MINNEAPOLIS – The jewelry industry’s worst nightmare opens Friday at a theater near you.

In “Blood Diamond,” machete-armed warlords chop off limbs, kidnap children and burn villages to the ground – all in an attempt to seize control over the rich diamond deposits of Sierra Leone.

The movie, which is generating Oscar buzz, particularly for star Leonardo DiCaprio, has already prompted the jewelry industry to go on the defensive in its most critical sales season. They fear scenes of amputated limbs and children being forced to kill could tarnish the public’s perceptions of the precious gems and how they are bought and sold.

An industry group, trying to protect the $30 billion in annual diamond jewelry sales in the United States, has taken out full-page ads in major newspapers and sent out packets of “talking points” to jewelry stores across the country.

Merchants are also preparing themselves. Anticipating the obvious question – “How do I know my diamond isn’t a blood diamond?” – some jewelers have printed statements assuring customers that their diamonds come from legitimate sources and don’t fund armed conflicts.

“Diamonds are meant to be a gift of love, and we at R.F. Moeller abhor the way in which some gems have been used to fund conflict,” reads a sign atop a glass display case at a Minnesota store.

While “blood diamonds” or “conflict diamonds,” gems used to fund arms conflict, have been a cause for humanitarian groups for years, many consumers aren’t familiar with the violence fueled by the illicit gem trade.

“This film could be the worst thing to happen to the diamond industry in 40 years,” said Tom Zoellner, author of “The Heartless Stone,” a book about the diamond trade. “A diamond is nothing without its image. And the specter of child soldiers and limbs being hacked off serves to tear apart that image.”

The film should reach a wider audience than other attempts by entertainers to raise awareness of the issue. The rapper Kanye West last year released a Grammy-winning single called, “Diamonds from Sierra Leone,” which contained the lyrics:

“Over here, it’s a drug trade, we die from drugs

Over there, they die from what we buy from drugs,

The diamonds, the chains, the bracelets, the charms-es,

I thought my Jesus piece was so harmless

‘Til I seen a picture of a shorty armless”

The role of diamonds in funding armed conflicts was little-publicized until 1998, when the British human rights organization Global Witness published a report showing how diamond profits were fueling the Angolan civil war, which killed 500,000 and left thousands more without limbs.

Following that report, the diamond industry in 2003 created a self-policing system known as the “Kimberly Process,” designed to monitor the flow of the gems across borders. More than 70 countries have agreed to participate in the system, which requires diamond-exporting nations to export their gems in tamper-proof containers, with documents stating that they did not originate in a war zone.

According to the World Diamond Council, which represents 50 industry organizations from mining companies to retailers, the Kimberly Process is largely responsible for reducing the sale of blood diamonds from 4 percent of the world’s diamond trade to less than 1 percent.

Jewelry merchants had hoped the new film would highlight steps the industry has taken to limit conflict diamonds. But while it mentions the Kimberly Process, it isn’t explained, said Scott Rudd, owner of Scheherazade, a jewelry store in Edina, Minn.

“It’s sad the film didn’t show the other side of the coin, how many good things the Kimberly Process has led to,” Rudd said.

But humanitarian groups note the Kimberly Process has limitations, largely because it’s a self-policing effort by the industry and even governments who’ve signed on often don’t enforce the rules. They argue conflict diamonds continue to enter the legal diamond trade through West African smugglers, and that the industry has underestimated the scope of the problem. The industry uses official government export data that doesn’t capture sales from smuggled diamonds.

Also, some participating governments have not increased border security to limit the import of blood diamonds. Ghana, for instance, is a Kimberly Process participant; however, blood diamonds are being smuggled regularly into the country from war-torn areas of the Ivory Coast, Sierra Leone and Liberia, according to research done by Global Witness and the United Nations.

“No local jeweler can tell you with certainty that a diamond they have in a display case does not come from a war zone,” said Jim Paul, executive director of the Global Policy Forum, a nonprofit group based in New York that monitors policymaking at the United Nations. “Guarantees are absolutely bogus.”

Zoellner said he was routinely offered stolen gems while visiting Africa to research his book.

Another problem with the system is that it only focuses on countries that are in a state of civil war as defined by the United Nations, Zoellner said. It overlooks atrocities in Angola and the Democratic Republic of Congo, for instance, where children are forced to work in diamond mines and armed guards will kill and mutilate people who attempt to steal diamonds, he added.

That’s why Zoellner would never buy a diamond ring. “They’ve caused too much hurt and too much misery to people around the world.”

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