JOHANNESBURG - Zimbabwe
government is using money earned from diamond exports to fund its Central
Intelligence Organisation, blamed for a raft of human-rights abuses as it’s
helped to keep President Robert Mugabe in power since 1980, Global Witness
Diamonds dug from the Marange fields in eastern Zimbabwe are channeled through Dubai,
India, the Netherlands and South
Africa by a complicated web of cross-owned companies
based in places as diverse as Mauritius,
Hong Kong and Johannesburg,
the London-based group said in a report released on Monday.
The companies have one thing in common: partnerships with
businesses owned by the Zimbabwe
government or its military. The earnings, says Global Witness, are funneled
back to the CIO and army “off budget.” Zimbabwe’s army and the CIO
declined to comment. Calls to the mines ministry weren’t answered.
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In 2011, the then Finance Minister Tendai Biti said
government had lost as much as $15 billion in revenue as a result of diamond
looting and accused the elite in Mugabe’s Zimbabwe African Union-Patriotic
Front party of “ prospering from the stones.”
At the time, Biti, then a member of the Movement for
Democratic Change was part of a power-sharing agreement. Two years later,
Mugabe himself lamented the loss of $13 billion to diamond theft. The country’s
gross domestic product is about $16 billion, according to the World Bank.
“The future of Zimbabwe’s diamonds now hangs in
the balance. Dwindling reserves are demanding greater investment from an
industry shaped by state-sponsored looting and short-term thinking,” Global
Witness said in the report, the first attempt to link a web of companies and
individuals who’ve prospered from the Marange fields.
It blames the government, which owns at least 50 percent of
the diamond mining companies in Marange and selected each of its partners. “With
billions missing, any heist it is clear started closer to home,” it says.
With debt of over $10 billion and deteriorating
infrastructure, diamond wealth could have lifted Zimbabwe from the mire of
unemployment, unpaid civil service wages and factory closures, the report said.
The “CIO, the military, notorious smugglers and well-heeled
political elites all gained control or ownership of companies operating in Zimbabwe’s
diamond fields,” Global Witness said. “Despite the role the security forces
played in subverting Zimbabwe’s
democracy and perpetrating serious human rights abuses, Zimbabwean diamonds are
traded freely on international markets.”
Global Witness identifies Kusena Diamonds, which it says was
“set up by the CIO to secure a secret off-the-books source of financing,” Anjin
Diamonds, Jinan Diamonds, Mbada Diamonds and the Diamond Mining Corp as
companies with links to Zimbabwe’s intelligence and military organisations.
Officials were said to be unavailable when calls were made to their offices.
Anjin and Jinan have links to state-owned Zimbabwe Defence
Industries Pvt , a company still under European Union and U.S. sanctions. Gems
from Marange have been sold in Antwerp, Dubai and at auctions
elsewhere, Global Witness said.
Though production from Marange began to slump in 2014, the
country was the fourth-largest producer of the precious gems in 2012, after Russia, the Democratic Republic of Congo and Botswana. The
southern African nation remains in the ranks of the top 10 global diamond
producers, Global Witness reported.
diamonds, and the wealth accrued from them, disappear in several ways,
according to the report. Smuggling likely accounts for many unregistered
stones, while the under-reporting of gems mined is also a cause for concern, it
said. Diamonds are also probably undervalued on the books, with profit accruing
to shadowy ownership structures.
“Despite the risks, Zimbabwe’s diamonds are sold on
international markets with minimal scrutiny,” Global Witness said. “Little is
done to ensure the proceeds reach the people of Zimbabwe rather than the powerful
elites and oppressive security agents intent on gaining what they can.”
- BUSINESS REPORT ONLINE