The diamond industry’s double-standard on Israel

All too aware of how bad association with war crimes is for business, the diamond industry has taken pains to evade

Diamonds are Israel’s number one export commodity.

questions about its connections with Israel’s human rights abuses — and so far has escaped scrutiny from watchdog organizations.

Representatives for 75 countries affiliated to the United Nations-based Kimberley Process Certification Scheme meeting in Kinshasa this week failed to reach agreement on the export of blood-stained diamonds from Zimbabwe. The elephant in the room was Israel’s burgeoning diamond exports which evade the human rights strictures imposed on Zimbabwe’s diamond exports.

A “letter of the month” that I authored and which was published in the April edition of Retail Jeweller magazine exposes these double standards in the Kimberley Process regulations that facilitate the trade in blood-stained diamonds from Israel and Zimbabwe (Letters, Retail Jeweller Magazine, April 2011).

The letter caused “consternation” to some in the diamond industry and resulted in the withdrawal of the magazine from a major jewellery trade fair in Switzerland (“Gems editor sorry for ‘blood diamond’ boycott letter,” The Jewish Chronicle, 7 April 2011).

The letter drew the wrath of vested interests and leaders of the Israeli diamond industry. Their response via the Letters page in the May edition of the magazine demonstrated the sensitivity of the global diamond industry to any exposure of the links between Israeli diamonds and Israeli war crimes.

Three letters, signed by six prominent members of the global diamond industry, representing eight different organizations, all repeated the same mantra about the delegitimization of Israel. The writers ignored the key issue — that Israel’s cut and polished diamond exports evade the human rights strictures applying to exports of rough diamonds.

While the diamond industry continues to promote a soft-focus image of diamonds as objects of desire, the public, increasingly concerned about the ethical credentials of the goods they purchase, are no longer prepared to accept at face value claims that diamonds processed in Israeli are conflict-free.

Israel’s diamond trade funds war crimes

Israeli Diamond Industry Chairman Moti Ganz said recently: “Americans still buy diamonds to symbolize love and commitment” (“IDI plans its largest participation at JCK Las Vegas,” Diamond World, 17 May 2011). For the people in Gaza, on the receiving end of Israel’s diamond-funded white phosphorous and flechette nail bombs, diamonds are more likely to symbolize murder, mayhem and blood-soaked terror than love and commitment.

Israeli political economist Shir Hever, in evidence to the Russell Tribunal on Palestine stated in November 2010: “Overall the Israeli diamond industry contributes about $1 billion annually to the Israeli military and security industries … every time somebody buys a diamond that was exported from Israel some of that money ends up in the Israeli military so the financial connection is quite clear” (“Day 2, Part 1 of London Session, Russell Tribunal on Palestine,” 21 November 2010).

The introduction of the Kimberley Process (KP) regulations in 2003 was supposed to prevent the trade in diamonds that fund human rights violations. However, the Kimberly Process regulations’ narrow definition of a conflict or blood diamond excludes cut and polished diamonds. This anomaly facilitates the situation whereby jewelers can label cut and polished diamonds that are generating revenue used to fund the Israeli military which stands accused of war crimes, as conflict-free.

As a result, de facto blood diamonds from Israel contaminate the global market. The absence of a legal definition of a conflict-free diamond facilitates this deception. A public petition by a group of international Palestine solidarity activists, Global Palestine Solidarity (GPS), to the members of the Kimberley Process seeks an urgent review of the definition of a conflict diamond to include cut and polished diamonds that fund human rights violations (“Stop Israel’s Blood Diamond Trade,” accessed 1 June 2011).

Censorship by online retailers

To maintain the charade, a number of the world’s leading diamond retailers have resorted to censorship to avoid answering questions about the provenance of their so-called conflict-free diamonds.

Blue Nile, a Seattle-based, NASDAQ-listed company, is the world’s leading online diamond retailer. The company claims their diamonds “are warranted to be conflict-free.” Over the past six months, however, subscribers to the Blue Nile Facebook page have on numerous occasions asked how the company can justify the claim that diamonds crafted in Israel are conflict-free as they generate revenue used to fund the Israeli military, which stands accused of war crimes.

In response, the company censored their Facebook page, blocking scores of people and their 90,000 Facebook fans from posting new threads or pictures on their wall. Following sustained questioning from people in Ireland over a four-week period prior to 5 November 2010, Blue Nile imposed a blanket ban on all Irish IP address users.

This is not the only example of Blue Nile attempting to evade the issue of Israel’s blood diamonds.

In February 2011, Blue Nile filed its annual report with the United States Securities and Exchange Commission (the file is accessible via the Blue Nile website, accessed 21 June ...). Blue Nile’s annual report is supposed to be a full disclosure of all the information necessary for investors to make an informed decision about the risks to the company’s future trading performance.

While this legally-binding statement of the company’s trading performance lists 16 pages of possible risk factors to the business, it fails to mention that the company is selling diamonds crafted in Israel that are the target of an international campaign that seeks to have them classified as conflict or blood diamonds. Nor does it state that the company took evasive action on its Facebook page to prevent people questioning the provenance of their so-called conflict-free diamonds.

Retailers attempting to evade accountability

Meanwhile, other diamond retailers have also tried to avoid scrutiny for involvement in Israel’s diamond trade.

Over the past six months, Brilliant Earth, another leading online diamond retailer, which promotes their diamonds as “ethically sourced” and “conflict-free,” has also blocked scores of people who posted questions on their Facebook wall asking if any of their so-called conflict-free diamonds are crafted in Israel.

And in April, forty members of the Independent Jewelers Organization (IJO), an 800-member American association of “jewelers with the highest ethical standards,” went on a diamond-buying trip to Israel (“IJO
makes pilot diamond buying trip to Israel,” Israeli Diamond industry website, 1 May 2011). When subscribers to their Facebook page queried how they justify buying diamonds in a country that stands accused of war crimes, the administrators censored the page and deleted all references to their trip to Israel.

These are just some examples of the difficulties faced by jewelers who sell diamonds crafted in Israel claiming they are conflict-free diamonds. Jewelers want to promote their ethical practices, but if they sell diamonds crafted in Israel they are helping to fund a military regime that stands accused of war crimes. The contamination of the global diamond market with Israeli diamonds gives Palestine solidarity activists enormous leverage with the diamond industry at local, national and international levels.

Israel’s biggest export

Diamonds are Israel’s number one export commodity, accounting for between one quarter and one third of Israeli exports. In 2008, diamond exports were valued at $19.4 billion with a net value of approximately $10 billion — far exceeding even the gross value of electronic or pharmaceutical exports.

The diamond industry in Israel adds 5 percent to the GDP and is a significant source of the revenue needed to sustain Israel’s occupations, siege on Gaza and illegal settlements.

Israel’s occupation of Palestinian land and the brutal subjugation of the Palestinian people places a heavy burden on Israeli government finances. According to US government statistics, Israel’s military expenditures consume more than 7 percent of the GDP, or approximately $16 billion per year (CIA World Factbook - Israel).

While American military aid of $3 billion per year is significant, the bulk of the money needed to sustain the many facets of Israeli hegemony has to be extracted from the economy in taxes of one form or another.

However, American consumers contribute more than the value of Washington’s aid package to the Israeli economy through the purchase of Israeli diamonds. According to the Israeli diamond industry website, approximately 50 percent of all diamonds bought in the US come from Israel (“The Israeli diamond industry - A leading center of the diamond world”).

The US is Israel’s most important diamond export market, accounting for roughly 40 percent of exports. In 2010 the net value of Israeli diamond exports to America was $5.8 billion (“IDI plans its largest participation at JCK Las Vegas,” Diamond World website, 17 May 2011).

Israel’s economy, to a large extent isolated from its natural markets in neighboring Arab states, is heavily reliant on the export of goods and services to Europe, the US and Asia. Israeli planners have long recognized the need for high-value, export-orientated industries that would draw in the foreign currency necessary to sustain the Zionist project in Palestine.

Zimbabwe vs. Israel

Israel’s overdependence on a luxury fashion commodity leaves it exposed and vulnerable to a consumer-lead rejection of Israeli diamonds. The demise of the Israeli diamond industry could have a significant impact on other sectors of the economy, on the Israeli stock market and on Israel’s ability to attract foreign direct investment.

The diamond industry is well aware how easily a brand image that has taken decades to establish can be ruined in a fraction of that time by any unsavory association. In the wake of Israel’s pre-election assault on the besieged residents of Gaza in the winter of 2008-09, a UN Human Rights Council investigation found evidence that Israel committed war crimes and possible crimes against humanity. The $1 billion revenue generated by the Israeli diamond industry helped fund the attack on Gaza — a clear justification for labeling Israeli diamonds “blood diamonds.”

Nongovernmental organizations (NGOs) with observer status in the Kimberley Process (such as Global Witness and others) have a responsibility to ensure their support is not misused by the diamond industry.

Despite Israel’s well-documented human rights abuses, none of the NGOs have raised the issue of Israel’s continuing membership of the Kimberly Process scheme. Instead, their attention is mainly focused on diamond exports from Zimbabwe, where government forces are reported to have killed more than 200 persons in the violent takeover of the Marange diamond fields in 2008 (“Zimbabwe: End Repression in Marange Diamond Fields,” Human Rights Watch, 26 June 2009).

In 2008, Israel’s diamond exports were worth more than 1,200 times that of Zimbabwe’s diamond exports. NGOs cannot remain credible defenders of human rights if they continue to ignore Israel’s diamond-funded occupations, diamond-funded war crimes, diamond-funded siege, diamond-funded colonization and the diamond-funded ethnic cleansing of Palestine.

Seán Clinton is a Palestine solidarity activist from Ireland. He is a member of the international group of Palestine solidarity activists, Global Palestine Solidarity, which focuses primarily on the Israel diamond industry.

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