Africa: ‘Blood Diamond’ Regulation System Broken

Khadija Sharife

28 July 2011

The recent regulatory approval of Zimbabwean diamonds for sale reveals deep flaws in the system, writes Khadija Sharife.

The recent approval of Zimbabwean diamonds mined from the US$800 billion Marange fields, by the Kimberley Process (KP) chair, the DRC’s Mathieu Yamba Lapfa Lambang, has prompted a global ‘human rights’ outcry with KP members such as Canada, the EU[1], and US claiming there was ‘no consensus’.

Meanwhile, others like China (the world’s fastest growing diamond consumer market), and India (cutting and polishing 11 of 12 stones) have all given the green light to Zimbabwe, removing any potential problems of surplus minerals from Marange – described by Zimbabwean Finance Minister Tendai Biti, as ‘the biggest find of alluvial diamonds in the history of mankind.'[2]

With potential revenues pegged at US$1 – $1.7 billion annually[3], the support of neighbouring governments like South Africa, another major diamond producer, and ‘host’ country to 3 million Zimbabwean political and economic ‘refugees’, is not surprising. Nor is the potential KP rupture being shaped as a battle between politically ‘interfering’ Western nations and cash-starved developing nations.

That Zimbabwe’s diamonds are mined under the direct surveillance of the country’s vicious military, controlled by brutal lifetime dictator Robert Mugabe, is not in question. Since the discovery of Marange’s diamonds in 2006, the military has largely supervised mining; mass looting by political, corporate and military elites has occurred accompanied by violent displacement and human rights violations; companies based in secrecy jurisdictions such as Mauritius and Hong Kong have been granted ‘due diligence’ approval; and there exists complete opacity over volumes extracted, exported and sold.

But to what extent does the vehement opposition stem from political objections to a nation controlled by the blatantly anti-Western Mugabe? More broadly, was the KP system – propagating that less than 1 per cent of global diamonds constitute ‘blood’ minerals – built for the purposes of eliminating corporate and state-sanctioned exploitation – or normalising and sanitising it?

GOVERNMENTS GIVEN A FREE PASS

Arguably the best thing about the much-lauded and oft-applauded Kimberley Process (KP) system, an international initiative – created and backed by governments, multinationals, and civil society organisations to diminish the trade in conflict or ‘blood’ diamonds – is that the KP’s very definition of blood diamonds, by default, excludes the world’s primary agents of ‘conflict’: Governments. It also excludes the private mining corporations that partner up with the governments in developing countries to extract the diamonds.

By default, the KP’s definition excludes Zimbabwe as a ‘conflict’ agent.

According to the KP, ‘Conflict diamonds means rough diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments.’

This definition, spurred by the investigative research of two NGOs – Global Witness and Partnership Africa Canada, was largely structured around two primary cases: Angola’s brutal opposition movement UNITA under Jonas Savimbi, using resources as a ‘portable wealth’ fuelling the 27 year conflict with the MPLA government; and Sierra Leone’s civil war-for-resources, facilitated and backed by neighbouring Liberian warlord Charles Taylor. Both cases, evidencing violent exploitation of alluvial diamond fields, were identified as rebel movements striving to undermine the governments of Angola and Sierra Leone through the control of key mines.

Marginalised were the key roles that ‘governments played in initiating and sustaining both conflicts: as much as 70 per cent of Taylor’s official war-chest – financing the rebel movement in Sierra Leone, for instance, was supplied by major Western multinationals, with the assistance and blessing of the US government, via Liberia’s maritime ‘tax haven’ registry, operating from the US state of Virginia, just outside Washington. The registry, known as the LISCR, peddles Liberia’s flag (ie: corporate registration) for a small fee (US$713), in exchange for zero tax and a host of other secrecy services. Liberia’ – through their US base – hosts over 11 per cent of global maritime trade, and represents one of the world’s top two ‘flags of convenience’ (FOC).

During a lawsuit at the US Supreme Court, it was stated, ‘Taylor’s oversight of LISCR is so tight he acts in effect as one of LISCR’s senior partners, and is intimately involved in all aspects of management, personal assignments [and] distribution of funds, salaries and foreign offices… Taylor received a substantial piece of LISCR’s revenue–up to one-third.’

No matter. ‘LISCR has always cooperated with, and received support from, the US State Department,’ stated key LISCR figure Yoram Cohen.

Meanwhile, the US’s political, financial and military support for Angola’s Savimbi – described by US President Ronald Reagan as a ‘freedom fighter’ (though a US diplomat countered that he was ‘pure evil’) was not only in partnership with South Africa’s apartheid regime, which also financed Savimbi in addition to military strikes on the MPLA government, but continued long after the MPLA was recognised globally as Angola’s legitimate ruling party. The three decade long conflict – wiping out 330,000 children from 1980-1988 alone [4], costing US $30 billion during the same period[5], was directly fueled by Angola’s vast diamonds. The landmark Fowler Report (2000)[6] claimed UNITA could easily wash diamonds through official channels.

DE BEERS FUNDS AFRICAN CONFLICTS

While the KP definition of ‘conflict’ diamonds makes no mention of state-sanctioned human rights violations and conflict waged by ‘legitimate’ governments – in both cases, the US government played a key role undermining legiitmate governments, so too does it elide the role of corporations, chiefly De Beers – controlling 70 per cent of the rough diamond market, in facilitating and sustaining conflict as buyers.

Between 1992-1993 alone, De Beers was known to have purchased between US$300 – $500 million[7] in diamonds from UNITA. The Fowler Report claimed that in 1999[8] – around the time Global Witness began drawing attention to the subject, De Beers ceased purchasing diamonds directly from Savimbi (labeled by the AU as an ‘agent of apartheid South Africa) or via potential third parties. The combination of a democratic South Africa and the loss of De Beers direct support destroyed UNITA’s political and financial foundation.

Savimbi himself would be killed soon after – the same year, the Kimberley Process certification system was formally adopted.

For their part, African governments – including many tinpot regimes, are all too happy with the KP system primarily requiring self-regulation on the part of governments. The deliberate simplification of ‘conflict’ resources as non-state, apolitical, and marginal to the global architecture, intentionally locates it against a specific backdrop delinked from the forces of supply and demand-side corruption.

Life in Angola under the helm of lifetime dictator Dos Santos, for instance, is militaristic, brutal and grossly corrupt. As quickly as the billions from diamonds and oil – constituting 99 per cent of exports, are generated, a significant portion is looted.

Yet the KP’s narrow definition of conflict diamonds, and the system of compliance, enables the regime to ‘self-regulate’ what constitutes the taking and spilling of ‘blood’- be it an economic, political, or physical conflict. It also enables corporate buyers, such as De Beers, and the company’s main Africa rival, the Lev Leviev Group, also connected to the CIF, to purchase diamonds produced under Angola’s dictatorship, with a clean and clear KPCS certificate.[9]

Resource-rich Namibia, overflowing with diamonds and ruled by a one-party state – SWAPO, since liberation, is corrupt, maldeveloped, and anti-democratic. Botswana too, packaged as a shining democracy, is controlled by one political party for more than four decades, and shares the same characteristics with Namibia.

For the KPCS system, coming into effect in 2003, a forced peace is no different from a democracy.

But while the KP system compliments the undermining of democracy and widespread looting in African nations by allocating the right of identification to regimes, the marginalisation of Zimbabwe is perceived as motivated by decisions unrelated to human rights violations. Moreover, the KP system does not even explicitly articulate a human rights provision, preferring to focus on, and protect, the rights of governments.

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