Durham, NC - The upcoming film "Blood Diamond," which debuts Dec. 8 and is set in Sierra Leone in the 1990s, takes its title from diamonds mined by forced laborers to benefit murderous rebels. The profits from the "blood" or "conflict" diamond trade -- a small but significant fraction of the world market -- have been used to finance dictatorial regimes and terrorist organizations.

 The diamond industry is mounting a campaign to reassure retailers and holiday shoppers that their gems are "clean," touting the implementation of a certification procedure known as "the Kimberly Process." However sincere the effort, says Duke University law professor Barak Richman, the process has potentially crippling limitations.

 "The inherent features of diamonds - -- portability, untraceability and universal value - -- make diamonds the perfect currency for rebels and brutal dictators. But they also pose many other legal problems, such as contract enforcement," said Richman, an antitrust and contract law specialist who has written several articles on the diamond industry's unique legal systems. "Even a basic credit sale is beyond the reach of the legal system.

 "So to operate a functional market with effective contracts, the diamond industry has effectively erected its own legal system."

 Though the industry's private legal system operates successfully in downstream markets, such as New York's 47^th Street, Richman said it remains to be seen whether the Kimberly Process - -- another of the industry's instruments of self-governance -- - can substantially reduce the conflict diamond trade. Sparked by concerned non-governmental organizations and sanctioned by the United Nations, the Kimberly Process is a private certification system governing the import and export of diamonds between member countries, Richman explained. Members do not import or export diamonds with non-member states.

"Moreover, there is a real danger that this process that is intended to stop conflict diamonds can instead allow a monopolist, De Beers, to strengthen its control over the global supply," Richman said. "To be sure, conflict diamonds are responsible for horrendous crimes, and the industry -- in conjunction with the U.N. and the WTO - -- are correct to try to stem their flow. But it also is a paradigmatic coalition of ‘Baptists and bootleggers,' where an industry leader capitalizes on social politics to secure market power. The Kimberly Process just might stifle competition in an already concentrated industry, even as it fails to discharge its original duties.

"The great irony of this, and what the industry is most concerned about, is that the item is being sold as a part of a romantic, everlasting and pure relationship, but there are a lot of ugly shadows that have contributed to the industry's success."