To enter Johan Van Camp’s dark, shiny tiled jewelery shop on the Rijfstraat in Antwerp, in the heart of the Diamond District, customers have to go through two doors before standing at the counter. The years of daily robberies are over after the introduction of Goudi’s special police unit, but still the diamond business remains a risky and above all very expensive business.
Before the Russian invasion of Ukraine, diamonds worth more than 130 million euros were passed through a neighboring building every day. Since then, the diamond trade has dried up. Imports are becoming more difficult and there are more and more problems on the demand side. And they can be felt in the Diamond District, where men with an Indian look and briefcases in their hands walk the streets while trying to sell their purchased stones over the phone.
Johan Van Camp tells his cash register that more and more customers have recently asked where the gemstones in his jewelery come from. Not from Russia?
He usually has no answer, even though he knows that a significant portion of his trade is mined in Siberian mines.
Russia is the largest supplier of rough diamonds; 30 percent of the rough diamonds traded worldwide come from Russia. One third of this goes to Antwerp, via the Indian port of Surat. 90 percent of all rough diamonds from around the world are cut or polished. From that moment on, the stone is an Indian product; a certificate of origin is almost never issued, no matter where the stone originally comes from.
Van Camp also explains it to its customers. And then some go to a store that only works with gemstones from Canada or Botswana. They are aware of the reason: people do not want to wear conflict diamonds.
Link between diamonds and invasion
That Russian gemstones can be such, according to a recent report by IPIS (International Peace Information Service), a Belgian research agency that publishes advice on human rights in conflict areas. According to IPIS, there is a clear link between the Russian diamond trade and the invasion of Ukraine.
Russian Alrosa, a conglomerate of diamond companies and one of the world’s largest players, a third is owned by the Russian state and another third is owned by the autonomous region of Yakutia in Siberia, where the mines are located. As early as 1997, Alrosa invested in a submarine from the Russian Navy with the aim of keeping the ship “battle-ready”, according to one of the company’s newsletters. As a thank you, in 2004 the submarine was christened the ‘Alrosa’. Ten years later, with the support of Alrosa, soldiers are said to have been trained on the same ship for the Russian annexation of Crimea.
The Belgian newspaper The latest news found out that Alrosa has been collaborating with Rosatom, the Russian nuclear agency, since 2008. In a response, the company says it has nothing to do with uranium mining or nuclear weapons production. The collaboration would involve sharing knowledge about safety in a mine.
In late February, a day after Russia’s invasion of Ukraine, the United States put Alrosa’s CEO Sergei Ivanov on a sanctions list for his ties to Russian President Vladimir Putin. Ivanov is one of Putin’s most loyal group of confidants. His assets in the United States were frozen, and that prevented him from doing business in the United States or with Americans.
Two weeks later, the United States also decided on a total import ban on rough diamonds from Russia. According to experts, the impact of these sanctions was minimal: the United States is primarily a consumer market for diamonds, and as mentioned, the origin of these processed diamonds is rarely traceable. In other words: Russian stones kept finding their way.
Fearing damage to reputation, international jewelers such as Tiffany & Co, the Swiss watch brand Chopard and the largest global jewelery retailer Pandora subsequently decided to ‘pause’ their partnership with Alrosa.
But in Antwerp, due to its strategic location, the world’s most important marketplace for precious stones since the fifteenth century, people wanted nothing to do with stopping the import of Russian diamonds. Not even after Ukrainian President Zelensky in late March told the Belgian government that “peace is worth much more than diamonds” and confronted the country with an export product that is helping to finance a war.
Prime Minister Alexander De Croo always refers to the European Commission’s reasoning that sanctions should only be taken if they hurt more in Russia than in Europe. “If we stop importing diamonds, that trade will move to Dubai in a day,” he said. “In that case, the impact on Russia is zero, the one on Europe is very large.” He said Belgium would not object if the European Commission decided otherwise.
In a boardroom on the ninth floor of an office in the Antwerp Diamond District, Tom Neys uses words in that direction. He is Head of Communications at the Antwerp World Diamond Center (AWDC), which represents the interests of diamond dealers in Belgium. “By banning Russian stones, we would only cut our own meat,” he says. “It would cost ten thousand jobs in one fell swoop. And the Russians will not hurt you. They simply fly their stones to Dubai. You are pouring $ 1.8 billion into a country where Syrian President Assad was recently welcomed with open arms. Anyone who says an import ban is a more ethical decision is selling some nonsense. ”
Movie Blood diamond
The Belgian diamond sector has recovered somewhat in recent years after the successful Hollywood film Blood diamond caused the necessary damage in 2006. The film, starring Leonardo di Caprio, takes place in Sierra Leone, where gemstones are sold in favor of murderous rebel groups. Diamond dealers, already part of a closed network of formerly predominantly Jewish but now Indian families, retreated even further into closed office buildings in the Diamond District, often with only a desk and a lamp to value diamonds.
Partly because of the film, the diamond sector in Antwerp realized that regulation was needed to regain consumer confidence. Quality labels were introduced that made money laundering and fraud more difficult. Many companies moved to Dubai due to lack of supervision there. What was left in Antwerp were companies that prided themselves on their transparency and ethics. They said they only work with gemstones certified by the Kimberley Process, a UN-initiated body that monitors compliance with a trade ban on conflict diamonds.
But lately, the Kimberley Process has been criticized because Alrosa’s diamonds still carry its hallmark. This is because the body only decides by consensus. And since Russia is a part of it, it does not look like the Russian diamond will be stamped as a bad commodity in the near future.
NRC asked Kimberley Process President Jacob Zamage of Zimbabwean whether it plans to discuss conflict diamonds from Russia at its forthcoming meeting in June. There was no answer.
“Blood diamonds have been eradicated for more than sixteen years,” Tom Neys said on behalf of the AWDC. “What is happening in Russia now is different from what was happening in Africa back then. If you now want to ban Russian diamonds, you might as well stop using mobile phones. We also deal with the wrong regimes for the raw materials in batteries and monitors. Are you calling your mobile phone a blood phone†
Hans Merket, who is researching conflicts on behalf of IPIS and the University of Ghent in places where natural resources are in the ground, believes that in Antwerp and thus in the European Commission “until now it had been hoped that this conflict is a storm blowing “But the war in Ukraine is not over. You feel that the Russian diamond will have a negative connotation for a long time. I also hope that Antwerp sees that. And feels a need to act.”
According to Merket, the global diamond world should work together to ban Russian diamonds. “With the United States, you have the largest consumer market in the world, turning its back on Russia. If Antwerp participates, you will also complicate that part. Together, you must increase the pressure on India and Dubai. Only then can you make an impact. Belgium always presents itself as a leader for ethical diamonds in the world, so I think it is now up to the Belgians to proactively establish coordination. “
But the chance of achieving international cooperation is small. The World Diamond Council (WDC), the organization representing the industry at the Kimberley Process, has no intentions of calling for a boycott of Russian diamonds, said Dutch President Edward Asscher. “Then there is the risk of being accused of cartel formation by Russia. This would mean that we could be held liable for damages caused to Alrosa. Moreover, a country like India, which is also a member of the WDC, will never agree. ”
The diamond file is repeatedly discussed in the Belgian government. The federal governing parties Vooruit and Groen have been trying for weeks to get Alrosa’s CEO on the European sanctions list, but diamonds were also excluded in the sixth EU package.
The threat of a European ban has already had consequences. Merchants are no longer sure of their ordered stones. The supply of Russian diamonds in Antwerp has dried up since Russian planes were banned from landing in the EU. It can take months before a new contract is signed elsewhere in the world, especially in Africa. And too many mines have fallen into the hands of Alrosa in recent years.
For example, the uncertainty in Antwerp’s diamond district is rising. Outside a jewelery office on Hoveniersstraat, two Indian men in suits talk loudly to each other about the color and clarity of stones. 750 euros goes from one inside pocket to the other. “What more can I get from you?” it sounds. The man on the right frowns. “My supplies are running out. Because you know …”
The men are preparing for the worst, says one of the two after the deal. He does not want his name in the newspaper because it would worsen his negotiating position. “It is inevitable that the war in Ukraine will lead to bankruptcy here. There is no plane carrying Russian stones and no one wants to insure them. “The sector is breathing heavily.
Due to the great uncertainty, the Indian diamond trader Akash Jain, one of the smaller traders in Antwerp, recently decided to stop all trading in Russian diamonds. He will not say how much his international gemstone organization was dependent on ‘Russian’, that is, business-sensitive information. But it is more flexible than the larger companies that are bound by multi-year contracts with Alrosa.
Jain says he stopped not only for financial reasons but also for “humanity”. He cannot sell to himself by co-financing a war. “Russian diamonds have turned into blood diamonds,” he says bluntly. He wants nothing more to do with it.
A version of this article was also published in the newspaper on May 23, 2022