Forever stained, or a new era?

A South African-based company has developed a new DNA fingerprinting technique that has the potential, for the first time, and on an independent scientific basis, to clean up the world’s troubled diamond industry on both the quality control and ethics front. This development comes in the wake of the industry’s so-called Kimberley Process (KP) being left in a new crisis surrounding conflict or blood diamonds due to the Zimbabwean government's recent threat to ignore the controls of the KP.

The announcement by DiaLab Pty Ltd in Cape Town also comes on the eve of next month's panel discussion by the World Diamond Council (WDC) - the United Nations-sponsored industry organisation dedicated to reducing the flow of conflict diamonds - at the Las Vegas jewellery shows in the United States. The panel will discuss the current state of the KP and consumer confidence in diamonds.

The discussion will further review jewellers' obligations to disclose current gemstone treatments to customers.

The extent to which the present system of both ethical and quality control in the diamond and gemstones industry is still riddled with loopholes, is illustrated by the results of an analysis on 2 000 stones in South Africa done by DiaLab using its new DNA fingerprinting technique.

It found that an estimated 17%, and perhaps as much as 27%, of the diamonds on sale in South Africa are blood diamonds from conflict regions in Africa.

According to a statement released by the company last week, the DNA fingerprinting system allows an analysis of gemstones to a level that was previously unheard of.

“Stones can now be compared and checked for authenticity and other elements such as clarity, cut and colour by experts across the world within minutes," read the statement.

“More importantly, the DNA fingerprinting authentication process is revealing more about the stones than it was previously possible to know, especially when it comes to treated diamonds.

“The result is that many excellent gradings have been proved to be not quite as good as they purport to be, which means the stones have been overpriced, causing inflation," it read.

"The findings haven't made the company popular with many diamond sellers, especially as this is an industry where inflation is roughly 15 to 19% higher than anywhere else in the world,” the statement claimed. 

The problem with the KP to date has been that it is based on the voluntary participation of individual countries, which leads to a weak enforcement environment and leaves it vulnerable to corruption and exploitation, own short-term interests and political wrangling – as was clearly illustrated recently in Zimbabwe.

The KP is an international governmental certification scheme that was set up to prevent the trade in diamonds which funds conflict. Launched in January 2003, the scheme requires governments to certify that shipments of rough diamonds are free from blood diamonds.

The process derives its name from the fact that it developed from a meeting of the major diamond-producing and -trading  countries 10 years ago in Kimberley, to determine how to tackle the blood diamond problem. The meeting, hosted by the South African government, was the start of an important and often contentious three-year negotiating process to establish an international diamond certification scheme.

In November 2002, it was endorsed by participating governments, the diamond industry and non-governmental organisations and was finally launched in January 2003. The Kimberley Process was endorsed by the United Nations General Assembly (UNGA) and the United Nations Security Council (UNSC).

A United Nations Group of Experts on Côte d'Ivoire, however, has recently found that poor controls are allowing significant volumes of blood diamonds to enter the legitimate trade through Ghana, where they are being certified as conflict free, and through Mali.

As well as pointing to the need for stronger diamond controls in the region, the Group of Experts recommends that international trading centres introduce better systems for identifying suspicious shipments of rough diamonds.

Many other diamond-producing countries have weak government diamond controls which cannot guarantee that the diamonds they export are conflict free. The KP is struggling with its core mandate, which is guaranteeing consumers that the organisation is aware of the origin of the diamonds which consumers buy. Internal controls are weak or nonexistent in a multitude of countries, including the Democratic Republic of Congo, Angola, Zimbabwe, Venezuela, Guinea and Côte d’Ivoire.

But the DiaLabs survey has shown further that South Africa is far from being completely in the clear. In its statement, the company said: “We’re sitting on a time bomb. We’re taking the lid off wide-scale corruption in the South African diamond industry.

“Diamonds are sold with certification, but in some instances, the certification is not worth the paper it is printed on because the grading systems in use are not adequate to distinguish synthetically produced carbon-based diamonds from natural, carbon-based stones.”

The net result of the present situation is that there is still a flourishing illicit trade in diamonds globally. They are a high-value commodity that is easily smuggled and the KP controls have not been able to stop this, which is exacerbated by the lack of enforcement capacity.

The new DNA fingerprinting technique could go a long way in closing the loopholes in the system, since it makes it possible to have a certification process that would be free from human intervention and manipulation.

“The problem that we have globally is that there is no real way to link the certificate to the stone, other than clarity, cut and colour - and those measures are all subjective," said DiaLab.

"The new certification process provides in-depth reports that mean that a particular certificate can be indelibly linked to a particular stone. There is no more ambiguity, and no more room for fraud.”

According to the company, there is a rapidly growing number of cases where people have discovered that their diamonds are not authentic as stated on their certification. For example, some stones had treatments or colour enhancements that were not disclosed.