U.S. GOVERNMENT PRINTING OFFICE

66–786 CC WASHINGTON : 2000

AFRICA’S DIAMONDS: PRECIOUS, PERILOUS TOO?

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

(II)

COMMITTEE ON INTERNATIONAL RELATIONS

BENJAMIN A. GILMAN, New York, Chairman

WILLIAM F. GOODLING, Pennsylvania

JAMES A. LEACH, Iowa

HENRY J. HYDE, Illinois

DOUG BEREUTER, Nebraska

CHRISTOPHER H. SMITH, New Jersey

DAN BURTON, Indiana

ELTON GALLEGLY, California

ILEANA ROS-LEHTINEN, Florida

CASS BALLENGER, North Carolina

DANA ROHRABACHER, California

DONALD A. MANZULLO, Illinois

EDWARD R. ROYCE, California

PETER T. KING, New York

STEVE CHABOT, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

MATT SALMON, Arizona

AMO HOUGHTON, New York

TOM CAMPBELL, California

JOHN M. MCHUGH, New York

KEVIN BRADY, Texas

RICHARD BURR, North Carolina

PAUL E. GILLMOR, Ohio

GEORGE P. RADANOVICH, California

JOHN COOKSEY, Louisiana

THOMAS G. TANCREDO, Colorado

SAM GEJDENSON, Connecticut

TOM LANTOS, California

HOWARD L. BERMAN, California

GARY L. ACKERMAN, New York

ENI F.H. FALEOMAVAEGA, American

Samoa

MATTHEW G. MARTINEZ, California

DONALD M. PAYNE, New Jersey

ROBERT MENENDEZ, New Jersey

SHERROD BROWN, Ohio

CYNTHIA A. MCKINNEY, Georgia

ALCEE L. HASTINGS, Florida

PAT DANNER, Missouri

EARL F. HILLIARD, Alabama

BRAD SHERMAN, California

ROBERT WEXLER, Florida

STEVEN R. ROTHMAN, New Jersey

JIM DAVIS, Florida

EARL POMEROY, North Dakota

WILLIAM D. DELAHUNT, Massachusetts

GREGORY W. MEEKS, New York

BARBARA LEE, California

JOSEPH CROWLEY, New York

JOSEPH M. HOEFFEL, Pennsylvania

RICHARD J. GARON, Chief of Staff

KATHLEEN BERTELSEN MOAZED, Democratic Chief of Staff

SUBCOMMITTEE ON AFRICA

EDWARD R. ROYCE, California, Chairman

AMO HOUGHTON, New York

STEVE CHABOT, Ohio

TOM CAMPBELL, California

GEORGE RADANOVICH, California

THOMAS G. TANCREDO, Colorado

DONALD M. PAYNE, New Jersey

ALCEE L. HASTINGS, Florida

GREGORY W. MEEKS, New York

BARBARA LEE, California

TOM SHEEHY, Subcommittee Staff Director

MALIK M. CHAKA, Professional Staff Member

CHARISSE GLASSMAN, Democratic Professional Staff Member

CHARMAINE V. HOUSEMAN, Staff Associate

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C O N T E N T S

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

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AFRICA’S DIAMONDS: PRECIOUS, PERILOUS

TOO?

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

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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

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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

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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.

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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.

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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

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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

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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 41⁄2 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

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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.

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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 powersharing 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

11

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.

12

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

13

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

14

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

15

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

16

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.

17

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?

18

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

19

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.

20

[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 particiVerDate 11-MAY-2000 12:36 Jan 11, 2001 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 66786.TXT HINTREL1 PsN: HINTREL1
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pation 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.

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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 diaVerDate 11-MAY-2000 12:36 Jan 11, 2001 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 66786.TXT HINTREL1 PsN: HINTREL1
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monds 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

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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

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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

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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

27

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

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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.

29

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.

30

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

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monds 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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