Citizens requesting the governance of diamond exploitation

The Kimberly process as response.

As a result of large-scale civil society campaigns, the consumer on whose fingers the stone ends up have been held accountable. This has led to an industry wide initiative, the Kimberly process, to make the production and distribution chain of diamonds (mining, sorting, cutting, manufacturing and retail) more transparent.

This case study will focus on the civil war in Liberia and Sierra Leone, continuously fuelled by the international diamond trade. What role has been played in these events by the state, (legal and illegal) business actors and civil society? The study focuses on the personage of Charles Taylor, both a crook and a statesman, and the international business networks that gave him his position. Civil society mobilization has been able to challenge these strong networks with relative effectiveness.

I. Background on Liberia

Liberia was created as a state in the 19th Century and colonized by freed slaves from the United States (US). Yet as one finds in many other countries and cases, the type of governance that the former slaves put in place closely resembled the system that they were previously oppressed by: the system of government adopted in Liberia was a kind of apartheid, with indigenous Africans being denied the vote. This social system was modeled on the American South, with conservative government by men in top hats and morning coats. This system came to an end in 1980 with the military coup led by Samuel Doe. Doe could be considered the « prototype » of the African dictator, running the country through systems of patronage, with the main goal of increasing his own wealth. He ran the country in this authoritarian manner until civil war began in 1989.

There is long-standing US interest in Liberia: due to the business interests of Firestone and US government support of the Liberian government during the Cold War.

II. Firestone Tire and Rubber Company

In the 1920’s Liberia was facing financial crisis, and following the refusal of the US government to lend $5 million to the Liberian government, instead a deal was struck with Firestone, who were at that time searching for new supplies of rubber to meet the demands of the motor industry. In 1926 Firestone signed a deal with the Liberian government to rent, for a period of 99 years, an area of land approximately the size of the Rhône-Alpes Region. As part of the deal, Firestone also provided a loan to the Liberian government. This agreement gave Firestone an advantage in the rubber business, not only through the rates of their rent, but also via the labor advantages of owning such a vast area of land. This led to abuse; Firestone, who are still operating their huge plantation are the target of a campaign opposed to child labor, the abuse of laborers and environmental destruction. Firestone also stands accused of having colluded with the various regimes in Liberia in order to protect their business interests: during the civil war they are alleged to have provided communications facilities and a supply base to rebel leader Charles Taylor in return for the help of his forces in organizing the workers on the plantation. As rubber is very important to Liberia’s economy, the fact that Firestone cooperated with Taylor is significant in his accession to power. This is not the central issue of this case study, neither is Firestone the only multi-national to have profited from collusion with Taylor, but this highlights how international businesses interests can influence the politics of a state.

III. US involvement in Liberia during the Cold War

During the Cold War the US lent its backing to the authoritarian regime of Samuel Doe, to the tune of $10-80 million in aid per year. This was done as part of a policy to keep the region under Western influence, in order to protect against the spread of communism, as well as through the need to have other countries to align with the US during United Nations votes.

The following is an example of how this partnership worked:

Robertsfield Airport in Liberia is the largest on the continent. It was built “with (american) Department of Defense funds, but the project had nothing to do with Liberian passenger traffic. The ‘gift’ of an outsized airport, which Liberian society was not even remotely prepared to maintain was meant to accommodate the largest of cargo planes, and Washington used the facility for years as a refueling point for large arms shipments to the anti-communist Angolan rebel movement, UNITA, sent by the CIA and the Pentagon.”

With the end of the Cold War, serving the interests of a super power was no longer an option for Liberia or for political factions seeking backing. Trade in natural resources filled this vacuum, and since 1990 the illegal trade in natural resources has increased.

IV. Charles Taylor’s rise to power and conflicts in the region

Taylor went from the leader of 100 insurgents to a powerful regional figure, one of Africa’s most notorious warlords. In order to achieve this transition Taylor needed money. This was in order to:

Buy weapons;
Buy the loyalty of mercenary troops;
Supporta proxy army.

Money and arms were available to those with the right contacts through the exploitation of natural resources in the region:

1. Diamonds (Liberian region Lota and Eastern Sierra Leone);
2. Timber ;
3. Iron ore deposits;
4. Rubber plantations.

Taylor received training from the Libyan government - though the same Cold War mentality meant the US was backing Doe’s regime - as well as support from the Ivory Coast and Burkina Faso. But his creation of a network of foreign firms through which to exploit the natural wealth of the area was key in his rise to power in Liberia and strong influence in the region.

1989 Taylor leads insurgency into Liberia from Ivory Coast
1990 Doe assassinated, Taylor controlled most of vital economic regions in Liberia
1991 Helped train RUF in Sierra Leone
1995 Factions negotiate agreement; Taylor for first time has access to Monrovia
1997 Taylor wins elections becoming president of Liberia
Conflict continued, and Taylor fled the country in 2003.

In 1992 Taylor controlled most of Liberia, part of Guinea and part of Sierra Leone. As already mentioned, Taylor had an agreement with Firestone, but he also had one, through the trading of timber, for arms through French and Lebanese owned companies in Ivory Coast (the area under Taylor’s control, the « Greater Liberia » was France’s third largest source of timber in 1991). British and French firms were also involved in the exploitation of iron ore, helping to ship iron ore out of the territory controlled by Taylor. The diamond trade was also very important in funding and fueling Taylor’s rise to power; this was through the exploitation of diamond resources within Liberia, but also through the exportation of diamonds from Sierra Leone. Diamonds were no doubt an important reason for Taylor’s training and funding of the Revolutionary United Front (RUF) who went into Sierra Leone in 1991 and gained control of the diamond producing areas there, with their leader Foday Sankoh becoming president as part of a power sharing agreement in 1999. Sierra Leonean diamonds were laundered through Liberia where in the mid 1990’s the official level of diamond exportation was much higher than the countries own production.

Particular aspects of this conflict include:

In Liberia, Taylor’s forces abducted 1000s of children - Small Boys Units, shock troops of war. Joining a militia group is both meal ticket and substitute for education;
Child soldiers using drugs (marijuana, opium), “Pappy”;
Amulets against enemy bullets;
Atrocities: RUF commanders given free rein to maintain order, hacking off of hands and feet became their trademark.
Country has no running water, no electricity, no phone lines, illiteracy, and no consciousness of a nation-state, no international actors…
RUF (in Sierra Leone) conscripted civilians to work as slave labor in mines or as porters, beating or killing anyone who resisted.

The result of this was personal power and wealth for Taylor. Between 1997-2003 Taylor earned $105 million per year, some of which must have been spent on weapons and soldiers, but with $70-80 million per year going into bank accounts around the world (France, Switzerland, Italy and Liechtenstein). Taylor’s family and other members of the Liberian elite also accumulated wealth.

As for power, Taylor’s means to provoke violence as well as his control of many of the country’s main resources allowed him to win, with 75% of the vote the elections held in 1997 after the 1996 Abuja agreement.

How could Taylor win elections in 1997 with a campaign slogan “I killed your ma, I killed your pa”?

Taylor made it clear that the war would resume if he were not elected
- He still had armed force at his disposal as he was not militarily defeated and disarmament has not taken place
- He still controlled many resources
He controlled the country’s only nation-wide radio station
He distributed rice and t-shirts to voters
He had the use of a helicopter and was therefore in advantage over the other candidates as he could campaign in regions outside the capital.

V. Connections between conflict and diamond trade

It would not be an exaggeration to say that Taylor’s de facto monopoly over many Western Liberian diamond producing regions was essential to his part in the conflict and his eventual presidency; and that the French national Yrian, representative of a multinational holding company Samsson, was a key figure in this. Taylor used the control of the state as a strategy to accumulate wealth, to control the country through violence and networks of mutual interest rather than through the institutions and structures of a stable state. It is not only Liberia and the other countries destabilized by this conflict that have had conflict funded by illegal trade in diamonds, some other countries which have been affected are Angola, the Democratic republic of Congo and the Republic of Congo.

In the late 1990s, 4 % of the world’s diamond production was estimated to be conflict diamonds. However small this figure may seem we must not underestimate the impact that this quantity can have on a war economy. Increasinlgy international attention was drawn to this problem, by civil society campaigns that started to use the term “blood diamonds”, while the diamond industry has preferred to speak about “conflict diamonds”.

VI. What is a conflict diamond?

According to the United Nations conflict diamonds are « …diamonds that originate from areas controlled by forces or factions opposed to legitimate and internationally recognized governments, and are used to fund military action in opposition to those governments, or in contravention of the decisions of the Security Council. »

VII. What is the responsibility of corporations?

The diamond trade is key to the conflicts that have been endemic in parts of Central and West Africa. In circumstances such as these, where there is no state to effectively control the provenance of diamonds, the responsibility falls on diamond trading companies to ensure that the diamonds which they are selling do not come from conflict sources, or risk becoming an actor in a war. Most of the diamonds in the world, as can be seen in the figures quoted above, come from legitimate sources and countries at peace including Australia, Botswana, Canada, Namibia, South Africa and Tanzania. As diamonds have characteristics that permit their provenance to be identified, organisations have been campaigning for a tight system of controls to be put into place that guarantees the elimination of the trade in conflict diamonds.

In 1998 the UN identified diamonds as a source of funding for war. The same year Global Witness, an international NGO, started a campaign called « Combating Conflict Diamonds ». This led to growing international pressure on a secretive industry. The result of this was that in July 2000 the global diamond industry, NGOs and governments involved in the diamond industry met in Kimberley, South Africa, and began the creation of the Kimberley Process Certification System, adopted in 2003.

VIII. The Kimberley Process

The Kimberley process sets out a list of requirements to ensure that conflict diamonds are unable to enter the supply chain. In 2002 52 governments adopted the Kimberley Process Certification System, which was fully implemented in 2003. Today 74 countries have brought this into law, accounting for 99 % of the diamond trade. Peer monitoring and periodic reviews are carried out in order to ensure the compliance of participating governments in this process, with sanctions for those found not to be in compliance.

The requirements for compliance with the certification system are:

Each shipment of rough diamonds crossing an international border must be:
- Transported in a tamper-resistant container
- Accompanied by a government-validated Kimberley Process Certificate
Each certificate must be resistant to forgery, uniquely numbered and describe the shipment’s contents;
The shipment can only be exported to another Kimberley Process participant country;
It is illegal for uncertified shipments of rough diamonds to either be imported or exported by a Kimberley Process participant country;
Failure to comply with these procedures can lead to confiscation or rejection of parcels and/or criminal sanctions;
If any concerns arise regarding a country’s adherence to the Kimberley Process, they are investigated and dealt with at an intergovernmental level.

There is also a System of Warranties, which means that every time a diamond changes hands between traders, or enters the retail market, it should be accompanied by warranty declarations on invoices. Records of warranties on received and sold diamonds should be retained and are subject to audit. This system has been successful: 99% of diamonds are now certified to be from conflict free sources (11).

IX. Criticisms of the Kimberley Process

Despite the claims that the Kimberley process is a great success, there are criticisms of this process.

One of the main criticisms is that there has not been enough will on the part of governments and the World Diamond Council (representing the diamond industry on the issue of conflict diamonds) to ensure the proper implementation of the process: government controls are weak, allowing conflict diamonds to be certified conflict-free and policing of the system is lax. For example the US in known not to frequently inspect diamond imports and discrepancies between import and export figures show that illegal importation takes place. The exploitation of these weak controls means that conflict diamonds are still entering the market. This combined with the attempts of the World Diamond Council to convince the consumer that the problem of conflict diamonds has been solved puts the campaign against conflict diamonds at risk.

Another criticism leveled at the Kimberley Process specifically targets De Beers, saying that the result of this process has been to restrict the access of companies other than De Beers to diamonds, effectively giving De Beers control of the diamond market.

Finally, as a regulation mechanism for the diamond industry the Kimberley Process is one-dimensional as it does not address the dangerous and difficult conditions of mine workers in the diamond sector.

X. The current situation

The UN reported that $23 million of conflict diamonds from the Ivory Coast are still entering international markets. NGOs such as Global Witness continue to campaign for more effective implementation of the Kimberley process. Suggested measures are closer monitoring of the requirements already in place, concrete policies to back up the use of warranties, and an effective system of third party monitoring with strong sanctions.

Commentary

The diamond, which for many is the symbol of ever lasting love, can sometimes have a checkered past before ending up as a symbol of love. The majority of rough diamonds are found in Southern and Western Africa. Instead of having produced wealthy and flourishing societies, diamond mining has contributed to civil war and very violent conflicts. The population in countries where a functioning state has been lacking for years such as the DRC, Angola, Sierra Leone and Liberia have suffered severely under their countries’ natural richness.

Notes

Author of the file : Alexia STAINER.
(1) : www.stopfirestone.org/about/
(2) : Reno, William ‘Reinvention of an African Patrimonial State: Charles Taylor’s Liberia Third World Quarterly 16:1 1995 p 114.
(3) : Meredith, Martin The State of Africa Free Press 2005, p 551.
(4) : French, Howard A continent for the taking. The tragedy and hope of Africa Pan African Books 2004, p.106
(5) : Reno, William ‘Reinvention of an African Patrimonial State: Charles Taylor’s Liberia Third World Quarterly 16:1 1995 p 113.
(6) : ibid., p 144.
(7) : Meredith, Martin The State of Africa Free Press 2005, p 572.
(8) : Coalition for International Justice Following Taylor’s Money: A path of war and destruction May 2005 p 3.
(9) : Cited on Diamonds Facts Website.
(10) : See Conflict Diamonds briefing by Global Witness in background documents section of the course.
(11) : Diamond Facts website
(12) : Conflict Diamonds: What’s Happening Now?
(13) : www.sparkle.plus.com/
(14) : Conflict Diamonds: What’s Happening Now?