Chiadzwa heist a giant step backwards
LAST month’s gemstone heist at the Chiadzwa diamond fields in Manicaland province has cast serious doubts over government’s commitment to transparency and accountability in the mining sector, as well as the country’s adherence to Kimberley Process Certification Scheme (KPCS) rules.
Gunmen in military gear breached security at the government-owned Zimbabwe Consolidated Diamond Company (ZCDC) mine on January 15, and dramatically escaped with an unquantified amount of diamond ore after overpowering security guards. The daring robbery has opened a can of worms, with questions being asked about government policy on the diamond mining sector.
Although the government has sought to downplay the incident, saying the gunmen only looted worthless material from a mine dump, the theft has amplified reports of the often chaotic extraction of diamonds in Chiadzwa, more than a decade after the state commenced the commercial extraction of the precious mineral.
“On 19th January there was an intrusion by unidentified people who entered into the Portal A mining area of Zimbabwe Consolidated Diamond Company,” Mines minister Winston Chitando said last week.
“They took with them some tailings from dumps. For the record, tailings are the residue of ore which would have been processed to extract diamonds and for which there is no value attached.”
A diamond rush in the eastern parts of the country in 2006 following the discovery of gemstone deposits was punctuated by incidences of murder, rape and smuggling of the precious stones. Zimbabwe’s diamond find, initially projected to satisfy 25% of world demand, suddenly turned out to be a poisoned chalice as countless reports of gross human rights violations in the area began to surface. And at one point, the gemstones were classified as “conflict diamonds” or “blood diamonds”, which cannot be traded on the formal market.
An intricate web of shady networks mushroomed, which saw the large-scale looting of the mineral, amid revelations by the then finance minister Tendai Biti, that murky companies licenced by the government to operate in Chiadzwa were short-changing the state through all manner of questionable activities.
In 2013, Biti’s successor, Patrick Chinamasa, also observed that Treasury had not received meaningful diamond revenue from the companies operating in the Chiadzwa area. A few years later, in 2016, Zimbabwe’s former president Robert Mugabe finally lifted the lid on the shady mining activities in Zimbabwe. He made startling revelations that the state had been prejudiced a staggering US$15 billion in potential revenue through the opaque operations of firms in Chiadzwa. This prompted the government to cancel the licences of the diamond mining firms, leading to the formation of the state-run ZCDC.
The involvement of the military in mining ventures with private investors has been roundly criticised for allegedly facilitating corruption on a grand scale. The military has been accused of spiriting away substantial revenue through murky operations in Chiadzwa, as well as brutalising villagers, particularly in 2008 when thousands of families were relocated from the lucrative diamond fields.
At the commencement of “formal” diamond operations in 2008, the military held shareholding in Anjin and Mbada Holdings, among other firms licensed to operate in Chiadzwa.
Although Zimbabwe attained KPCS certification after fulfilling the rules governing diamond extraction and marketing in the world, political analyst and senior consultant at the International Crisis Group (ICG) Piers Pigou has argued that the country still has a long way to go towards fostering transparency in its opaque diamond sector. The KPCS is a grouping of diamond-producing countries committed to stemming the trade in conflict diamonds.
“Good governance in the diamond sector, which includes tangible progress towards improved transparency and accountability, remains a key litmus test of the Zimbabwean government’s reform commitments.
The apparent failure of the government to respond to the preliminary investigations of the Mines and Energy parliamentary portfolio committee into missing Chiadzwa diamond revenues reflects a lack of prioritisation to appropriately regulate, notwithstanding the development of a new diamond policy,” Pigou said.
“As recommended by Global Witness last month, this should include publishing detailed information about all diamond mining-related revenue flows, disaggregated by company, year, and type of revenue stream.”
Prior to last month’s diamond robbery at the ZCDC plant, Global Witness, a human rights watchdog, noted that quarantining Zimbabwe’s controversial diamond industry would add impetus to the country’s ongoing re-engagement drive with the international community.
“The new government’s handling of the Marange diamond industry will be a clear indication of whether its commitments to economic reform and anti-corruption go beyond lip service. Opening up the diamond industry to public scrutiny will make it much harder for bad actors to permeate and devastate the sector and may give reputable investors and the international community confidence in the commitment of the new government to genuine reform,” Global Witness noted.
Centre for Natural Resources Governance spokesperson Simiso Mlevu contended that the continued presence of the military in the Chiadzwa diamond fields violated provisions of the KPCS, to which Zimbabwe is a signatory.
“Theft of diamond ore from ZCDC in Marange by members of the military exposes the government of Zimbabwe for negating the commitments it made in a joint work plan with the Kimberley Process Certification Scheme in Namibia in November 2009.
Zimbabwe made commitments to demilitarise Marange diamond fields, following an administrative decision (AD) that the country has to provide security and strengthen internal controls,” Mlevu said.
“The militarisation of diamond mining has opened avenues for looting and perpetuated human rights violations by the feared armed forces and ZCDC. Militarisation is the root cause of problems in diamond mining.”