FUNDING OPPRESSION? The report raises concern that diamond money is secretly financing institutions responsible for oppressing the Zimbabwean people
The political elite and security forces have taken control of and secretly exploited Zimbabwe’s once promising diamond sector, while concealing the scale of the loss from its people, a new report from international watchdog organisation Global Witness reveals.
The report, titled ‘An Inside Job’, examines five of the major mining companies that recently operated in the Marange diamond region, in the east of the country. The report shows how companies have concealed their finances and shielded their operations from public scrutiny, hiding significant stakes in these companies held by the country’s spy agency, the Central Intelligence Organisation (CIO), the Zimbabwe military and government itself.
Global Witness says that this raises concerns that diamond money is secretly financing institutions responsible for oppressing the Zimbabwe people.
Alongside the report, Global Witness has released a never-before-shared map, finally revealing the details of company concessions in Zimbabwe’s Marange diamond fields. It has also produced a short film featuring members of local communities describing the impacts of Marange diamonds on their lives.
The organisation contends that “very little” of Zimbabwe’s diamond wealth has benefited ordinary people. It notes that, since 2010, Zimbabwe has officially exported about $2.5-billion worth of diamonds, according to official figures from the Kimberley Process. Limited available government reports show only around $300-million of this can clearly be identified in public accounts.
“A find that offered such promise to the people of Zimbabwe has delivered only disappointment, primarily serving a secretive cabal of vested political and economic interests. There are clear indications of State complicity in the expropriation of these critical resources,” states Global Witness conflict resources campaign leader Michael Gibb.
He remarks that, given how opaque and secretive the sector is, what the organisation has uncovered is likely just one symptom of a much wider problem. Gibb emphasises that the people of Zimbabwe deserve to know how much has been made from their diamonds, and where it has gone.
Gibb highlights that mismanagement of the diamond sector has had “devastating consequences” for Zimbabwe’s development and democracy. He says that not only have diamonds failed to benefit the Zimbabwe people, but evidence suggests that they have also funded the State machinery consistently implicated in oppression.
“This casts serious doubt on President Robert Mugabe’s claim that private investors are solely to blame for billions of dollars of missing diamond revenues,” the report states.
Key Findings
Secret documents indicated that the CIO is believed to have a stake in a Marange diamond mining company, Kusena Diamonds. The company’s diamonds have been traded in Antwerp and Dubai, circulating freely on international markets, despite the risk they may have funded human rights violations. This may be set to continue, with the company now merged into the new, government-backed mining company, Zimbabwe Consolidated Diamond Company (ZCDC).
The report notes that Zimbabwe’s military entered into a partnership with a Chinese investor to establish a diamond mining company called Anjin Mining. Evidence indicates Anjin’s diamonds were likely sold in Antwerp in violation of European Union sanctions against another of the company’s owners, linked to the Zimbabwe military.
Mbada Diamonds held the largest concession in Marange, yet the owner of a 25% stake in the company has remained a secret. Global Witness says it has found evidence to suggest that Robert Mhlanga, a retired member of Zimbabwe’s security forces and a strong ally of the ruling party and the President, “stands behind the hidden share”.
The Diamond Mining Corporation was formed as a joint venture (JV) by the government of Zimbabwe with a private investor, despite evidence that the individuals behind the company were involved in extensive smuggling of Zimbabwe diamonds for several years before obtaining a licence.
He notes that these revelations come as Zimbabwe gears up for elections in 2018 and the ruling party teeters on the brink of a divisive presidential succession struggle.
“Institutions and agencies named in the report have played significant roles in subverting Zimbabwe’s democracy and perpetrating serious human rights abuses at key points in the country’s tumultuous political history.”
Gibb says that undisclosed stakes in the country’s diamond industry have provided an off-the-books source of funding for their activities, undermining essential public oversight and scrutiny. The diamonds said to be responsible for funding these abuses continue to be traded relatively freely on international markets.
“Zimbabwe’s diamonds perfectly illustrate the limitations of current efforts to disrupt the sale of diamonds funding human rights abuses and conflict. Zimbabwe’s diamond sector needs ‘root and branch’ reform and diamond companies the world over must take responsibility for the hidden history of the resources they profit from,” Gibb asserts.
Further, Gibb says that Zimbabwe’s diamond sector is at a crossroads. An overhaul of the industry has started with the expulsion of the JV companies from the diamond fields and the creation of the ZCDC. However, he notes that the secrecy that has characterised the sector to date shows no signs of abating.
The report states that, without a complete overhaul of the industry, founded on transparent and accountable governance, the pattern of diverting the country’s mineral wealth is likely to continue.
“The Zimbabwe people deserve better. With nearly three-quarters of the population living below the poverty line and an estimated four-million people in need of food aid, the need has never been greater,” concludes Gibb.