It is an unimaginative part of Antwerp: gray buildings, gray pavement and men in gray suits walking around with gray trolleys. Nevertheless, the Hoveniersstraat, near the Central Station, is the most secure street in Europe, because 200 million euros worth of rough diamonds are transported in these trolleys every day – all en route to an inspection, a certificate, or a new owner.
At least, that was the case before the Russian invasion of Ukraine. ‘Now the diamond trade is drying up more and more’, Shah Jhigar, a small trader from India, sighs gloomily. ‘Imports are becoming more difficult, and it is more difficult to sell the diamonds. That’s why everyone stays put, in the hope that things will get better soon.’
The problem is that Russia is the largest producer of rough diamonds in the world: about 30 percent comes from the Siberian mines of the company Alrosa. Last year, almost a quarter of all diamonds circulating in Antwerp were of Russian origin. International sanctions have made it more difficult to trade with Russia, but imports are still legal. For the time being, the diamond sector is out of the question. Also last week, when the European member states reached an agreement on a new sanctions package against Russia, there was no ban on the import of Russian diamonds.
‘Quite rightly,’ says Tom Neys. According to the spokesperson for the Antwerp World Diamond Center umbrella organization, the diamond trade makes a very limited contribution to the Russian treasury (1 percent of GDP), especially if you compare that with other raw materials that Europe still imports, such as gas. Sanctions against Russian diamonds therefore have little impact on Russia, says Neys, while Antwerp would bleed. “About $40 billion a year goes down this street, and I’m guessing 10,000 people would lose their jobs.”
Dirty conflict
Besides, he doesn’t see the world getting any better. According to Neys, if the Russians can no longer sell their diamonds in Antwerp, they simply board a plane to Dubai or Mumbai. ‘And the trading circuits there are a lot less ethical and transparent than ours, which makes the bad guys of this world will only make it easier. Is that what you want then?’
The discussion about ‘bad diamonds’ has been had before. Thanks to the Hollywood movie Blood Diamond from 2006, in which Leonardo DiCaprio moves around the mines of Sierra Leone, the general public realized that these beautiful pebbles can fund an ugly war. It certainly had an effect: people started to ask their jeweler whether they were ‘clean’ before purchasing their jewelry.
Twenty years ago, the United Nations decided to curb such trade by checking the origin of gemstones and providing them with certificates: the so-called Kimberley Process. But that is only about diamonds whose proceeds go into the pockets of warlords and rebels, and by that definition the Russian company does not mine conflict diamonds. ‘While we are also talking about a nasty conflict, which is co-financed by diamonds,’ says Filip Reyniers, director of Ipis, a research institute that advises on human rights in conflict situations.
The mining company Alrosa is two-thirds owned by the Russian state, and CEO Sergei Ivanov is a close confidant of Putin, who is on the sanctions list in the US. The profit thus flows to the state treasury. ‘And to give you an idea of the links between the mining company and the army: there is even a submarine from the Russian navy called Alrosa,’ says Reyniers.
Always painful
For this reason, Ukrainian President Volodymyr Zelensky already asked the Belgian parliament for sanctions in March. “Peace is more important than diamonds,” he said. Although the United States, Canada and the United Kingdom have already taken measures against diamonds from Russia, the sector in the European Union remains unaffected.
It annoys Kathleen Van Brempt (of the Flemish social-democratic party Vooruit) immensely. She has been calling for sanctions from the European Parliament for months. ‘Because why should we do that with steel and not with diamonds? Sanctions are always painful.’
Moreover, Van Brempt questions the risk of many job losses. ‘The figures from the Federal Ministry of Economic Affairs show that Antwerp’s trade in Russian diamonds has fallen by 80 percent since the invasion of Ukraine. This has no or only a very limited impact on the sector. Why the last 20 percent then forms an obstacle remains unclear,” the European Member of Parliament wrote in an opinion piece in the Flemish newspaper this week. The standard.
Reyniers van Ipis fears that a ban would indeed cost Belgium money and jobs, although he calls the figures for the diamond sector outdated. ‘This is about principle. Do you want to get your hands dirty by contributing to Russia’s war treasury, don’t you?’
In any case, the consequences of the uncertainty can be felt in Hoveniersstraat. Rahul Dhanani, who together with three colleagues from his company R. Diamond unable to speak, notices that more and more traders are keeping their hands off Russian diamonds. ‘Sometimes because they are against the war, sometimes because these stones pose a great risk. For example, payments from Russia have been blocked for months. And maybe the stones in Europe are not yet covered by the sanctions, but that could happen soon.’ Experienced diamond trader Vincent Loos is pessimistic: ‘I wouldn’t let my children work in the diamond sector.’