Matthew Runci’s Statement to U.S. House of Representatives

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(Rapaport…October 11, 2001) The following is the statement of Matthew Runci, president and CEO of Jewelers of America and executive director of the World Diamond Council, at the U.S. House of Representatives Committee on Ways and Means hearing on the trade of conflict diamonds, on October 10, 2001, in Washington, DC.:

Mr. Chairman and Members of the Trade Subcommittee, thank you for this opportunity to testify in support of the Clean Diamonds Trade Act, the purpose of which is to choke off illicit traffic in conflict diamonds.

I am Matthew Runci, president and chief executive officer of Jewelers of America and executive director of the World Diamond Council. Jewelers of America, founded in 1903, represents more than 10,000 U.S. retail jewelers, including family-owned stores and major national chains. The World Diamond Council, representing all segments of the diamond and jewelry industries here and abroad, was founded a year ago to establish a workable system to eliminate trade in conflict diamonds.

Both organizations — along with trade groups associated with the importing, processing and distribution of diamonds in the U.S. — urge prompt enactment of H.R. 2722. This legislation is a major and essential step in eliminating the illicit trade in conflict diamonds. Both moral and business imperatives underpin our position. Halting this insidious traffic also serves the U.S. foreign policy goal of encouraging stability and economic progress in developing African nations.

The moral case is undeniable. Rebels and bandits in parts of Africa have used the profits from diamonds they appropriate to fuel their violent activities. Innocent citizens have suffered deprivation and terrible atrocities as a direct result. While criminals have grown rich, the economies of Sierra Leone, Angola, and the Democratic Republic of the Congo have been impoverished. This evil cycle must end.

The business factor is also clear. Gems are objects of beauty and symbols of enduring affection. They have value because of the positive feelings they evoke. If consumers come to believe that diamonds they might buy are connected to violence, the effects could be very damaging to thousands of businesses – and their employees. The threat exists even though it is clear that only a very small proportion of the world supply can be linked in any way to conflicts. And it exists even though there has been some progress toward eliminating conflict diamonds, thanks to efforts by the United Nations, individual governments, non-governmental organizations, and the industry.

The fact remains that – as of today – it is impossible for a retail jeweler to tell a customer with absolute certainty whether a particular stone offered for sale is conflict free. So there is a cloud over our industry casting a shadow not only on American retail establishments but also on all segments of the industry here and abroad.

Removing this cloud requires firm and timely action by the U.S. Government – specifically, enactment of the legislation now before you. In recent years, as awareness of the conflict diamond problem has grown, there have been several positive steps, as I mentioned a moment ago. One of these is the effort originally launched by South Africa, now grown to include more than 30 countries, called the Kimberley Process.

Just last month, I was in London for the latest Kimberley Process meeting, where there was agreement in principle on the ingredients of an international monitoring system to protect the legitimate supply chain from exploitation by those dealing in conflict diamonds.

While we applaud this work – as well as the steps taken by the United Nations – the fact is that a catalyst is required to put in place the controls necessary to eliminate conflict diamonds. Because the United States is the largest importer of diamonds, we have the opportunity – and the obligation – to provide that catalyst.

Enacting H.R. 2722 would serve that purpose admirably. It would, first of all, allow the importation of diamonds and diamond jewelry into the U.S. only from countries that have adopted effective controls on the import and export of rough diamonds. This alone would be a great incentive for other nations to take appropriate action within an acceptable timetable. The legislation would also encourage the President to negotiate an international agreement leading to a global control system.

H.R. 2722 and its Senate companion, S. 1084, include a number of other strong features. The Clean Diamonds Trade Act is totally consistent with the resolutions adopted by both the U.N. Security Council and the General Assembly. It is also consistent with the principles approved by the Kimberley Process.

Finally, this legislation is truly a consensus measure. Interested Members of both Houses and both parties support this bill. So does a broad coalition of humanitarian and faith-based organizations concerned with the issue. Jewelers of America, the World Diamond Council, and others representing segments of the industry also believe that this legislation is both sound and absolutely necessary for the success of our campaign to rid the world of conflict diamonds.

Again, my thanks for the opportunity to testify. I will be happy to take any questions you may have.

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