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'Blood Diamond' stokes fears of gem backlash

The new movie has buyers wondering where their gems come from, and has the industry on edge

Serjeo Minassian began hearing words of concern from some of his customers more than a year ago. They would arrive at his jewelry store, Serjeo, in Downtown Crossing, and ask him about conflict diamonds.

The terms "conflict diamonds" and "blood diamonds" began circulating in the late 1990s, when nongovernmental organizations, led by the London-based human rights/natural resources group Global Witness, discovered that rebel groups in countries such as Sierra Leone and Liberia used as much as 4 percent of the world's rough diamond supply to purchase weapons and otherwise fund their warfare. By 2000, the diamond industry, concerned groups, and governments with diamond industries had joined to battle this development by creating the Kimberley Process. The system, which commenced in 2002, certifies the origins of gems and exports them in tamper-resistant packs accompanied by a certificate validated by the government of origin. The certificate gets passed to the processing plants that polish the rough diamonds, then to the retailers that set the polished stones, and ultimately to the customers who purchase the finished rings, brooches, or necklaces. But even with the Kimberley Process in place -- 71 countries are now members -- reports continue to emerge about false certificates being issued for diamonds in Brazil and rebels in the Ivory Coast smuggling rough diamonds into Ghana where they get certified despite their origins.

Minassian, 36, began hearing industry insiders mention conflict diamonds five years ago. When one of his customers quizzed him about it a few years later, he knew he needed to learn more about the subject.

But people in the diamond industry say conflict diamonds are not a cause of concern for most consumers. "A lot of people come here because they suspect we don't mess around with this stuff," says Judd Rottenberg, co-owner of Long's Jewelers , which opened in 1878 and has seven stores in Massachusetts and New Hampshire.

Members of the diamond industry expect consumers to become more curious about conflict diamonds, and perhaps even shun the gems, once they see "Blood Diamond," a new film starring Leonardo DiCaprio and Djimon Hounsou. "Blood Diamond," which opens Friday , focuses on the search for a rare pink diamond amid the conflict in Sierra Leone in the 1990s. DiCaprio's character trades diamonds for arms; Hounsou's character wants to use the diamond to help his family avoid a life as refugees and child soldiers.

"I would like to think that ['Blood Diamond'] will make people aware [of the issue] and at least make people ask as to the origin of the diamond they're buying," says Charles Leavitt , the screenwriter who came up with the movie's concept.

The film arrives during one of the busiest periods in the lucrative diamond industry. US retail sales of diamonds totaled $34 billion last year, according to the advertising agency JWT . Americans purchase about half of the world's diamonds.

"A lot of retailers say, 'Why don't they release the movie after the holiday?' because it hurts business,' " Minassian says. But he has a different outlook. "Let them see the movie. What's wrong with that? An educated customer is a better customer."

Spreading the word
To prevent backlash from "Blood Diamond," the diamond industry turned to the World Diamond Council, an organization created in 2000 to represent the diamond industry and governments with diamond interests at the Kimberly Process meetings, and to address the conflict diamond issue. In the spring the council embarked on an educational campaign that included full-page advertisements in major newspapers, the creation of an informational website (diamondfacts.org), and the mailing of training pamphlets to jewelry store owners. The effort cost $15 million, according to media reports, but the organization's chairman, Eli Izhakoff , refused in an interview to confirm that amount.

The campaign's goal is to let consumers know that the movie's story line focuses on the period before the creation of the Kimberley Process. With the implementation of the system, says Izhakoff, 99.8 percent of the world's diamonds are now clean.

But some nongovernmental organizations worry that the diamond industry's focus downplays intractable problems in the Kimberley Process and the diamond industry in general. The groups claim that conflict diamonds are getting into Belgium and Israel, where many of the world's diamonds are processed. A September report by the US Government Accountability Office stated that "the US systems for reporting rough diamond statistics and for controlling imports and exports of these diamonds are vulnerable to illicit trade" because there is no physical inspection of the rough diamond imports/exports and no monitoring of the US Kimberley Process Authority, the private entity overseeing the program.

Some of the NGOs argue that the World Diamond Council's emphasis on the percentage of clean diamonds in the world clouds the opinion that the Kimberley Process needs to be strengthened.

"Focusing on the amount of conflict diamonds on the market entirely misses the point," says Corinna Gilfillan, who heads the US office of Global Witness. "Even a very small percentage of diamonds on the market can wreak enormous havoc in a country. . . . It really is important to look at the human toll of these blood diamond-fueled wars -- the people [in Sierra Leone] who died, the people who had limbs amputated, the women who were raped."

The Kimberley Process tried to rectify problems during its plenary meeting in Botswana last month attended by Izhakoff and Gilfillan. Ghana was given three months to stop trafficking blood diamonds from the Ivory Coast; if conflict diamonds continue to enter the country, Ghana's membership in the Kimberley Process will be revoked and the country will be unable to sell its diamond supply.

Gilfillan applauds the move but says she believes the strong response had more to do with the imminent release of "Blood Diamond."

"Why can't [the diamond industry] be proactive all the time," Gilfillan asks, "rather than when a movie comes out?"

Jewelers' watchful eyes
Global Witness has its own webpage filled with facts about conflict diamonds at blooddiamondaction.org. On it, viewers can find a 2004 report by Amnesty International USA that showed how little some jewelry store owners knew about conflict diamonds and the Kimberley Process. In a survey of 246 stores in 18 states, 54 percent of the owners gave inaccurate definitions of conflict diamonds. Only 28 percent knew about the Kimberley Process. Although Izhakoff dismisses this survey -- he says he believes surveyors could have just as easily happened upon retailers knowledgeable about the subject -- the World Diamond Council put a lot of effort into mailing its informational guides and training manuals to as many jewelry store owners as possible.

Minassian didn't receive the informational package, but he said he has long been careful about where he buys his gems. His reputation and, by extension, the longevity of his business, depends on a high level of vigilance. Such watchfulness among retailers, says Gilfillan, is integral to ensuring a clean diamond supply.

Signs of hanky panky are easy to discern, Minassian believes, particularly for people on his side of the business. Minassian says he has been approached by people from New York and elsewhere who try to sell him diamonds in a one-time deal. He avoids such transactions. The local diamond industry is a small community, so Minassian often hears about people who may harbor fake certificates for their diamonds.

Minassian knows enough about the issue to be aware of recent rumors about conflict diamonds getting into Israel and Belgium, the sources of his polished diamonds. To prevent an accidental acquisition of such gems, Minassian says he asks probing questions.

"You try to put pressure on the vendors and dealers," Minassian says. " 'Do they know?' Yes, they know. Put pressure so they don't buy from those people."

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