Leave no stone unturned

President Mnangagwa has pledged to deliver a new era of stabilisation and growth for Zimbabwe.

Carefully managed, the country’s diamond sector may have much to offer in stimulating economic recovery and contributing to development and democracy in Zimbabwe. 

Our new briefing shows that it is only through a concerted effort to overhaul the industry based on principles of transparency and accountability, that the mistakes of the past will not be repeated and the Zimbabwean people will see real benefit from their precious natural resource. 

In his first year as Zimbabwe’s President, Emmerson Mnangagwa has pledged to stamp out corruption, prioritise economic recovery and attract foreign investment, following nearly two decades of instability and international isolation.

At this critical juncture, the management of Zimbabwe’s valuable diamond industry will indicate whether the new government is serious about reform and willing to match rhetoric with action, as we reveal in our new briefing.

Photo: © Jekesai Njikizana/AFP/Getty Images

The diamond sector is one of the country’s key industries, but corruption, structural weaknesses and the ruthless misappropriation of diamond wealth under former President Robert Mugabe’s tenure not only deprived the Zimbabwean people of a precious source of funds for development but may have fuelled human rights abuses.

With recent indications  of new investment in Marange’s diamond fields, the Mnangagwa-led government’s ability to harness the potential of the sector for the benefit of the population will test his resolve to live up to promises of delivering economic reform and breaking with past ‘misbehaviours’.

The discovery of huge deposits of diamonds in Marange, eastern Zimbabwe, in the mid-2000s came at a time when Zimbabwe was facing crises on multiple fronts. However, rather than injecting much-needed life into an economy in severe decline, Zimbabwe’s diamonds were ruthlessly exploited by the elite under the Mugabe-led government and came to be far better known for their association with human rights abuses, corruption and looting.

The Zimbabwean people saw very little benefit from the Marange find with billions of dollars’ worth of the precious stones still unaccounted for.

The role of the security sector in the Marange diamond industry has been of significant concern since the outset. In 2008, the army launched a brutal clampdown on informal miners in Marange in which an estimated 200 people were killed. This triggered the biggest crisis in the history of the international diamond certification scheme, the Kimberley Process.

Global Witness investigations showed how extreme secrecy across the diamond sector facilitated wide-ranging harms to flourish and  revealed extensive involvement of the security forces with both the army and the Central Intelligence Organisation holding ownership stakes in diamond mining companies.

The security forces have played a key role in silencing dissenting voices in Zimbabwe, including through the orchestration and perpetration of campaigns of violence, particularly during political processes, presenting the risk that diamond mining money could have funded abuses. 

The decade-long looting of Zimbabwe’s diamonds and the associated violence and abuses were aided by a lack of transparency and oversight.

To avoid repeating the mistakes of the past and allow the diamond sector to finally realise its potential for the people of Zimbabwe, it is crucial that the government and companies in the diamond industry implement a raft of transparency reforms.

Meaningful changes to how the country’s diamond sector is managed would be a concrete sign of the political will to affect a real break with the past and help reassure the international community and responsible investors of the government’s commitment to deliver a clean and accountable business environment.

This could help support economic growth and fund the Zimbabwean budget. Currently  over half of the population is living beneath the poverty line, the government is in arrears on most of its USD 11 billion of external debt and depends on USD 810 million in annual international aid.

Moreover, a reformed diamond sector may also point the way towards reforms needed across Zimbabwe’s economy to combat corruption and ensure all share in its economic resources. 

To help to achieve a transparent, accountable and well-governed diamond sector, we are urging the Zimbabwean government to take much-needed steps including:

• Making all beneficial owners of diamond companies, and any private investors, public;
  
• Publishing detailed information about all diamond mining related revenue flows, disaggregated by company, year, and type of revenue stream;
  
• Publication of any joint venture contracts signed with private investors;
  
• Requiring risk based supply chain due diligence by companies trading in Marange diamonds;
  
• Preventing the risk of the security sector receiving off-budget funding through control or ownership positions in diamond companies that is free from parliamentary oversight.

Download the briefing: Leave no stone unturned here [PDF, 4.54 KB]