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

War - Economics by Other Means

Throughout the post-colonial period, internecine warfare—along with the poverty and underdevelopment that attend it—has been endemic to sub-Saharan Africa. The images are depressingly familiar: government forces fighting against armed rebel militias; terrorized, starving refugees fleeing for their lives; villages burned to the ground; women raped and men tortured.

Conflict seems to radiate from the continent’s heart. A 2001 Institute of Development Studies (IDS) report listed 28 sub-Saharan African countries that have been embroiled in some form of warfare since 1980, including Angola, Burundi, Chad, the Democratic Republic of the Congo, Ethiopia, Liberia, Rwanda, Somalia, and Sudan along with many others. Many have suffered fatalities in the hundreds of thousands along with the maiming and traumatization of countless victims. And then there is the broader toll. “Armed conflict,” observes the IDS report, “is arguably now the single most important determinant of poverty in Africa.”

In a 2001 study called The Political Ecology of War: Natural Resources and Armed Conflicts, researcher Philippe Le Billon analyzed the role of natural resources in armed conflict, both their scarcity and abundance. “The availability in nature of any resource is…not in itself a predictive indicator of conflict,” he wrote. “Rather, the desires sparked by this availability as well as people’s needs (or greed), and the practices shaping the political economy of any resource can prove conflictual, with violence becoming the decisive means of arbitration.” In other words, resource deposits themselves are not good predictors of conflict, but in an unstable political environment, resource markets can be.

In early November 2013, the militia group M23 surrendered after its defeat by the DRC army. Despite the general jubilation greeting this news, critics have warned that if no effort is made to address the root sources of violence in the eastern Congo—which include simmering ethnic tensions and a lucrative minerals trade—some other rebel group could easily arise in M23’s stead. In the DRC, the mineral that has up until recently fueled the war is called coltan, short for columbite-tantalite, from which tantalum is extracted. The tantalum capacitor is a stable and reliable component in smartphones, DVD players, laptops, hearing aids, and other devices. This has led critics of the mineral trade to lampoon smartphones as “blood phones,” a designation particularly aimed at the iPhone, although Apple is by no means the only guilty party. However, there are some indications that miners have switched to digging for gold, which has become much more profitable than the other so-called conflict minerals: tin, tungsten, and tantalum, known as the “three Ts.”

International markets for conflict commodities have often roped former colonial powers into resource wars directly. A case in point is Nigeria, where the entrenched hand of the British played a conniving role during the Nigerian civil war of 1967-1970. Charismatic Colonel Odumewu Ojukwu led the attempted secession of southeastern Nigeria, which was to be called Biafra. If successful, the breakaway would have cut the oil production of the Federal Republic of Nigeria in half. The military government in Lagos, headed by General Yakubu Gowon, was not the only one panicked over the potential loss of all that crude oil. So were the British, who went on to aid Gowon with a steady supply of weapons. Abetting Gowon’s food blockade of Biafra, the British contributed to the starvation of Biafrans. Images of skeletal, pot-bellied children shocked the world, but the position of the British was clear: “The sole immediate British interest in Nigeria,” wrote Commonwealth Minister George Thomas in August 1967, “is that the Nigerian economy should be brought back to a condition in which our substantial trade and investment in the country can be further developed, and particularly so we can regain access to important oil installations. While Britain supported Nigeria, France and other countries covertly supplied weapons to Biafra. Did oil cause the Nigerian civil war? No. But was it an important contributing factor? Certainly.

However, as much as the minerals may be in the thick of the conflict, they aren’t necessarily the immediate cause of these wars. Rather, complex social and political factors in the region, many but not all of them colonial legacies, create an environment ripe for the outbreak of wars in which the valuable minerals become a funding source for the combatants. Some of these factors include social inequality and ethnic rivalries (Tutsis and Hutus of Rwanda and the DRC); peacetime kleptocracy (Siaka Stevens of Sierra Leone); a lack of employment opportunities for young men; disillusionment with government; weak democratic institutions; and poverty itself.

David Keen, in the book Greed & Grievance: Economic Agendas in Civil Wars, makes the point that labels such as “ethnic hatred,” “mindless violence,” and “chaos” are applied chiefly by people who assume that the goal of any war should be victory. However, as Keen notes, sometimes the image of war serves as a smokescreen for the emergence of a wartime political economy from which rebels and even governments may be benefitting. Small wonder the warring factions may show little interest in negotiating a settlement. War for them is not just a continuation of politics by other means; it may be a continuation of economics by other means.

Full article here

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 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