Following the success last year of the movie Blood Diamond, consumers are increasingly aware of the role diamonds have played in funding recent wars in Angola, the Democratic Republic of the Congo (DRC), Liberia and Sierra Leone.  

The problem of blood diamonds has receded since the late 1990s, but remains a real issue. However, it now comprises a relatively small part of the ethical crisis facing the jewellery industry, a fact that most consumers remain blissfully unaware of.   

Of equal concern is the exploitation that workers suffer in the mining and processing of supposedly legitimate diamonds, gemstones and precious metals. 

According to the International Labour Organisation, an estimated one million children work in small-scale mining around the world. These children often work in some of the worst conditions imaginable, where they face serious risk of work-related death, injury, or chronic illness. 

Conditions can be equally harsh for adults. Health and Safety is widely ignored, and wages can be pitiful. Employee Rights are often non-existent, with sick leave, collective bargaining and maternity leave a hopeless dream for people struggling to feed their families.

Abuses arent limited to small-scale mining; the major mining companies also have a lot to answer for. Their operations are often established against the wishes of local people, who rarely accrue much benefit and whose wellbeing is of little concern to the corporations. A classic example occurred in Ghana's Tarkwa mining district, where more than 30,000 people were displaced between 1990 and 1998. Protesters were often jailed without trial.

Human exploitation isnt confined to mining, it occurs all the way along the supply chain. A lot of jewellery is manufactured in Asia under sweatshop conditions. Most of the worlds diamonds are cut in India, where in 2003 the average wage for a diamond worker was 6 per week. Often the work falls to bonded child labourers, who endure 12-14 hour shifts in order to pay off debts passed down to them by their parents.

As well as causing its workers immense hardship, the jewellery industry is also responsible for widespread environmental damage. Large-scale gold mining is especially harmful, involving the use of cyanide compounds, which often pollute an area for long after the local mine has been closed down. The production of a single gold wedding band can leave behind up to twenty tonnes of mine waste.

Small-scale mining is often just as bad. Artisnal miners frequently use mercury to aid the extraction process, and this can easily find its way into local water supplies. Whether conducted by major companies, or self-employed labourers, gold mining can be environmentally devastating.

Ultimately the jewellery industry is accountable for this human and environmental exploitation by virtue of the fact that it funds it, turning a blind eye to the child labourers, the toxic waste, and the widespread poverty that blights so many of the countries from which these riches are sourced. And against this background, it is naive to think that the issue of conflict diamonds has simply disappeared.

Many jewellers claim that blood diamonds are no longer a problem, and point to the Kimberley Process, a certification scheme established in 2003 with the aim of restricting the flow of conflict-diamonds onto the market. But there are major flaws with the Kimberley Process. First, its certificates only apply to rough diamonds once a stone has reached its cut and polished state, the Kimberley Process does nothing to track it. Second, the Kimberley Process is extremely porous. Diamonds are easily smuggled, and widespread anecdotal evidence suggests that it is not difficult to acquire fraudulent Kimberley Process Certificates.

It is undoubtedly true that there are less conflict diamonds on the market today than there were in the 1990s. But this has more to do with improved political stability in various diamond producing areas of Africa than it does with the Kimberley Process. In those areas where conflicts continue, they are often still fuelled by the trade in illicit diamonds. According to Global Witness, diamonds are being smuggled out of the rebel-held north of Cote dIvoire and out of eastern Democratic Republic of Congo, and continue to be used for money laundering, tax evasion and organised crime. Conflict diamonds remain a very real problem, and there is certainly no room for complacency.

But in spite of the immense harm the jewellery industry causes, there is some evidence of improvement. Ethical consumerism is on the rise, and the early signs are that increased demand for ethical jewellery will drive change within this most conservative of industries. This new demand results largely from campaigns by non-governmental organisations to raise awareness of the issues around conflict diamonds and environmentally catastrophic gold mining (Global Witness and Oxfam US respectively).

The response to these campaigns has been mixed. Some jewellers have begun cynically referring to their ethical policies in their marketing material, while doing nothing to clean up their act. But that is not the full story there are a number of programmes underway that suggest that many within the industry have a real desire to for change.

The Madison Dialogue is a cross-sector initiative established to promote communication and collaboration among companies, civil society groups and others seeking to encourage best practices, sustainable economic development, and verified sources of responsible gold, diamonds and other minerals.

It was launched in New York in 2006 at a meeting that included representatives from EARTHWORKS, WWF, Partnership Africa Canada, Tiffany & Co, The Council for Responsible Jewellery Practices, the Diamond Development Initiative, Conservation International, and others.

The goal is to bring together different initiatives, to prevent duplication of effort, and to work towards a single, universally recognised definition of ethical jewellery. This is a long-term project, and may ultimately involve Fairtrade labelling for gold and diamonds.

In the meantime, what should the ethical consumer do, amidst the barrage of misinformation claiming there is really nothing wrong with the existing jewellery industry? Firstly, they should not be embarrassed to ask difficult questions: Where does this gold come from? Where does this diamond come from?

Equally importantly, they should not allow themselves to be fobbed off with vague assurances about reputable suppliers. If a jeweller is evasive, dont buy from them it really is a simple as that. In spite of what some people within the industry might claim, there really are alternatives to the way things have been done in the past. Its early days, but there are good reasons to be optimistic.

Tim Ingle is one of the directors of Ingle & Rhode London based jewellers who provide ethically made jewellery including diamond engagement rings and wedding bands.