In the beginning of November, a high-profiled Kimberley Process meeting in Israel decided that the export ban on Zimbabwean diamonds would not yet be lifted. The Kimberley Process regulates the international diamond trade and especially aims at preventing "blood diamonds" reaching world markets.
Zimbabwe had been blacklisted as a diamond exporter last year over systematic human rights abuses in the diamond mining industry and due to the alleged control of President Robert Mugabe’s ZANU-PF party of the industry.
At the Israel meeting it was noted that, while Zimbabwe had made progress in some areas, further work was still required on key elements including demilitarisation, smuggling and the legalisation of small-scale mining. The plenary discussions on diamonds from Zimbabwe’s Marange mining area ended without agreement following four days of negotiations.
The discussion to a large degree was based on a report by the Kimberley Process’ responsible for monitoring Marange, South African businessman Abbey Chikane. Mr Chikane had earlier been implicated in the arrest of diamond researcher Farai Maguwu, who had played a pivotal role in exposing the rights abuses at Marange.
This week, it was known that the same Mr Chikane, still attached to the Kimberley Process, has acted on his own behalf, issuing Kimberley certificates for a large number of Zimbabwean diamonds.
According to the pressure group Partnership Africa Canada (PAC), Mr Chikane had returned to Zimbabwe on Friday 12 November and immediately certified all production from two controversial mining concessions, "including millions of stockpiled diamonds."
Mr Chikane’s actions took place "without the authorisation or sanction of the Kimberley Process," according to PAC. Industry sources had confirmed that the diamonds, worth an estimated US$ 160 million, have already been sold to four Indian buyers. The controversial gems probably already have arrived the Indian state of Gujarat, which now cuts and polishes 90 percent of the world’s diamonds.
After the Israel meeting, Zimbabwean authorities have already threatened to openly defy the Kimberley Process and export its diamonds despite the international ban still being in place.
Bernard Taylor of PAC says the large-scale export of Zimbabwean diamonds would be "an unprecedented and serious breach of Kimberley Process standards." He urged Kimberley Process members to send "a clear and unified message to Zimbabwe that they will not accept these illegal exports. The entire credibility of the Kimberley Process as a mechanism to stop the trade of conflict diamonds is on the line."
"The Kimberley Process is at a crossroads. Either we unite in the face of such blatant disregard for the rules, or we allow ourselves to be bullied into irrelevance," added Nadim Kara of PAC. "Zimbabwe must operate within the Kimberley Process, or the diamond industry will go back to the anarchy and chaos of the 1990s."
The pressure group demanded the Kimberley Process to "nullify the certificates Mr Chikane issued and notify all diamond trading countries that any shipments would be in violation of Kimberley Process standards."
Kimberley Process participants remain banned from trading diamonds from the Marange region of Zimbabwe, organization officials warned today.
The notice, issued by the office of KP chairman Boaz Hirsch, comes amid news that the KP monitor for Marange, Abbey Chikane, was certifying diamonds without the organization’s approval. However, it is not clear whether those diamonds have actually left Zimbabwe at this time.
Marange diamonds remain banned by the KP under a Joint Work plan negotiated last November. In an agreement reached in July, the country was allowed to export two shipments of gems, but a recent Plenary in Jerusalem ended without an agreement on further exports.
“Participants [are asked] to notify the [Working Group of Monitoring] chair in the event of receipt of an irregular shipment of Marange diamonds, until new arrangements are agreed,” the letter said. “It is of utmost importance that all Participants remain vigilant and ensure that the terms of the Joint Work Plan and Saint Petersburg agreement are respected.”
The letter noted that negotiations with Zimbabwe are ongoing, and added, “I am confident that we will find a consensual way forward which recognizes the progress made by Zimbabwe in terms of compliance with KP requirements, whilst offering sufficient reassurance that there would continue to be progress in all areas under the Joint Work Plan, so that we can eventually bring the whole of Marange – and indeed Zimbabwe as a Participant – into full KP compliance.”
NGO Global Witness has asked diamond industry organizations to issue a similar statement.
Meanwhile an international insurance and courier firms remain reluctant to insure or ship Zimbabwe’s controversial Marange diamonds to Europe and the United States even when the gems were certified clean by the Kimberley Process (KP), a diamond consulting firm has said.
The Tacy Ltd Diamond Industry Consultants said in its Diamond Intelligence report that “profound reputational problems” and Western financial sanctions on some top Zimbabwean officials and firms linked to the Harare government all combined to dissuade insurers and courier firms from handling the Marange gems.
The Tel Aviv-based diamond consultancy said unwillingness by transporters and insurers to move Marange stones to Europe and America or to cover such shipments meant Dubai and Mumbai will eventually become the main destinations for the gems and their entry points onto the international market.
“Mumbai and Dubai will gradually emerge as the near automatic point of entry of Marange goods,” the firm’s principal consultant Chaim Even-Zohar said in the report.
Zimbabwe has been trying to regain the confidence of the international diamond industry following the controversy sparked by human rights abuses allegedly committed by the army at the Marange fields to the east of the country.
But key Western diamond players have banned stones from the controversial fields, even after the KP that regulates the diamond industry cleared mining operations at Marange and authorised Zimbabwe to auction diamonds in August and September.
The report said courier firms were “hesitant or unwilling” to ship diamonds from the two Harare auctions partly due to lack of preparations and because of uncertainty over the legality of handling the Marange stones.
The firms were also put off by the fact that there remains uncertainty over security of making transfer payments to and from Zimbabwe, with several international banks still reluctant to do business with the southern African country, said the report.
“Not all banks are open to conduct business with Zimbabwe,” the report said. “This goes beyond sanctions. Business with Zimbabwe has profound reputational problems that are not easy to ignore.”
It said insurance giant, Lloyds Underwriters, refused to insure the Marange gems because it did not want to be associated with the stones that human rights groups and some Western governments still insist are virtually blood diamonds because of human rights abuses said to be continuing at the mines.