The report, titled 'The Heart of the Matter: Sierra Leone Diamonds and Human Security', was released on Wednesday. Published by the Partnership Africa Canada and jointly authored by Ian Smillie, Lansana Gberie and Ralph Hazleton, it is the product of research conducted in and outside Sierra Leone in February-December 1999.
It recommends that "special long-term UN security forces" be deployed in all major diamond areas in Sierra Leone, and that the government ensure transparency, high standards and rigorous probity in its diamond purchasing, valuation and oversight activities.
Donors should support current British government efforts to rebuild Sierra Leone's army and police force and a professional diamond unit should be created to anticipate and counteract criminal activities, the report recommends.
Pointing out that the formal trading of half the rough diamonds produced in the world is structured around the Hoge Raad voor Diamant (HRD) in Antwerp, Belgium, the report argues that this structure "has a demonstrated attraction for new forms of organised crime, and is implicit in fuelling African wars".
By recording the origin of a diamond as the country from which it was last exported, the HRD makes it difficult to track diamond movements and does little to prevent large-scale diamond smuggling, it says.
Liberia's average annual mining capacity is 100,000 to 150,000 carats, but the HRD recorded Liberian imports into Belgium of more than 31 million carats between 1994 and 1998 - an average of over 6 million carats a year.
Cote d'Ivoire purportedly exported an average of more than 1.5 million carats to Belgium each year between 1995 and 1997, even though Cote d'Ivoire's small diamond mining industry was closed in the mid-1980s, the report said.
Conversely, exports recorded by the government of Sierra Leone amounted to a mere 8,500 carats in 1998, whereas the HRD registered imports of 770,000 carats in that year.
The study recommends that the Belgian government take full and direct responsibility for the oversight of the Belgium diamond industry and that an enquiry be launched "with particular reference to its lack of transparency and questionable paper work and its possible infiltration by organised criminal elements".
The UN Security Council should place an embargo on all diamonds said to originate in Liberia and Cote d'Ivoire until an international review is made into the resource bases of these countries and until exports fall in line with that resource base, the report adds.
"Attention should also be given by the UN peacekeeping force (in Sierra Leone) to blocking or destabilising major smuggling routes from Sierra Leone into neighbouring countries," it says.
But the diamond industry should also accept its share of the blame, particularly De Beers which purchases by far the majority of all diamonds produced, and more or less sets the prices of rough diamonds on the world market, according to the report.
"If De Beers were to take a greater interest in countries like Sierra Leone, and if it were to stop purchasing large amounts of diamonds from countries with a negligible production base, much could be done to end the current high levels of theft and smuggling," the report says.
It suggests that De Beers be encouraged and "given every incentive" to open a purchasing office in Freetown and close its purchasing agencies in Liberia and Cote d'Ivoire until diamonds exported from these countries are proven to be of local origin.
The report also notes that three Canadian companies, Rex Diamond, AmCan Minerals and Diamondworks became involved in diamond mining in Sierra Leone during the 1990s.
It recommends that Canadian stock exchanges, where a high proportion of the world's smaller mining companies are listed, should do more to include issues relating to corporate behaviour in war zones in existing codes of conduct.
[The report is available at http://www.web.net/pac/ ]
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