Following intense international criticism, De Beers has for the first time guaranteed that the stones it sells do not originate from rebel-held areas in Africa.
By DAVID PALLISTER and CHRIS MCGREAL in Johannesburg
The company which has dominated the world diamond trade for nearly three-quarters of a century yesterday guaranteed for the first time that the stones it sells do not originate from rebel-held areas in Africa.
At a London sale for its registered buyers De Beers, which markets around 65% of all diamond production, promised that the diamonds had not fuelled the conflicts in Angola and Congo.
The move follows intense international criticism of the company's practices in the 1990s when it bought billions of dollars worth of diamonds from war-torn areas in west and central Africa, allowing rebel groups to buy arms and supplies on the black market.
A spokesman said it would also continue its ban on stones from Sierra Leone, where diamonds fuelled a horrific conflict marked by the rebels systematic hacking off civilians' hands, arms and legs from civilians, even those of tiny children.
While human rights groups welcomed the initiative, diamond experts expressed scepticism that De Beers would be able to control the complex smuggling routes associated with the trade.
A spokesman for London-based group Global Witness, which spearheaded a campaign for more accountability, said the decision could only be regarded as genuine if De Beers promised never to buy "conflict diamonds" again.
For decades the rationale of De Beers - effectively a cartel - has been to buy as much of the world's diamond production as possible and to stockpile to maintain the price. Until 1998, De Beers's annual reports boasted of the company's ability to absorb Angolan production.
Its sales, which are held 10 times a year, are attended by about 125 "sight holders" - cutters, polishers and dealers - from Antwerp, Tel Aviv, Bombay and New York.
Yesterday's guarantee was the company's response to a June 1998 United Nations resolution which prohibited the import of Angolan diamonds without a certificate of origin from the Angolan government.
The frailty of that embargo was demonstrated last October when De Beers announced that it was suspending all imports of Angolan diamonds because of evidence of fraudulent certificates.
The UN report on sanctions-busting, published last month, detailed how diamonds from the Unita-held areas of Angola were smuggled on to the world market through Rwanda, the Ivory Coast, Namibia, South Africa and Zambia and through the unregulated parts of the diamond market in Antwerp.
Belgium accounts for nearly 80% of the rough diamond trade. Robert Fowler, the Canadian author of the UN report, accused Belgian authorities of failing to establish an effective import identification system.
"Nor has any effort been made to monitor the activities of suspect brokers, dealers and traders - virtually all of whom appear to travel freely and operate without hindrance. Once diamonds are brought to Antwerp they are almost impossible to trace," he said.
De Beers, which itself mines about 40% of diamonds produced each year, insisted yesterday that its controls would include instructing its buying offices in Antwerp as well as Tel Aviv not to buy any diamonds imported from Africa.
The company would also stop buying from the informal sector of the economy. It has closed its offices in the Congo and Guinea - two centres traditionally used for smuggling stones from Unita territory and areas held by the rebel Revolutionary United Front in Sierra Leone.
The question of whether the origin of stones can be easily determined is much disputed. De Beers said yesterday that "run of mine" diamonds - those coming from a particular area - can be sourced, reversing its longstanding insistence that Angolan diamonds could not be identified.
"Our experts can be 90% certain," the spokesman said. But the director general of the Antwerp Diamond Council, Peter Meeus, said: "It will be unworkable in practice. Batches of diamonds are handled in a mix. That makes a search for origin an impossible task."
Speaking on Radio France Internationale yesterday, a spokesman for the Belgian foreign ministry said: "It is very difficult to identify a diamond's origin. You can't find adequate systems in Africa for origin certificates."
Earlier this month, two South African diamond dealers, who were named in the Fowler report as breaking diamond sanctions against Unita, said they had sold gems purchased from the rebels to De Beers.
Brothers Joe and Ronnie de Decker were said to have supplied light weapons to Unita in exchange for the diamonds.
Ronnie de Decker denied shipping arms to the rebels but admitted that between 1993 and 1997 he bought diamond parcels worth up to $5m (=A33m) from Unita, and says he sold them to De Beers or one of its associated companies. Mr De Decker claims De Beers was not in any doubt about the source of the diamonds.
A De Beers spokesman in Johannesburg said it was "very likely" that the company had bought diamonds from Mr De Decker, but that it was impossible to establish where diamonds came from once they had been polished.
Another dealer named in the report, David Zollman, said he stopped buying diamonds from conflict areas in 1997.