MAC: Mines and Communities

Still more questions for the Kimberley Process

Published by MAC on 2013-06-21
Source: Daily Telegraph, Business Times (2013-06-19)

Backing the Kimberley Process, no question

By Chris Barron

Sunday Times: Business Times (South Africa)

16 June 2013

DON'T blame the Kimberley Process if diamonds continue to fuel violent conflict and human rights abuses, chairman Welile Nhlapo said this week.

The Kimberley Process was started 10 years ago, with South Africa and the De Beers diamond group as the main movers. The aim was to close down the trade in so-called conflict diamonds, diamonds traded to fund anti-government rebel groups in Africa wreaking havoc on civilians.

The initiative was driven by self-interest as much as philanthropy. The issue of blood diamonds had become so controversial that there was a fear that public outrage would force the industry to source its diamonds from other countries outside Africa. South Africa and De Beers would have been the biggest losers.

There is a strong feeling that the self-interest of its members, rather than ethics, has driven the Kimberley Process, leaving it seriously discredited as a result.

You would never think so, however, listening to the self-congratulatory tone of the Kimberley Process intercessional summit, which was held last week in the Northern Cape city. Mineral Resources Minister Susan Shabangu hailed the "heroes and heroines" who set up "this gallant organisation" whose work had ensured that "99% of diamonds traded globally are conflict-free".

Mr Nhlapo enthusiastically supported her claim. But his insistence later in our interview that the blood-spattered diamonds from the Marange fields in Zimbabwe were conflict-free cast considerable doubt on what the minister and the members of the Kimberley Process mean by the term.

The initiative has achieved some notable successes in staunching the flow of blood diamonds from West Africa. But it was widely condemned for allowing Zimbabwe to export diamonds from the Marange fields in spite of copious evidence that the extraction of the gems involved appalling and often murderous human rights abuses by state agencies and enriched the regime of President Robert Mugabe, rather than his people.

To the extent that profits from the Marange diamonds have been used to fund Mr Mugabe's security forces, including the police, they have contributed to the oppression of Zimbabweans, rather than benefiting them.

Mr Nhlapo, 65, who was close to Jacob Zuma in exile and was South Africa's ambassador to the US before becoming Zuma's national security adviser, said that, in terms of its mandate, the Kimberley Process acted correctly. Its mandate was to stop blood diamonds being used by rebel groups to fund the overthrow of legitimate governments, he said.

The diamonds from Marange are not being used for this purpose and therefore the Kimberley Process cannot stop them from being traded.

Human rights groups say such a narrow adherence to its original mandate makes a mockery of the initiative's original intention. They say the failure to extend its mandate to include the perpetration of violence by governments against their people, and not just by rebel groups against governments, has made it largely irrelevant.

Co-founder Ian Smillie, a leading member of participating nongovernmental organisation Partnership Africa Canada, resigned from the Kimberley Process in 2009, saying he could "no longer in good faith contribute to a pretence that failure is success".

He cited the scheme's inability to address major challenges, such as the ongoing trade in conflict diamonds from Côte d'Ivoire, smuggling of Venezuelan diamonds and the serious human rights abuses in Zimbabwe's diamond sector.

"When regulators fail to regulate, the systems they were designed to protect collapse," he said.

Another founding member, the resource-extraction monitoring group Global Witness, walked out in 2011 when the Kimberley Process gave the Zimbabwean government permission to export diamonds from Marange.

The initiative had "lurched from one shoddy compromise to the next", Global Witness said.

It had failed to prevent rogue states from manipulating the system for their own gain.

Mr Nhlapo was unmoved.

"Some of their concerns have to do with disappointment about institutions like the United Nations and the Security Council, who are not rising to their expectations in dealing with conflict situations where diamonds are involved," he told the Sunday Times.

The Kimberley Process needed to develop "areas of complementarity" with agencies and institutions that have the mandates and resources to deal with these issues, he said.

As far as Zimbabwe was concerned, "we have done everything in terms of due diligence and are satisfied that the diamonds can be marketed without any restrictions", said Mr Nhlapo.

He was clearly irritated with those who keep harping on about Zimbabwe. "Zimbabwe is off the agenda of the Kimberley Process," he kept insisting, sounding angrier each time.

He rejected the accusation by Global Witness, among others, that the scheme was being browbeaten and manipulated by Zimbabwe. But he weakened his case somewhat when he explained how the Kimberley Process had "convinced Zimbabwe to allow itself to be monitored".

There are those who feel this is precisely what is wrong with the initiative. It allows itself to be held to ransom by its 84 member countries and a consensus-driven approach to its work.

In the case of Zimbabwe, it should have read Mr Mugabe the riot act. Instead, it allowed the Zimbabwean autocrat and his henchmen to call the shots.

When the Kimberley Process suspended trade in the Marange diamonds in 2009 pending investigations into the allegations of human rights abuses, the Mugabe government told it to go hang itself. It did not need the permission of the Kimberley Process to trade what belonged to the Zimbabwean people, they said.

In 2011 the Kimberley Process succumbed not only to Mr Mugabe's belligerence, but also to pressure by the Zuma government, which in 2010 had urged that certification be granted to the Marange diamonds. It was ironic that the man who gave Mr Mugabe the nod, Umkhonto weSizwe veteran Abbey Chikane, was the initiative's founding chairman, who at the time promised that it would free Africa "from corrupt individuals at a very high level".

"The Kimberley Process should be able to bring this development in Africa to an end," Mr Chikane announced boldly.

"We do what we can in terms of our mandate and do not entangle ourselves in political matters," Mr Nhlapo said. "We don't want to get entangled in those."

It is not only in Zimbabwe where the original idealism has succumbed to government pressure.

When François Bozizé - friend of Mr Zuma and former president Thabo Mbeki - grabbed power in a coup in the Central African Republic, the Kimberley Process happily certified his country's trade in diamonds in spite of his illegitimate leadership and the fact that most of the money went to Mr Bozizé and his mates.

But it wasted no time withdrawing its certification when Mr Bozizé himself was overthrown by rebel forces in January this year.

Mr Nhlapo said it was the credibility of those who criticised the Kimberley Process on human rights grounds that had been damaged by its doubtful record and not the credibility of the process itself.

"They know what has been done and they also understand our limitations," he said. "Let them be honest and not try to prolong their existence through lies."

Zimbabwe mining taxes disappear

By Aislinn Laing, Peta Thornycroft in Johannesburg

Daily Telegraph (UK)

19 June 2013

The cross-party mines and energy portfolio committee found that there were "serious discrepancies" between what the diamond firms claimed to have paid in local taxes, and what the government had received.

One firm, Mbada Mining, which works with the Zimbabwean government, said it had paid $293million (£187million) in taxes over four years, but the government said it had received just $82 million (£52million) in total from Mbada for operations in 2011 and 2012.

Three other companies operating in the Marange fields, which are estimated to hold around a quarter of the world's gem stocks, refused to disclose the payments they made to the government, a coalition of Morgan Tsvangirai's MDC party and Robert Mugabe's Zanu-PF.

The committee said that attempts to visit the diamond fields were repeatedly thwarted by government mining officials and security agents.

"The diamond industry is operating without a clear legal framework and administration to provide assurance that the people's resources are being protected," the committee said.

Its concerns have been echoed by Tendai Biti, the Finance Minister and member of Morgan Tsvangirai's MDC which sits in uneasy coalition with Robert Mugabe's Zanu PF since disputed elections in 2008.

He has repeatedly complained about diamond revenues going missing, and been forced to slash social spending for several years running, and seek election funding from outside Zimbabwe as a result.

Last year, a report by diamond watchdog Partnership Canada Africa alleged that the "theft" of diamonds and their revenue in the past four years was in part financing renewed political and military support for Zanu PF.

Four companies operate in Marange - three are 50 per cent owned by the state and one is entirely state-owned.

The parliamentary committee claimed that since the government took part-ownership of the diamond fields, it was refused permission to visit. A first attempt, in April 2010, was called off when their members were "constantly mobbed by security agents". It finally visited a second time, in 2012, after nearly two years of asking permission.

The committee said that large parts of Marange are still run by the military, who were accused of killing 200 illegal miners in 2008. It was refused permission to hold a public meeting with some of the estimated 4,000 people displaced the mining activities because of "security concerns", it said.

Witnesses called to give evidence to the committee were "either too defensive or uncooperative or unwilling" to attend hearing sessions, despite them being held in camera.

It had to get a court summons, delivered by police, to persuade officials from Mbada and another firm to attend hearings, it revealed.

"There seemed to be a lot of influence by the Ministry of Mines in discouraging these company officials from attending the hearings," it added.

Alan Martin, director of research for Partnership Africa Canada, said the missing diamond revenues on the eve of an election campaign, "does not bode well for a free and fair election".



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