Does Kimberly Process certification of Zimbabwe's Marange diamonds end the controversy?

After much controversy and contention, the Kimberly Process diamond certification scheme has lifted its sanctions on the sale of stones from the Marange diamond fields. This will have a significant effect on Zimbabwe’s battered economy, but the overall controversy over Marange is unlikely to end soon.

The current stockpile of Marange diamonds, said to be worth $2 billion, can now be sold openly on the international market, meaning that the effect of the KP decision for Zimbabwe could be significant and instant. 

The triumphant mines minister, Obert Mpofu, boasted, "Zimbabwe will no longer be begging for anything from anybody." That remains to be seen, but with estimated optimal revenue said to be a possible $1.5 billion per month, the Marange fields could indeed be a significant game changer for Zimbabwe.

The KP decision is a stunning victory for the government of President Robert Mugabe, although only time will tell if it will be as much of a benefit for the people of Zimbabwe. In winning the KP decision it long fought for, Mugabe’s government has overcome the significant opposition of Western members of the KP, as well as many Western and Zimbabwean NGOs that allege corruption and human rights abuses at Marange.

The U.S. abstained from the final vote, rather than vote against, because they said they feared the continuing impasse over the Marange diamonds would stall the international diamond industry. In other words, it was recognition of two things: the huge output of the Marange fields and the Mugabe government’s willingness to sell the diamonds outside the KP if certification were denied, which would throw a significant wrench into the world diamond industry. Clearly every stakeholder would prefer to avoid this.

The KP decision is therefore a significant diplomatic victory for the Mugabe government over its many powerful Western foes, the full implication of which will only become clear with time. One result is that the Mugabe government is going to become less worried about seeking recognition and acceptance from the Western governments that have long criticized and shunned it. The power of Western sanctions against Mugabe’s government will be significantly diluted, giving it more freedom of action than before.

Economic stabilization and recovery could significantly step up if the diamond revenues are properly accounted for and used wisely. This would entrench and strengthen a new economic order that the Mugabe government has quite deliberately set to bring about: one that is in all key sectors much less dependent than before on Western investment, input and influence that are considered potentially hostile and politically interfering.

The decision of Western governments in the KP to at least tacitly go along with certification for Marange diamonds represents a serious split in the coalition that had been arrayed against the Mugabe government. Western and some Zimbabwean NGOs are still bitterly opposed to certification, but they now no longer can count on the significant support of the governments of the U.S., Canada and others.

Yet the vocal opposition of the NGO groups had recently had little solid basis. If several hundred artisanal miners died during their brutal eviction by the Zimbabwean army from Marange in 2008, was there solid documentation of systematic, entrenched and on-going abuses? The Mugabe government has made Marange a mostly no-go high security area, but the failure of the NGOs to put any real meat to their charges increasingly weakened their opposition to certification. That opposition increasingly begun to appear as much about general anti-Mugabe politics as about concerns for the people of Marange.  

Mugabe’s ZANU-PF is in a governing coalition with the MDC party. The MDC finance minister, Tendai Biti, has been vocal in charging that the ZANU-PF mines minister, Obert Mpofu, has been grossly under-reporting revenue from the Marange fields.    

Said Biti recently, “The money we are getting from diamonds and the carats which are being extracted there are not in agreement. I won’t name the people, but the truth is some people are stealing.”

This kind of innuendo is widely believed by a Zimbabwean public suspicious of their politicians and convinced of their widespread corruption. Yet the kind of coyness about specifics displayed by Biti does nothing to put any serious pressure for malpractices in the diamond sector to stop. If you know the names of the thieves of the country’s diamond wealth and have proof, why on earth would you as finance minister not spill the beans one way or another? It’s not as if it has to be in a Cabinet  or Parliamentary statement.    

MDC parliamentarian Eddie Cross tried to give specifics to charges of the value of sales declared by the mines minister being undervalued, but it was the kind of speculative report which could not be used to specifically pin anything on anybody.

Despite these misgivings about goings-on at Marange by members of the MDC, as a  party it was in support of KP certification, further weakening the voices in favour of a continuing ban. Furthermore, MDC leader and Prime Minister Morgan Tsvangirai, like his ZANU-PF counterparts, seems to see diamond revenue as a way to placate restless civil servants, rather than primarily as a way to invest in Zimbabwe’s long funding-starved, struggling productive sectors. With that kind of thinking, diamonds could very much be more of a resource curse than a means to a significantly stronger economy.

So the KP opponents of Marange certification have capitulated to the reality of Zimbabwe’s sudden and significant influence in the world diamond sector. They  calculated that given the size of the Marange diamond find and its potential to upset the world diamond industry, it was better to appease Zimbabwe and keep it part of the KP than let it become a market-distorting loose cannon outside the certification body.

The certification opposed NGOs, it seemed clear, had many more bones to chew with the Mugabe government than just alleged abuses and corruption at Marange. Almost nothing was going to satisfy them enough for them to be happy about green lighting the diamonds.

The certification compromise includes oversight and reporting of conditions at the sprawling Marange field by the KP and civil society groups, but a government determined to carefully proscribe this process would have little trouble doing so. Besides, after having gained full control of Marange, the Mugabe government no longer has the incentive of continuing with human rights abuses on the scale said to have taken place in 2008, particularly when it is under the international spotlight as  currently. It is difficult to escape the suspicion that the alleged abuses of 2008, terrible as they were, were being used to prevent the certification of Marange diamonds in 2011, which was not a tenable position for opponents to take.

The KP could clearly not sustain a ban on the sale of Marange diamonds without doing itself serious harm. For the Western opponents of Marange certification to reluctantly agree to it was simply to accept an uncomfortable truth about Zimbabwe’s potential to severely upset the global diamond market. But that the go-ahead for the sale of the Marange diamonds has been given more or less on Zimbabwe’s terms means that little of the controversy will have been settled, and aggrieved interest groups will likely try to find other ways to settle their various scores with the Mugabe government.  

Issues of internal corruption are beyond the scope of the KP to do anything about, even if in theory its oversight should make it easier to tally the figures of carats mined versus revenue reported to the government. The reality is that certification on its own will likely have little or no immediate effect on whatever ‘stealing’ is taking place.

The expectation of bringing sanity and open-ness to the diamond sector when such transparency hardly exists in any other area of Zimbabwean life was perhaps unrealistic to begin with. Such transparency can not be imposed by a relatively weak and powerless foreign system like the KP. It will have to come about as part of the overall, on-going internal struggles to bring about a fundamentally different society than that which obtains in Zimbabwe today. The work of bringing accountability to the diamond sector does not end because the country’s biggest diamond field has won KP certification.

So corruption and ‘stealing’ will likely continue in Zimbabwe’s diamond sector, but this is not to say that the country will not also benefit from its diamond wealth. Even if it is a long time before the country’s diamond sector can be said to be ‘clean,’ the country’s ability to sell its precious stones on the open market is a very significant economic development.

The Zimbabwe Review