Zimbabwe linked to $200-million sale of ‘blood diamonds’

In defiance of international rules, Zimbabwe secretly sold more than $200-million in illicit diamonds to foreign buyers this year, funnelling the money through three banks that are partly owned by Western shareholders, a leaked document suggests.

The document, obtained by an Ottawa-based organization, states that the large cache of Zimbabwean diamonds did not have an internationally recognized certificate from the Kimberley Process, the global watchdog on the sale of “blood diamonds.”
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The gems were mined from the notorious Marange diamond field, where human-rights groups have documented the killing or torture of many Zimbabweans by the soldiers and security guards who control the fields.

“It shows that Zimbabwe, and those that bought these stones, were willfully in breach of a universally respected ban on Marange stones,” said Partnership Africa Canada, an independent Ottawa-based organization that helped establish the Kimberley Process.

In a separate report on Tuesday, another group said it had documented a continued wave of violent attacks by those who control the Marange diamonds. Over the past six months, dozens of small-scale miners at the diamond fields have been shot or beaten by guards or attacked by guard dogs, according to the report by Human Rights Watch.

“These acts were particularly brutal and barbaric,” said Tiseke Kasambala, a researcher at Human Rights Watch. “I spoke to the miners and saw the scars and wounds on them.”

The Marange diamond fields are among the richest in the world today, but most of the revenue never reaches the Zimbabwean treasury. The Zimbabwean Finance Minister, Tendai Biti, complained this year that $300-million in diamond revenue had not arrived in the government coffers.

Instead, analysts say, most of the money goes into the hands of the Zimbabwean military and the political party of the long-ruling president, Robert Mugabe. There are widespread concerns that the diamond revenue could make it easier for the military and Mr. Mugabe to gain control of the next Zimbabwean election, as they did in the last election in 2008.

“The money is going into private pockets,” said Farai Maguwu, director of the Centre for Research and Development in eastern Zimbabwe, who has investigated the Marange diamonds for the past three years.

“The diamonds have brought more sorrow than joy to the people of Marange,” he said. “They’re a curse to Zimbabwe, not a blessing.”

Mr. Maguwu was arrested by Zimbabwean authorities last year, just two days after he met an investigator from the Kimberley Process to discuss the diamond situation. He was held in detention for 40 days on charges of “communicating falsehoods.”

Though he was eventually released, the police harassment has continued. Last week, he said, three of his staff members were detained when they tried to provide medical assistance to the victims of assaults and dog bites at the diamond fields.

The Kimberley Process, which represents 75 nations, aims to prevent the trade of “blood diamonds” that fuel wars around the world. It has imposed restrictions on Zimbabwe’s diamond exports since 2009, following reports that the Zimbabwean military had killed more than 200 small-scale diamond miners at the Marange fields.

Last year, several temporary sales of Zimbabwean diamonds were permitted by the Kimberley Process. Its current chairman, Mathieu Yamba of the Democratic Republic of Congo, announced in March that Zimbabwe could export its Marange diamonds, but most of the world’s biggest diamond-trading and consuming nations did not accept the decision.

The leaked document, obtained by Partnership Africa Canada, shows that Zimbabwe offered $201-million in diamonds to foreign buyers on March 17 – two days before Mr. Yamba announced that Zimbabwean exports would be permitted.

The document specifies that the buyers should transfer their payments to any of three Zimbabwean commercial banks. Shareholders of the three banks include some of the world’s best-known financial institutions, including Barclay’s Bank and the investment arm of the World Bank.

Although the document does not indicate who purchased the diamonds, there is no question that the diamonds would have been snapped up by foreign buyers, as happened with all previous Zimbabwean sales, according to Alan Martin, research director at Partnership Africa Canada.