation and peaceful co-existence; youth recovery from marginalization and exploitation, and generally supporting the process of youth empowerment, so as to deter them from the lures of rebel warfare. World Vision works with over 50 different community and civic groups in Sierra Leone to accomplish the objectives of this program, which is funded by the Office of Transition Initiatives. Support for agriculture. The agriculture productive infrastructure of Sierra Leone started to deteriorate even before the war began in 1991. According to FAO reports, production of the country's staple crop, rice, fell 18% between 1990 and 1997. As a result of the war, estimates have only half of the nation's requirement for rice being produced locally in 1999. People are beginning to return to their land and World Vision, with the support of the Office of Foreign Disaster Assistance, is helping to improve food production in Sierra Leone through support to the agriculture sector. There are three main objectives: 1) provide seeds and tools to 16,000 returnee and vulnerable farm families in the Kono district (10,000) and Kailahun district (6,000) during this year’s crop season; 2) capacity building to improve agricultural practices among 48,396 farm families in our target communities through increased access to a network of strengthened community-based extension services; and 3) improve agricultural productivity for 21,841 farm families in the Southern region by addressing other issues of agricultural recovery beyond the emergency supply of seeds and tools. Conclusion Effective, holistic solutions are not implemented in a vacuum. Wise policymakers recognize that the solution to conflict diamonds is a constellation of actions involving key stakeholders, including NGOs, industry and governments, coupled with solutions addressing the fundamental causes for the proliferation of conflict diamonds. The diamond industry has an incentive to eliminate conflict diamonds by better monitoring the flow of rough stones. However, much of the success of these initiatives will have to come from importing and exporting governments and international regulatory and trade regimes. Given the present media attention and consumer scrutiny, there has been a lot of movement at government levels to address the issue of conflict diamonds. It is essential that civil society in diamond importing and exporting countries watch both industry and governments, and hold them accountable. No system is perfect, but no system means war. As long as greed exists, conflict diamonds won’t entirely go away, but cooperative and consistent action can help to minimize the economic incentives for war. Thank you, Mr. Chairman, for the opportunity to present this testimony to the committee. I look forward to answering questions of the committee. Also, World Vision is prepared to work with the Congress and the Administration to implement any solutions that will lessen the suffering of people caused by conflict diamonds and restore stability, peace and responsible governance in Africa. |  |
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