[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:66786.wais]




               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<INF>--</INF>relations

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
66-786 CC                   WASHINGTON : 2000




                  COMMITTEE ON INTERNATIONAL RELATIONS

                 BENJAMIN A. GILMAN, New York, Chairman
WILLIAM F. GOODLING, Pennsylvania    SAM GEJDENSON, Connecticut
JAMES A. LEACH, Iowa                 TOM LANTOS, California
HENRY J. HYDE, Illinois              HOWARD L. BERMAN, California
DOUG BEREUTER, Nebraska              GARY L. ACKERMAN, New York
CHRISTOPHER H. SMITH, New Jersey     ENI F.H. FALEOMAVAEGA, American 
DAN BURTON, Indiana                      Samoa
ELTON GALLEGLY, California           MATTHEW G. MARTINEZ, California
ILEANA ROS-LEHTINEN, Florida         DONALD M. PAYNE, New Jersey
CASS BALLENGER, North Carolina       ROBERT MENENDEZ, New Jersey
DANA ROHRABACHER, California         SHERROD BROWN, Ohio
DONALD A. MANZULLO, Illinois         CYNTHIA A. McKINNEY, Georgia
EDWARD R. ROYCE, California          ALCEE L. HASTINGS, Florida
PETER T. KING, New York              PAT DANNER, Missouri
STEVE CHABOT, Ohio                   EARL F. HILLIARD, Alabama
MARSHALL ``MARK'' SANFORD, South     BRAD SHERMAN, California
    Carolina                         ROBERT WEXLER, Florida
MATT SALMON, Arizona                 STEVEN R. ROTHMAN, New Jersey
AMO HOUGHTON, New York               JIM DAVIS, Florida
TOM CAMPBELL, California             EARL POMEROY, North Dakota
JOHN M. McHUGH, New York             WILLIAM D. DELAHUNT, Massachusetts
KEVIN BRADY, Texas                   GREGORY W. MEEKS, New York
RICHARD BURR, North Carolina         BARBARA LEE, California
PAUL E. GILLMOR, Ohio                JOSEPH CROWLEY, New York
GEORGE P. RADANOVICH, California     JOSEPH M. HOEFFEL, Pennsylvania
JOHN COOKSEY, Louisiana
THOMAS G. TANCREDO, Colorado
                    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               DONALD M. PAYNE, New Jersey
STEVE CHABOT, Ohio                   ALCEE L. HASTINGS, Florida
TOM CAMPBELL, California             GREGORY W. MEEKS, New York
GEORGE RADANOVICH, California        BARBARA LEE, California
THOMAS G. TANCREDO, Colorado
                Tom Sheehy, Subcommittee Staff Director
               Malik M. Chaka, Professional Staff Member
        Charisse Glassman, Democratic Professional Staff Member
                 Charmaine V. Houseman, Staff Associate




                            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

 
               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 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 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 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.
    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.
    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 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 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 4\1/2\ 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 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.
    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 power-sharing 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 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.
    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 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 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 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 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.
    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?
    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 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.
    [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 participation 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.
    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 diamonds 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 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 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 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 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 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.
    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. 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 they operate, they have to undertake 
never to ever buy conflict diamonds 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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