Marange diamond industry is the litmus test of Zimbabwe’s reform

“The new government’s handling of the Marange diamond industry will be a clear indication of whether its commitments to economic reform and anti-corruption go beyond lip service,” said Sophia Pickles, Campaign Leader at Global Witness. 

The briefing calls on the Zimbabwean government and companies in the diamond industry to implement a raft of transparency measures, which are essential if the diamond industry is to realise its potential for the people of Zimbabwe.

“Secrecy across Zimbabwe’s diamond sector has played a huge role in aiding rogue actors to gain a foothold, allowing diamonds that should have benefited the Zimbabwean people to be ruthlessly exploited putting them at risk of funding human rights abuses. As one of the country’s key industries, good governance of the diamond sector is not only hugely significant for the economy but also a barometer of the direction that Zimbabwe is taking more broadly in the post-Mugabe era. It will attest to the credence of President Mnangagwa’s claims of a zero tolerance approach to corruption and transformed economic governance,” said Pickles.

Since he took power, President Mnangagwa has been vocal about promoting a new era for Zimbabwe’s economy and tackling corruption. The ousting of former President Robert Mugabe precipitated changes to some of the policies that have come to define Zimbabwe over the past near two decades.

In particular, the Mnangagwa-led government is making moves to end the country’s international isolation and attract foreign investment to boost an economy in tatters. This includes recent indications of new private investment in the Marange diamond fields, meaning it is critical that the government acts now to increase transparency and improve governance of the sector if the mistakes of the past are not to be repeated. 

The discovery of diamonds in Marange in the mid-2000s came at a time when Zimbabwe was facing crises on multiple fronts, not least economically. However, rather than injecting much-needed life into an economy in severe decline, Marange diamonds came to be far better known for their association with human rights abuses, corruption and looting.[i]

“Nothing encapsulates Zimbabwe’s lost opportunity like the diamond sector. A diamond find of global significance was effectively squandered at a time when the Zimbabwean people were facing severe hardship,” said Pickles.

Under the previous government, diamonds were ruthlessly exploited by the elite. The Zimbabwean people saw very little benefit from the Marange find with billions of dollars worth of the precious stones still unaccounted for.

In 2008, Zimbabwe’s state security forces launched a brutal clampdown on informal miners in Marange in which an estimated 200 people were killed, triggering the biggest crisis in the history of the international diamond certification scheme the Kimberley Process. Global Witness’ investigations into joint-venture companies that were subsequently licensed to operate mining concessions in Marange revealed widespread involvement of the security forces with both the army and the Central Intelligence Organisation holding ownership stakes in diamond mining companies.

“Under President Mugabe, Zimbabwe’s security forces were highly politically partisan and played an instrumental role in keeping the ruling party in power. They were rewarded with lucrative access to natural resources which may have been used to fund campaigns of violence,” said Pickles. “It is vital that the new government sends a clear signal that this era is over through root and branch reform of the diamond sector,” she added.  

Global Witness urges the Zimbabwean government to take essential steps to achieve a transparent, accountable and well-governed diamond sector, including:

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

 After nearly two decades of crisis in Zimbabwe, it is critical that the mistakes of the past are not repeated. Opening up the diamond industry to public scrutiny will make it much harder for bad actors to permeate and devastate the sector and may give reputable investors and the international community confidence in the commitment of the new government to genuine reform.

Zimbabwe’s diamond industry stands at a crossroads. The way in which it is steered over the coming year will be a clear indicator of whether the government led by President Mnangagwa is serious about change in Zimbabwe.