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My Take Always from the All Stakeholders Diamond Indaba

By Shamiso Mtisi

Deputy Director for Zimbabwe Environmental Law Association (ZELA) and Coordinator of KP Civil Society Coalition   

Despite years of working on diamonds, this is my very first blog profiling my observations and points of reflection in monitoring a highly sensitive diamond industry. This is a sector where one meets the rich, the famous and the dishonest from global diamond producing, transit, and trading countries. My observations are further informed by numerous visits to rough diamonds producing and trading countries, including stories of despair and hopelessness from impoverished communities in diamond mining areas. This is the first in a series of articles reflecting on my experiences. I will start with my beloved country-Zimbabwe with the 4th All Stakeholders Diamond Indaba held on the 6th of November 2019 in Mutare.    

Wearing two hats, that of ZELA and the Kimberley Process Civil Society Coalition, I was a panellist at the Indaba organised by the Zimbabwe Consolidated Diamond Company (ZCDC). Other attendees were Government officials, Minister of State for Manicaland, ZCDC Board members, state security agents (police and military), the Joint Operations Command (JOC), private security companies, traditional leaders, communities and civil society groups. To those familiar with Zimbabwean social, economic and political set up, this is a delicate, intricate and complex platform to navigate. However, I have been through similar situations and attended similar events without major incidences. The primary aim of the Indaba was to identify challenges, discuss ideas and solutions to address problems in Marange. Thanks to ZCDC for organising the Indaba. Definitely for ZCDC, this was an opportunity to clean its battered image and legacy issues coming a few weeks after the announcement of further restrictions by the US Customs and Border Security Department on Marange diamonds.  In recent months, possibly in pursuance of the Zimbabwe is open for business agenda, the Ministry of Mines and ZCDC appear to be on a charm offensive to win over foreign and local friends and investments. I looked at the Indaba from that perspective and think it should be maintained.   

I made a presentation on Responsible Mining and Sourcing – a topic I have grown interest in due to my interactions with rough diamond and jewellery industry players involved in promoting responsible sourcing practices in the OECD. My presentation highlighted that the event was good for finding solutions to make diamonds sustainably deliver value and sparkle for Zimbabwe and Marange communities. My presentation challenged ZCDC to do better on local community development and leave a good legacy and positive developmental footprint in Marange. This could be a solar farm for renewable electricity, a dam, a major road or such other big infrastructure project that creates employment, promote community and national development and enjoyment of rights. That is what sustainable mining is all about – creating lasting value for the community while extracting the resource in an environmentally sound or responsible manner.

In my presentation I referred to a recent report by the KP Civil Society Coalition titled “Real Care is Rare: An On-The-Ground Perspective on Blood Diamonds and the Fifth ‘C’,” which highlights systemic failure by Governments and the diamond industry in the Kimberley Process to curb human rights violations, ethical concerns, environmental harm, and forced displacements of communities. The report profiles ethical concerns with mining practices in Lesotho, DRC, Tanzania, Angola, Sierra Leone and Zimbabwe and collusion by trading countries such as India and the United Arab Emirates. I further indicated that the global diamond industry should embrace and religiously apply responsible mining and investment practices underpinned by due diligence approaches across their supply chain through the System of Warrantees, including making efforts to apply it to the operations of smaller industry players operating in many African countries. This means assessing, detecting and addressing potential negative impacts and risks associated with direct or indirect diamond mining and trading activities, no matter how far removed from consumers or mining affected communities a diamond supply chain actor might be. The diamond industry has been negatively affected by new forms of conflicts. The risks in the sector are many, but so are the opportunities for reform. 

I cautioned ZCDC, Government and the Security services against taking for granted the ethical needs, concerns and interests of millennial and Generation Z consumers, whose lives are being largely shaped by the internet of things and social media. The consumers of jewellery made from rough diamonds may seem far removed from the diamond value chain by their geographical location in the United States, India or China – which are the largest markets, but any negative online image of rough diamonds mined in Africa or any other part of the world associated with violence, child labour, environmental damage, corruption and illicit financial flows will register as unethical and blood diamonds that should be shunned in the minds of millennials and Generation Z consumers.

Such consumers will end up preferring synthetic or lab grown diamonds at the expense of rough natural diamonds. Naturally, losing the trust of millennials and Generation Z consumers means loss of the market and profit for the diamond industry and in turn loss of value for natural diamonds. African economies reliant on rough diamond production will most likely be the hardest hit in an age looking for alternative and ethical products. This means African natural diamond producing countries will lose their market share to cheaper lab grown diamonds, a large number of which are allegedly being produced in China. Therefore, China appears to be playing double standards by rallying behind African states in resisting expanding the definition of conflict diamonds to enable the Kimberley Process to investigate and take action against cases of systematic or widespread violence or human rights in diamond mining areas. Yet this is affecting the image of natural diamonds in the eyes of millennials and Generation Z consumers. Again, it can be argued that China stands to benefit from both a rise in massive industrial production of synthetic or lab grown diamonds or from cheap natural diamonds whose value will go down. The same double standards approach is being applied by India. India wants massively cheap and undervalued diamonds from countries affected by allegations of human rights abuses for its huge cutting and polishing industry in Surat. De Beers is also producing synthetics and has pushed into the market what they term the “light -box”’- a much cheaper version of synthetic diamonds.  Unwittingly, in the Kimberley Process, many African states are blindly resisting a change or expansion of definition of conflict diamonds to include cases of systematic or widespread that include abuses that occur and affect a large number of people or take place over a prolonged period of time. This does not include  single or isolated incidences of abuse or violence. On that basis, I implored Zimbabwe’s diamond industry and Government to support reforms on expanding the Kimberley Process definition of conflict diamonds to include cases of systematic and widespread violence to enable the KP to move with the times.  Zimbabwe will benefit from supporting the KP to reform and in the same vein clean the tainted image of Marange diamonds in the eyes of consumers.

From the Diamond Indaba discussions and questions from the floor, I took down some issues I thought were surprises and take always as follows; 

  • Human Rights Training for ZCDC: In September 2019, using its own resources and experts, ZELA conducted a human rights training for ZCDC managers and field officers at the mine site in Marange. The primary objective was to help inculcate a culture of corporate accountability, responsible mining and respect of human rights at ZCDC following many reported cases of abuse of villagers and artisanal miners by private and public security agents. ZELA plans to conduct another human rights training for ZCDC private security guards before the end of 2019. This approach is meant to assist ZCDC security and state security to apply internationally accepted law enforcement standards and minimum use of force when apprehending illegal miners and dealers in Marange. 
  • Refusal by Audit Firms to investigate human rights violations in Marange: A rather disturbing revelation by ZCDC was that following invitation and acceptance of a tender for investigation of previous cases human rights violations in Marange, on 3 occasions, the selected international audit firms refused to conduct the investigation for unknown reasons. ZCDC left everyone to guess what the reasons could be. This left me and possibly others, speculating that it might be a reputational issue. International Audit firms may not want to be associated with Marange, despite the efforts of ZCDC to clean its image for the 4 years it has been operating in Marange. For me, if ZCDC wants to move forward on this, it can easily call on the Zimbabwe Human Rights Commission (ZHRC) to assist and investigate such cases. Such an investigation and prosecution of offenders will help bring sparkle to Marange diamonds.
  • More than 3000 illegal miners arrested by October 2019: TheZCDC Chief Security Officer informed the Indaba that more than 3000 illegal diggers and dealers were arrested in Marange since the beginning of the year, including some local villagers and others from around the country. It was also revealed that some illegal miners now live with villagers in Marange or rent houses at shopping centres. ZCDC accused villagers of harbouring illegal miners thereby creating risks for themselves. Criminality and cases of fights amongst illegal miners or with villagers are also on the rise. This situation calls for institution of a community-based security monitoring in Marange. This is how the community can protect itself. The Government should seriously consider a framework to enable illegal miners to operate lawfully. In addition, fencing of diamond mining concessions must be prioritised, while respecting the rights of communities living within or closer to the concessions access pastures, cultural sites and other services. The views and consent of communities should be respected while adequate compensation is paid in cases of relocation. These measures can help clean the image of Marange diamonds.  
  • Sponsored Illegal Miners: The ZCDC Chief of Security Officer informed the meeting that some illegal miners are sponsored by diamond dealers or syndicate managers. Syndicates are still alive in Marange. This is a matter that should be investigated to curb illicit digging and trading of diamonds from Marange. This can go a long way in cleaning the image of Marange diamonds.
  • Debate on benefit sharing: Traditional leaders versus the People: A heated debate ensued pitting community members and traditional leaders after traditional leaders appealed to ZCDC to provide them with benefits first before everyone else in the community. The idea was challenged by a community member who argued that benefits should go to the people first before individual traditional leaders and their families. There is clear loss of trust in some traditional leaders by the people. The tension appears to be fuelled by ZCDC’s Corporate Social Responsibility approach which throughout the meeting showed a bias towards completion of projects for traditional leaders. Projects that benefit the community at large are certainly preferable and ZCDC should focus on such projects. ZCDC’s current approach may further create a wedge between the people and traditional leaders in Marange and endanger its social license to operate.
  • Allocation of a Community mining Concession in Marange: The Minister of State for Manicaland revealed that Government has agreed to award a mining concession to the community through a community company called Katanga. The concession will be financed through a Joint-Venture with a London Stock Exchange listed company – Vast Resources. While this is an important development for the community, my view is that the process should be transparent, consultative, and inclusive. Otherwise the concession may suffer the same fate as community share ownership schemes.
  • First ZCDC Annual Reports for 2016 and 2017:  After 4 years of operating, the ZCDC Board held their first Board meeting in August 2019. This admission was surprising and shocking. The Board considered Annual Reports for 2016 and 2017 and these will be the first annuals reports to be produced by ZCDC. On this point I emphasised the need for ZCDC to publicly share the Annual Reports, including Audited annual reports that includes disaggregated data on production and revenues for public information. It will also be good practice for ZCDC to give an indication of loans, contracts signed and funds raised and how they have been utilised. This will help build public confidence in light of the legacy of associated with Marange diamonds.
  • ’Zimunya-Marange Community Ownership Scheme constructing Ruins’’: One of the tragic but comical issues raised during the Diamond Indaba was a statement by Chief Marange that the Zimunya-Marange Community Share Ownership Trust was constructing ruins in some villages of Marange using US$5 million donated to the Trust by ZCDC in 2018. This is because the funds were wiped out by inflation and most of the projects (clinics and schools and community centres) still under construction are not likely to be finished due to lack of funds before the rains set in. Given the quality of materials and bricks used, they are likely to crumble and become ruins. ZCDC should urgently inject some funds to finish the projects.
  • Notable developments since the Last Diamond Security Indaba: ZCDC presented a list of projects and programmes selected for implementation from a long list of community and civil society demands during the last Indaba in June 2019. Notable ones included the Human Rights training for ZCDC managers and mine officials by ZELA, adoption of ISO14001 Environmental Management Systems by ZCDC, holding of the first Board meeting to consider Annual Reports for 2016 and 2017, construction of courtyards for Chiefs, drilling of a borehole and holding of training workshops for security guards on gun handling. 

In conclusion, I firmly believe that Zimbabwe should not look too far in finding solutions to the low market valuation of Marange diamonds. The country can go a long way in addressing this by dealing with issues within its own courtyard. The political will is the starting point and most important one.

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