Dr. Ali Usman, Pakistan, CASM Asia, Conflict Gems

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Dr. Ali Usman, Pakistan, CASM Asia, Conflict Gems

  1. 1. Human Security & Sustainability Conflict Gems: Mining, Marketing & Terror Funding In Relation To ASM. Certificate of origin, Fair/Ethical Trade Certification Presented By Ch. Usman Ali CASM-Pakistan Made Possible by Lords & Barons Fine Jewellers. USA Global Assets Management &Associates. USA Metro Consulting Group (MCG). Pakistan The World Bank, DFID, CASM Global
  2. 2. What is the Definition of Terror or Terrorism , <ul><li>There are numerous definitions but I will go with this one, In November 2004, a UN panel described terrorism as any act: &quot;intended to cause death or serious bodily harm to civilians or non-combatants with the purpose of intimidating a population or compelling a government or an international organization to do or abstain from doing any act. Violence, threat of violence, Psychological impact and fear Perpetrated for a Political Goal, Deliberately, unlawfully and illegitimately targeting of non-combatants. </li></ul>
  3. 3. Conflict Gems <ul><li>A nd Conflict gems are the precious stones, colored stones and diamonds, defined as gems that are illegally traded to finance civil unrest. The United Nations uses a term, conflict diamonds. But even though we have proven links of terror funding through the trade of gemstones or colored stones, there is no existence of Conflict colored stones, the phrase conflict gems is still used for diamonds. </li></ul>
  4. 4. Why Diamonds and gems <ul><li>D iamonds and Gems are offered across the globe as tokens of love and devotion. However, behind the beauty of some of these intricately hewn mineral crystals lies a dark story. Though most diamonds and gems come from legitimate sources and travel respectable routes to market, however, a small portion funds wars, genocide and international terrorism. Several of our World’s most lethal civil wars and conflicts are partially financed through the diamonds and Gems trade. Rough stones are usually smuggled from conflict areas to more peaceful neighboring states and then enter the international market. The profits go back to the terrorist groups or rebels. </li></ul><ul><li>S ome diamondsand gems that buy the arms and supplies in such conflicts are from Liberia, Sierra Leone, The DRC and Angola, Afghanistan, Pakistan, Burma, Colombia, Tanzania, Sri Lanka, to name few. All of these nations are blessed with vast mineral wealth but suffering from ongoing attempts to overthrow their internationally recognized governments. </li></ul><ul><li>W e have proven links between gemstones and terrorism to Afghanistan, Burma, Tanzania, Sri Lanka </li></ul>
  5. 5. Illegal Gems traffic <ul><li>T he term Gem Smuggling evokes pictures in our mind of some movies like the blood diamonds. In reality it is far more gritty and physically dangerous on an individual level. Real smugglers, known as &quot;mules,&quot; often carry stones from the mine over treacherous terrain by foot, horse, or motor scooter to gem brokers in bordering countries who sell to international buyers. Those international buyers may themselves become smugglers, bringing the gems into their home country illegally. </li></ul><ul><li>O ne of the most confusing questions surrounding international gem smuggling is what it means to smuggle a stone. The answer is not as straightforward as one might think. </li></ul><ul><li>F rom a country’s perspective, an item smuggled into the country is one that is not officially declared. That definition may seem obvious, but it's a little-understood facet of the customs process that only gemstones that are not declared on entry are considered smuggled. Even if a gem left its country of origin illegally, it can still be legally imported into the country through simple declaration of its value. </li></ul><ul><li>H ow big is the problem? Just to give you the example, The U.S. government has no official statistics ? or official estimates ? on the number or value of colored stones which enter the United States illegally every year. They simply do not exist. The reason, according to a former US customs employee speaking off the record, is that gem smuggling simply is not a high-profile problem. &quot;You're talking about a total annual market of about $788 million, and illegal gems don't hurt anyone. How many resources would you allocate to the problem?&quot; </li></ul><ul><li>L aw enforcement cares about gem smuggling when it is linked to terrorism, money laundering, drug smuggling, or organized crime. Smuggled gems are sometimes discovered in connection to one of these activities, but gem smuggling by itself is a relatively low priority since there are no news out there. </li></ul><ul><li>T he situation is compounded because of the inability to ascertain the origin of stones. Customs agents are incapable of differentiating a Myanmar ruby from a Thai ruby, for example. Because they are not gem experts, they also have very little ability to estimate the value of a stone, so importers can vastly under-declare the value of an item to avoid the import taxes that are applied to all merchandise. This is a reason to have a certificate of origin </li></ul><ul><li>A ll this means that, while gem smuggling into any country including the United States undoubtedly takes place daily, the governments lacks both the capability and the political will to stop it, or even track it. And this is true for most of the countries where there is a high demand of gems. </li></ul><ul><li>G em producing countries have a much different view of smuggling. For them, gems bleed from every possible fissure, at every level. They are smuggled out of countries, in some cases, because it is illegal to own or sell them; to avoid export fees; because obtaining a permit to sell them is extraordinarily difficult; or because they are stolen from the mines in the first place. They are smuggled at every level: by individual miners, by mine owners, by members of the military, and by rebel groups. </li></ul><ul><li>E stimates on the amount of stones smuggled out of producing countries vary wildly, depending on the source. In 1996, the Colombian government officially valued its emerald exports at $180 million and said illegal exports ? i.e., those for which no taxes or royalties were paid to the Colombian government ? were more than 10 times that amount. According to a 2001 report funded by the USAID. 45 percent of Tanzania's colored gem production is smuggled out of the country, and legal exports were undervalued by 50 percent. Pakistan estimates illegal gem sales at &quot;more than 100 times&quot; legal gem sales, and it is impossible to make any serious estimate of smuggling out of Myanmar or Afghanistan. </li></ul><ul><li>I n every case, attempts by the producer-country governments to reduce illegal smuggling through tighter controls actually increase the amount of colored gems illegally exported. The smuggling routes exist because they are cheaper and easier than exporting through legal channels. Once smuggling routes have been established, they are difficult to disrupt ? especially in cultures with widespread corruption, where officials are paid to look the other way. </li></ul>
  6. 6. Who, Why, and How? <ul><li>I n the equation of smuggling to occur there are two players, one the stone producing country and second the external demand for those stones. If there are high import or export duties, tightly controlled ownership, a culture of smuggling, or an enforcement system that is easily avoided or seriously flawed, it's a prime recipe for smuggling. </li></ul><ul><li>I llicit gem trafficking often occurs at the individual level, but it also involves large syndicates. According to the Federal Bureau of Investigation, Russian, Chinese, Italian, and African organized crime groups illegally move colored gems across international borders to avoid customs duties or taxes. Russian organized crime, for example, extracts and sells more than 300 metric tons of amber a year worth more than $1 billion. according to international law enforcement. India's long and porous coastline allows criminal operations there to smuggle drugs, gemstones, and other prized contrabands. </li></ul><ul><li>T wo of the largest sources of smuggled gems are Myanmar and Afghanistan. Both countries have an entrenched history of smuggling, a culture which supports it, well-established smuggling routes, a wildly corrupt enforcement system, and a large contingent of processors and buyers in bordering countries. </li></ul><ul><li>M ost Afghanis don't think of taking emeralds, rubies, lapis, or other precious stones from Afghan mines, through treacherous mountain terrain, and across the border as &quot;smuggling.&quot; It is the way items have moved for centuries, along the same trails, and it is simply the way things are done. Many individual &quot;mules&quot; claim not even to know that what they are doing is illegal, or that there are any alternatives. In a country without an educational system, railway, commercial air service, national mail delivery, power grid, functioning banks, national police, army, civil service, tax collection, or judiciary, it is difficult to explain that to legally transport gems, one must have a permit from the government. </li></ul><ul><li>O ne professional gem smuggler explained that to get a permit, it would take him at least five days to get to Kabul and up to six months to actually get a document from the government. In the process, he would have to bribe multiple government officials, some of whom probably have little to do with the actual process, and he will eventually receive a piece of paper. He would then return to the mine and would still have to cross the mountains, stave off attacks from warlords, rebels, and criminals, and bribe different government officials. The government document gives him nothing, and costs him both time and money. </li></ul><ul><li>C urrently, gems are moved from mines in the northern Hindu Kush region to Peshawar, Pakistan. To reach Pakistan, the smuggler will cross mountains of 7,000 to 14,300 feet. There also are likely to be attacks by armed criminals ? either affiliated with local warlords or &quot;independents&quot; ? which require paying bribes or judiciously avoiding certain areas. Moreover, the Pakistan border is now difficult for Afghanis to enter, often requiring additional bribes or stealth to get into Peshawar. </li></ul><ul><li>O nce in Peshawar, the gems are purchased by brokers or dealers. Most buyers are Asian or European. They take the gems back to centers in Thailand, India, Hong Kong, Antwerp, or elsewhere, and the country of origin is rarely mentioned. According to U.S. gem analysts, many Afghani emeralds are purchased by Polish buyers, who sell them as Colombian emeralds. There are even unconfirmed reports of Colombian emerald mine owners paying international purchasers of high-quality Afghani emeralds to classify them as Colombian emeralds. </li></ul><ul><li>A sk a Myanmar contraband smuggler about the U.S. embargo against Myanmar goods, and he likely will have no idea what you are talking about. Myanmar goods, including colored stones, are smuggled out of Myanmar to Thailand to avoid ridiculously high government taxes, to skirt government control, and because it is the way goods have moved for literally hundreds of years. The U.S. embargo has almost nothing to do with the Myanmar side of smuggling. Gems are smuggled by individual miners, private companies that partner with the government, army officials, drug dealers, and rebels. </li></ul><ul><li>G em smuggling from Myanmar to Thailand is even more dangerous than from Afghanistan to Pakistan, but it is also one of the only ways many Myanmar citizens have to break out of extreme poverty. The two primary starting points for colored stones are Mogok and Mong Hsu. &quot;Mules&quot; move a few gems at a time by hiding them on themselves. They then take a two-day trip by foot, motor scooter, or horse to deliver the gems to a dealer in a Thai border town. During the trip, the &quot;mule&quot; ? usually a woman ? will have to cross several official border crossings, where lackadaisical government officials will conduct a cursory inspection. The smuggler pays a bribe to the official and is waved through; whether an individual is carrying contraband or not is irrelevant. </li></ul><ul><li>T hey also likely will face renegade members of the army, armed rebels, security forces of drug lords, mine fields, and wild animals. U.S. officials describe the journey as going through &quot;a completely lawless frontier,&quot; where there is every imaginable danger. If a relatively wealthy individual wants to smuggle gems without taking the dangerous trip, he can hire one of the smuggling syndicates to transport the gems. For approximately $80, a courier will make the trip and meet the buyer in a Thai border town which brokers gem sales. </li></ul><ul><li>O nce in Thailand, Myanmar smugglers, Thai brokers, and international buyers meet to sell gems. Only known purchasers can do business there; strangers are not included in any serious transactions. Most gems then go to Bangkok, where they are cut, treated, and sold to international purchasers. </li></ul><ul><li>A lthough Myanmar gems are embargoed by the United States, the reality is that it is almost impossible to spot a Myanmar gem or for customs agents to take any action to stem the flow. Even in Thai border areas, Myanmar stones are mingled with gems from Africa, India, Cambodia, Australia, Thailand, and elsewhere. There is no certificate of origin at this stage. Once the stones have moved to Bangkok, they are further mingled. This is where the certificate of origin or authenticity often appears. By that time, only a practiced gemologist can offer an opinion on where the gemstone originated. </li></ul><ul><li>I n many cases, stones are set in cheap metal settings in Bangkok so they can be brought in to the United States and other countries without attracting any attention from customs officers. Again, the practice springs more from ignorance of the rules than a genuine need to avoid tariffs. As one former customs agent put it, &quot;People are idiots, and they like to think they're doing something sneaky.&quot; </li></ul><ul><li>T he culture surrounding gem mining, government attempts to control it, and individual attempts to avoid government control create a situation which almost assures that as long as gems are mined, some will be smuggled. The deplorable economic conditions of many of the gem-producing countries exacerbate the problem, as do the almost complete inability on the part of customs officers to spot a smuggled stone, limited U.S. government resources, and lack of political will to stop illegal imports. So, chances are that at some point along the line, some of those prized gems in your collection were smuggled. </li></ul>
  7. 7. Why South Asia <ul><li>S outh Asia is the hotbed of terrorism and according to American Enterprise Institute (AEI) and other think tanks this is the major trouble spot in the world for the next decade if unchecked and this area proves them right. There have been more suicidal deaths in Afghanistan this year than Iraq or any other palce on the plannet. </li></ul><ul><li>T he reason for our study to pick South East Asia was due to a town in Pakistan considered as the capital of conflict gems trade. Peshawar is located in the NW part of Pakistan, close to the border of Afghanistan. Any given day, you can find nationals from more countries in that city than any other city of Pakistan. You will see Afghans, Iranians, Chinese, Uzbeks, people from Azerbaijan, Tajikistan, India, Thailand, US, Germany among others. This town is the biggest market of rough stones. All the stones from Pakistan, Afghanistan, and a big amount from Iran, Caucus states and even artisan miners from China bring their stones to this market. </li></ul><ul><li>T he link with CASM and the gemstones is that almost 90% of all the gemstone mining is done by artisan miners and with this comes all the problems, most of the problems and even their solutions are universally the same. Just in Pakistan there are more than 4000 mining sites and 3.5 million miners. Among these there are more than a million artisan miners that we do not hear about. Mining for copper, salt, coal, granite, marble and gemstones. </li></ul>
  8. 8. Problems/solutions <ul><li>P ROBLEMS CREATED BY CONFLICT GEMS </li></ul><ul><ul><li>Gender Issues </li></ul></ul><ul><ul><li>Child labor </li></ul></ul><ul><ul><li>Health </li></ul></ul><ul><ul><li>Education </li></ul></ul><ul><ul><li>Absolute / Perpetual Poverty </li></ul></ul><ul><ul><li>Environmental Impact </li></ul></ul><ul><ul><li>Socio-Economic </li></ul></ul><ul><ul><li>Terrorism </li></ul></ul><ul><li>M ost of the Solutions are same but terror is a new issue evolved or put in the spotlight in past few years. What makes this field unique from copper, coal or tin or other mining is that this product is small enough, related to the value to be transported around the world across the borders. Just to give you numbers in the US alone the colored stones are smuggled in the excess of $300 million. The gemstone industry in the US is worth $900 millions. Law enforcement cares about gem smuggling when it is linked to terrorism, money laundering, drug smuggling, or organized crime. Smuggled gems are sometimes discovered in connection to one of these activities, but gem smuggling by itself is a relatively low priority since there is no news out there. </li></ul><ul><li>T he situation is compounded because of the inability to ascertain the origin of stones. Customs agents are incapable of differentiating a Myanmar ruby from a Thai ruby, for example and there is no authority to issue a certificate. Because they are not gem experts, they also have very little ability to estimate the value of a stone, so importers can vastly under-declare the value of an item to avoid the import taxes that are applied to all merchandise. </li></ul><ul><li>C ertificate of origin: This is one of the main solutions to stop this epidemic. This can be setup in stages. We have been working with the GIA and ICA on this since 2005. We even sent our recommendations to the G-8 secretariat in 2006. </li></ul><ul><li>E thical/Fair Trade certification: The other main solution is the certification of fair and ethical trade, certifying the whole chain from mining to final delivery of the product to the consumers. We are working with the GIA and ICA on this since 2005 and sent our recommendations to the G-8 secretariat in 2006 </li></ul>
  9. 9. “ Clean Diamond Trade Act’’ Public Law 108–19 ,108th U.S Congress <ul><li>FINDINGS. </li></ul><ul><li>Congress finds the following: </li></ul><ul><li>(1) Funds derived from the sale of rough diamonds are being used by rebels and state actors to finance military activities, overthrow legitimate governments, subvert international efforts to promote peace and stability, and commit horrifying atrocities against unarmed civilians. During the past decade, more than 6,500,000 people from Sierra Leone, Angola, and the Democratic Republic of the Congo have been driven from their homes by wars waged in large part for control of diamond mining areas. A million of these are refugees eking out a miserable existence in neighboring countries, and tens of thousands have fled to the United States. Approximately 3,700,000 people have died during these wars. </li></ul><ul><li>(2) The countries caught in this fighting are home to nearly 70,000,000 people whose societies have been torn apart not only by fighting but also by terrible human rights violations. </li></ul><ul><li>(3) Human rights and humanitarian advocates, the diamond trade as represented by the World Diamond Council, and the United States Government have been working to block the trade in conflict diamonds. Their efforts have helped to build a consensus that action is urgently needed to end the trade in conflict diamonds. </li></ul><ul><li>(4) The United Nations Security Council has acted at various times under chapter VII of the Charter of the United Nations to address threats to international peace and security posed by conflicts linked to diamonds. Through these actions, it has prohibited all states from exporting weapons to certain countries affected by such conflicts. It has further required all states to prohibit the direct and indirect import of rough diamonds from Sierra Leone unless the diamonds are controlled under specified certificate of origin regimes and to prohibit absolutely the direct and indirect import of rough diamonds from Liberia. </li></ul><ul><li>(5) In response, the United States implemented sanctions restricting the importation of rough diamonds from Sierra Leone to those diamonds accompanied by specified certificates of origin and fully prohibiting the importation of rough diamonds from Liberia. The United States is now taking further action against trade in conflict diamonds. </li></ul><ul><li>(6) Without effective action to eliminate trade in conflict diamonds, the trade in legitimate diamonds faces the threat of a consumer backlash that could damage the economies of countries not involved in the trade in conflict diamonds and penalize members of the legitimate trade and the people they employ. To prevent that, South Africa and more than 30 other countries are involved in working, through the ‘‘Kimberley Process’’, toward devising a solution to this problem. As the consumer of a majority of the world’s supply of diamonds, the United States has an obligation to help sever the link between diamonds and conflict and press for implementation of an effective solution. </li></ul><ul><li>(7) Failure to curtail the trade in conflict diamonds or to differentiate between the trade in conflict diamonds and the trade in legitimate diamonds could have a severe negative impact on the legitimate diamond trade in countries such as Botswana, Namibia, South Africa, and Tanzania. </li></ul><ul><li>(8) Initiatives of the United States seek to resolve the regional conflicts in sub-Saharan Africa which facilitate the trade in conflict diamonds. </li></ul><ul><li>(9) The Interlaken Declaration on the Kimberley Process Certification Scheme for Rough Diamonds of November 5, 2002, states that Participants will ensure that measures taken to implement the Kimberley Process Certification Scheme for Rough Diamonds will be consistent with international trade </li></ul><ul><li>rules. </li></ul>
  10. 10. KPCS <ul><li>S o what is the solution! among The certificate of origin and the certificate of fair/ethical trade is the Kimberly Process. </li></ul><ul><li>KIMBERLY PROCESS </li></ul><ul><li>I n May 2000, Southern African diamond producing states met in Kimberley, South Africa, to come up with a way to stop the trade in conflict diamonds and to ensure consumers that the diamonds that they purchase have not contributed to violent conflict and human rights abuses in their countries of origin. I n December 2000, the United Nations General Assembly adopted a resolution supporting the creation of an international certification scheme for rough diamonds. In November 2002, after nearly two years of negotiation, the efforts of governments, the international diamond industry and NGOs culminated in the creation of the Kimberley Process Certification Scheme (KPCS). The KPCS outlines the provisions by which the trade in rough diamonds is to be regulated by countries, regional economic integration organizations and rough diamond-trading entities. T he KPCS imposes stringent requirements on all Participants to guard against conflict diamonds entering the legitimate trade. Participants are required to implement internal controls, as outlined in the KPCS document, and all shipments of rough diamonds must be accompanied by a Kimberley Process certificate. The requirements for participation are outlined in Sections II, V (a) and VI (8, 9) of the KPCS. Participants can only trade with other Participants who have met the minimum requirements of the certification scheme. Currently there are 72 member countries. W hile each Participant is required to implement the Kimberley Process in their respective territories, sharing information and insight is an integral part of making the certification scheme work. Annual Plenary meetings are held to give Participants the opportunity to converse with one another and with industry and civil society members to improve the effectiveness of the regulatory regime. P articipants, industry and civil society representatives work together in Working Groups - Monitoring, Statistics, Diamond Experts - and Committees - Participation Committee and Selection Committee - to ensure that the integrity of the certification scheme is upheld and that the Kimberley Process moves closer to stopping the trade in conflict diamonds. T oday the Kimberley Process Certification Scheme has evolved into an effective mechanism for stopping the trade in conflict diamonds. The tireless efforts of governments, industry leaders and civil society representatives have helped ensure that the horrors caused by conflict diamonds may one day come to an end. But there remains much to be done. All involved with the Kimberley Process continue to monitor and assess the effectiveness of the certification scheme and strive towards a world free of conflict diamonds. </li></ul><ul><li>W hen this process was in formation they were more interested in the diamonds since there was bigger lobby involved. Later part of 2002, I personally as a member of the association, JA suggested the authorities to involve gemstones due to their importance but they wanted to start with the diamonds alone in the beginning and later on add gemstones to this process. I think it is the time now to regulate the gemstones under the Kimberly process, since it is already working and there is no need to start a new process. </li></ul><ul><li>I n 2005 and 2006 we requested the KPCS to include the colored gemstones in the process and are still trying to include the colored stones trade under the scheme. We hope that it is included in the scheme soon so that the trade can be more ethical and fair. This will also choke the funding for the war lords in various parts of the world. </li></ul>
  11. 11. Projects and Supports to ASM In relation to Human Security and Sustainability <ul><li>key areas of the international Community’s support can help this sector: </li></ul><ul><li>In Cooperation with the Governmental Agencies: </li></ul><ul><ul><li>Support of the decentralization of the mining and minerals administration </li></ul></ul><ul><ul><li>Establishment of legal trade structures for ASM products </li></ul></ul><ul><ul><li>Contributions to the development of a legal framework promoting the formalization of informal ASM and advisory services in mining legislation </li></ul></ul><ul><ul><li>Policy and strategy development for ASM </li></ul></ul><ul><ul><li>Promotion of good governance for the efficient management of mineral resources and sustainable development triggered by mineral exploitation </li></ul></ul><ul><ul><li>Establishment of demand oriented extension services </li></ul></ul><ul><ul><li>Capacity Building </li></ul></ul><ul><ul><li>A detailed study of developmental Issues </li></ul></ul><ul><li>In Cooperation with NGO and Service Providers: </li></ul><ul><ul><li>Provision of social infrastructure </li></ul></ul><ul><ul><li>Establishment of decentralized service supplies </li></ul></ul><ul><ul><li>Provision of sector specific information </li></ul></ul><ul><ul><li>Support of associations </li></ul></ul><ul><ul><li>Establishment of appropriate finance services, including leasing pools for equipment and machinery, exploration funds etc. </li></ul></ul><ul><ul><li>Elimination of child labor </li></ul></ul><ul><ul><li>Local manufacture of equipment </li></ul></ul><ul><li>In Cooperation with the ASM Operators: </li></ul><ul><ul><li>Technology transfer </li></ul></ul><ul><ul><li>Training and qualification in best practice and best available technology </li></ul></ul><ul><ul><li>Development of didactical materials </li></ul></ul><ul><ul><li>Support of legalization and formalization </li></ul></ul><ul><ul><li>Organization of ASM operators in cooperatives, enterprises and associations </li></ul></ul><ul><ul><li>Capacity Building </li></ul></ul><ul><ul><li>Value Addition </li></ul></ul><ul><ul><li>Dialogue and Engagement </li></ul></ul><ul><ul><li>Sustainability and solutions at local level </li></ul></ul><ul><ul><li>Poverty alleviation </li></ul></ul><ul><ul><li>Institutional Changes </li></ul></ul><ul><ul><li>Have an Inside out approach, No one size fit all. </li></ul></ul><ul><ul><li>Multilateral Partnerships </li></ul></ul>
  12. 12. STATISTICS <ul><li>According to the WB, current exports of Gems from Afghanistan are $2.75 million legally, where as a potential of $160 Million by UNDP. </li></ul><ul><li>The world trade in uncut colored gemstones is estimated to be US $320 m. (International Trade Centre based on COMTRADE) </li></ul><ul><li>Total export of Pakistan $24 million </li></ul><ul><li>Oppenheimer said the global diamond trade is currently worth around US$ 60bn a year, with US$ 10bn coming from rough diamonds. Opppenheimer valued global ownership of diamond Jewellery at around US$ 1 trillion, comprising around 240 million individual diamond Jewellery owners. 1995 </li></ul><ul><li>The West African nation's diamond industry has undergone a remarkable turnaround since the 1990s, when the Revolutionary United Front (RUF) used the sale of diamonds to finance a decade-long rebel war. In 2003, after two years of peace, Sierra Leone officially exported half a million carats of diamonds, worth more than 75 million dollars, says the report, 'The Diamond Industry Annual Review: Sierra Leone 2004'. In Sierra Leone, that poses an enormous challenge because more than 200,000 small-scale, or artisanal, miners work in remote locations, the report points out. </li></ul><ul><li>Gem trade is major foreign currency earner for Myanmar which started to hold gem sale shows annually since 1964. So far it has earned more than $ 600 million directly from such events. These figures do not include the trade done directly by the dealers all year round. The Indian Gem & Jewellery Export Promotion Council (GJEPC). </li></ul><ul><li>In 2007-08, India's export of cut and polished diamonds was $14 billion,&quot; said the Union commerce secretary, GK Pillai. In India, the Gem and Jewellery Export Promotion Council (GJEPC) has been designated as an authority for implementation of KPCS. Also, the development commissioners of the special economic zones have been delegated powers 2008 </li></ul><ul><li>U.S. President Bush passed a bill Wednesday tightening a ban on the sale of Burmese gemstones to the United States on the premise that the international trade in Burma's precious stones helps finance the nation's repressive military junta, reports an international human rights monitor July 31, 2008. Gems constitute Burma's third-most important export product, following petroleum (oil and natural gas) and agricultural products. Global gem exports from Burma in fiscal year 2007-2008 reached as high as US$647 million, according to reports citing official statistics, although Burmese data must be treated with some skepticism. </li></ul><ul><li>T he problem of conflict diamonds is huge. According to Global Witness, a London-based advocacy organization, Angolan rebel army, Unita generated $3.7 billion over 6 years in the 1990s largely through trading diamonds. Global Witness also estimates that total world-diamond production in 1999 was worth $6.8 billion. A Dec. 30, 2001, article in the Washington Post linked some trade in conflict diamonds in Congo to the terrorist groups Al Qaeda and Hezbollah. </li></ul><ul><li>Conflict diamonds make up about 2.5 percent of annual worldwide production, says Jeffrey Harris, an earth scientist at the University of Glasgow in Scotland and a consultant to the De Beers. Other scientists give estimates of up to 4 percent. </li></ul><ul><li>T he direct link of terrorism and colored stones or gems can be found in Tanzania, Ethiopia, Burma, Srilanka, Afghanistan, Pakistan, Kashmir, Columbia, Panama among other parts of the world. This is a clear and present danger. Most of these countries are with volatile political governments and are heaven for the terror groups. Some countries also act as host countries in one or the other way, such as Pakistan, India, Thailand, Dubai, and Ghana. </li></ul><ul><li>Estimates on the amount of stones smuggled out of producing countries vary wildly, depending on the source. In 1996, the Colombian government officially valued its emerald exports at $180 million and said illegal exports i.e., those for which no taxes or royalties were paid to the Colombian government, Was more than 10 times that amount. According to a 2001 report funded by the USAID. 45 percent of Tanzania's colored gem production is smuggled out of the country, and legal exports were undervalued by 50 percent. Pakistan estimates illegal gem sales at &quot;more than 100 times&quot; legal gem sales of $43 Million USD and it is impossible to make any serious estimate of smuggling out of Myanmar or Afghanistan. </li></ul>
  13. 13. Conclusion <ul><li>L adies and Gentlemen: these threats are real, clear and present and we can not ignore them, they directly effect all of us. As we know that ideally, security is directly related to the development and development should be directly related to Human rights (S ∞D∞R). </li></ul><ul><li>J on Hobbs, chairman of the World Bank-hosted Communities and Small Scale Mining Initiative said as many as 100 million people worldwide were directly involved in or depended on the proceeds of small-scale mining. </li></ul><ul><li>D riven by hunger and poverty, many of these small-scale miners grind out a living in Africa, Asia, South and Central America and elsewhere, sifting for elusive minerals and gems in old, disused mines, often with rudimentary tools. </li></ul><ul><li>W e can't ignore them,&quot; Mr. Hobbs told Reuters at the annual Indaba African mining conference in Cape Town. </li></ul><ul><li>&quot; I f sustainability in the mining sector is going to be successful and not fatally flawed, you have to engage with the artisanal miners ... rather than trying either to ignore them or worse still, treat them with hostility,&quot; Hobbs said. </li></ul><ul><li>M r. Hobbs said the number of artisanal miners was increasing thanks to high commodity prices, changes in land use policy and changes in climate. </li></ul><ul><li>A rtisanal and small-scale mining accounted for 12 percent of the world's production of metals, 21 percent of industrial minerals, 20 percent of coal, 10 percent of diamonds and 75 percent of other gem stones. </li></ul><ul><li>T here have been accusations that some of the small-scale miners are engaged in criminal activity, with funds generated supporting violent conflict in Africa, parts of which have only recently emerged from decades of conflict.  </li></ul><ul><li>T he only solution is dialogue and engagement, with assets management and tools to empower the poor and the suppressed, to involve them rather isolating them. These issues have to be discussed sooner than later. </li></ul><ul><li>D onor agencies should cooperate with the governments, NGOs and ASMs. Build their capacity, train them and monitor them. </li></ul><ul><li>H ave certification schemes based on the KPCS for all minerals including gemstones. </li></ul><ul><li>H ave an isotopic certificate for each mineral showing the origin of the specimen. Tagging of mineral data from each mine. </li></ul><ul><li>H ave fair/ethical trade certification for each mineral. </li></ul><ul><li>D ue to the working of this project ,the International Conference for Peace in the Great Lakes, are considering replicating the process for other minerals, especially for colored gem stones owing to the implication of these in funding wars, terrorist activities and human rights abuses in countries such as Tanzania, Colombia, Sri Lanka, Pakistan, and Burma. </li></ul><ul><li>W e consider this our project’s greatest success as The G8 summit in 2007 recognized the threat for peace and security of illegal mineral trade and have decided to consider a certification system for mineral resources. </li></ul><ul><li>W e request the World Bank / CASM Global to support our project so we are able to carry on with our goals to implement the policies for the certification of origin and the certification for fair/ethical trade for all minerals including the colored gemstones. We need help to strengthen the governments, NGOs and ASMs for capacity building and policy making on country and global level. </li></ul>
  14. 14. We don’t want to see this happen again 14-year-old Adaman Kamara lost both her hands to rebels during Sierra Leone's civil war, which was funded in part by conflict diamonds In the1990s. courtesy world vision uk.

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