Gems sales continue despite sanctions

Western sanctions on army-ruled Myanmar's lucrative gems trade are likely to fail because nearly all buyers are from Asian countries which have no stomach for trade embargoes, officials and traders said.

"I don't think Western sanctions will have as much impact on our gems and jade industry as they think," a Ministry of Mines official said on the eve of the regime's first major auction since September's bloody crackdown on democracy protests.

Human Rights Watch has called for a total ban on precious stones from the former Burma, where state-controlled mines supply sapphires, pearls, jade and 90% of the world's rubies.

"Burma's rubies and jade are prized for their beauty, but the ugly truth is that the trade in these stones supports human rights abuses," Arvind Ganesan, director of the group's business and human rights programme, said.

"The sale of these gems gives Burma's military rulers quick cash to stay in power," he said in a statement.

International outrage over the brutal crackdown on the monk-led protests has led to tighter Western sanctions on the regime, including moves by the United States and European Union to target the gems trade.

But most of the 3,000 foreign buyers expected to attend the 12-day event in Yangon are from China, Hong Kong, Taiwan and Thailand which have ignored calls for sanctions on the regime.

"So we don't think it will have much impact on our business," said a jade merchant, who declined to be named.

Although the United States imposed a ban on imports of Myanmar gems in 2003, a customs loophole allows in stones cut or polished elsewhere.

As Myanmar exports virtually all its gems uncut, this interpretation rendered the ban useless.

Last month a key US congressional committee approved an amendment to close the loophole.

The EU has also promised gems-related sanctions, and international jewellers Bulgari and Cartier have told their suppliers to confirm stones are not mined there.

Valley of rubies

Myanmar's generals are estimated to have earned around $750 million (NZ$993 million) since they began holding official gem and jade sales in 1964.

A far bigger number of precious stones are smuggled out.

In neighbouring Thailand, where the majority of Myanmar's gems are bought and sold, stone merchants have yet to be put off business with the junta.

"People are unhappy about what's going on but they are not angry enough to stop buying rubies," Pornchai Chuenchomlada, president of the Thai Gem and Jewellery Traders Association, told Reuters in October.

The state holds a majority stake in all mines, including the Valley of Rubies, the mountainous Mogok area, 200 km north of Mandalay, famed for its pigeon's blood rubies and blue sapphires worth tens of thousands of dollars apiece.

Conditions in the mines, off-limits to most outsiders, are reported to be horrendous.

"Reports from non-governmental groups suggest that land confiscation, extortion, forced labour, child labour, environmental pollution and unsafe working conditions for miners are rampant," Human Rights Watch said.

Source: tvnz.co.nz