[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
AFRICA'S DIAMONDS: PRECIOUS, PERILOUS TOO?
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HEARING
BEFORE THE
SUBCOMMITTEE ON AFRICA
OF THE
COMMITTEE ON
INTERNATIONAL RELATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
MAY 9, 2000
__________
Serial No. 106-142
__________
Printed for the use of the Committee on International Relations
Available via the World Wide Web: http://www.house.gov/
international--relations
______
U.S. GOVERNMENT PRINTING OFFICE
66-786 CC WASHINGTON : 2000
COMMITTEE ON INTERNATIONAL RELATIONS
BENJAMIN A. GILMAN, New York, Chairman
WILLIAM F. GOODLING, Pennsylvania SAM GEJDENSON, Connecticut
JAMES A. LEACH, Iowa TOM LANTOS, California
HENRY J. HYDE, Illinois HOWARD L. BERMAN, California
DOUG BEREUTER, Nebraska GARY L. ACKERMAN, New York
CHRISTOPHER H. SMITH, New Jersey ENI F.H. FALEOMAVAEGA, American
DAN BURTON, Indiana Samoa
ELTON GALLEGLY, California MATTHEW G. MARTINEZ, California
ILEANA ROS-LEHTINEN, Florida DONALD M. PAYNE, New Jersey
CASS BALLENGER, North Carolina ROBERT MENENDEZ, New Jersey
DANA ROHRABACHER, California SHERROD BROWN, Ohio
DONALD A. MANZULLO, Illinois CYNTHIA A. McKINNEY, Georgia
EDWARD R. ROYCE, California ALCEE L. HASTINGS, Florida
PETER T. KING, New York PAT DANNER, Missouri
STEVE CHABOT, Ohio EARL F. HILLIARD, Alabama
MARSHALL ``MARK'' SANFORD, South BRAD SHERMAN, California
Carolina ROBERT WEXLER, Florida
MATT SALMON, Arizona STEVEN R. ROTHMAN, New Jersey
AMO HOUGHTON, New York JIM DAVIS, Florida
TOM CAMPBELL, California EARL POMEROY, North Dakota
JOHN M. McHUGH, New York WILLIAM D. DELAHUNT, Massachusetts
KEVIN BRADY, Texas GREGORY W. MEEKS, New York
RICHARD BURR, North Carolina BARBARA LEE, California
PAUL E. GILLMOR, Ohio JOSEPH CROWLEY, New York
GEORGE P. RADANOVICH, California JOSEPH M. HOEFFEL, Pennsylvania
JOHN COOKSEY, Louisiana
THOMAS G. TANCREDO, Colorado
Richard J. Garon, Chief of Staff
Kathleen Bertelsen Moazed, Democratic Chief of Staff
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Subcommittee on Africa
EDWARD R. ROYCE, California, Chairman
AMO HOUGHTON, New York DONALD M. PAYNE, New Jersey
STEVE CHABOT, Ohio ALCEE L. HASTINGS, Florida
TOM CAMPBELL, California GREGORY W. MEEKS, New York
GEORGE RADANOVICH, California BARBARA LEE, California
THOMAS G. TANCREDO, Colorado
Tom Sheehy, Subcommittee Staff Director
Malik M. Chaka, Professional Staff Member
Charisse Glassman, Democratic Professional Staff Member
Charmaine V. Houseman, Staff Associate
C O N T E N T S
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Page
WITNESSES
The Honorable Howard Jeter, Deputy Assistant Secretary, Bureau of
African Affairs, Department of State........................... 6
Mr. Nchakna Moloi, Special Advisor to the Minister for Minerals
and Energy, The Republic of South Africa....................... 20
Ms. Charmian Gooch, Director, Global Witness..................... 23
APPENDIX
Prepared statements:
The Honorable Ed Royce, a Representative in Congress from
California and Chairman, Subcommittee on Africa................ 34
The Honorable Frank Wolf, a Representative in Congress from
Virginia....................................................... 36
The Honorable Tony Hall, a Representative in Congress from Ohio.. 38
The Honorable Sam Gejdenson, a Representative in Congress from
Connecticut.................................................... 41
Ambassador Howard Jeter.......................................... 42
Nchakna Moloi.................................................... 50
Charmian Gooch................................................... 67
Ambassador John Leigh, Embassy of Sierra Leone................... 76
Ambassador Faida M. Mitifu, Embassy of the Democratic Republic of
the Congo...................................................... 77
The Government of Botswana....................................... 80
De Beers Consolidated Mines, Ltd. and De Beers Centenary AG...... 88
Eli Haas, President, Diamond Dealers Club........................ 103
Additional material submitted for the record:
Observations by Representative Frank Wolf: Visit to Western
Africa: Sierra Leone After a Decade of Civil War, November 30-
December 8, 1999............................................... 109
AFRICA'S DIAMONDS: PRECIOUS, PERILOUS TOO?
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TUESDAY, MAY 9, 2000
House of Representatives,
Subcommittee on Africa,
Committee on International Relations,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:15 a.m. in
room 2172, Rayburn House Office Building, Hon. Ed Royce
(Chairman of the Subcommittee) presiding.
Mr. Royce. This hearing of the Africa Subcommittee will
come to order.
Over the last year, increasing attention has been given to
the issue of conflict diamonds in Africa, that is, diamonds
that have been mined by rebel groups who use the proceeds to
wage war. The countries primarily suffering from this misuse of
their resource are Sierra Leone and Angola. In the Democratic
Republic of Congo diamonds illicitly being mined by rebel
groups and warring countries are helping fuel a multistate
conflict. There are some seven countries involved in war in
that region.
While this and Africa's all too many other wars are
occurring for numerous reasons, diamond revenues raise the
stakes, while making these conflicts more deadly by funding
otherwise unaffordable weapons purchases abroad. With this
realization, the United States and the international community
have been working to take diamonds out of the African conflict
equation. The G-8 has agreed to look at ways to better control
the international diamond trade while the State Department has
been working with De Beers and others in the industry to see
that diamonds do not undermine conflict resolution efforts in
Africa.
Legislation passed just last week by the House requires
that the administration report on how Sierra Leone's neighbors,
including Liberia, are cooperating in stemming the illicit flow
of diamonds from Sierra Leone. While proceeding with remedies
which are needed, it is important that these gems do not become
stigmatized in the minds of potential diamond jewelry buyers,
half of whom are Americans. The vast majority of diamonds, 90
percent, originate in countries with well-regulated diamond
mining and distribution systems. Moreover, diamond resources in
some producer nations, including Botswana, Namibia and South
Africa, are important and even critical to these nations'
development.
Diamonds account for two-thirds of government revenue in
Botswana, the world's largest producer of gem diamonds. In
acting on the challenge of conflict diamonds, all interested
should be very aware of potential collateral damage to producer
nations, which Nelson Mandela warns against and warned against
last year in testimony.
This hearing is designed to better understand conflict
diamonds and the proposals surrounding them. We are doing so
against the backdrop of more death and destruction in Sierra
Leone, death and destruction being perpetrated by RUF leader
Foday Sankoh. Under the administration-backed loan-lease
agreement, Sankoh, who gained notoriety for the RUF's policy of
chopping off the limbs of little boys and girls--and it is
important to note there has been 10's of thousands of
amputations so far in Sierra Leone--he is to head a national
commission charged with diamond mining operations and revenues
in Sierra Leone. I have repeatedly expressed grave concerns
about this policy and cannot support on moral or political
grounds putting Foday Sankoh into what was a democratically
elected government. The human rights groups, in my view, were
right to condemn this deal in the first place.
Pragmatism has its limits, especially when it fails. So I
look forward to hearing from the Administration on how it plans
to pick up the pieces in Sierra Leone where the U.N. operation
is on a lifeline.
I will now turn to Subcommittee Members for any statements.
[The prepared statement of Mr. Royce appears in the
appendix.]
Mr. Meeks.
Mr. Meeks. Thank you Mr. Chairman. They often say diamonds
can be your best friends, but that's a statement that cuts like
a double-edge sword. On one side they are a means of survival
for many citizens who risk their lives and limbs in order to
mine them by working in the mines or by chance find them in the
river banks, as a chance to provide food and shelter for their
families. On the other side, to have them, they are ways for
control and power.
I have been thinking about this issue with reference to
diamonds that we have in areas like Sierra Leone in the war
that has gone on, and I am always so mindful of the history of
that area. For a long period of time, for at least almost a
century that Sierra Leone was controlled, well, colonized, and
diamonds was a way for the colonial powers to hold wealth and
the people never had an opportunity to benefit from any of its
natural resources. Those resources always seemed to have been
going out of the country.
Then came the era of independence, and when you have the
era of independence, those same people who saw these diamonds
as a mechanism of finally having and achieving something that
they did not have under colonization; and so therefore you have
had for the past 25 years, for example, the middle of the civil
war, the fight for these diamonds which is, first, is a fight
for power; and second, it is a fight for wealth. I am sometimes
mindful of the early beginnings of independence with reference
to this country and some of the things that were going on
initially with some of the corruptness that took place, and I
just feel that there has got to be a way to find a mechanism to
make sure that everybody fits into this equation.
We know we talk about the rebels and we talk about the
government, but as long as you have a country that is divided
and split as it is and no one feels that they are able to fit
into the equation, then you are always going to have a kind of
violence.
Finally we want to bring an end to the kind of destruction
and the civil war within the government. I think that we have
got to look at some ways of bringing everybody to the table,
legitimizing the entire diamond industry, or otherwise we could
be faced for a longer period of time with this kind of fighting
that is going on. I know that President Clinton, for example,
has talked about going back to Africa again; and we would urge
that he visit Sierra Leone along with any of the other western
coast nations that are there so that we could have a--and take
a very serious look at all of the players and try to decide and
see how we can make everyone feel a part of this, because I
think that is the only way that we are really going to come to
a resolution. Otherwise, it will be just talking, troops will
always be in danger, and we will never then be fully able to
accomplish anything there.
We have got to stop this vicious cycle, and this vicious
cycle means that we have to have some true intervention in the
sense of legitimizing some of the parties, both rebels and the
governments, so that we can make sure they have a mechanism of
working together.
Thank you, Mr. Chairman.
Mr. Royce. Thank you, Mr. Meeks. We will now go to Ms.
Barbara Lee of California.
Ms. Lee. Thank you, Mr. Chairman, and thank you for
conducting this hearing, and as yourself and Mr. Meeks has
indicated, there are many dimensions to this whole diamond
issue that hopefully we will be able to address here. One of
the areas that I have always been concerned about and want to
learn more about is the whole notion that African countries
should be able to develop a diamond industry for African
workers and for the African population, and what has happened
in the past that has not allowed the creation of a diamond
manufacturing industry, for example, in these countries that
would allow the employment and economic development of African
countries which hold diamonds as a natural resource.
I can remember many times hearing people who were shocked
when they went to Africa and wanted to buy a diamond ring for
example and found that the diamonds were actually sent out of
the country to be cut and to be set and the jewelry actually
was not made in Africa. So this hearing, I hope, will at least
allow us to ask some of those kinds of questions so we can
learn more about that aspect of the diamond industry in Africa
also.
Thank you, Mr. Chairman. Look forward to the hearing.
Mr. Royce. Thank you, Ms. Lee. We have been joined by Mr.
Steve Chabot of Ohio and two other prominent members of the
Human Rights Caucus, members who have traveled to Freetown in
Sierra Leone, Mr. Frank Wolf of Virginia and Mr. Tony Hall of
Ohio; and I am going to go first to Mr. Wolf and then to Mr.
Hall for any opening statements that they would like to make at
this time. Mr. Wolf.
Mr. Wolf. I thank you, Mr. Chairman, and I appreciate you
even inviting me. The Full Appropriations Committee is marking
up, and I am going to go off to there; but I want to personally
thank you for holding this hearing and bringing this to the
attention of the world and forcing this administration to deal
with the problem that they have been negligent and have failed
on.
Today, thinking of what is going on with moms and dads in
Sierra Leone and in Freetown where they are afraid of their
kids being killed and husbands and wives--and when I think of
how little this administration has done, whether it be on
Sudan, whether it be on Rwanda and now on Sierra Leone--I hope
that the Committee can see fit to support Congressman Hall's
bill with regard to diamonds, and also I will submit the
statement; but I think that a permanent travel ban should be
issued by the United States and Europe against the rebels and
their families. They ought never to be permitted to enter the
United States or by any other Western powers. Bank accounts of
the rebels and their families' members in the United States and
Europe should be frozen. They should be denied access to these
accounts and the future commerce with the United States.
The rebel leaders, Sankoh and others, should be declared
war criminals by the United States and other European
countries, and the United States and Europe should direct our
intelligence and police agencies to actively pursue
apprehending rebels who have not disarmed and have been
declared war criminals.
Last, the same conditions should be applied to Liberian
Charles Taylor and all Liberians who have assisted in the
atrocities that have taken place in Sierra Leone. Just look at
the news knowing the frightening fear and that 90,000 have been
killed, and frankly this administration has done just about
nothing.
I thank the Chairman for having this hearing.
[The prepared statement of Mr. Wolf appears in the
appendix.]
Mr. Royce. Thank you, Mr. Wolf. Mr. Hall.
Mr. Hall. Thank you, Mr. Chairman. Thanks for letting me
and Frank Wolf participate today. Twenty years ago, I was on
this Committee, and it's a great Committee. I appreciate the
work that this Subcommittee does, as well as the Full
Committee.
As Congressman Wolf has mentioned, we went to Sierra Leone
together in December of last year. Frank and I are good
friends. We travel a lot together. This was my second trip to
Sierra Leone. I was there 10 or 12 years ago; and as you know,
Sierra Leone is an interesting country, beautiful, great
people, blessed with tremendous natural resources, diamonds,
emeralds, platinum, gold, great soil, lots of rain, wonderful
beaches. It could be a gem, but it actually ranks last in the
world as United Nations ranks countries, by gross national
product, infant mortality rates, etc. It should be maybe No. 1;
but because of tremendous corruption and a lack of good leaders
over the years, it has gone from bad to worse.
I don't think the United States is going to send troops
into the current crisis, but we could help logistically. So
what can we do? My feeling is you have to take the profit out
of the war. Mr. Sankoh, who Frank and I talked with one night,
who we consider to be a very evil man, turned a ragtag group of
rebel soldiers into a force of 25,000 to 30,000 people who are
well-armed. They are well-armed because they seized the diamond
mines, and they have used the diamonds to supply their troops
with the latest in arms.
We think our CARAT Act will go a long way in improving this
situation. It will take the profit out of this war. This
problem also affects Angola. It affects the Congo. It affects
Liberia, and until we get a handle on these things, until we
let Americans know what is going on, we are not going to stop
this violence. This is about the only way the United States can
get into this situation, in my opinion.
I want to thank President Haas of the Diamond Dealers Club
of New York. They have written me a letter in support of our
resolution on this whole situation in Sierra Leone. It is a
strongly worded resolution that I hope that this Committee and
the Full Committee would consider. The Diamond Dealers Club of
New York has endorsed that particular resolution.
I want to thank Ambassador Melrose in Sierra Leone, who is
in the middle of something that is very, very difficult. He
works very hard. I know he is in touch with my office, and he
is working every day, and he stays in touch with all the people
over there; and it is almost an impossible situation.
I do hope, though, Mr. Chairman, that we can certainly
consider this diamond bill, The CARAT Act. I think it is very,
very important. It is not a perfect bill. A lot of people say
it won't work. I don't believe that for a minute. I think the
diamond industry employs very sharp people, some good business
people. A lot of these conflict diamonds, I would say somewhere
between 5 and 15 percent, are finding their ways into our
country. I think our people ought to know about it so we should
protect legitimate businesses in this country and in the world,
but at the same time figure out a way to let consumers know
that we are not going to buy these conflict diamonds anymore,
especially when we buy 65 to 70 percent of all the diamonds in
the world.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Hall appears in the
appendix.]
Mr. Royce. Thank you, Mr. Hall. I also want to acknowledge
Ambassador Leigh of Sierra Leone. Ambassador Leigh is with us
today, if you will stand at this time. Thank you. Our thoughts
and interests are with you today, Ambassador; and we have your
testimony, and without objection I am going to submit that for
the record. Thank you, sir.
[Ambassador Leigh's statement appears in the appendix.]
Mr. Royce. Cynthia McKinney, Congresswoman Cynthia McKinney
from Georgia is with us; and I am going to ask if she has an
opening statement she would like to give.
Ms. McKinney. Mr. Chairman, I would like to commend you for
calling this very important hearing, and I would just like to
say that I agree with everything that has been said before me
because there is really only one thing that can be said.
However, I would like to just make a plea to the African
countries, and also Belgium and Israel, to tighten up on the
diamond industry and the diamond trade in those countries so
that when we deal with them, we can understand that their
profits are not at the expense of poor people in Africa and
something must be done. I would like at the appropriate time
for the Ambassador to speak about what it is that the American
Government is doing to press Belgium and Israel in relation to
their own activities with the diamond trade.
I would like to commend Ambassador Fowler for the Fowler
Report at the United Nations, which took the bold step of
naming names and naming countries that were evading the
sanctions against UNITA, and finally and most importantly, the
efforts that we do here in this Congress to make sure that the
United States is on the moral high ground, as it has not been
in the case of its relations with Africa.
Thank you, Mr. Chairman.
Mr. Royce. Thank you. We are now going to go to our first
witness, Ambassador Howard Jeter. I should share with the
members that we are also being telecast in Pretoria; and our
second panel will testify from Pretoria. So at this time, let
me go to Ambassador Howard Jeter, Deputy Secretary of State for
African Affairs. He has had a very distinguished diplomatic
career. He has served as the U.S. Ambassador to Botswana and
special Presidential envoy for Liberia. In addition to his
postings there, he has had postings in Lesotho, in Mozambique,
in Namibia, and in Tanzania. Ambassador Jeter has been working
very hard on this issue and we look forward to your testimony.
Thank you.
STATEMENT OF AMBASSADOR HOWARD JETER, DEPUTY ASSISTANT
SECRETARY, BUREAU OF AFRICAN AFFAIRS, U.S. DEPARTMENT OF STATE
Ambassador Jeter. Thank you, Mr. Chairman.
Mr. Royce. Howard, the red button there. Thank you,
Ambassador. Also, Ambassador Jeter, if you could summarize your
statement, that would helpful.
Ambassador Jeter. Mr. Chairman, thank you very much for
that very kind introduction, and I have submitted a statement
for the record, and I will now give you an oral testimony that
pretty much summarizes that.
Mr. Chairman and distinguished Members of the Committee, I
am honored and pleased to be here today on the question of what
can be done to curb the powerful influence of the illegitimate
diamond trade on African conflicts. This is a timely, important
gathering on a complex subject that cannot possibly be
overlooked or wished away, nor can it be reduced to quick,
simple solutions.
Members of Congress, nongovernmental organizations and the
media have all in the past year drawn increasing attention to
this problem. I commend you, the administration commends you
for taking the constructive step of calling us here together
today to take account of the scope and nature of the problem,
what has to be done to address it and the way forward.
I also wish to commend you for bringing together in today's
dialogue several important figures integral to the evolving
international debate over conflict diamonds. These witnesses
are each dedicated individuals who have thought long and hard
about what pragmatic steps make sense.
The central foreign policy challenge we face, Mr. Chairman,
is to reconcile two critical imperatives: first, to devise
feasible measures to curb the powerful influence on African
conflicts of illegitimate diamond trading, both through the
tightening of global marketing practices and direct assistance
in building capacity to manage the diamond sector in conflicted
States such as Sierra Leone; second and equally important, to
ensure we do no harm to the stable market democracies,
Botswana, South Africa, Namibia, who depend heavily on gem
stone diamond production and international consumer confidence.
Mr. Chairman, I would like to affirm and to affirm
emphatically at the outset of this hearing that the
administration will take no action in regard to trade in
diamonds that puts at risk the national interests and economic
welfare of Botswana, South Africa, or Namibia. That is a pledge
we have made directly and repeatedly to those governments in
our recent consultations in early March in southern Africa.
In the past year, our efforts on conflict diamonds have
begun to achieve results. Most notable are the achievements of
the U.N. Sanctions Committee on Angola, through the work of
Canadian Ambassador Robert Fowler and the Experts Panel; the
steps taken by De Beers to guarantee that none of the diamonds
it issues at the central selling organization originate in
conflict zones; the southern African initiative led by the
South African Government and strongly supported by Botswana and
Namibia to convene an international conference on May 11 and 12
in Kimberley, South Africa, to weigh options to tighten
regional law enforcement, harmonize customs and enhance
exchange of information; efforts, Mr. Chairman, by USAID, the
diamond industry and the Sierra Leonean Government to lay the
groundwork for the creation of the Commission on the Management
of Strategic Resources, called for in the Lome Agreement to
rationalize Sierra Leone's diamond sector; steps underway by
the Belgian Government and the Diamond High Council in Antwerp
to tighten the entry requirements of diamonds into the Antwerp
marketing center.
Norms and practices are beginning to change in the
international diamond industry, in recognition that it is in
the industry's best self-interest to be proactive and to be
responsible. The U.N. effort led by Ambassador Fowler has
redirected international attention to sanctions enforcement on
UNITA and has begun to narrow UNITA's options. New dialogues
across industry, governments, and nongovernmental sectors have
ensued. These, Mr. Chairman, I would submit are all very
encouraging developments.
In July 1999, the State Department began to examine the
role of diamonds in African conflicts in close collaboration
with the British Government through a series of internal
studies and consultation. We are still very much in the
preliminary investigative phase of our attempt to grasp the
scope and the role of unregulated diamonds in Africa.
The immediate impetus of our efforts was the imposition of
the U.N. Security Council sanctions on UNITA diamonds in June
1998 and the subsequent establishment of the Experts Panel
under the direction of Ambassador Fowler. These Security
Council actions were taken out of the recognition that the
Lusaka Protocol had failed because UNITA, one of the parties in
the conflict, failed to comply with key parts of the Lusaka
Protocol. It is estimated that from 1994 to 1998, UNITA's
weapons acquisitions were financed by 3 to $4 billion in
illicit diamond sales. A potentially stable peace was lost, and
Angola returned to a cruel war that had already cost half a
million lives, internally displaced over 3.5 million people and
generated over 300,000 refugees.
We were also motivated, Mr. Chairman, by an awareness of
how integral illegitimate diamonds had become to ongoing
conflict, violent displacement and the death of 10's of
thousands of civilians in two other crises zones in Africa,
Sierra Leone, and the Congo.
In Sierra Leone, Foday Sankoh's Revolutionary United Front
used the proceeds from diamond smuggling to transform itself
from a ragtag band of several hundred into a well-equipped
force of perhaps as many as 20,000. In the process, the RUF
killed an estimated 50,000 Sierra Leoneans, committed thousands
of atrocities, generated half a million refugees, and displaced
fully one-third of Sierra Leone's 4\1/2\ million citizens.
In the eastern Congo, diamonds are integral to the RCD
(Congolese Rally for Democracy) and MLC (movement for the
liberation of Congo) insurgencies, and their external allies in
Rwanda and Uganda. Diamonds that move through underground
channels are also integral to the war-making capacities of the
Kabila Government and its external allies. The State Department
has taken a leading role in raising the international profile
of a conflict diamond issue.
Secretary Albright highlighted the arms/diamonds dimension
to Africa's conflict and the urgent need to identify feasible
measures to address the problem in a September 1999 Security
Council ministerial and also at the December G-8 Berlin
ministerial on conflict prevention.
In early October 1999, the State Department sponsored an
international conference here in Washington with a special
focus on the economies of war in Angola, Congo, and Sierra
Leone. That was the occasion, Mr. Chairman, to open a direct
dialogue with diamond officials in Botswana and from Angola.
Soon thereafter, we conducted consultations with executives of
the American diamond industry in Washington in November and
again last week in New York.
In March, we sponsored a strategic planning exercise for
the government of Sierra Leone with the participation of
international diamond industry leaders, which resulted in
proposals that we believe are realistic and hopefully workable
if the situation in Sierra Leone can somehow be stabilized.
In late February and March, I visited southern Africa and
Belgium, together with a representative of the United Kingdom.
During that trip, at a conference in Gaborone, Botswana, that
brought together diamond officials from Botswana, South Africa,
Namibia, and Angola, we were able to build a consensus around
the twin goals of defining pragmatic measures to combat
conflict diamonds while taking special care to do no harm to
the stable democracies of Botswana, Namibia, and South Africa.
Mr. Chairman, there is no single fix to the problem of
conflict diamonds in Africa. Rather, it is essential that we
press ahead simultaneously on multiple fronts and that we
recognize that this is a difficult, complex problem that will
take a long time to address.
In the coming months, we will actively seek to support
progress in the following areas: in followup to Ambassador
Fowler's innovative work, a 5-person panel will be appointed in
May under the Secretary General's direction to continue
investigation of effective sanctions and enforcement measures
on UNITA and to advise the Security Council. We anticipate
providing technical assistance as warranted and as welcomed by
the southern African states to support initiatives stemming
from the Kimberley conference and the subsequent African
ministerial meeting planned for July.
We will work with the British and with other G-8 partners
to raise the profile of the link between conflict diamonds and
development--develop pragmatic means of addressing the problem.
When the situation in Sierra Leone has stabilized, we will
continue our efforts to support the establishment of the Sierra
Leone commission on the management of strategic resources.
Defining lines of authority and a detailed blueprint for the
commission are essential next steps.
Mr. Chairman, we look forward to working closely with you,
with the Subcommittee, and with members of your staffs in
thinking through actions by the Congress which has taken a
constructive and proactive interest in this difficult problem.
I thank you for your attention, and I welcome any questions
you may have.
[The prepared statement of Ambassador Jeter appears in the
appendix.]
Mr. Royce. Thank you, Ambassador Jeter.
Let me ask a few questions at this time. Since the Sierra
Leone peace agreement was signed last July, the United States
and others have been working, De Beers and other diamond
companies, to regularize the diamond trade there. Now, we have
seen the lethal RUF attacks on peacekeepers in Sierra Leone,
and as of this morning there are approximately 500 peacekeepers
being held hostage, a number of casualties, a number of deaths,
armored vehicles--U.N.-armored vehicles now being manned by the
rebels. I want to take this opportunity to ask the
administration, after having endorsed and pressured for Foday
Sankoh's entry into the government where he now heads the
national commission charged with diamond mining operations and
revenue, are we ready to change course? Is the United States
still committed to seeing Foday Sankoh as part of the solution
in Sierra Leone? That is my first question to you.
Ambassador Jeter. Mr. Chairman, thank you very much. I
think that our first and foremost priority in Sierra Leone at
this point has to be gaining the release of the detainees and
the hostages that are held by the RUF. A second priority must
be to somehow enhance the capabilities of the UNAMSIL force on
the ground. One of the problems in Sierra Leone was that as
ECOMOG was leaving the country and as UNAMSIL was in the
process of deploying, it had not reached its full strength in
terms of troop deployments. We are working intensively with the
United Nations and with countries in the West African region
and beyond to try to address some of these problems.
We are also, as you may know, we have a team of U.S.
military now in Nigeria to talk about what might be done by the
region in terms of perhaps Nigeria's reentry in Sierra Leone. I
think that it is clear that the problem we see in Sierra Leone
at this moment was caused by Mr. Foday Sankoh. He has clearly
violated the agreement, and we condemn that violation.
Our primary objective now, I believe, however, must be to
get the peace process back on track and to do so by
strengthening and helping UNAMSIL and first and foremost to get
the release of the hostages.
Mr. Royce. I think we do need to be focused on that, but
what jumped out at me in your written testimony was your
reference to continuing efforts to support the Sierra Leone
commission on the management of strategic resources when the
situation is stabilized; and I just want to make the
observation that things are not going to stabilize, at least
they are not going to stabilize in the way the administration
would like them to, with Foday Sankoh heading the commission.
So I think that some new thinking on this crisis is desperately
needed.
Let me make the observation that I have written the
administration repeatedly on this, noting my grave concern over
the consequences and implication of a power-sharing arrangement
with the RUF to begin with; and I made the point at that time
that in Mozambique, which is perhaps the most successful
example of national reconciliation following civil strife in
Africa, the government and the rebel organization followed the
course of transforming the rebel organization into a political
party, which subsequently contested elections and assumed its
place in government as then a legitimately elected opposition
party. My point was that if the RUF cared about democracy, this
course and not a demand for a power-sharing deal should have
been acceptable to them, and this is what the administration
should have negotiated because, frankly, everything that I
suggested would come to pass so far has come to pass; and I
must say that I don't think at this point appeasement is going
to work with Mr. Foday Sankoh.
I notice in the morning paper, in the Post, Nigeria offers
to send reinforcement troops to Sierra Leone; and I would
suggest that this offer for additional troops should be
encouraged in the strongest terms, including U.S. air lift
support which I understand has been announced, though it is
unclear how extensive that will be. But I think the time is at
hand to do something about the mayhem that is about to befall
Freetown again if the international community does not take
concerted action.
I would make the observation that in 1995, Executive
Outcomes--and we all have concerns about Executive Outcomes--
but in 1995 with 200 soldiers and sophisticated equipment they
managed to push the RUF out of Freetown and out of the major
diamond areas within about a month. They were cheered in the
streets of Freetown for their efforts. Freetown is now under
siege. How is it that 5,000 U.N. peacekeepers are flailing
about now against the RUF, which supposedly has been disarming?
I think the answer is they have not been disarming. I would
also like to ask you, to the best of your knowledge, how is RUF
marketing their illicit diamonds? I have heard some second-hand
information. I would like to hear from the administration how
they are marketing those diamonds. Thank you.
Ambassador Jeter. Thank you, Mr. Chairman. I think
obviously the question of what might be done with the
commission can only be answered in the context of a restoration
of peace and stability in Sierra Leone. We believe that one of
the reasons that UNAMSIL has had difficulties is that there is
an unwillingness certainly on the part of the RUF and a
demonstrated unwillingness on their part to abandon the diamond
producing areas. I think that a restoration of a legitimate
diamond sector in Sierra Leone is one of the only ways that we
can manage to bring and restore peace to that beleaguered
country.
We also see, Mr. Chairman, that we are not prepared at this
moment to say that the UNAMSIL, U.N. peace process in Sierra
Leone has failed. If you look at the statistics, out of an
estimated 30,000 armed combatants, 23,000 of those combatants
had been or had voluntarily disarmed, and that represented
certainly a measure of progress. There is a perception that
individual combatants within the RUF--and this is actually the
origins of the current conflict that we are seeing in Sierra
Leone--there were individual members of the RUF who actually
wanted to disarm who had reported to a disarmament site
independently in Makeni. RUF commanders in that area tried to
stop them, and they did so through violent means. It led to the
death of some of the Kenyan peacekeepers.
Certainly, we will do what we can to get a peace process
back on track once the military situation in Sierra Leone has
stabilized.
Mr. Royce. Let me just make the point that some of the
23,000 former rebels who were disarmed are now rearmed with
U.N. equipment. This is a debacle. There is no other way to
look at it. Just to close here, so you are not ready--the
Administration's not ready yet to write Foday Sankoh out of
political life in Sierra Leone? That is my question.
Ambassador Jeter. I think, Mr. Chairman, one would have to
think through the consequences of doing that, certainly at this
stage. Foday Sankoh still has command over thousands of armed
combatants in Sierra Leone, and somehow we are going to, and
hopefully we will be able to, negotiate some solution to the
situation that we see there now.
Mr. Royce. I'll just take the opportunity to read from the
embassy here: ``It is the view of this embassy (Sierra Leone)
that Mr. Sankoh was never a legitimate political dissenter. He
was merely a diamond thief and smuggler in collusion with
outsiders who became so successful. He conned the world with
bogus political rhetoric and fooled himself into believing that
he had acquired the power to seize control of our government.''
And this, again from the Embassy in Sierra Leone. ``We invite
any United States public official who may have asked President
Kabbah to release and give amnesty to Mr. Sankoh so he could
negotiate the participation of RUF criminals in the present
power-sharing government of Sierra Leone to clarify their
position, given Mr. Sankoh's demonstrated contempt for the
health and safety of the people of Sierra Leone and his
continued corrupt and brutal exploitation of the wealth of our
land.'' Now, that was the view of the elected government in
Sierra Leone.
I would like to close with one last question. We sanction
UNITA diamond sales. Why not sanction diamonds also from Sierra
Leone rebels?
Ambassador Jeter. Mr. Chairman, that is certainly something
that should come under consideration and examination.
Mr. Royce. I will go to Mr. Meeks. Mr. Meeks of New York.
Mr. Meeks. Thank you, Mr. Chairman. Thank you, Mr.
Secretary--Mr. Ambassador, I should say. The RUF has been
unwilling to relinquish its control of the diamond mining areas
in Sierra Leone as mandated by the Lome Agreement. The RUF
command claimed, though, that other areas of the Lome accord
have also not been enforced, such as setting up a trust fund
and the appointing of a senior cabinet--a senior cabinet
appointment such as a foreign affairs or finance minister. Can
you comment on this or on the slowness of this process?
Ambassador Jeter. Thank you, Congressman Meeks. Some weeks
ago, Foday Sankoh composed a letter that he sent out to
numerous sources outlining his grievances about the Lome peace
accord and its implementation. These were two of the issues I
think that were addressed. There is a provision of the accord
that would set up a trust fund to allow the RUF to transform
itself into a political party. That trust fund has not to date
been fully financed.
In terms of senior cabinet appointments, the Lome Agreement
provided for 4.4 cabinet positions for the RUF. The RUF now
encumbers two cabinet positions; the Armed Forces Revolutionary
Council two positions. It was our perception certainly that the
AFRC and the RUF were unified during the negotiations in Lome,
and I think that that requirement contained in the Lome
Agreement has been fulfilled.
I just want to comment briefly on the Accord and the
agreement itself. I think that that agreement resulted from a
determination on the part of the government of Sierra Leone
that it was not going to be possible to defeat the RUF
militarily. It had been tried on several occasions. It had
failed on several occasions. With the announcement by Nigeria
that it could no longer remain in Sierra Leone because of
financial and other implications, I think that the government
of Sierra Leone made a considered judgment that it had to
negotiate a solution to this conflict. That decision was
supported, and the process of arriving at the agreement was
then supported fully by the region.
We were there on the sidelines as facilitators and did what
we could when called upon to try to advance that process.
Mr. Meeks. One other question, and I don't know maybe--I
have been speaking to several individuals, so I am saying the
bottom line may not just be sharing of the power in the
government but actually just be a question of money. For
example, the sharing of diamonds in most other countries--it is
Israel and Belgium that may have a joint partnership with
government officials as opposed to someone else from within the
country itself--having and setting up, as my colleague, Barbara
Lee, indicated a manufacturing business from within the Nation
itself.
Have we looked at them being controlled by private
individuals within that nation itself as opposed to having a
joint partnership with another nation or having another nation
actually being in control of some of those diamonds? Have we
looked in this area about trying to set up a private situation
with the government and private enterprise as far as control of
the diamonds are concerned to set up a legitimate diamond
industry within the country itself?
Ambassador Jeter. I think precisely, Congressman Meeks,
that is one of the things we are trying to do through AID. One
of the problems in Sierra Leone is lack of capacity, and one of
the things that we are trying to do through our OTI program
there is to help build that capacity. We also have to try to
assist the government of Sierra Leone in restoring a regulatory
and legal framework that will actually govern the diamond
sector. Those are things that we are trying to do. We have also
spoken with a number of very legitimate diamond buyers in our
own country and overseas who now have taken an interest in
trying to help the government of Sierra Leone restore
legitimacy to that sector. That includes the Diamond High
Council here. It includes De Beers. It includes others that
actually have provided, I think, large contributions to or at
least in terms of the initial steps of trying to regularize the
system of diamond buying and selling in Sierra Leone itself,
but the capacity has to be rebuilt and that is what we are
trying to do.
Mr. Royce. We will go to Ms. Lee.
Ms. Lee. Thank you, Mr. Chairman. Let me ask you, Mr.
Ambassador, with regard to the steps taken by De Beers, first
of all, it has announced as you indicate in your testimony that
its intention is to actually boycott conflict diamonds in
Sierra Leone and Angola. Now De Beers does not have an office
in Freetown, but I understand it has an office in Conakry,
Guinea. Partnership Africa Canada indicates that it is really
inconceivable that De Beers is not in one way or the other
purchasing diamonds that have been smuggled out of Sierra
Leone. What is the administration's take on this, and can you
comment on that specific allegation?
Ambassador Jeter. Thank you very much for that question. We
had an opportunity to visit with De Beers both in London and
during our trip to South Africa; and we actually spoke with
Nicky Oppenheimer, myself and with Gary Ralfe, who is the chief
operating officer. One of the reasons for our meeting was to
enlist their support to help Sierra Leone, and I think that
they responded to that request. There was someone who actually
came from their London office and someone who came, I believe,
from their operation in Guinea to sit down during the 2 days of
the strategic planning session that we had in Sierra Leone to
actually try to work out some modalities to legitimize the
sector. I saw that, personally, as a very large and very
positive step. De Beers has said to us, however, that they are
not interested whatsoever in reentering into commercial
relations in Sierra Leone in the diamond sector itself.
Ms. Lee. Let me ask you about the basis then--and I assume
no one from Partnership Africa Canada is here--do you know what
the basis is for their at least concern about that, given the
office in Guinea?
Ambassador Jeter. Their concern about?
Ms. Lee. With regard to De Beers, Partnership Africa Canada
believes that it is inconceivable that this is actually the
case in terms of De Beers not purchasing smuggled diamonds,
given the fact that they are located now in Guinea and that
this could be just another spot for them to do that kind of
business.
Ambassador Jeter. First of all, I think one of the things
that we have talked to De Beers about is some kind of
independent audit of their diamond reserves. I think it is a
legitimate question; it is a legitimate concern. When you speak
with Global Witness, I think it is something that they have
pursued. Given the nature of conflict diamonds, given the
nature of the illicit trade, it is going to be very, very
difficult, Congresswoman Lee, until there is some kind of
mechanism in place to actually monitor and to make certain that
you set up channels that would attract those diamonds that are
produced in country. Right now, certainly, that does not exist
in Sierra Leone.
Ms. Lee. Thank you.
Mr. Royce. Thank you. We will go to Mr. Hall.
Mr. Hall. Thank you, Mr. Chairman. Mr. Ambassador, who is
going to pick up on this project now that Steve Morrison has
left. You are, as I understand, going to be our Ambassador to
Nigeria--who is going to pick up this whole idea of how to deal
with conflict diamonds?
Ambassador Jeter. There is someone who is already in our
policy planning staff who follows the issue. There is a fine
officer who has been recruited to replace Steve Morrison. Steve
Morrison at the moment, and I think for the foreseeable future,
remains on contract to the State Department to work exclusively
on this issue; and it is Steve Morrison who is traveling to
South Africa to actually participate in the meeting there.
Mr. Hall. Are there changes in U.S. law concerning the
trafficking of diamonds that we can make in the Congress? For
example, we have monitored diamond smuggling for a long time
now, as part of the work that goes with fighting narcotic
trafficking. Rebels' cash-flow goes through some banks. Is
there a way we can get at this money? Are there any changes in
the law that we need to make?
Ambassador Jeter. I think, Congressman Hall, that that is
something that needs to be looked at. As I indicated in my oral
and in written remarks, we are now at the early stages of an
initiative to try to control this phenomenon of conflict
diamonds. There are certain banks, some of which are in
Belgium, some of which might be in Israel, that have very large
transactions with those in the diamond industry. It is our
intent to engage those banks and the leadership of those banks
in a dialogue in the future. I think that the legislation that
you have introduced certainly represents one step in the right
direction and shows the concern of the Congress on this issue.
So I think that perhaps that is something that will have to be
considered in the future. I don't think we are at a stage now
where we can actually define what needs to be done.
Mr. Hall. Now, Canada has taken some pretty strong
positions on conflict diamonds. So has Great Britain. I am very
concerned that our own country needs to take some strong
positions too. I realize that we have to protect legitimate
businesses in the diamond industry; but at the same time, this
whole issue needs to be pushed and the diamond industry needs
to be pushed, De Beers needs to be pushed. There needs to be a
better way of monitoring. Whether it is my legislation or some
other legislation, I think it is important for our
administration to take a position. We can't sit on the
sidelines on this one. I think we have to come out swinging.
We have to take the profit out of this war, not only in
Sierra Leone but any other nation that participates in
trafficking conflict diamonds. This trade is fueling wars; it
is killing people. I can't tell you how many people by the
hundreds that Frank Wolf and I saw when we were in Sierra
Leone. If we sit on the sidelines, the administration and the
Congress, on this issue--and I have been dealing with this
issue for a year; all of you have probably been dealing with it
much longer--if we don't come up with some concrete proposals,
I think what is going to happen is Industry's worst fear, I
think human rights groups will take off, and it will hurt a
legitimate business; and I think it is incumbent upon you, the
Congress and the diamond industry to come up with some darn
good ideas; and we better start making some concrete proposals
because I think people are going to get mad. This is getting
crazy. So we need to take some positions here.
Ambassador Jeter. I can only say that I thoroughly agree
with your statement. I think that progress has been made. I
think that we have been big and very influential supporters of
the Fowler initiatives at the United Nations. We have now
certainly contacted the major figures in the diamond industry.
We have touched base with the legitimate producers in southern
Africa. I think that we have been encouraging those governments
to take a leadership role on this issue, and that I think will
be the important result of the conference that is taking place
in Kimberley. We put, I think, the international community on
notice that this is an issue that matters to us and that we are
going to do whatever we can to deal effectively with this issue
of conflict diamonds. I outlined, Congressman Hall, some of the
steps that we are planning to take in the future in my oral
statement.
Mr. Royce. We are going to go to Mr. Chabot of Ohio. Thank
you.
Mr. Chabot. Thank you, Mr. Chairman. Mr. Ambassador, the
Chairman referred a few moments ago to the fact that Sankoh's
troops confiscated U.N. equipment and is now using that
equipment, that they have also obviously killed and taken
hostage U.N. personnel. Would you comment on the practice of
sending U.N. peacekeepers into areas where there is no peace. I
also remember Bosnia, a situation where U.N. troops were
literally tied up and used as human shields in that instance.
Is there any hope that the United Nations may learn something
from these types of incidences, or are they just slow learners
over there?
Ambassador Jeter. Thank you very, very much, Congressman. I
think that in the case of Sierra Leone, one of the things that
actually occurred was a question of strategy on the ground. The
troops that had arrived, there wasn't a full complement of the
UNAMSIL force which should have been eleven hundred. I think
that now it is in the neighborhood of perhaps 8,700 troops. In
order to support the disarmament, the mobilization process, the
UNAMSIL commander sent contingents, small contingents out to
the countryside in Sierra Leone to disarmament sites so that
UNAMSIL could have been of assistance there. That was perhaps a
mistake. I don't want to try to second guess the force
commander, but it seems that perhaps he should have waited
until he had a full complement of troops on the ground.
The other deficiency that is very clear now was in the
equipping and the equipment that was carried to Sierra Leone by
the peacekeepers. There was not enough logistical support on
the ground, not enough personnel on the ground, I think, to
carry out their mandate. One of the problems of course for U.N.
peacekeeping operations like this is that there are some
countries that are not paying their assessments, including our
own.
Mr. Royce. We are going to go to Ms. McKinney of Georgia
for her questions.
Ms. McKinney. Thank you, Mr. Chairman. Thank you, Mr.
Ambassador, for being here. In your testimony you have
suggested that the administration has examined, held a
conference and a planning exercise but that the administration
is not yet ready to suggest policy proposals to curb the
illicit diamond trade. Is that correct? Is that what you said?
Ambassador Jeter. I think that the approach to genuine
control of this issue of conflict diamonds has to be an
international approach, and certainly we are working
internationally now with the legitimate producers in southern
Africa, with the United Nations there will be discussion of
this issue during G-8 deliberations that are coming up, and I
think that we want to make certain that we have touched all of
the bases and that we support the multiple initiatives that are
going on now before we get down to the issue of spoil. I think
what we are doing actually represents policy.
Ms. McKinney. Just to read into the record a little bit
about what Congresswoman Lee, I believe, was referring to, I
will just read it. A comparison of West African diamond export
figures with Belgian imports is revealing. For example, while
the government of Sierra Leone recorded exports of only 8,500
carats in 1998, the Belgian Diamond High Council recorded
imports of 770,000 carats. Annual Liberian diamond mining
capacity is between 100 and 150,000 carats; but the Belgian
Diamond High Council records Liberian imports into Belgium of
over 31 million carats between 1994 and 1998, an average of
over 6 million carats a year. Ivory Coast, where the small
diamond industry was closed in the mid-1980's, apparently
exported an average of more than 1.5 million carats to Belgium
between 1995 and 1997. This is not a new issue. It is not a new
problem. Perhaps the scrutiny that it is undergoing now is new,
and I am surprised that the administration would suggest that
they are not yet ready to propose policy changes that can curb
the illicit diamond trade.
Now, several times you have made reference to the Fowler
Report. What about an arms embargo against those governments
that are named in the Fowler Report that are currently engaged
in acts of armed aggression?
Ambassador Jeter. Thank your much for those questions. I
think that certainly we agree with your analysis and the
figures that you have quoted. It is our understanding that in
1999, the government of Sierra Leone realized less than $1.5
million in revenue from diamond sales. Production in Sierra
Leone at a minimum I think would be in the neighborhood of 30
million. Liberia, as statistics indicate, may have realized as
much as $300 million from diamond sales. There is no question
that diamonds from Sierra Leone are going through Liberia.
There is no question that some of those diamonds, illicit
diamonds, are also going through countries like Burkina Faso
and Cote d'Ivoire. We don't deny that. I think one has to be a
bit careful, however, because of the laxity in the system.
What I have been led to understand is that a seller in
Antwerp for example could simply declare that the diamonds that
they brought in originated in a certain country, and this is
where the system has to be fixed. I am certain that, as I said,
that some of the diamonds coming out of Sierra Leone are going
through Liberia and we need to do something about that.
In terms of an arms embargo, in the region an arms embargo
in the case of Liberia already exists. I must admit I don't
think that that embargo has been terribly successful because we
have indications that there are arms going into Sierra Leone,
have been transiting Liberian territory. The question is how do
you shore up those kinds of embargoes without actually
deploying people on the ground, and I think that we have been
invited, for example, by the Liberian government to send troops
and deploy those troops along the border. The Liberian
government I think has invited ECOMOG when they were in Sierra
Leone to send troops and deploy those troops along the border.
That takes resources that we don't currently have, and I think
that the idea of an embargo against the countries that are
involved in this illegal trade certainly is something that
deserves to be looked at.
Ms. McKinney. That, in fact, is one of the 39
recommendations of the Fowler Report. What is the position of
the administration? I would also like to just point out that
all of this has happened under the watch of this
administration. What is the position of this administration on
the 39 recommendations of the Fowler Report?
Ambassador Jeter. We have and do support the Fowler Report.
We applaud what Ambassador Fowler has done. I think he has
shown that when you have that kind of leadership and that kind
of determination that the kinds of things that we have seen
from the report actually can be done. I think that we would
have to look at each individual recommendation, and I would be
happy to get back to you with some of our views on those
recommendations. But as a global document, we support the
Fowler effort.
Ms. McKinney. Finally, Mr. Chairman, I would just ask what
has the administration said and done to stop the fighting in
Kinsangani?
Ambassador Jeter. I think that senior administration
officials have been in touch with both Uganda and Rwanda at the
Presidential level. I think that those contacts are going on
even as we speak. There was another flair-up of conflict last
night in the area. We are trying to touch base with President
Museveni and with Kagame. One of the suggestions that has been
made--and they themselves have been in contact at our urging--I
think that there is a plan that has been developed now by the
two that could lead to a cessation of hostilities. We are
working to do that. We think there should be a disengagement of
forces, and one of the recommendations that has been made is
that the two respective governments should send their chiefs of
defense staffs to Kisangani to make sure that that happens.
Ms. McKinney. What about withdrawal from Democratic
Republic of Congo?
Ambassador Jeter. The withdrawal of?
Ms. McKinney. The Ugandan and Rwandan forces that are
fighting each other in Kisangani. Why not just ask them to
withdraw from Democratic Republic of Congo?
Ambassador Jeter. I think that ultimately that is our
objective in the Congo in a global context. We would like to
see all foreign forces out of the Congo, and we have done that
before.
Mr. Royce. We thank you, Ambassador. Mr. Chabot had one
last question.
Mr. Chabot. Thank you, Mr. Chairman. I appreciate your
indulgence here. Mr. Ambassador, have you any--have you
received any reports that U.N. peacekeepers, Zambian
peacekeepers who were taken hostage, have actually been pressed
into labor at one of the diamond mines that is operated by RUF?
Ambassador Jeter. No, Mr. Chabot, we haven't to the best of
my knowledge.
Mr. Chabot. If you find out differently could you followup
with us on that?
Ambassador Jeter. We will certainly report back to you.
Mr. Chabot. Thank you very much.
Ambassador jeter. Thank you.
Mr. Royce. Ambassador, I would just like to make a couple
of observations as we complete this panel, if I could. One, I
would like to make the observation that the United States
should have done more to support ECOMOG in their peacekeeping
operation when the Nigerian forces and other ECOMOG forces were
engaged on the ground in battle with the RUF and looking for
support. I hope that we learn from that, and I hope that the
Nigerian offer this morning that was--they referenced in the
Washington Post for additional troops--I would hope that that
would be encouraged in the strongest possible terms. Let me say
that we should back Nigeria in this, and let me also make the
observation that I hope the administration will agree with me
that we should bring the United Nations to sanction diamonds
from Sierra Leone's rebels. I think that is very do-able.
Let me also say as to the question of whether or not this
agreement was engineered by the administration in terms of
bringing Foday Sankoh into the government, in February 1999 in
testimony before this Subcommittee, the Assistant Secretary for
Africa referred to the negotiations between the Government and
RUF as a result to a large extent of the energetic diplomatic
efforts of the United States and others who have been leaning
hard on the two sides to find a negotiated solution. In May
1999, Jesse Jackson in the role of special envoy for Africa,
released a statement saying he brokered and signed a cease-fire
agreement between the countries, President Kabbah and rebel
leader Foday Sankoh. President Clinton soon after thanked
Jackson for bringing about this agreement. Now the reason I
bring this up is because during this period of time I was
objecting to this approach and I believe that the government of
Sierra Leone was objecting to this approach. I know the
newspapers. I mean, the headline on the day that that occurred
was ``America kidnaps Kabbah,'' meaning gist of the story was
that we were foisting upon that government in their view and
upon the view of at least the particular newspaper in Sierra
Leone a government that they did not wish to be part of, a
government in which the RUF was not elected but instead were
brought into the process forcibly.
I think that the very notion of U.N. peacekeeping in Africa
is on the line, and that is why I am very hopeful that we will
take up the offer from the Nigerians and assist them in their
effort.
We in my view have forced an immoral deal on the people of
Sierra Leone, and I want to respond to the question which has
come up in hearing after hearing which is, is Foday Sankoh part
of the solution. I believe that after years of evidence of the
killings and the maimings we can say with confidence, no, he is
not part of the solution; and I believe that a professor I had
in university who said some men are evil, I believe he was
right. I don't think it is circumstances as stated in the
testimony here. I think it is time we recognized evil when we
see it; and I think that when we see it and recognize it, we
need to take concerted action.
I know that you are busy with a tremendous challenge here,
and I really want to thank you for appearing before us and
testifying before our Committee today; and we wish you well in
terms of this challenge. Sierra Leone is a small country in
this world, but there is a lot more at stake here than Sierra
Leone, and so we hope you are successful, Ambassador.
Ambassador Jeter. Mr. Chairman, thank you very much. If I
may be permitted just to make a brief remark.
Mr. Royce. Absolutely.
Ambassador Jeter. I think that when the Lome peace
agreement was concluded and we applauded President Kabbah--
because I think it took a lot of courage and I think it took a
lot of love of country to do what he did. As I said, I don't
believe that you can--one can say that the United States forced
this agreement on anyone. We were present at the creation. We
were there to facilitate. We were not the final and ultimate
decisionmakers. It was a sovereign decision, Mr. Chairman, made
on the part of the government of Sierra Leone and one that I
think made enormous sense when the agreement was concluded. Our
hope had been that the terms of that agreement would have been
honored. Unfortunately, the terms of that agreement have not
been honored, and we are trying as best we can to put the
pieces back together.
Let me also say a word or two about Nigeria. West Africa is
the only region on the continent that I think has demonstrated
that it is prepared to solve some of its own problems involving
internal and cross-border conflicts. Nigeria has been at the
center of that. We applaud them. We will try to help them as
much as we can. Mr. Chairman, we will need certainly the
support of the Congress to find the resources to do so. We
certainly could have done a better job with ECOMOG when they
were present in Nigeria and it was a question of resources. So
we ask for your help on that issue.
We also ask for your help in trying to get the hole that is
currently in place on the SEPA funding for UNAMSIL; and again,
thank you very much for calling this hearing. I think it has
been most useful and very valuable. Thank you.
Mr. Royce. Thank you, Ambassador. Before proceeding,
without objection, I would like to submit for the record
testimony from De Beers and the Diamond Dealers Club that has
been submitted here.
[The testimony appears in the appendix.]
Mr. Royce. I would also like at this point to recognize the
efforts of three of our interns over the last months for the
Africa Subcommittee. I would like to recognize Brett Yellen,
Eleanor Musarurwa, and Monica Kindles for their contributions
and assistance; and I would like to ask them, they are standing
here, I would like to again thank you for all they have done on
behalf of the Subcommittee.
With that said, I think the time's at hand to go to our
second panel; and this is being telecast. We want to thank Ms.
Charmian Gooch, and we want to thank Nchakna Moloi for
appearing with us, and Mr. Moloi is the special adviser to the
South African minister for minerals and energy. Ms. Gooch has
worked in the NGO sector--working at the Environmental
Investigation Agency, a British NGO and then Media Natura, a
British media communications charity that helped other
countries develop professional communication skills. In 1993
she established Global Witness with two colleagues, Simon
Taylor and Patrick Alley. So if you would like to begin your
testimony.
I am going to ask--one last thing, Mr. Moloi, if I could
ask you to summarize your testimony because we have the printed
copy. We have read your reports, and if you could summarize to
5 minutes, we would very much appreciate it. Thank you.
STATEMENT OF NCHAKNA MOLOI, SPECIAL ADVISOR TO THE MINISTER FOR
MINERALS AND ENERGY, THE REPUBLIC OF SOUTH AFRICA
Mr. Moloi. Thank you. Mr. Chairman, distinguished Members
of the Subcommittee, I would like to thank you for giving us
the opportunity to present our views to the Congress on the
issue of conflict diamonds and also to contribute to finding
solutions to this very complex problem.
South Africa is a country that has a proud history of
protection of human rights and has made significant progress in
introducing and sustaining a democratic order. The country is
involved in various initiatives throughout the continent and
internationally to address the issue of conflict and violation
of human rights, to promote democracy, rule of law, and respect
for human life. It is against this background that South Africa
is involved as a country and through organizations such as the
nonaligned movement, organization of African unity and several
other organizations to finding lasting peace and prosperity in
countries which are currently involved in conflict.
Moving to diamonds, diamonds are a very important source of
employment, foreign exchange, check revenue and new investment
in South Africa. The South African Government intends to look
at the diamond industry to play a larger and not a smaller role
in the country's economic reconstruction and development.
However, despite these exceptional human endowments, the
benefits derived from the exploitation of this process have not
made a significant impact on profit allegations and improvement
of quality of life for the majority of our people. The
realities of the exclusive policies of the past are still
haunting us to the extent that today the participation of the
historical disadvantaged in the ownership of the mining and
minerals industry is insignificant.
In particular, it has been raised that very little
investment invalidation in the situation of diamonds has
actually taken place in South Africa and other major producing
countries such as Botswana and Namibia in Southern Africa.
Coming to the act itself, we believe that the United States
is the world's largest market for diamonds, and that is, any
such proposal concerning the sale of diamonds in this market
such as the current act H.R. 3188 introduced by the Congressman
from Ohio is of vital interest to South Africa. We are grateful
to Congressman Hall for his long-time concern for people of
Africa, especially for those who suffer from hunger, from the
denial of their human rights or from their the culture of war,
including the rebellion in Angola, Sierra Leone and the DRC,
which illicit diamonds helps to finance.
The growing global concern for this country's diamonds
could backfire, Congressman Hall has rightly noted, fighting a
general boycott of all diamonds and hurting the people of
Botswana, Namibia and South Africa. We share Congressman Hall's
concern and applaud his intentions and the good intentions of
the many private and public bodies who have joined in the
effort to shut down the sale of conflict diamonds, but we are
extremely concerned that some of these efforts, including this
proposed bill, would unintentionally undermine the very worthy
goals that they set out to achieve. Because of the general
interested to the Subcommittee, we wish to focus on this
testimony.
Adoption of this legislation, contrary to the sincere hopes
of this, would not provide the American continent with
consistent, reliable and relevant knowledge as to the origin of
the diamonds they buy, would not deprive rebel forces in the
three conflict areas mentioned of their ability to profit from
the sale of illicit diamonds. It would not protect the
legitimate diamond industry and economic well being of the
people of South Africa and other legitimate diamond producing
countries from international counter measures at the sale of
conflict diamonds, but would in fact lead to heightened
confusion and concern about diamonds in general which could
eventually lead to a decline in global service which has
significant negative impact on the economies of several African
countries, including our own.
To be more specific, this bill will require each American
diamond processor, jeweler or manufacturer, wholesaler or other
importer to certify the national source of virtually every
diamond he or she imports.
Now, there are two broad methods which can be employed to
ascertain the origin of a diamond. One is the administrative
system, such as the one that is currently operating in South
Africa, Botswana and Namibia. These systems are practical,
functional and implementable. However, they are not foolproof
and could still be improved on.
Other systems which could be employed are of course
scientific systems, and here you could either use observational
systems where you look at the physical characteristics of
diamonds and use them to fingerprint the origin of diamonds,
and this would actually be developed in the formative process
of diamonds.
The second process that you can use would be your chemical
and spectroscopic techniques. Now a lot of work has actually
been done to develop processes that can be used using chemical
characteristics of diamonds and other spectroscopic
characteristics to identify their source. But however, to date,
we are not aware of any technology that can be applied and
marked and thereby be effective.
Now, there are other complications which you could see
arising from the way these diamonds are used. Some diamonds are
found and transported by the original processors. Now the issue
that I should really mention here is that most of the diamonds,
which form part of what we call conflict diamonds, are actually
individual diamonds, and these are the diamonds which are being
transported by river systems over at least a 100 million years.
These diamonds come from multiple sources. The logistical
problems which they represent cut across political boundaries,
and it would be very difficult in our opinion to use those
systems.
One of the things that actually could be considered when
developing anything pertaining to technology and systems is the
economic feasibility and the practicality of the
implementation, and we think that is very important in Africa.
Now, the fact that there are still significant reports
which are required to develop a reliable and practical system
and scientific efforts is necessary to verify or fortify a
diamond's origin open an opportunity for illicit diamond buyers
and traders to explore certain gaps. This is so, even if the
certification is developed in the consumer market. In short,
starting a certification process in the United States at the
end of the marketing trade and in that market only could well
have unintended effects of confounding the whole process,
thereby confusing consumers, changing the reputation of the
entire industry, and greatly damaging the economies of several
African countries.
Many consumers we fear are unsure of distinguishing one
African rebellion from another or perhaps even one African
state from the other and will simply play it safe by not buying
any diamonds that come from anywhere in Africa. This is in our
opinion confirmed by the fact that an average person from the
northern hemisphere actually regards Africa as a country and
not as a continent. Some consumers who are well informed may
decide to avoid helping either side and refrain from purchasing
even legitimate diamonds from countries in conflict, thereby
setting back efforts by those governments and the United States
and the United Nations to begin the process of reconstruction
and development. Furthermore, the other unintended consequence
of the measures as proposed could be to fuel Afro-pessimism.
The important thing is that we have a problem that needs to
be dealt with, a problem that needs to be resolved. So we
cannot close our eyes and actually be in a denial mode. The
African diamond producing countries have decided to take a lead
on this issue in formulating such measures as a coordinated
certificate of origin system to be required at the beginning of
the marketing trade and with a rigorous audit trade that can
isolate and penalize those dealing in uncertified diamonds,
thereby providing an incentive to virtually the whole industry
to stay with authentic certified diamonds and provide diamond
consumers in every market with reassuring and reliable
information.
The initiative of the African-producing countries was
actually started in February 2000 when the ministers from
African-producing countries met in Cape Town, South Africa, to
weigh different options that could be followed to find lasting
solutions to avert the potential threat that conflict diamonds
can bring on the economy of the producing country.
It was decided that a joint initiative of African-producing
countries be established to address the potential threat of
conflict diamonds by agreeing on a state of regulatory and
monitoring systems which African governments should be
responsible for and lead. It was thought that the high-level
continent-wide government-sponsored conference be held in July
2000 in South Africa to cement ties of the joint initiative of
diamond-producing African countries. In that theme, the
nongovernmental organization, labor and other officials will
also participate in the conference. Governments and government-
related institutions from the major diamond markets
internationally, as well as the United Nations, are also being
invited to the conference.
As already mentioned, as part of the broad consultative
process leading up to the conference, intended to organize and
gather inputs as well as to clear contentious issues, a
technical forum of diamond experts from government, industry
and civil society will be held in Kimberley, South Africa, from
the 11th to the 12th of May; and the focus areas of this
technical forum will be to reach at the appropriate regulatory
and enforcement monitoring systems, the role of the diamond
industry in the rehabilitation of economies, and also the issue
of creating a conflict-free and functional society.
The forum of experts will debate and come up with practical
and implementable remedial measures to effectively regulate the
diamond industry, develop cross-border enforcement mechanisms
and monitoring systems and propose measures which can be
implemented and resourced to develop the institutional capacity
of some African countries to comply with the proposed
regulations, enforcement and monitoring systems.
Furthermore, the technical forum will propose a proactive
campaign to promote and develop the industry so that it could
have an impact on the rehabilitation and reconstruction of the
economies of the producing African countries.
I thank you.
[The prepared statement of Mr. Moloi appears in the
appendix.]
Mr. Royce. We thank you, Mr. Moloi.
We will now go to Ms. Charmian Gooch, director of Global
Witness. Good afternoon.
STATEMENT OF CHARMIAN GOOCH, DIRECTOR, GLOBAL WITNESS
Ms. Gooch. Good morning, Mr. Chairman; and thank you for
giving me the chance to give testimony today. To correct you on
one point, it is Charmian Gooch, not Charmain, but there we go.
I would briefly like to explain a little bit about Global
Witness and why we are working on conflict diamonds. Global
Witness was set up about 6 years ago to focus on the role of
natural resources in funding conflicts. Most of the
organization's work to date have been on Cambodia and the way
in which the illegal trade in timber is used by both Khmer
Rouge and the government to fund the conflict, in the process
threatening to destroy the country's only future source of
revenue. We continue to work on reforms in the timber trade
within Cambodia and are a not-for-profit nonparty organization.
To move on, I would like to ask you all to imagine the
following scenario. It's not meant to sound flippant but to
give a clear explanation of the nature of this problem that we
are all talking about today. So if you can imagine it is July
2000, and in the State of Arkansas, the Arkansas Liberation
Army, the ALA, have started mining high-quality gem diamonds
and selling them in the world's diamond market. They are using
the revenue to buy weapons, explosives, land mines and tanks,
and as a result thousands of American citizens are being killed
and maimed. The diamonds are easy to move around the globe
because there is no way currently of verifying the true country
of extraction, and so traders can claim that the diamonds are
from anywhere. Traders have even begun to set up offices and
front companies in Canada and other neighboring countries in
order to buy diamonds smuggled out by the rebels.
ALA representatives start to sell diamonds in New York's
diamond district. What does Congress do? What does it ask other
governments to do? Does it consider it acceptable that the
trade continues to buy these conflict diamonds, because as
traders say so often, if I don't buy them someone else will,
and does it consider it acceptable for government to adopt a
laissez-faire approach to diamond control?
Of course, as far as America is concerned, this is just a
scenario; but for a number of countries in Africa, it is the
grim reality and has been for the last decade as diamonds mined
by rebel forces have been and continue to be sold with relative
ease on the world's market. Global Witness is campaigning on
this issue that conflict diamonds, as you have already very
much heard today, are having a devastating impact on people, on
regional security and economies in Africa. We believe
government and the diamond trade have to work urgently to put
controls in place to tackle the problem.
Exactly what is a conflict diamond? Although conflict
diamonds have been sold for at least a decade, the term has
only been in use for about a year and a half, and many people
are still working on a definition. However, conflict diamonds
can be defined as diamonds sold by rebel forces who are
fighting democratically elected and internationally recognized
governments.
It should be emphasized that conflict diamonds are not an
African problem. They are a problem that affects all of those
involved in the trade, and the development of conflict diamonds
has only been profitable because of the total absence of
controls in the market and the industry and also because the
industry has spent a lot of time promoting the idea that such
diamonds had to be bought up on the open market in order to
keep prices stable. However, recently this has begun to change.
The issue of conflict diamonds has, since November 1998,
come to the fore on international agendas in just 16 months. By
some measures, this is a remarkably short period of time for
the issue to be understood and established, governments begin
to move, U.N. initiatives to happen and for the trade to begin
to accept it is a problem and to begin to address the issue;
but it is too slow for people who are suffering in those
countries, affected countries in Africa, and action is
definitely required.
Now can anything be done? We have heard some ideas already
today. We believe on the basis of research we have carried out
that it is very possible to put controls in place. In a
document that we are launching tomorrow called ``Conflict
Diamonds: Possibilities for Identification, Certification and
Control,'' we outline some of the technologies and information
currently available and make recommendations aimed at
governments in the trade. We are taking this document to the
technical forum on conflict diamonds hosted by the South
African government that Mr. Nchakna Moloi has already
mentioned; and we really welcome the initiative of the South
African Government and the other diamond-producing countries in
Southern Africa on this conference.
Now, initial research, which is not exhaustive, has
identified applicable technology that is either developed or is
being developed and could be used in the implementation of
controls. We are advocating that trade in government consider,
and I say consider advisedly because this is a complex process
and it does need both the government who needs to look at
regulation and the diamond industry who need to look at self-
regulation that can be audited and checked on to consider some
of these possibilities.
Currently, there are systems already that can calculate and
record the individual surface profile of rough diamonds;
confirm the identity of a parcel of stones that has been
registered using this method; mark rough diamonds with
individual bar code or other readable inscription; mark cut
diamonds with code, bar code and logos; identify and verify the
identity of cut or rough diamonds that have been coded; recode
and verify the individual optical signatures that a cut diamond
exhibits using laser refraction.
Now, a system using elements of these coupled with improved
regimes in exporting countries, and that is important, the
exporting producer countries are the key starting point for any
controls that are going to be effective, and these countries do
need support on this issue. So a system using elements of this,
coupled with improved regimes in exporting countries and the
introduction of relatively low technology identification
pending, including work on surface features and profiling of
mine production could be used as a basis for reform by both
governments in the trade.
Country of extraction, as Ambassador Jeter has mentioned,
is absolutely key to developing a control system. This is a
central point, and it has to be addressed; and indeed the work
of the United Nations on UNITA diamonds has had a serious
impact and effective impact and shown what collectively
international will can do when focused effectively. The report
of the expert panel is right to conclude that greater
transparency is needed within the industry and that a system to
identify countries of extraction is needed.
In conclusion, Global Witness believes that America has a
special responsibility to work on conflict diamonds and
welcomes the work of the State Department on this issue.
America consumers, as you have already heard, buy more diamond
jewelry than anywhere else in the world, and America accounts
for about 48 percent of total world sales. Japan is the next
biggest market, and it accounts for just 14 percent.
Also, high-value diamonds, the sort often sold by rebels,
are an important sector of the market. In 1999 jewelry sales,
which is not just diamond jewelry, but all jewelry, accounted
for approximately 25 percent of all consumer spending in
America in competition with clothing, consumer electronics,
toys, and sporting goods, which I think gives an indication of
how important this sector is.
We think that American consumers, indeed all consumers,
should be able to buy a diamond which is sold as a gift of
love, confident that it has not helped to purchase a land mine,
knowing it wasn't part of the estimated $3.7 billion generated
by UNITA in just 6 years and used by them to undermine the
peace process in Angola, knowing that it did not help fund the
Sierra Leonean Rebel United Front to mutilate thousands of
civilians. This is why with three other NGO's we launched the
Fatal Transactions Consumer campaign in October 1999, and this
is to encourage consumers to demand conflict-free diamonds,
very much a pro-diamond campaign but antiwar; and we were
looking at how diamonds could be used to help build lives and
build economies.
We would urge Congress to closely monitor the results of
the technical forum on conflict diamonds, as already mentioned.
This is a highly important initiative for African diamond-
producing countries; and in starting the complicated process of
reforming the industry, Congress should seek to support reform
initiatives within Africa, and that should also include
financial support. However, the G-8 countries as importers of
most of the world's diamonds also play a key role in pushing
reforms through and the United Nations also has the potential
to work on this.
The simple truth is that the way the trade currently
operates is completely unacceptable and has to change. The
legislation proposed by Hall and Wolf has been a very valuable
catalyst in forcing the industry into realizing that change is
inevitable, and if the trade doesn't swiftly put some of the
fine statements that they have issued recently into meaningful
action, then Congress should look at putting a lot of support
into this bill, as it should do in any case.
Finally, and I apologize--I think I have probably run over
time here--we would urge Congress to take some immediate and
urgent action on Sierra Leone. If the current instability is
not resolved within the next few days, then a U.N. embargo
should be considered for all diamonds on Sierra Leone because
the source of revenue has to be stopped. The United Nations
needs to reconsider its policy on diamonds if it is to learn
from the tragic lessons of Angola.
As of February of this year when my colleague and I visited
Sierra Leone, we found that the United Nations did not have a
single member of staff in place to monitor diamonds, which was
of grave concern. There should, we believe, also be a re-
examination of the role of Foday Sankoh and the commission for
strategic mineral resources; and whilst it may be important to
try and build the capacity of that commission, the already-
existing government gold and diamond office and the ministry of
minerals, their capacity is also vital. There are systems and
structures already in place that could be used to bring more
legitimate controls into Sierra Leone.
I will finish with that. Thank you.
[The prepared statement of Ms. Gooch appears in the
appendix.]
Mr. Royce. Thank you, Ms. Charmian Gooch.
We appreciate very much your testimony, and let me just ask
you a couple of questions, if I could. One of the things in
your written testimony, one of the things you argue is that
organized crime utilizing offshore tax havens and the global
banking system is trying to acquire extensive concessions of
natural resources in Africa in return for weapons. What do we
know about this international crime, I would ask you. That is
the first question.
Ms. Gooch. Unfortunately not nearly enough is known. There
are some individuals, such as the arms trader whose name pops
up all over the place in different countries. We would urge
that this Subcommittee should consider holding a full meeting
on this issue and calling in a wide range of witnesses to give
testimony.
We have seen in Angola in terms of oil, but it is a
problem. We have seen in Sierra Leone it is a problem and
elsewhere, and we think that there does need to be a lot more
work done on this issue.
Mr. Royce. I think that's a very good suggestion, and I am
going to followup and do just that. I appreciate that. Let me
also ask you, the Sierra Leone peace process based on the Lome
accord is all but collapsed with the abduction now of 500 U.N.
peacekeepers and other personnel. How did the fact that the
U.N. mandate did not address the issue of control of diamond
mines influence the course of events, in your view?
Ms. Gooch. I think it is very hard to give a precise answer
on that. I think it is clear to say that looking at the way in
which the revenue continued to be gathered by our United States
and there was no hinder on diamond sales from our U.S.-
controlled areas that must have played a factor because in the
same way with Angola and UNITA, if a rebel group is able to
keep generating revenue, then if the political process doesn't
go the way it wants, it can just go back to war. That is why we
think that there does now need to be some focus on looking at
the flows of IUS diamonds and there really should be an embargo
we believe on all Sierra Leonean diamonds which we know will
have an impact on government.
I am afraid we haven't had a chance to talk to them about
this; but again, as Ambassador Jeter mentioned, the revenue
last year was, in fact, 3.2 million. That wasn't actually
revenue. That was the total official export. Revenue was a few
hundred thousand dollars, not even enough to run the gold and
diamond office, which is the export office. So we think that
perhaps with the assistance of the international community
those few hundred thousand dollars could be replaced.
Mr. Royce. What role has Liberia and Burkina Faso played in
enabling Sierra Leonean diamonds to fuel the civil war in that
country, and what is the Liberian role in diamond-related
criminal activity, money laundering, and gun running, in your
view?
Ms. Gooch. I am afraid I am not an expert on Liberia, but
it is clear--and I think that the work carried out by
Partnership Africa Canada in their very good report on this
whole issue in Sierra Leone--the heart of the matter goes into
that very well. It is clear that Liberia is a major problem,
and it is going to be a major problem in terms of any sort of
peace process in Sierra Leone because it is facilitating the
trade in diamonds; and it is facilitating international traders
to be able to work in that country, and I can see it very much
a developing problem of the United Nations and the
international community needs to develop policy on because
right now there doesn't seem to be a neat policy on how to deal
with this problem, and I think there should be consideration of
arms embargoes and other issues where they consider those
countries.
Mr. Royce. Let me also ask you one last question, and that
has to do with the role that diamonds play in the Congo crisis.
Who is profiting from them, and would that war be sustainable
without diamonds?
Ms. Gooch. That is a difficult question to answer in terms
of would the war be sustainable. I think that war is being
fought for a number of reasons; and as in many cases, diamonds
may not be the main reason there is a war; but they are a
causal factor in its continuation. On all sides, all parties
are profiting from diamonds. I think it is fair to say that
where both Rwanda and Uganda are involved, diamonds were a big
draw for them, as were other natural resources. I believe that
the U.N. Secretary General has called for a commission or
expert panel to look at the role of natural resources in the
conflict in DRC, Democratic Republic of Congo, and again we
would welcome that and say it should be set up immediately or
urgently.
Mr. Royce. I thank you. I will ask the last question of Mr.
Moloi; and that question would be, what can the United States
do to support the efforts of African diamond-producing
countries to contain and eliminate conflict diamonds? I know
you spoke about the concern that Botswana and South Africa and
other countries have about stigmatizing diamonds. Maybe you
could speak a little bit to that issue and what we could do in
your view to try to eliminate conflict diamonds. Mr. Moloi.
Mr. Moloi. Thank you. As I have said, the African diamond-
producing countries have taken initiatives to come up with
concrete solutions to the problem of conflict diamonds as far
as the regulation of the movement of those diamonds actually is
concerned from source to terminal market.
The second important thing would be for the United States
to support that program and participate effectively in it.
Second, one of the problems identified which has also been
discussed is the issue of lack of capacity of some of the
diamond-producing countries to implement any form of
legislative proposals which it might have on the table. So
investment in development of capacity, the capacity of those
governments to implement and enforce and monitor legislation
would be a very, very important asset.
Third, we believe that one of the issues that is actually
furthering conflict in Africa is the issue of profiting; and we
believe that the United States could help in developing and
investing in programs that are targeted at profit alleviation.
Thank you.
Mr. Royce. Thank you. We are going to go to Mr. Meeks now
of New York for his questions.
Mr. Meeks. Thank you, Mr. Chairman. Can you tell us what is
on the agenda for the Kimberley meeting this week and what you
hope to accomplish?
Mr. Moloi. The issues which are on the agenda, we have got
three broad themes. The first theme looks at reaching consensus
on the development of a practical and implementable regulatory
and enforcement and monitoring regime, which will be like as
implemented at least certainly at the producing-country level.
That is the first thing.
The second theme, we will be looking at the role of the
diamond industry in the negotiation of conflicts and how the
industry could be changed to be corrupt free and to contribute
positively to economic development.
The third theme, we will be looking at what we call
creating functional society and that looks at the drivers of
conflicts, the capacity of governments to implement
legislation. It also looks at putting into place measures which
will eliminate corruption.
Mr. Meeks. When you talk about economic development in the
country, are you talking about creating an opportunity for
individuals from within the African countries, in South Africa
in particular, where the people have the opportunity to become
or to create manufacturing businesses themselves so that they
can manufacture some of the diamonds? Can you just further
expand what you mean by economic development?
Mr. Moloi. By economic development--actually, you are very
correct. One of the things is to ensure that we facilitate
meaningful participation of the historically disadvantaged
South African in the economy, both from the mining,
exploration, and monitoring sites but also creating more
opportunity for value adding, that is, cutting, polishing and
the development of the jewelry industry. That will be the core
of what we will be looking at. Thank you.
Mr. Meeks. Thank you.
Mr. Royce.Ms. Lee.
Ms. Lee. Thank you, Mr. Chairman. Let me ask Mr. Moloi a
question with regard to his testimony. You indicated that
conflict diamonds comprise only a small percentage of the
world's annual supply of diamonds, far less than consumer
demand, and that there is no such technology and also the cost
factor makes tagging of diamonds virtually impossible. In your
opinion, if the conflict diamonds are a small market, do we
need to invest resources for tagging? How realistic is tagging,
and do you have any indication of De Beers' response or
position with regard to the tagging of diamonds?
Mr. Moloi. Clearly conflict diamonds will contribute to
less than 5 percent of the annual supply of diamonds, but we do
believe that it is because of the brutality that is associated
with conflict diamonds in countries such as Sierra Leone and
Angola and also the DRC, definitely legislation has to be put
in place to ensure that we eliminate profiteering from conflict
diamonds. That is the very clear thing.
But on the technology side, from our investigation we are
not aware of any scientific system that is developed enough at
the moment that could be satisfactory and that could actually
be implemented to identify the origin of diamonds without
question. OK. We believe that systems are there that are being
developed, but there are still quite a lot of loopholes in
them.
As far as tagging is concerned, at the moment we are not
aware of any technology that can actually stop the process.
Ms. Lee. Let me just ask you the final point in my question
with regard to De Beers. Have you had any discussions with
them--are you aware of what they think with regard to the
tagging of diamonds?
Mr. Moloi. We have had extensive discussions with De Beers,
as far as other technologies are concerned. I know that De
Beers is developing a technology called diamond branding which
is almost a similar thing to tagging but where they will brand
manufactured diamonds. Now if there are greater and more
investments in the cutting, polishing and manufacturing of
diamonds in the African producing countries, that may very well
be available technology in the future, but we believe that with
the current movement of RUF and the fact that we are not aware
of any technical device manufacturing of diamonds, we do not
believe at the moment that this might be a feasible option.
Thank you.
Mr. Royce. We are going to go to Ms. McKinney of Georgia.
Ms. McKinney. Thank you, Mr. Chairman. First of all, I
would like to commend Ms. Gooch for the work that Global
Witness is doing, has done and is doing. But now on this issue
of being able to identify diamonds from their origin source, it
is my understanding that there is such a way of identifying
diamonds. Could you elaborate on that, Ms. Gooch, for me,
please.
Ms. Gooch. All right. The issue comes down to what type of
diamonds you are identifying. A lot of the work that has been
done on diamond identification has been geological exploration,
or it has been aimed at mine security. So people are looking at
individual stones, they are looking at someone picking up a
diamond, dropping it in their pocket and trying to smuggle it
out. Now in terms of conflict diamonds, we are not talking
about that scale of trade at all. We are talking about parcels
of diamonds and diamonds worth tens or hundreds of millions of
dollars a year in some cases, and that is not a single stone
type of trade. Occasionally, you will get very large diamonds
worth millions of dollars. That is a completely different
scenario.
What we are advocating is trying to put more controls and
regulations in place in producing-countries so that parcels of
diamonds can be tracked from the point where they are extracted
through to export and trying to create a product-audit trail so
diamonds can be verified from where they have come from. We are
not talking about finding a system of identification or tagging
that is going to provide the manufacturing process. We are
talking about overlapping that process.
You did mention De Beers. I think it is very interesting
that they have put forward this commitment that they are not
going to sell conflict diamonds. I think they should be asked
to make a public commitment to never do that again, because so
far they have been very, very hazy on that point; and you know,
if they are going to make meaningful and structural reform to
the industry, as to how they operate, they have to undertake
never to ever buy conflict diamonds again, and they also need
to put in place an audit trail for their goods so that that can
be independently verified.
Ms. McKinney. Ms. Gooch, you can consider that at this
hearing today I will request of De Beers that they say never
again on the purchase of illicit diamonds; and I will await
their response, but I am not going to hold my breath.
Ms. Gooch. Thank you very much.
Ms. McKinney. Now, I guess my final question--I have read
all of the testimony that has been presented before us and
apparently some still cling to the belief that the industry can
be trusted to police itself. What is your opinion of that, Ms.
Gooch?
Ms. Gooch. Me?
Ms. McKinney. Yes.
Ms. Gooch. Absolutely not. It has spent a decade doing
nothing about it, trying to tell governments and the rest of
the world that there is not a problem. It has not very
belatedly woke up to the horror of the issue, and it is
rediscovering or rather discovering ethics, but while not
actually welcomed, I think like many industries, self-
regulation without independent monitoring is just not a way to
go--and it has really been made very clear at this hearing--it
is vital that the legitimate countries and their production and
their economies are protected.
We think that if the diamond trade is able to put forward a
system that doesn't get much scrutiny and isn't possible to
independently verify, then there will be problems shortly down
the line. So what we would like to see is a system--the diamond
trade coming up, it has expertise to do it--come up with a
system that will work all the way through from point of
extraction right through to the jewelry shop on High Street or
in the shopping mall.
Ms. McKinney. Finally, Mr. Chairman, I would just like to
say that Global Witness and Ms. Gooch have touched on some very
rich, powerful people; and these people obviously don't care
one bit about human life, and I just hope that the personal
security of those people who are involved in exposing this is
something that they consider for themselves. Thank you, Mr.
Chairman.
Mr. Royce. Thank you, Ms. McKinney. I want to thank Ms.
Charmian Gooch of Global Witness, and I want to thank Nchakna
Moloi, special adviser to the South African Minister of
Minerals and Energy for their testimony. This has been a first
for our Subcommittee here to try a telecast like this, and I
think it has worked out well. I also want to thank Ms. Gooch
for the concept for a future hearing, and I also think we
should thank Ambassador Jeter for his testimony here today.
What is it, about 4:30 in the afternoon now there in
Pretoria--well, 6:30. It has been a longer hearing than I had
anticipated. Thank you again so much for your participation and
we stand adjourned.
[Whereupon, at 12:15 p.m., the Subcommittee was adjourned.]
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A P P E N D I X
May 9, 2000
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