PRESS CONFERENCE BY PERMANENT REPRESENTATIVE OF CANADA

Press Briefing

PRESS CONFERENCE BY PERMANENT REPRESENTATIVE OF CANADA

The resolution passed by the World Diamond Congress in Antwerp two days ago was remarkable, Robert Fowler, Canada's Permanent Representative to the United Nations told correspondents at a Headquarters press conference this afternoon.

By passing the resolution, the diamond industry had answered the question he had posed to it a year ago of whether it intended to be part of the problem or part of the solution, Mr. Fowler said. Having attended the three-day World Diamond Congress in Antwerp, Belgium, in his capacity as Chairman of the Security Council Sanctions Committee on Angola, Mr. Fowler said that he was extremely happy about the absolutely remarkable resolution passed by the Congress with respect to diamonds.

"Candidly, I never would have expected this a year ago", he told correspondents. Mr. Fowler, who had briefed the Security Council on the outcome of the Congress moments earlier, said that he had met exactly one year ago with leaders of the International Diamonds Manufacturers Association and had been asked then to return to this year's Congress as keynote speaker. At that time, neither he nor the industry itself could have anticipated that the issue of "conflict" diamonds would have achieved such prominence. Conflict diamonds had not merely been an issue on the Congress's agenda. Conflict diamonds was the agenda and had informed every aspect of every discussion during the week.

The past year had been a significant one, Mr. Fowler said. There had been some very effective players in the field, including two non-governmental organizations, Global Witness and Human Rights Watch. Those organizations had been extremely active in bringing the issue of conflict diamonds to the floor. The Security Council's work on Angola, including the Expert Panel Report on Violations of Security Council Sanctions Against UNITA (National Union for the Total Independence of Angola) tabled in March and the resolution adopted in April, added to the momentum of the issue leading to the meeting.

Conflict diamonds -- also called "dirty" and "blood" diamonds -- represented a very small, but very vital part of the international diamond industry, he said. While 4 per cent might seem insignificant, he had never suggested that it was not extremely vital. At the same time, however, it would be a "travesty in the extreme" to destroy the 96 per cent of the diamond industry that was clean and conflict-free. It was important that whatever measures taken would not have enormous collateral damage on the rest of the industry. The diamond industry employed millions of people, principally in developing countries. A handful of those countries owed their success and relative wealth to that single industry.

The diamond industry was a conservative industry and not one that was used to playing out its concerns, differences and problems in the public eye, Mr. Fowler said. Certain far-sighted elements, however, understood the potential damage that the issue of conflict diamonds could do to the entire industry.

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The agreement passed by the Congress did not come out of the blue, he said. Mr. Fowler had been in touch with the industry leader, DeBeers, and other industry associations throughout the year. In October, DeBeers had announced that they would not buy any Angolan diamonds because they did not wish to risk inadvertently buying conflict diamonds.

Subsequently, at the end of the year, DeBeers adopted a policy whereby all of its diamonds would be accompanied by an attestation certificate that they were conflict-free. They took further measures to require that their principal clients accepted a code of conduct which was foreseen in the Diamond Congress resolution and which would provide an ethnical standard by which the industry would operate. All DeBeers clients would be required to adhere to that code of conduct.

The momentum for the World Diamond Congress to adopt the resolution had originated both within the industry and outside of it, particularly from non- governmental organizations and the United Nations, Mr. Fowler said. Although the momentum came from slightly different directions, it was to achieve the same end.

Outlining the main provisions of the World Diamond Congress resolution, Mr. Fowler said that it required each rough-diamond importing country to enact legislation that would require that imported parcels of rough diamonds be sealed and registered in a universally standardized measure by an accredited export authority. It also required each exporting country to establish diamond boards that would be responsible for sealing those packages and registering parcels into an international database. It was possible that the United Nations would play some role in that process.

The resolution also required that countries that consumed cut and polished diamonds enact legislation forbidding the import of polished diamonds from any exporting country that did not agree to seal packages and to accompany them with an unforgeable certificate of origin, he said. Consuming countries were also forbidden to import diamonds from any country that did not agree to participate in the sharing of data on exports.

Each country also had to enact legislation that would bring criminal measures to bear on any individual or company proven to be knowingly involved in illegal rough diamonds trade, he said. The resolution also required each diamond organization to adopt an ethical code of conduct regarding conflict diamonds and labour practices. Failure to adhere to such a code would lead to expulsion from the International Diamonds Manufacturers Association, the World Federation of Diamond Bourses, and from any other relevant diamond association. All parties would be required to promote adherence to the code of conduct.

Compliance with measures would be monitored by the International Diamond Council, which was comprised of producers, manufacturers, traders, governments, relevant international organizations and the Security Council, Mr. Fowler said. It was a system that would be fully verified and audited. Using the "buzzwords" of the industry, the idea was to create an unbreakable chain of warranty. "The chain or warranty implied that the stone would be traced from the streambed or the mine-head to the lady's finger", he said. Anyone seeking to buy a diamond

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could have full confidence that they were buying a conflict-free, prosperity diamond and not a blood diamond.

Once such a system was operating, it would enhance consumer confidence in legitimate diamonds, avoid collateral damage and isolate the illegal conflict diamonds that were proceeding to market, Mr. Fowler said. Canada soon hoped to introduce a resolution or presidential statement in the Security Council that would welcome the measures taken by the diamond industry and encourage the industry to proceed quickly. By adopting such a resolution or presidential statement, the Council would be committing itself to working with the diamond industry to put dirty diamonds into a controllable box.

Regarding recent discussions in the Security Council on Liberian diamonds in connection with resolution 1306 (2000) on Sierra Leone, diamonds that were not legitimate Sierra Leonean diamonds could not get to market, he said. At the very least, it would ensure that such diamonds had to reach any possible markets through devious backdoor chains that would result in significantly reduced revenues for the dealers and huge risk.

On the Sierra Leone resolution, would the resolution from the World Diamond Congress do to Liberia what the Security Council resolution did not? a correspondent asked.

The World Diamond Congress resolution had only been agreed to 48 hours ago, Mr. Fowler said. Rules, regulations, monitoring and legislation must be put in place. Even with the best will in the world, it would take a while to get such legislation passed. He personally felt that the Council had to move further with respect to Sierra Leonean diamonds, in particular diamonds that were getting to market through Liberia, other West African nations or any other nation. Given the speed with which the diamond industry had moved on the issue, the Council was challenged to keep up with them. Not everything would fall into place instantly. Further measures on the part of the Council would be required. What the Council had done with respect to Sierra Leone was a first start. There was more to do.

What happened if a packet of diamonds without proper certification arrived in New York? a correspondent asked.

According to the Diamond Congress's proposal, the diamonds would be seized, forfeited and the perpetrators wanting the diamonds would be subject to criminal penalty, Mr. Fowler said. Also, the entity that was importing or exporting the diamonds would suffer sanctions from within the industry and would be expelled from the relevant industry associations. As for the actual diamonds, it was clear that the system proposed by the Congress would be financed by the diamond industry. It was a self-financing proposal that would require some expenditure. Therefore, he would not be surprised if a practice similar to the one in the United States would be used in which the proceeds of crime were forfeitable to be used in the business of “crime busting”.

Another correspondent asked why more had not been done on small arms, which were easier to detect than diamonds. There had indeed been lots of talk at the Diamond Congress that diamonds did not kill people, people killed people,

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Mr. Fowler said. While certain denizens of the diamond industry had questioned the focus on diamonds, it was the same coin. The Expert Panel on Angola made that case rather clearly. The arms dealers came to Andulo to fill Mr. Savimbi's shopping list and he handed them bags of diamonds. If he did not have the bags of diamonds to hand them, he would not have gotten the arms. While it was true that both sides of the equation must be looked at, it was crazy to say that either one was isolatable. They were the same problem. He was very pleased what the diamond industry had decided to do because it was both realistic and wise.

How did he expect governments to follow up rather than the industry? a correspondent asked. Governments would have a role in international organizations like the United Nations, Mr. Fowler said. They would also have a role in bringing their national rules, regulations, and customs expertise to the process. The industry would have the role of educating all governments so that they could recognize diamonds for what they were and from where they came. Governments, customs and border managers would have to be educated on the sealed packaging arrangements and on the identification of legitimate and forged certificates of origin.

Did the resolution contain everything that he would have wanted to see in it, and if not, what would he have added? a correspondent asked. He did not see anything obviously missing, Mr. Fowler said. As some of the broad thrusts of the resolutions were played out and honed, they would encounter application problems that would have to be worked out. They had not worked out the best way to centralize, coordinate, manage and protect all the data flows, which were key to providing to the unbreakable chain of warranties.

"But it's a very jealous industry", he said. Every company was looking over its shoulder at every other company. Antwerp was worried that if they had tougher rules than Tel Aviv then the whole business would go to Tel Aviv, and Tel Aviv was worrying about Bombay. What was key was that the international diamond regulatory body would bring all of the diamond industry actors around the same table so that everybody would be a part of the solution.

Was there any discussion of "grandfathering" any of that because of the obvious grudge to export illegal diamonds? a correspondent asked.

There were other measures in place for that, whether or not they were adequate, he said. There were very few legal jurisdictions that loved "grandfathering". In fact, there was some discussion in the Congress about when Security Council resolution actually came into effect. What if there had been a packet of diamonds somewhere over the Mediterranean when that resolution was passed? Were those diamonds subject to the dictates of resolution 1306 (2000) or not? His view was yes. He was principally interested in getting it right from here on in.

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