Mr. Speaker, Bill C-14 deals with the Canadian situation in terms of diamonds and certification of our diamonds in the international marketplace. This certainly separates the bill, in many respects, from conflict diamonds. We have a very serious circumstance with conflict diamonds, which are tied up with a lot of destabilization in the world, a lot of terrorist acts and a lot of human atrocities. One must separate what is going on there in terms of looking at this piece of legislation, which deals exclusively with diamonds of Canadian origin within the framework of an international certification system.
I would like to say right off the top that the penalties involved in the legislation in the Canadian context are rather toothless, I believe. It is one thing to deal with certification of diamonds whose origin is Canada, where we have well-established governance, rule of law and freedom of speech. It is quite different in many of the African diamond areas. We have estimates showing that at any given time approximately 20% of the world's supply of diamonds are illicit diamonds and it may well exceed that. Hundreds of thousands of people have been killed, many because of squabbles over diamonds. That is occurring in areas of the world where lives are not valued the way they are in the developed and industrialized areas of the world.
One diamond found on the surface in fluvial areas in Sierra Leone can be worth millions of dollars. One can see the difficulties inherent in trying to establish rules of certification for that kind of resource in a country which has just gone from a prosperous democracy through a destabilization and a civil war and is now trying to rebuild itself. It does not have well-established rules of law and other safeguards for people. Therefore, in that jurisdiction, rules of origin are not going to be respected in the same way they are here.
I have some very good friends from Sierra Leone. I have watched the films that have been smuggled out of Sierra Leone which document the tragedies of the conflict. I have had many conversations. The horror of those films have awakened me to the problems of very tragic proportions.
There has been an important document produced about the Kimberley process. “The Case for Proper Monitoring” by Ian Smillie is an occasional paper of a the joint initiative of Partnership Africa Canada, the International Peace Information Service in Antwerp and the Network Movement for Justice and Development, in Freetown, Sierra Leone. This document is current.
I will read a part of the conclusion into the record because I think we have to recognize that the bill certainly does not solve a lot of the overall problem. The bill deals with the Canadian context for the most part. The conclusion reads:
In fact, of all the recent international agreements dealing with labour, environmental and security concerns, the Kimberley Process provisions for monitoring and verification are undoubtedly the weakest. Industry monitoring proposals remain vague, and the governmental provisions are virtually non-existent. In comparing the Kimberley monitoring provisions with those of other agreements concerned with human security it would appear that there are two standards. Where the security of industrialized nations is concerned, tough, unequivocal agreements can be promulgated quickly, with clear and detailed provisions for compliance and third party monitoring. Where African diamonds and African lives are concerned, however, the issue is treated as an abstract trade matter. Terrorism and human security in Africa are treated differently from terrorism and human security elsewhere, and are therefore accorded less urgency and lower levels of remedial and preventive action.
I will summarize some of the discussions I have had with my friends from Sierra Leone.
All of Sierra Leone's problems relate to diamonds. Sierra Leone was a democracy and technically is today, but there is a lot of electoral tampering and fighting resulting from the process. Many of Sierra Leone's problems emanate from Liberia. Liberia's rebels infiltrated the border between the two countries and became involved in the Sierra Leone diamond industry to finance their schemes.
There is not a diamond industry of any note in Liberia and the Liberians are using diamonds from Sierra Leone to buy weapons. Liberia used to export a few diamonds and Sierra Leone once had a thriving industry. Now the roles have reversed and diamonds are easy to smuggle.
The smuggling can never be stopped but it can be largely curbed. Government policy is part of the problem. This is where we need to go and have not gone with any international agreements or legislation to date. If legitimate miners buy the proper permits from the government, they have to take their gems to the government valuation office and pay taxes before selling them. The existing valuation process may be flawed, with miners having to pay disproportionate fees in order to be above board.
The real concern and what really needs to be addressed and is not addressed by anything so far is not related to certification nor is it related to enforcement. It is related to the business of buying and selling diamonds, the diamond exchange.
A system is required where those in the diamond business get a square deal. This will not occur in many of these African source areas unless there is an internationally supervised diamond exchange in situ, in other words in those countries. It is essential that it is profitable to sell diamonds through legitimate channels. That is the part that is missing from all of this so far.
As a consequence the banking system of countries like Sierra Leone does not have the foreign exchange or currency because of the lack of a legitimate exchange. This would bring tradable currencies into the nation. Consequently the diamond smuggling is impacting the whole country and all of society because the national treasury is deprived of American dollars, euros and other forms of currency that would allow the country to become more involved in international trade and to purchase commodities on the world market.
I want to talk a minute about the ties to terrorism and the ties to international destabilization. The trouble in Liberia stems from the country's leadership. The leader, Charles Taylor, before taking over the reins of the country was in a maximum security prison in the United States. Many postulate that the U.S. wanted the former leader in Liberia deposed and that is how Mr. Taylor was released.
Since his taking over the leadership in Liberia, he has created havoc through the region. This is ongoing. This year alone, 60,000 Liberians have fled to Sierra Leone. One of the reasons they are fleeing to Sierra Leone is that there are 17,000 UN peacekeepers in that country. Many of the peacekeepers come from other west African nations. The west African peacekeepers are very interested in the land mass where the majority of diamond extraction is going on. They had an agreement with the Liberian rebels regarding where mining could take place within Sierra Leone and it appears that some of the peacekeepers may be involved.
All of the diamonds in Sierra Leone are extracted from alluvial deposits rather than being mined deep underground. This contributes to the significance of the problem.