Blood diamonds will flood back into the worldwide market unless a way is found to bring Zimbabwe back under global control at a key meeting of the World Diamond Council (WDC) next week, according to one of the world's biggest diamond tycoons.
Willie Nagel, founding father of the Kimberley Process – a group made up of government, human rights and diamond-industry officials to prevent the trading of diamonds that could be used for financing wars – has warned that Zimbabwe is not adhering to the "clean trade" system.
But, he said, unless the country was swiftly bought back into the international fold, it would destabilise the market by saturating the world with non-approved diamonds.
Harare insists it has complied with Kimberley's demands. They point to a recent positive report from the regulator's monitors. But human rights groups say abuses continue to take place in the Marange diamond fields. They cite the massacre of hundreds of illegal diggers and say soldiers are still engaging in forced labour, torture and harassment.
There are also fears that profits from the industry could be used to fund President Robert Mugabe's cash-strapped Zanu-PF party at the expense of the country's rival-in-government, the Movement for Democratic Change.
Zimbabwe's minister of mines and mining development, Obert Moses Mpofu, has said that his country plans to begin selling diamonds from the Marange immediately, regardless of whether the Kimberley Process gives its approval next week. If fully mined, diamonds could make up 25% of the global supply.
Nagel said that Zimbabwe's "continued refusal to conform [to the system] will undermine the Kimberley Process and destabilise the whole market".
It could, he said, lead to the US – the largest diamond market in the world – banning all imported stones, with EU countries following suit.
At a meeting in St Petersburg next week, the World Diamond Council (WDC) will try to establish whether Zimbabwe has met Kimberley's minimum standards. Their decision will be guided by Boaz Hirsch, the current chair of the Kimberley Process, who will be the keynote speaker.
Nagel is asking delegates not to repeat the failure of last month, when international diamond experts meeting in Tel Aviv failed to reach a consensus on whether Zimbabwe's government is profiting from the diamonds while engaging in human rights abuses.
"We risk upsetting the whole fabric of Kimberley because the find of diamonds in Zimbabwe is such a major one," said Nagel. "If they begin smuggling their diamonds out to the rest of the world, it would be disastrous: for us and for them.
"If Zimbabwe don't conform, sooner or later the USA may not allow diamonds in at all," he warned. "If we can't sell to the ultimate consumer if diamonds, we're lost. And then there is also the risk that the EU could come to the same conclusion as the US.
Despite the overall success of the Kimberley Process, blood diamonds are still used to fund human rights abuses. The model Naomi Campbell and actor Mia Farrow have been ordered to testify in court about the gift of blood diamonds Campbell allegedly received from Charles Taylor, former president of Liberia. Taylor is accused of having been paid in rough diamonds for weapons to arm the rebels in Sierra Leone's bloody civil war.
Concerns over human rights abuses in Zimbabwe are so acute that the European parliament today passed a resolution highly critical of Mugabe and his supporters for plundering diamonds for their own financial benefit.
The resolution called for the "revision of the Kimberley Process to take proper account of human rights principles" and for the Zimbabwe government to use diamond revenue to help regenerate the economy as a whole.
Eli Izhakoff, the WDC's chairman, said the WDC meeting next week will "reconfirm our commitment to ethical trading and to the eradication of conflict diamonds from our distribution chain".
"We will not be assembling in St Petersburg simply to pay lip service to the values upon which the organisation was founded," he added. "The ongoing situation in Zimbabwe and the dedication of our industry to operate in a transparent and principled manner means that there are burning issues on the table, which we will discuss and for which we will formulate strategies."
What is the Kimberley Process?
The brainchild of Willie Nagel, the Kimberley Process Certification Scheme is a joint initiative by governments, the diamond industry and advocacy groups to assure buyers that they are not financing war and human rights abuses.
Prior to the 2003 implementation of the UN resolution, the sale of conflict – or "blood" – diamonds was worth around 15% of the international trade. Today, the illicit trade is thought to account for just 1% of the global market.
Illicit diamond sales continue, however, in countries including Venezuela, Ivory Coast, Guinea and Lebanon.
The scheme has also been criticised for failing to address issues of non-compliance, smuggling, money laundering and human rights abuses.
Elly Harrowell, a campaigner at Global Witness, which helped set up the scheme, said recently: "Is the KP a success or a failure? The process has definitely had some impressive successes in the last 10 years, but unfortunately, in the last few years, a lack of political will has jeopardised the progress." Guardian