Monday, December 16, 2013

Zimbabwe diamonds for sale

A week-long sale of Zimbabwean diamonds in Antwerp is the first of many and is expected to raise between $7.5m (£4.6m) and $15m. Belgian officials estimate that the lifting of sanctions could mean an extra $400m a year in revenue for Zimbabwe.For the Belgian government and diamond industry officials who successfully lobbied the European Union to lift sanctions on Zimbabwe’s state-owned mining company this year, the sale marked the first step towards generating billions of dollars in revenue for Zimbabwe’s government, which they say will help lift its people out of poverty and encourage transparency.

Critics argue that the sale of stones mined in one of the world’s most corrupt countries, which has a dismal human rights record, is another example of how the Kimberley Process – launched a decade ago to keep unethical diamonds from the market – is hobbled by its  narrow remit.

The Kimberley Process came into effect in 2003 after groups such as PAC and UK-based Global Witness highlighted atrocities as rebel groups plundered African diamond mines to fund civil wars. The process in which diamond-producing nations are now monitored and certified has largely stemmed the involvement of rebel groups, with what are traditionally termed “blood diamonds” making up only about 1 per cent of all stones currently on the market. Rights groups and some governments are now lobbying for the narrow definition of conflict diamonds to be expanded, while groups such as PAC argue that transparency and accountability should also be more closely monitored.

Alan Martin, research director at the resources watchdog, Partnership Africa Canada (PAC). Today, he says, it is not only the rebel groups sanctioned by the Kimberley Process that stand accused of abuses, but state bodies and private security firms. There is also growing concern that diamond revenue is not ending up in the pockets of the people who need it most. “In the same way that the definition of violence and conflict diamonds has changed, the entire corporate social responsibility landscape has changed,” Mr Martin adds.

 A PAC report last year alleged that up to $2bn in diamond revenue had gone missing in four years, the result of smuggling, undervaluation of stones leaving the country and a “high level of collusion” by government officials.

Zimbabwean mining executives denied the claims but complaints have also come from within the government. The former Finance Minister Tendai Biti, of the opposition MDC party, complained that the promised $600m from diamond sales earmarked for development projects had not materialised, with only $41m making its way into government hands last year.

Emily Armistead, a campaigner for Global Witness, thinks the EU was premature in lifting the sanctions. The fields are run by joint ventures between private firms and the state-owned ZMDC, and opaque management structures have led to concerns that military and government-linked figures are still profiting from the gems. “We continue to be anxious that the military and other parts of the regime are bolstering their power through diamond revenues and potentially undermining democracy,” she said.

From Here

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