Blood diamonds are forever

Certain details of what happened in Suite 1409 remain shrouded in mystery. For instance, where did Const. Stephen Carmichael aim his MP5 submachine gun as he stormed the 10-by-10 office? We also don’t know precisely where the package containing the four carved wooden statues sat in relation to the suite’s bewildered, frightened occupant. The greatest mysteries of all, though, relate to the diamonds hidden inside the statues. Where did they come from? To whom did they belong? And what untold suffering—if any—had they wrought?

Image: Teun Voeten/Panos

Here, in a nutshell, is what we do know: On Feb. 27, 2008, RCMP officers sporting riot gear stormed an office in a secure high-rise building in downtown Toronto. They found gemologist Donald MacKay in possession of a quantity of rough diamonds. (“Rough” means unprocessed and uncut.) They arrested and charged MacKay with smuggling-related offences. For reasons that have everything to do with those heavily armed police officers, the case against MacKay collapsed in March. The prosecution is now appealing, but none of the allegations made by police and prosecutors held up in any court of law.

While this outcome can be regarded simply as a customs case gone wrong, it also hints at just how difficult policing diamond smuggling can be. And that’s bad news for the Kimberley Process, the international certification scheme aimed at curbing trade in so-called blood diamonds or conflict diamonds. In the eight years since its inception, the KP has forced this trade into the spotlight, making life considerably more difficult for rebels looking to finance arms purchases. Though any estimates are necessarily speculative, it was thought by some observers that blood diamonds accounted for as much as 15% of the total global trade during their heyday in the 1990s, compared to less than 1% by the mid-2000s. Yet hapless would-be grooms puzzling over gems at Birks and Tiffany & Co. would be wrong to believe the trade has vanished altogether. Some critics warn that tyrants still fill their coffers trading blood-soaked gems,only today their goods sometimes ship with certificates of approval. And one of its earliest champions—a Canadian NGO leader who participated in its founding—blasted the Kimberley Process as “complacent and almost completely ineffectual” before resigning his post.

The uninitiated or naive sometimes imagine that the corridors of international trade are closely guarded. Yet stolen cars leave this country daily in shipping containers. Cocaine ships concealed in auto parts. Even illegal firearms sometimes traverse the postal system. Sheer volume means only a tiny portion of the daily traffic can be inspected, and even then a keen eye for detail is required to detect malfeasance.

Marija Kangrga was attentive on Feb. 25, 2008. An officer with the Canada Border Services Agency (CBSA), her job was to inspect shipments flagged by her colleagues. About two hours into her shift at the Vista Cargo Complex in Mississauga, Ont., she came across a package recently arrived from Pearson International Airport. Its packing slip identified the exporter as Patrick Mhlanga, whose mailing address was a school in Blantyre, Malawi. The waybill indicated it contained four wood carvings, with a declared value of US$40.

Kangrga opened the package. One of the carvings represented a female and a baby; the others each depicted males, one holding a lamb, another holding a shaft and one wearing a hat. She noticed a faint circle at the base of one statue that looked like a wooden plug, and carved it out with her multi-tool. Something wrapped in blue paper lay inside. “I removed the paper and found a dark-coloured translucent rough stone,” she later testified in court. “I believed it to be possibly a rough diamond.” There were dozens more inside, packed so tightly that they could not be extracted without splitting the statues open.

Somebody had broken the law. The Export and Import of Rough Diamonds Act is Canada’s legislation implementing the Kimberley Process. It insists imported rough diamonds arrive in tamper-resistant containers. They must be accompanied by a certificate detailing carat weight, value and the name of a valid issuing authority. That last requirement effectively means diamonds can be shipped only via other KP-participating nations. Malawi isn’t one of them.

Kangrga notified her supervisor, and the RCMP took over. Time was of the essence. MacKay was listed as the package’s recipient, but that proved little; third parties sometimes receive illegal goods unwittingly. The RCMP needed to establish MacKay’s role in the shipment. Any substantial delay in delivery might arouse suspicion, though. So police settled on what’s known as a “controlled delivery.” They split apart the female-with-baby sculpture, rigged it with an electronic device that would signal police if it was reopened, then resealed it.

Police knew MacKay’s name and business address. And they learned more through an industry body called Jeweler’s Vigilance. Their target was between 55 and 60 years old, balding and with a pronounced belly; he lived in the city’s east end and took the train to work. It wasn’t much to go on. Police had no idea how many people to expect at MacKay’s suite. Complicating matters, the office was located in a 16-storey building almost exclusively occupied by businesses related to the diamond industry—a rather security-conscious milieu. People working in the business have been known to fortify their premises with additional locks and to have weapons on hand—knives, baseball bats, firearms—to deter thieves. Adding all that to the already considerable dangers of controlled deliveries, the RCMP opted to dispatch an Emergency Response Team (ERT), which uses weapons, protective gear and breaching equipment unavailable to ordinary police. MacKay was about to receive a visit he’d never forget.

There were highs and lows in all of this,” says Ian Smillie. He was there, on Parliament Hill, on the day Canada criminalized shipments like the one MacKay received. On Dec. 12, 2002, Bill C-14, Canada’s hastily drafted legislation intended to implement the Kimberley Process, received final assent in the House of Commons. “It was just nice to be able to see that happen in our Parliament,” he says, “and to know my colleagues and I had been part of it.”

Smillie’s involvement went back decades. In the late 1960s, he volunteered to teach children in Sierra Leone, which gained independence from Britain in 1961—a period of considerable optimism. “Nobody could foresee how it would go off the rails.” But it did. Sierra Leone’s civil war, which lasted more than a decade, began in 1991. Estimates place the resulting deaths in the tens of thousands, with about one-third of the nation’s population displaced. A rebel group, the Revolutionary United Front (RUF), became notorious for chopping the arms, noses, ears and other parts off tens of thousands of civilians, and for employing legions of drugged-up child soldiers.

By then, Smillie had become a fixture in the NGO world, campaigning on development issues. He joined an informal group of concerned citizens trying to make sense of the war. “There was a Sierra Leonean in the group who finally said, ‘Really, it’s about diamonds. And until somebody does something about the diamonds, this will never end.’”

That’s now widely accepted. The RUF gained control of key diamond fields in 1992; a UN expert panel later guessed the rebels earned between US$25 million and $125 million a year by selling diamonds. One alleged customer: Charles Taylor, then president of Liberia, who paid in weapons. (Taylor is currently on trial at The Hague in the Netherlands.) Working for an NGO called Partnership Africa Canada, Smillie wrote journalistic reports that helped others understand diamond-fuelled conflicts in Sierra Leone and elsewhere, and contributed to the birth of the movement to end the blood-diamond trade.

Diamonds, like opium, are an ideal commodity for funding war. They’re tremendously valuable relative to their size and weight. They’re often easy to mine; in many African countries, they can be found within a metre of the surface. The diamond industry features an unending sideshow of larceny and chicanery, so finding customers is relatively easy. And once in the hands of a licensed trader, illegal diamonds mingle easily with the legitimate trade. A licensed diamond-trading house can launder blood diamonds simply by attaching a certificate. Or they can be mixed with other African rough diamonds. And once they’re polished, clues of their provenance vanish forever.

The lure of illicit diamonds only grew after the end of the Cold War, which saw rebel groups cut off from their former Soviet or American benefactors. Angola, the Democratic Republic of the Congo (DRC) and other conflict zones quickly got hotter. Seeking to choke the flow of blood diamonds, NGOs including Partnership Africa Canada, Human Rights Watch and Global Witness began calling for an auditable paper trail running straight through the diamond trade, from mine to consumer. In May 2000, South Africa hosted meetings between governments, NGOs and industry that laid the foundation for a global certification scheme named for the city in which the meetings were held: Kimberley, South Africa. It brought together strange bedfellows, but “once industry began to understand that NGOs were not just thrill-seekers trying to wreck an industry, they started to listen to us,” Smillie says. “And I think we began to realize that the industry, although it had become badly infected by all kinds of criminality, the core of it was as interested in putting an end to this as we were.” De Beers, the South African giant that has dominated the trade for more than a century, lent its support.

The greater difficulty was getting governments onside, and the resulting scheme was a compromise. Smillie thought he could live with it. One academic paper, written shortly before introduction of the KP, captured the sentiments of many involved: “The Kimberley Process has gone farther than any other proposal or agreement to stem the trade, and should be implemented without delay,” it read. “The kinks can be hammered out later.” It formally launched in November 2002.

In the afternoon of Feb. 27, 2008, a woman wearing a uniform of DHL (an international shipping and logistics company) delivered the package to Donald MacKay. She found him in a messy, disorganized office with loose paper, gems and jewelry scattered throughout. MacKay, then 57 and standing five-foot-four, had lived in Canada since the mid-1970s but retained a strong Scottish accent. As usual, he was dressed in business attire. The woman paid close attention to her surroundings; she was an undercover RCMP officer. After leaving, she told colleagues there was a low risk of weapons on the premises.

MacKay tripped the electronic device by opening the rigged statue. Under the pretence that she’d misplaced her gloves, the undercover officer returned half an hour later. The five-member ERT team stood ready in a nearby stairwell, wearing black clothing, Kevlar body armour, helmets and goggles, and carrying MP5 assault rifles. They had also a two-man ram, Thor’s Hammer, and a prying instrument called a hooligan, ready to bash down MacKay’s door at a moment’s notice.

Suspecting nothing, MacKay again un­locked the door using a foot switch under his desk. That’s when, as he later put it, “all Hell broke loose.” In single file, the ERT team stormed through his waiting room into his office. Taking the lead, Const. Stephen Carmichael shouted: “Police! Don’t move!” MacKay, seated at his L-shaped desk, raised his hands into the air. “I experienced utter terror,” he later recalled. (MacKay later claimed that Carmichael aimed an MP5 directly at him, but Carmichael said his weapon was “canted toward the ground.”)

Police retrieved the diamonds. They found 13 more, green and brown in colour, that had arrived two months earlier from the same sender. Police copied records from MacKay’s computer. And they found a fax in which MacKay discussed the Kimberley Process with a client—evidence, they later claimed, that the gemologist understood its requirements all too well. Meanwhile, Cpl. Dominic Clamp lobbed pointed questions: Where was the money? Who’s Mr. Big?

The RCMP took MacKay to the Toronto Airport Detachment, where he was fingerprinted, photographed and allowed to phone a lawyer. She advised him to say nothing. Nevertheless, MacKay sat down with Clamp afterward for an interview. He told a vague story about an affable African engineer named Lionel, who owned a property somewhere in Africa he wanted to mine for diamonds. A potential investor retained MacKay to assess Lionel’s stones and provide an opinion on the quality, colour, inclusions and other characteristics. “My job was to tell him if this stuff was cuttable,” MacKay explained. If they were, they were to be shipped to cutters in India, China, Israel or elsewhere. MacKay was to receive between $50 and $60 an hour for his services. “I’m just a little guy trying to make a living,” he said.

MacKay repeatedly told Clamp the diamonds were “rubbish.” There were numerous inclusions, and the colour was “godawful.” They were not even worth the postage. They could never be cut for jewelry, but might find industrial use. (At trial, MacKay’s lawyer estimated their combined value at just US$1,200. A gemologist retained by the RCMP, however, later appraised them at more than 10 times that amount.)

It was Lionel who caused both diamond shipments to be sent, MacKay claimed. MacKay knew they’d arrive concealed in statues—the earlier diamonds were hidden in three wooden owls, to thwart African thieves. But he expected Lionel would complete the necessary paperwork, and that CBSA would inspect the packages on arrival. He had, in fact, spoken with Lionel by phone and in person that very day; Lionel was anxious about the package’s arrival, and had called DHL inquiring about its whereabouts. (The RCMP confirmed that someone called DHL that morning looking for the package.) As for the KP, MacKay was familiar with it. “But it just never crossed my mind ’cause I have never dealt with it commercially,” he said.

MacKay’s story raised more questions than it answered. For one, who was Lionel? MacKay said the man lived in Ontario, but didn’t know his surname—he wasn’t even sure how his first name was pronounced. He was more specific in court, calling him “Mr. Mugambe.” (At least that’s how it sounded—MacKay was not asked to spell it.)

There is no engineer by that name in the membership directory of Professional Engineers Ontario. There is, however, a Toronto-area mining engineer with a similar name, and fitting MacKay’s vague description: he worked for a variety of mining companies in Zimbabwe during the 1990s, gaining experience in copper, nickel, platinum, cobalt and gold. And he has travelled to Malawi. When contacted by Canadian Business, though, that engineer said he’d never heard of MacKay, much less done business with him. (MacKay declined interview requests for this story.) The RCMP says MacKay never provided sufficient information to verify Mugambe’s existence.

What about this prospective mine? MacKay thought it might be in Malawi, but wasn’t sure. That’s odd. Malawi has no formal diamond mining sector. The country’s geological assets have barely been surveyed, and a brief paper published by the geological department of Malawi’s Ministry of Natural Resources & Environmental Affairs doesn’t even mention diamonds among the many resources it welcomes foreigners to harvest. Only last year, an Australian company started up what has been described as the country’s first and only modern mine, which produces uranium.

Perhaps the putative Mr. Mugambe had located some alluvial diamonds in Malawi. Or maybe they were smuggled in from another country. And that raises the most sinister possibility of all.

It must be emphasized: there’s not a scrap of evidence to suggest the stones MacKay received were conflict diamonds. People smuggle diamonds for any number of reasons, some of the more popular involving money laundering, tax evasion, avoiding duties or simply preventing them from being stolen in transit. Owing to the lack of documentation, little can be said about them with confidence—and that’s precisely the point. In a world where diamonds can navigate the corridors of international trade anonymously, there’s no telling what they’ve been up to.

MacKay’s four-day trial before the Ontario Court of Justice in Brampton, Ont., left this problem unresolved. He faced charges of unlawfully importing rough diamonds in violation of the Rough Diamonds Act, and also illegally importing goods contrary to the Customs Act. MacKay pleaded not guilty. The trial began last summer, and resumed in March following a lengthy pause.

The RCMP felt it had a watertight, open-and-shut case. But it was up to Crown prosecutor Anik Jodouin to prove it. Among other things, she needed to demonstrate that MacKay was more than simply the hapless intermediary he claimed to be.

Could MacKay, a gemologist with two decades’ experience, fail to understand the impropriety of receiving diamonds secreted in statues? In court, he acknowledged that “the packaging was a bit off,” but refused to agree with the Crown’s persistent suggestions that the shipment should have raised his suspicions. But Justice J. P. Currie (who during the trial acknowledged he didn’t know what the Kimberley Process was) never got around to sorting out MacKay’s relationship with the diamonds, because there was an even more fundamental problem.

MacKay’s lawyer, Alan Gold, contended the ERT raid violated his client’s rights under the Canadian Charter of Rights and Freedoms. The Charter provides for the exclusion of evidence that was obtained in a manner that brings “justice into disrepute.” In an oral decision, Currie conceded “the world community has an interest” in having the charges decided on their merits. But that was outweighed by the defendant’s Charter rights. Once the RCMP’s undercover operator saw the situation inside MacKay’s office, Currie opined, it was unnecessary and unreasonable to send in the ERT. Therefore, any evidence procured during the raid was excluded.

With that, the Crown’s case collapsed. Gold turned to his client and touched his shoulder. “It’s over,” he said.

But for Ian Smillie, it’s not over. Just inside Zimbabwe, near its border with Mozambique, lie the diamond fields of Marange. Diamonds were discovered there in 2006 on a mining concession held by African Consolidated Resources, a small U.K.-based exploration company. Days later, the government of President Robert Mugabe seized the property by force, commencing a bloody saga that laid bare the Kimberley Process’s shortcomings.

The economic stewardship of Mugabe, a caricature of a despotic kleptocrat, has been much maligned. Now in its 30th year, his reign has witnessed astounding hyperinflation, and the CIA World Factbook estimated the unemployment rate last year at 95%. (You read that correctly.) Demonstrating once again his unorthodox approach to resource management, Mugabe declared Marange open to all comers, touching off a frenzy of artisanal mining.

Mugabe’s ZANU-PF government evidently hoped to become the exclusive buyer of Marange’s rough stones. But Lebanese and Belgian buyers, armed with hard currency, soon arrived and outbid the state. Attempting to reassert control, the regime cracked down on illegal mining nationwide, but this merely allowed unscrupulous police to get in on the action. The Reserve Bank of Zimbabwe’s governor estimated the illegal trade attracted more than 10,000 people to the nearby border town of Mutare each month. Thousands of local criminal syndicates were smuggling diamonds out of the country, he claimed. Marange’s wealth was slipping through ZANU-PF’s fingers.

Finally, on Oct. 27, 2008, military helicopters descended on Marange. Hundreds of soldiers also arrived by truck and bus. A report published last year by Human Rights Watch, based on interviews with soldiers and miners present, recounted what happened next. The choppers released tear gas into the fields and nearby villages, and opened fire with mounted automatic rifles. “Soldiers fired their AK-47 assault rifles indiscriminately, without giving any warning,” the report alleged. “In the panic, there was a stampede, and some miners were trapped and died in the structurally unsound and shallow tunnels.” The operation continued for three weeks, killing some 200 people.

Having established control, the army set about exploiting the fields using coerced labour, including children. “Illegal diamond trading has not stopped,” the report asserted, and human rights abuses continued. “Although it was not possible to trace the proceeds of diamond sales, Human Rights Watch believes that revenue from the gems mined by the police and military has also enriched senior ZANU-PF officials and provided an important revenue stream for the Reserve Bank of Zimbabwe.”

Canada, Israel and various NGOs called for Zimbabwe’s suspension from the KP. Henri-Paul Normandin, a diplomat who represents Canada at the United Nations in New York, accused elements of Zimbabwe’s government of trying to circumvent the KP. Mugabe’s regime, though, casts itself as a victim. Its UN representative called the mounting criticism a “charade” and asserted that diamonds smuggled from Marange made their way to Canada and elsewhere.

To the dissatisfaction of many, the KP dithered on Marange. Its chairman acknowledged smuggled Zimbabwean diamonds were likely mingling with legitimate ones. A “review mission” dispatched to Zimbabwe found what it called “credible indications of serious non-compliance with KP minimum standards.” None of that, though, persuaded the KP to suspend the country. One problem is that the KP works by consensus, so Zimbabwe can effectively veto any proposed sanctions. And because the KP defines conflict diamonds as being rough diamonds used by rebels to finance their wars against governments, the Process does not recognize Marange’s gems (now controlled by government, and never by rebels) as blood diamonds—no matter how many miners are shot.

The latest in a series of compromises was reached in July: another review mission will be dispatched to Zimbabwe. The KP’s monitoring committee will review its report “to formulate a position regarding future exports.” The upshot: Zimbabwe continues to ship diamonds certified as conflict-free.

All this bureaucratic wrangling was too much for Smillie. “African governments, particularly South Africa, seem completely unwilling to challenge Zimbabwe,” he complains, “or to discuss the possibility of punishing bad behaviour.” Disgusted, he submitted a stinging resignation letter last May, in which he blasted the KP as “complacent and almost completely ineffectual.” In so doing, he amicably departed from Partnership Africa Canada. “I assumed it would be better for me to be outside the tent pissing in than the reverse,” he chuckles ruefully. “That hasn’t been without merit. Now I just don’t get paid for it.”

He’s not through pissing just yet. Several years ago, while attending a conference in Freetown, Sierra Leone, Smillie met a woman in her mid-40s whom he recognized. “She was very shy. She was about 14 when I taught her,” Smillie says, recalling the conversation.

“She said that she was the daughter of the paramount chief, and they had land somewhere. She and her husband got into the diamond business, and they had a pump and workers and so on. And I guess they were doing fairly well. But the war got worse and worse, and they made a plan that if the rebels came, they would get out the back way and trek over the hills into Guinea.

“Well, the rebels did come. They were dragged out of bed early one morning and taken out in front of the house. The rebels chopped off her husband’s head in front of her and her two daughters. She was covered in blood. She had keys to the Land Rover, she had keys to the house, and there was money in the house. She said, ‘Take everything. Take it.’ They lost interest in her and the girls for a while, and they did manage to get away. They walked and walked. They spent something like two weeks in the bush, eating berries and who knows what. Her arms were still scarred from the elephant grass that cut her as they walked.”

The woman and her daughters lived for years in a refugee camp before eventually returning to Freetown. She told Smillie she planned to head back to Koidu, in western Sierra Leone’s diamond-producing region. “‘I can probably rent a pump and start diamond digging again, and we can get ourselves back on our feet,’” Smillie remembers the woman telling him. “I said: ‘Esther, don’t you think diamonds are a curse?’ She said, ‘Yes, but what else is there?”