The DRC - Who benefits from the chaos

The Democratic Republic of the Congo is one of the least developed countries in the world. Yet it is also home to $24 trillion worth of untapped mineral reserves. In the eastern hills of the country, the "three Ts" - tantalum, tungsten and tin - are mined by hand, eventually making their way into electronic devices across the world.

In the Democratic Republic of Congo (DRC) more than 5.4 million have killed since 1998, so coffins, are the one thing which people will spend their limited money. For the funeral undertakers, business is good. Prostitution is also a prosperous industry thanks to the war. With more than 30 armed groups in the region, there is a growing market of men seeking sex. But with little money, plenty of weapons and ample alcohol, the soldiers often rape and threaten the women.

War is another profitable activity, with many investors - both internally and externally. The United Nations, for example, sent 19,815 blue helmets to the country through its United Nations Organization Stabilization Mission in the DR Congo (MONUSCO), the second-largest mission in the world. For the home countries of those troops - Pakistan, India, Uruguay, Tanzania, South Africa and Malawi - the mission can be extremely profitable: the UN pays them four times the cost of the deployment.

Then there are the NGOs. More than 80 humanitarian organisations ply their trade in the DRC, as part of an arguably self-sustaining business. One NGO mission chief confessed: "I don't know what we're doing here. Our presence raises the price of food and rent, we stop people from moving on, from taking their own decisions and demanding their government take responsibility. We should have left Congo years ago."

Another booming the trafficking in blood minerals, for nothing serves this illicit trade better than a failed and unstable state that is incapable of collecting taxes and stopping neighbouring countries from looting its riches through strongman proxies.

 Rubaya in the province of Masisi is three hours' drive from Goma and the epicentre of the blood minerals war. Some tech lobbies, perhaps wishing to wash their hands of any responsibility for the exploitation of blood minerals, recently insisted that coltan is no longer used in the making of mobile phones, tablets, consoles or cameras, and that the mines were closing. But in truth, demand for the mineral is still much greater than its supply. Around 80 percent of the world's supply resides under Congolese soil. 5,000 miners, many of them children and teenagers, continue to toil in a state of quasi slavery in DRC, at first under the open sky and then, when there is no more of the mineral left on the surface, in deep tunnels where they eat, sleep and work from dawn until dusk, seven days a week, 365 days a year. Many work nearly nude, without helmets or protective gear, and some are even barefoot. Others wear fake Real Madrid or Barcelona shirts. The luckiest have wellington boots. The mines are particularly dangerous during the rainy season, when the damp earth can crumble, leaving miners at the mercy of carbonic gas or crushed inside underground caverns.

In North Kivu there are between 5,000 and 6,000 Congolese rebels spread among 30 armed groups. In addition to racial hatred, they are motivated by a desire to control the mineral resources - and will massacre entire villages in an effort to do so.

A dark web of large multinational companies, corrupt officials and unscrupulous states concealed by anonymous tax haven bank accounts participate in the ancient game of looting the DRC. The UN has denounced neighbouring countries such as Rwanda and Uganda for selling  minerals that are not theirs and for feeding armed groups in order to keep the trade alive. Meanwhile, the developed world receives its sacks of cassiterite, coltan, gold, diamonds, uranium, tungsten and manganese cheaply and promptly.

 Who then, other than the Congolese themselves, could want a conflict that sustains such a business to end?

From here

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

Diamonds are a dictator's best friend

This week, Partnership Africa Canada, a member of the Kimberley Process, the world regulatory body on the diamond trade, accused Zimbabwe President Robert Mugabe’s ruling circle, international gem dealers and criminals of stealing at least $2 billion worth of diamonds.

Zimbabawe’s eastern Marange field, one of the world’s biggest diamond deposits, has been mined since 2006 and its vast earning could have turned around the nation’s economy, the Partnership Africa Canada contended. But the revenue from the sale of the diamonds have not made it to the state treasury. Millions have gone to Mugabe and his cronies.

Mugabe has been in power in the southern African nation for decades by silencing through violence his critics and intimidating the populace. Poverty is rampant in a country.

The Looting of Africa

In terms of natural resources, Africa is the most abundant continent on earth.

BP has stated that Africa holds 127 billion barrels of untapped oil, almost ten per cent of global reserves.Oil was first drilled commercially in Africa in Oloibiri in the Niger Delta, in 1956 by the Anglo-Dutch oil giant Shell. There are now ten oil exporting nations in Africa, with another three soon to join that list.

There are ten major diamond producing nations in Africa, the largest being Botswana, where the industry is worth $158bn a year.Diamond production remains a major source of revenue for Africa. In Sierra Leone, income from the diamond trade rose by a quarter to $35m in the first six months of the 2010.

Coltan or "colombo-tantalite ore" is a mineral used to make electric capacitors in computers, gaming consoles and mobile phones. One of the world's largest reserves is in the Democratic Republic of Congo.

But rather than a blessing, most of Africa's commodities have proved a burden; allegedly stoking conflict, funding wars and leading to rampant labour market abuse.

Africa's largest single oil exporting nation is Nigeria. While no official figures exist, Standard Bank estimates the country has made $6 trillion in oil revenue over the last 50 years. The International Energy Agency says Nigeria holds 37 billion barrels of reserve oil, dwarfing that of Norway which has just 6 billion. Yet 70% of Nigerians live under the poverty line and the country has consistently been ranked among the most corrupt on earth by international observers.Despite its oil wealth, Nigeria has to import 60% of its own fuel.

The portability and high value of diamonds have made them a favourite source of funding for rebel groups across the continent. Angola, Congo and the Cote D'Ivoire have all been subject to the trade in so called "blood diamonds"..During the brutal 10 year civil war in Sierra Leone, the diamond mines in Kono were controlled by the rebel RUF forces, led by Foday Sankoh. Diamonds smuggled from the region were allegedly passed on to Charles Taylor, president of neighbouring Liberia, who in turn helped arm the rebel movement.Diamonds from blacklisted countries like Zimbabwe are still routinely being traded on the international market.

Most of the coltan mines in the DRC are in the remote South Kivu district. In 2001 a report by the United Nation Security Council claimed that rebel forces, regrouping in the country after the Rwandan genocide, had taken control of the mines and were using coltan to fund their operations, often using forced or child labour. These groups included the CNDP, a Tutsi rebel force led by General Laurent Nkunda, and the Democratic Forces for the Liberation of Rwanda, a Hutu rebel group responsible for the Rwandan genocide of 1994, which had the backing of the Congolese government under President Mobutu.The report concluded that the DRC was suffering a "systemic and systematic" looting of natural resources, with the CNDP alone raising $250m over 18 months by selling coltan.A follow up report by the UN in 2008 claimed the looting of the mineral in the DRC was still rife. Rwanda is estimated to have made $19m from coltan sales in 2008, a rise of 72% on the previous year, even though no coltan is mined within Rwandan borders.

Blood and Treasure

The tragic and often bloody conditions of the Congo is rarely out of the news and it is often commented upon . Socialist Banner read this about the Democratic Republic of Congo .

One of the world's richest countries is also one of its poorest.As far back as Congo's history is recorded, the wealth from this vast natural treasure house has flowed almost entirely overseas, leaving some of the planet's best-endowed land with some of its poorest people. It is often heard, "We wouldn't have so much trouble if we weren't so rich."

Gold is only one of a half-dozen or more lucrative minerals to be found in Congo, and together they constitute what may be the worst case on Earth of what has come to be known as the "resource curse" . As inevitably as oil drew the United States into Iraq, it is the temptations of this wealth—more than ethnic rivalries, the legacy of colonialism, or anything else—that has turned Congo into the horrific battleground it has been in recent years. A country with a lavish array of natural riches and a dysfunctional government is like a child heiress without a guardian: Everyone schemes for a piece of what she's got. Multinational corporations prefer a government weak enough not to tax and regulate heavily but strong enough to guarantee order.A failed state fails its people in many ways, and one of them is that, in a world of powerful corporate players, a weak and corrupt government has no bargaining power.

Congo has been in the grips of a fiendishly complex and brutal war whose exact toll no one knows. It may well be in the millions if you count those who died because fleeing their homes or living in packed, disease-ridden refugee camps cut them off from adequate food and medical care. Women and girls by at least the tens of thousands have been gang-raped by government soldiers and rebel militias. This has not been a civil war driven by ideology, but rather a multisided free-for-all driven by plunder.The warring militias assume that multinational corporations would have few scruples about dealing with warlords if the stakes were high enough. They turn out to be right.Congo has virtually no public health system, and AngloGold Ashanti,the world's third-largest gold mining company, a multinational company spending millions prospecting for gold in the desperately poor community, have largely ignored pleas for help.While spending millions of dollars prospecting, it has made only small contributions to a local hospital, schools, a soccer tournament, and the like, keeping at arm's length a coalition of local groups and churches lobbying for this desperately poor community. "Of everything we've put in our list of demands and grievances," says Richard Magabusini, an elected chief .
AngloGold Ashanti recently finalized a series of agreements with the government. Four other multinationals—based in London, Canada, and South Africa—have likewise concluded closed-door agreements over mining rights. No one will ever know what Congolese government officials may have reaped from these deals in the way of quietly promised jobs, favors, or money under the table, in a country where such rewards are routine. As the company takes its slice of the African cake, only a tiny percentage of the proceeds from those 2.5 million ounces of gold is likely to stay in Congo—and even then, much of what does will probably leak into high officials' private bank accounts.More than 97 percent of Congo's gold leaves the country without ever being taxed, according to one recent estimate by the Ministry of Mines. AngloGold Ashanti mined more than $1.5 billion worth of gold in neighboring Tanzania between 2000 and 2007, but only 9 percent of that money has remained in the country as taxes or royalties. Where do the profits go instead? A good chunk comes to the United States, for even though the company is based in South Africa, its largest single shareholder—hedge fund billionaire John Paulson—lives on the Upper East Side and summers in the Hamptons. He owns 12 percent of the company, and a number of other Americans have shares.

The big money in gold mining comes to those who can afford to dig massive mines and build refineries to process the ore. But those who cannot, an estimated 70,000 to 100,000 people in Congo's northeast—including some 10,000 children—dig for gold literally by hand, much the way men did in California in 1849. Sometimes, risking great danger in the hope of richer ore, these freelance miners slip into abandoned, partly flooded underground mines with rotted roof supports and hack out new tunnels. Health and safety regulations are in long-forgotten law books only, and no one even records the number of miners maimed or killed each year.

In the 60s, many Americans boycotted Californian grapes to help farmworkers unionize; in the '70s and '80s, many boycotted South Africa to help the anti-apartheid movement. In the late 1990s there was the push to ban "conflict diamonds," which led to the 2002 agreement, now signed by some 75 countries, to boycott diamonds produced by armed rebel groups in Africa and elsewhere. Shouldn't we help war-torn Congo by boycotting "conflict minerals"? Unfortunately, it's not clear that a boycott would do much more than put tens of thousands of miserably paid miners out of work. Take the rather toothless conflict diamonds accord (which came about only because the international diamond cartel saw "blood diamonds" undercutting its inflated prices): It already applies to Congo, but makes no practical difference since the country's diamonds, like the overwhelming majority of its other exports, don't come from areas currently at war.The real problem is not conflict minerals, but the fact that Congo's long-suffering people reap only a tiny share of their country's vast wealth.

Blood Diamonds - The Trade Continues

Problems are often swept under the carpet by supposed reforms and agreements and voluntary self-regulation . During the 1990s, diamonds were a significant factor in the civil wars that devastated Angola, Sierra Leone and Liberia. Nearly 4 billion dollars worth of diamonds are believed to have passed through the hands of the Angolan rebel group UNITA in the 1992-98 period. Since 2005 export of rough diamonds from Cote d'Ivoire has been banned by the United Nations due to violation of a ceasefire agreement between the Abidjan government and the New Forces guerrillas, which control the north of the country.

Yet the embargo does not appear to have prevented Ivorian diamonds from entering Europe. Last month it was reported that Belgian judicial authorities had confiscated 14 million euros (21 million dollars) worth of illegal diamonds of Ivorian origin. This was despite a screening system introduced by the Antwerp World Diamond Centre to block 'conflict diamonds' -- gemstones sold to fund a war effort.

"The borders of Cote d'Ivoire are porous," said Ian Smillie, research coordinator with Partnership Africa Canada, an independent group that works to build sustainable human development in Africa. "The borders of its neighbours are also porous. Diamonds don't stop in Burkina Faso, if that is where they are going. They all reach world markets in Europe, the U.S., Japan and India."

"..The diamond industry has failed to live up to its promise to create an auditable tracking system to ensure that diamonds are conflict-free." - Charmian Gooch, director of Global Witness