A Game of Stones

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The dealer knows his audience. He is speaking to an opportunist. Where others see conflict, instability, and chaos, he sees a business opportunity. 

“If you come, you are going to see stones. Maybe if you are lucky, a stone will catch your eye” another dealer beckons.² All that remains is to find a way to move the valuable stones out of the war-stricken country.

To do so, he needs help. Fortunately there are many ready to offer their services and finding them is easier than ever. Facebook, Messenger, WhatsApp—the tools of the digital economy—are also helping smugglers and middlemen piece together the first steps of the global supply chains that still carry conflict diamonds to international markets.

Posing as one of the many opportunists eyeing a quick profit in some of the world’s poorest and most unstable countries, we spoke to several dealers who promised easy access to CAR’s valuable diamonds.³ Despite international efforts, CAR’s strongmen and armed groups remain open for business.

“Even where there is war, there are dubious buyers who go to buy [diamonds] and get [them] out in a fraudulent way (…). It is what it is,” one of CAR’s many diamond traders fatefully concedes.⁴

“Traffickers,” he tells us, “go retrieve (…) diamonds towards the rebel side because it’s still much cheaper. We bring them. Often there is a local rebel chief there that hosts them (…). They buy, they buy, they buy (…). Once at the airport [e.g. in CAR or Cameroon], they leave as there are no controls and they pose as simple travelers.”

For those fainter of heart, a different dealer offers an alternative. “If you want to order some diamonds,” he says, we “will send people on motorcycles to, for example, Berberati [in CAR] to pick up the diamonds and deliver them to you [in Cameroon].”⁵ As another trader puts it, “we don’t even need to move an inch!”⁶

If diamond smuggling takes a bit of courage, it also takes a head for logistics.

In March 2013 a coalition of rebel groups, bound by a shared sense of political and economic marginalisation and known as the ‘Seleka’, seized CAR’s capital, Bangui. Meaning ‘alliance’ in the national language Sango, the ‘Seleka’ violently ousted then-President François Bozizé and installed their leader, Michel Djotodia, in his place. His brief rule was to be characterised by widespread abuses against the civilian population, including killings, pillage, rape and forced displacement.¹⁰

CAR was no stranger to coups and instability. Even prior to the fall of Bozizé—himself the victor of a coup— nearly 60 per cent of the country’s territory was beyond effective government control.¹¹ The descent into all out conflict was swift and intense. 

The abuses, perpetrated by the predominantly Muslim Seleka, spurred a vicious backlash from loosely organised Christian and Animist self-defence groups known locally as the “anti-balaka,” or “anti-machete” in Sango. Opposed to Seleka rule, these anti-balaka militias carried out large-scale reprisals against mainly Muslim civilians, giving the conflict a sectarian dimension.¹²

The protracted period of serious violence eventually led to international pressure and the arrival of French troops, forcing Michel Djotodia to relinquish power in January 2014. As soon as he left office, Seleka forces withdrew to the northeast of the country—their traditional power base— and anti-balaka militias took control of many of the areas they left behind.

A UN peacekeeping mission (MINUSCA) was deployed in September 2014 to protect civilians and support CAR’s transition out of conflict. Presidential elections, repeatedly postponed by violence and instability, eventually took place, paving the way for President Faustin-Archange Touadéra to take the reins of a new government in March 2016.

The Seleka have fractured following their retreat to the east, but still hold territory while visiting regular violence on the rest of the country. “Incidents have grown more severe and widespread during the months of September and October 2016,” warned the UN Panel of Experts on CAR in December 2016.¹³ In May 2017 the Global Centre for the Responsibility to Protect warned that "populations in the Central African Republic remain at risk of mass atrocity crimes committed by ex-Séléka rebel factions, "anti-balaka" militias and other armed groups."¹⁴ 

In Bangui, parts of a fragile government stands accused of serious corruption as it struggles to govern remaining territories alongside strongmen and remnants of the anti-balaka in the west. ¹⁵ Transparency International currently ranks CAR 159 out of 176 countries on its Corruption Perception Index. ¹⁶

This most recent conflict has many causes. But its fortunes cannot be separated from the fate of CAR’s natural resources.

While the international community—including the Kimberley Process—are working with CAR’s government and diamond companies to establish legitimate supply chains; smugglers and traders are thriving in the parallel black market. Through these illicit channels, the violent armed groups that still control large diamond-rich areas in the east, and the strongmen that retain influence in parts of the west, may still be profiting from diamonds that reach international markets with ease. 

The profits of this trade not only provide armed groups with the means they need to keep fighting, they offer an economic incentive to perpetuate chaos and instability over peace.

In May 2013, several months after the Seleka seized power, CAR was suspended from the Kimberley Process, the international system set up to limit the funding available to armed groups from the diamond trade. While suspended, CAR could not export its diamonds.

This export ban was meant to limit the ability of armed groups to finance their activities through diamond sales. But while this suspension has had some impact on the diamond trade in CAR, it was also routinely frustrated. A thriving black market kept diamonds flowing into neighbouring countries, including the Democratic Republic of Congo and Cameroon.⁴⁵

At the same time, domestic buying houses kept the domestic diamond market alive by buying stones—including from areas under the control of armed groups—and stockpiling them while they waited for the export ban to be lifted.

In the summer of 2016 their patience was rewarded. Noting the thousands of livelihoods—and government tax-revenues—which rely on CAR’s diamond trade, officials and companies had long been pushing for the suspension to be lifted.⁴⁶ Faced with former-Seleka’s continued presence in the east, however, a complete lifting of the suspension was out of the question. 

In response, the Kimberley Process sought to carefully thread this needle by proposing a novel solution. A partial lifting of the blanket suspension that now permits exports only from certain parts of the country—‘compliant zones’—while, at least in theory, remaining in force elsewhere in the country.⁴⁷

More flexible and nuanced than a complete ban, this approach aims to restart the official diamond trade in the western parts of the country edging towards stability, while simultaneously preserving the export ban in the centre and east, where diamonds proceeds are likely to fall into the wrong hands. To date, compliant zones have been identified in Berberati, Nola, Carnot, and some of Boda’s sub-prefectures.⁴⁸

Although innovative, this partial ban carries significant risks. If it is not effectively enforced and rigorously monitored, the revived trade in CAR’s diamonds will reduce vigilance to the benefit of licit and illicit traders alike. If CAR’s diamonds offer a means of funding CAR’s peacebuilding, they also offer a lifeline to those intent on frustrating it.

Next to a Facebook photo of a pile of rough diamonds, posted during CAR’s suspension from the Kimberley Process, a young trader, originally from CAR, but now in Brazil, leaves a telling comment.⁴⁹ 

In the diamond world, appearances can be deceptive.

Diamonds are famously easy to smuggle. The high value of small stones means resources worth thousands of dollars can be carried and concealed with ease. Traders described the use of everything from private planes to cars and motorcycles as they discussed their experience of trafficking diamonds across CAR’s porous borders. But getting the stones out of CAR is only the first step. Before they can be sold onto international markets, the orphaned stones need a new home.

Several traders referred to this as the process of ‘naturalising’ their diamonds. Once out of CAR, buyers claim that the stones have been mined elsewhere. They mix them with other stones, get the right papers, and send them on their way—the troubled past of the CAR stowaways long forgotten.

Among the traders we speak to it is an open secret. It is hardly a secret at all. In Cameroon, we are told, we “naturalise the merchandise. They give [CAR diamonds] Cameroonian nationality.”⁵⁰ “The majority of the diamonds in Cameroon arrive thanks to us—CAR diamonds dealers. We finance the extraction in CAR and then we cross the border with them into Cameroon or export to Congo.”

The process is described in simple terms. “To ensure that diamonds are not suspicious, they do their official paperwork and they pay their little export tax in Cameroon.”⁵¹ It all comes down to having the right connections. “I have a friend. He can do all the documents,” promises another trader.⁵² Once this process is completed, CAR diamonds can be traded onward as though they were found or bought in Cameroon. 

In theory, diamonds from outside CAR’s four compliant zones should not find their way into the newly created and legal supply chains that service them. Buying houses must have a local presence in a compliant zone and provide a paper trail that follows the diamonds from mine to export. A monitoring team checks parcels proposed for export using forensic techniques that should allow them to tell diamonds mined in the west from diamonds mined in the east.

But, as one trader puts it, CAR “is a country where there is a war, and where there is war”, we are reminded, “everything is possible.”⁶⁶

The UN Panel of Experts have warned that diamonds from CAR’s compliant zones may be linked armed groups, as well as human right abuses. These include serious constraints on the freedom of movement of returning Muslim traders in western CAR.⁶⁷

While only a few parcels have been exported to date through the resumed Kimberley Process channels, some local and international traders clearly see it as an opportunity. Some professed indifference to the boundaries of the compliant zones. One of them told us that “you can buy [diamonds] in Bria [in eastern CAR], that you bring to Bangui and then you export.”⁶⁸ Others appeared to believe the ban had been lifted for the entire country. “Now the embargo is lifted. The country is pacified,” one dealer tried to explain.⁶⁹

Just as CAR’s diamonds continue to flow into neighbouring countries, there is a risk of new internal smuggling channels undermining the Kimberley Process’ efforts as stones are carried into the compliant zones from elsewhere in the country. Diamonds from non-compliant parts of the west appear particularly at risk of slipping into compliant zones through indifferent or opportunistic traders. These are unlikely to be detected by any of the secondary forensic tests currently in place to exclude eastern stones that may have slipped through the net.

In addition to freshly mined stones from outside the compliant zones, another threat to the integrity of the new system stems from the legacy of CAR’s conflict and suspension.

CAR’s suspension from the Kimberley Process banned the export of diamonds, not their purchase. Several of CAR’s large buying houses kept buying diamonds during the period of CAR’s suspension, amassing considerable stockpiles. Diamonds were purchased from across the country, including in areas controlled by armed groups, undermining the effectiveness of the ban. At worst, what was intended to stem the flow of conflict diamonds became a mere cash-flow challenge for well-resourced buying houses.

Badica (Bureau d’Achat de Diamants en Centrafique) was one of the buying houses that kept buying. By July 2014, the UN Panel of Experts reported that Badica had purchased 2,896 carats of diamonds. Most from Bria and Sam-Ouandja, where Seleka forces were consistently present.⁷⁰ The Panel concluded that “Badica’s legal and illegal purchases from those areas provided sustainable financial support for the former Séléka, in violation of the United Nations sanctions regime.”⁷¹

Another member of this group is Badica’s sister company in Antwerp, Kardiam.⁷² On 20 August 2015, both Badica and Kardiam were placed on the UN sanctions list following the seizure of suspected CAR diamonds destined for Kardiam in Antwerp.⁷³

Badica have denied all these allegations, both to Global Witness and to the Panel of Experts. Kardiam declined to meet researchers from Global Witness, and have not responded to a request for comment.

Sodiam (Société Centraficaine du Diamant) is one of the largest buying houses in CAR. Sodiam also kept buying diamonds during the period of CAR’s suspension. The company confirmed to Global Witness that it is purchasing around 30,000 carats per year, principally from the west of CAR.⁷⁴ Information in a third party audit, available from the company’s website, is consistent with this estimate. 

In June 2015 solicitors representing Sodiam told Global Witness that Sodiam’s purchases were “concentrated in the west of the CAR,” adding that “the east has been designed a ‘red zone’ and therefore off limits by the Government of the CAR due to the fact that it is controlled by Seleka forces.”⁷⁵

In December 2015 the Panel reported that Sodiam’s stocks had reached 70,845 carats as of 5 September 2015.⁷⁶ According to Sodiam’s own internal audit, these stocks included roughly 6,400 carats of diamonds purchased in the east of the country, between May 2013 and July 2015.⁷⁷ A source confirmed to Global Witness that Sodiam bought diamonds from Berberati, Yaloke and Bria during the period of Seleka rule.⁷⁸

In 2014 the UN Panel of Experts spoke to several diamond collectors in the west of CAR. These collectors told the UN Panel that they could not assure their customers that their diamonds had not financed armed groups, given the significant presence of anti-balaka groups in and around diamond mines. Several of these dealers stated that they had sold diamonds to Sodiam. The Panel therefore concluded that it “believes that Sodiam’s purchases have incidentally financed anti-balaka members.”⁷⁹

The Panel did, however, make it clear that it believes Sodiam have taken positive steps to mitigate against this risk, and that Sodiam does aim to exclude purchases from military personnel and members of armed groups.

Sodiam has denied these allegations in communication with Global Witness. Representatives of the company have also contested the findings reported by the UN Panel of Experts, and have stated that Sodiam has never “purchased anything that could reasonably be described as a conflict diamond.”⁸⁰

Sodiam also insists that it conducted “due diligence” on all its diamond purchases in CAR. Representatives of Sodiam referred Global Witness to a document titled “Sodiam Procedures Manual,” placed on its website, which contains the companies due diligence procedures.⁸¹

Both the website and the 800 word document in question appear to have been created in June 2015, shortly after Global Witness contacted Sodiam with a request for information about its due diligence practices.

Sodiam was one of the loudest voices calling for CAR’s Kimberley Process suspension to be lifted. In a letter dated 28 May 2015 the transitional government’s Minister of Mines and Geology thanks Sodiam for its assistance during the Kimberley Process review mission of May 2015. The letter then expresses the wish that the company’s “patience” will be “rewarded” once the suspension is lifted.⁸²

The Kimberley Process has recently proposed a forensic audit in an effort to differentiate stocks amassed in the east from those purchased in the west.⁸³ This suggests officials may be considering allowing portions of the stockpiles to be exported as part of the restored Kimberley Process. This would most likely apply to stones thought to have been mined in what are now the western compliant zones.

Whether purchased in the east or in the west, the stockpiled diamonds are at serious risk of having financed armed groups. Regardless of what may now be the case in the relevant compliant zones, these stones were purchased during a period when an anti-balaka presence in and around western mines was as well-established, as was a Seleka presence in the east. 

Absent detailed proof of robust due diligence conducted at the time of their purchase, no stones purchased during the period of CAR’s suspension from the Kimberley Process can appropriately be described as “conflict free.” No company should be rewarded for irresponsible sourcing during a violent conflict. This is the risk the Kimberley Process is running if it chooses to look the other way and ignore the troubled past of CAR’s stockpiles.

For decades the international community has witnessed the fortunes of fragile states destabilised and pushed toward conflict by their own resource wealth. There are important lessons to be learnt from experiences in countries like Liberia, Sierra Leone, Angola, and Côte d’Ivoire. There are also important lessons to be learnt from CAR’s own history, which has been plagued by cycles of predatory rule and violent coups. One such lesson is the potential long-term costs of a hasty resumption of the trade in natural resources, particularly in the absence of effective control and governance of the sector.

The course on which CAR sets off now will define the next phase of its economic and political development. If its resources are again seen as fair game, even in the absence of good transparent governance, this risks further entrenching the corruption and looting that has plagued the sector in the past. CAR deserves the full support of the international community, including its companies. This is an occasion for a new start—not a business opportunity.