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27 february 2023
m_zee_fula_ngenge_xx.pngThe African Diamond Council (ADC) is calling on the Kimberley Process (KP) to remodel its enforcement and accountability mechanisms if it wants to remain relevant and effective.

ADC chairperson M’zée Fula-Ngenge told Rough&Polished’s Mathew Nyaungwa on the sidelines of the Mining Indaba in Cape Town, South Africa that at the same time, KP must be under an obligation to rework its consensus model of decision-making, which would allow prompt and forceful retribution for noncompliance by members.

He said the diamond trade watchdog’s operational framework is not being met and this was encouraging diamond smuggling, particularly in Africa.

Fula-Ngenge also said that the remittance of smuggled diamonds from Africa has become one of ADC’s top priorities.

He said that currently there is no law requiring the return of the smuggled diamonds back to the country of origin.

Below are excerpts from the interview.

What is the African Diamond Council (ADC)’s reaction to the recent decision to have Botswana host the permanent secretariat of the Kimberley Process (KP)?

From an African Diamond Council (ADC)’s vantage point, the long-term objective was inevitably to position a presiding and accountable level of influence in the hands of African diamond-producing countries, so the ADC is more than satisfied by the successful outcome of our unabated lobbying efforts to secure the government of Botswana for their selection as hosts of the Kimberley Process Permanent Secretariat. It’s a new beginning and things will change for the better, especially if we remain focused on defining reality.

Why was it important for Botswana to host the permanent secretariat of the Kimberley Process (KP)?

There is an infallible belief or culture within the ADC structure that African diamond-producing countries should be at the forefront, leading the way and functioning as the definitive mouthpiece that ushers in ground-breaking concepts for all legislation regarding the direction that the natural diamond industry takes on a global level. While the ADC equally encourages all of its member states to contribute to a more transparent and better-controlled African diamond trade, Botswana's legacy of good governance in the diamond mining sector serves as an excellent example, particularly concerning highlighting transparency as well as underlining accountability in the global rough diamond trade.

Botswana is currently Africa's top diamond-producing nation of natural, gem-quality diamonds and one should pay very close attention to how this nation has transitioned from meagerness - more than five and a half decades ago - to having the third highest sovereign credit ratings in sub-Saharan Africa, which means that they consistently possessed an unmatched understanding that their people will perish without evidence of vision.

This nation is the second freest economy on the continent and they have reared some of Africa’s most competent academics, so their undertaking as KP Permanent Secretariat will give prominence to their commitment to innovation. This southern African nation has demonstrated that they possess an exceptionally effective and positive political structure, despite its struggles to reaffirm its partnership with the De Beers Group of Companies in the last few months. We will see the government of Botswana demand a bigger share of the profits.

Botswana serves as an admirable example in diamond mining for what many would consider not-so-developed countries, such as the Democratic Republic of Congo, Angola, Sierra Leone and the Central African Republic. Botswana must also keep in mind that to enjoy long-term success as the KP Permanent Secretariat, its leadership should not only be pioneering, but it must also be disruptive and free of time-consuming, bureaucratic procedures. Botswana has to work harder to establish more efficient regulatory procedures to maintain this high level of reference I am conveying at this present time.

What do you think needs to be done to ensure Kimberley Process (KP) remains relevant?

Well, let us first demonstrate a bit of hindsight by looking back to some of the armed conflicts that took place within African diamond-producing countries around the time when the Kimberley Process (KP) was launched. In 2002, Angola's civil war ended as well as the one in Sierra Leone. The second Congo war concluded in 2003 and the civil war in Côte d'Ivoire ended in 2007 which was followed by renewed conflict in 2010. A civil war started in the Central African Republic that has been ongoing since 2012, so despite the soft-law structure of the Kimberley Process, together with their participating governments, Non-Governmental Organisations (NGOs) and key diamond industry players, many believe that they are innocently advocating for the good of the industry.

Nonetheless, many are also fully aware that the certification scheme was originally designed to address a very distinct set of circumstances. In other words, the global diamond industry continues to be subjected to defeat in its effort to effectively combat the smuggling of rough diamonds in line with the KP Operational Framework. In the middle of 2000, several pivotal industry stakeholders met in Kimberley, South Africa to discuss and introduce ways that would prevent the trading of so-called blood or conflict diamonds. While our collective aim was to make sure that diamond purchases were not financing violence, we made a mistake by settling on a limited definition that was too explicit as well as a bit too inflexible.

When the world becomes cognisant of founding members abandoning the KP with an unforgiving sense of conviction, such as Partnership-Africa Canada (PAC), which is presently known as IMPACT and when the world witnesses advocacy groups, such as Global Witness, make their departure in 2011, then it is effortless to confront the reality that the initial course of action can be deemed as defective. The African Diamond Council (ADC) believes that for KP to remain relevant and effective, it must remodel its enforcement and accountability mechanisms. At the same time, the KP must also be under an obligation to rework its consensus model of decision-making, which would certainly allow prompt and forceful retribution for noncompliance by members.

In other words, the desired results of the KP operational framework are not being met and quite the contrary, these deficiencies are precisely what encourages diamond smuggling, particularly in Africa. We have witnessed many times that the KP’s operational framework cannot even achieve its objectives that allow a flow of diamonds from areas under government control. We should also concede that a KP Certificate is not part of international law and by no means is it a certificate of origin, however, I shall maintain that it does bestow a sense of self-proclaimed authority to affiliated entities that have become preoccupied with representing and presiding over the entire global diamond industry.

An imposing effort has been made to revamp and expand upon a System of Warranties (SoW), which is a supply chain program of self-regulation that is intended to track diamonds after the Kimberley Process goes through the process to certify them. The updated SoW should lend a helping hand in extending the effectiveness of the KP beyond the export and import of rough, natural diamonds. On top of that, the Kimberley Process Civil Society Coalition has been there without fail to remind the entire diamond industry that African diamond-producing nations have consistently mastered the art of making the most of industry loopholes and nations such as the Central African Republic continue to exemplify prowess in exploiting the lassitude of the KP traceability chain with intricate smuggling operations by way of well-structured networks in Cameroon.

KP's consensus model is effectively and forcefully used to rule out any significant progress. Attempts to discuss KP's weaknesses are blocked as well as confrontational dialogue that censures Russian diamond trading, both, serve as excellent reasons why preceding and potential supporters of the KP hold the belief that the certification scheme has become contaminated. Industry leaders who know the way to success tend to travel the right path day in and day out. These are typically the ones who are good at showing others the best way to settle on an insightful plan of action.

If we use Zimbabwe as an illuminating case study, we will see that this diamond-producing nation was cited with several human rights cases of abuse for two consecutive years between 2006 and 2008. When "rapid response" police conducted raids to drive out local miners from the Marange diamond fields, there were various accusations of tormenting, homicide, physical abuse and persecution of local miners, none of which could be held chargeable under the existing definition of KP's blood or conflict diamond.

No civil war was taking place at that time and the entire world was able to witness the opposition leader in Zimbabwe be named Prime Minister in 2008 by the country's President.

In 2011, the ADC was motivated to take the lead in vindicating Zimbabwe's misfortune at the 9th Kimberley Process Plenary in Kinshasa by making a comprehensible argument that Zimbabwe may have been the world's best example of a power-sharing agreement. The resolution of that dispute was an unpredicted core issue that divided the KP and was certainly responsible for obstructing dialogue amongst its existing members.

If external advocates of the KP, such as the U.S.’s executive department responsible for foreign policy and relations has been a bit more attentive domestically, they would have been able to witness greater turmoil and chaos within U.S. borders than those they believed that they had identified inside Marange’s diamond fields or between Robert Mugabe and Morgan Tsvangirai, who both proved that they could join forces without any external or unsolicited intervention.

The ADC continues to protect, defend and promote its diamond-producing member countries. Every year, we position ourselves as a governing body to proliferate their influence, visibility and relevance. In the case of Zimbabwe, we knew it was essential for us to stand up for them as an African diamond-producing nation, without ever falling victim to the political senselessness of those who were determined to unsettle governmental harmony in Africa.

Which definition of conflict diamonds do you subscribe to?

Technically speaking, 'Conflict' or 'Blood' diamonds are rough, natural diamonds used by rebel movements or their allies to finance armed conflicts aimed at undermining or waging war against legitimate governments. The Kimberley Process Diamond Certification Scheme (KPCS) is a multilateral international initiative that was established in 2003 and it aimed to prevent the global flow of these diamonds that usually originated in Africa.

Since the scope of the KP has proven to be rather limited, we have seen several foundational and supporting international entities walk away as a result of its fragmentary definition. The ADC has continually suggested the implementation of a broader definition; however, we are cognisant that there are many possessing no qualms about a definition since they can benefit more from KP's existing denotation and framework. As the global diamond industry maintains high hopes of salvaging KP’s impaired certification scheme, they will certainly have to depend more on their Civil Society coalition to assist in restoring any misplaced credibility.

The ADC has suggested that KP’s finite definition be broadened to encompass “natural diamonds that are being mined as a result of human suffering”. This would also consist of human rights abuses by governments as well as rebel or militia groups collecting diamond revenue to engage in armed conflicts. I am also suggesting that there should be harsh penalties for criminal misconduct such as corruption, forced child labour and illegal transport of diamonds. If smuggled African diamonds are ever confiscated outside of the continent, there is no legislation requiring the return of those diamonds back to the country of origin, so remittance has become one of our top priorities.

Some members of KP expressed their dissatisfaction over the chairmanship of Zimbabwe this year. What is your reaction to that?

My retort is binary. Despite that, I shall attempt to establish a bit of context. When we see Russian diamonds coming under attack for the last year, Zimbabwe has to view this uncertainty as a bona fide and immediate opportunity to exhibit an unforeseen level of domestic transparency. For example, a nationwide initiative to implement blockchain technology on all Zimbabwean goods would certainly give credence to dismissing any complaints regarding Zimbabwe's intention to assume the role of KP Chair. This non-compulsory gesture would be a clear indication that Zimbabwe is attempting to arrive at solutions for its domestic industry that external entities would not be inclined to solve.

Furthermore, it would mean that Zimbabwe is becoming much more comfortable and confident in assuming responsibility for themselves within the realm of industry transparency. The global diamond trade is and has always been preoccupied with self-regulation and having Zimbabwe as the KP Chair would prove to be rather disparaging and disturbing in the eyes of those who typically maintain a contrived sense of control over the industry. Since Zimbabwe has often been denounced for engaging in past human rights transgressions, I anticipated that there be would resistance from those who feel that they will be tested. Nonetheless, many will remember that Zimbabwe is an African nation that displayed a great deal of success in exposing the vulnerabilities of the KP while demonstrating its ineffectiveness, so dismay is inevitable.

Sitting at KP Chair is an opportunity for Zimbabwe to step out of its comfort zone, walk a straight line and discard any past KP violations that they have been repeatedly criticised for. This is a nation that is now in control of its destiny and if they take the time to confront its internal proceedings, I am confident that they will provide solutions without any external intervention or intrusion. Since the KP has been stripped of much of its embryonic cogency, there should not be any insistent anxiety whatsoever concerning Zimbabwe becoming the KP Chair.

What are you doing as a Council to help Zimbabwe succeed as this year’s KP chairperson?

Since Zimbabwe was the KP Vice-Chair to Botswana, it is expected that they would become the Chair. The country is entitled to this preferment and their tenure to administer the KP shall leave many of the detractors confounded. It is a matter of time before each African diamond-producing country receives an opportunity to illustrate how their nation can positively contribute to the existing certification scheme.

The ADC is supporting Zimbabwe's eagerness to implement nationwide blockchain technology on their mined diamonds because the technology is well-positioned to record the entire journey of the mined diamond. Since this move is unanticipated, it shall unquestionably assist them in their efforts to establish greater positioning among higher-ranking African diamond-producing nations. I know this is an exhausting topic, but let's just talk about it. The issue of illegal diamond mining.

What is being done to put to an end this problem in Africa?

The ADC has become much better at anticipating the industry problems of African diamond-producing countries and we are taking prompt action to solve them in advance. We are attacking activities of illegal mining through a variety of avenues and the most successful operation to date is the Republic of Angola's 'Operation Transparency', which commenced in 2018. If you look at Angola’s diamond sector today, much of the success you see is a direct result of this particular initiative.

Since many of the garimpeiros (Portuguese) in Angola and zama zamas (isiZulu) in South Africa are not officially recognized or go undetected by the system, the ADC works to organize these small-scale miners or informal supply chain players, while highlighting the skillset to assist us in recovering lost revenue. The ADC commits to occupying and addressing industry voids that are typically overlooked or abandoned by both, the public and private sectors as well as those by international industry bodies.

There are undesired transgressors, armed private security forces as well as imprudent public sector companies, who make use of widespread and systematic violence throughout Africa to secure their economic interests in diamond exploitation, so major diamond trading centres and hubs have got to reinforce their decrepit internal controls and so must each African diamond producing nation. Operation Transparency was incredibly effective and at the same time, I will admit that it was not free from criticism or controversy, particularly since the crackdown shut down more than 70 illegal diamond cooperatives, imprisoned more than 60 illegal immigrants and expelled close to 400,000.

The operation was intended to ameliorate the local diamond sector as well as increase domestic revenues and of course, both the African Diamond Council (ADC) and the Government of Angola welcome this favourable outcome. Much of the reform is ongoing with the collaborative efforts of the Angolan Armed Forces (FAA), the National Police (PN) and the Migration and Foreigners Service (SME). A great deal of these diamonds is now being reclaimed through the ADC's revenue recovery initiative which aims on procuring rough diamond parcels that routinely get illegally transported out of the country.

The rough diamond production that the ADC takes in through its safe houses in the Republic of Angola has proved to be remunerative for the domestic diamond trade. The premium goods recovered by ADC are kept in reserves within the state-owned national bank and are designated to fulfill the function of serving as fringe benefits to those investing in diamond exploration projects.

An unspecified amount of the common goods are put up for sale through Angola’s national diamond trading company and the special stones that ADC recovers are allocated through the African International Diamond Exchange (AIDEX) platform.

Diamond concession holders in African diamond-producing countries are being advised to beef up security and surveil activities in their designated mining areas, frequent police raids are being carried out in countries such as the Democratic Republic of Congo, Sierra Leone and Zimbabwe where illegal mining is widespread, nearly all of the fictitious cooperatives in Angola have been dissolved, small-scale and artisanal miners are becoming more useful in facilitating the mining objectives of each African diamond mining nation. In South Africa, there is still intermittent Zama-Zama activity and while none are getting rich from their unwelcome extraction efforts, many of their undertakings are prompted by high unemployment rates.

The ADC's attempts to highlight the success of artisanal and informal miners have even secured many jobs for them within several major mining companies. Our long-term efforts have significantly contributed to reducing violence and child labour in the African diamond trade and have improved environmental as well as issues & safety issues. We have exceeded our expectations in attracting huge investments in exploration and we continue to create better economic conditions for entire regions that depend on diamond mining revenue.

What are you doing as Africa Diamond Council (ADC) to promote diamond mining and trading on the continent?

The ADC is committed to globally promoting natural diamonds, particularly those that are extracted in Africa. There are a handful of diamond mining companies that tend to be hypersensitive to situations that draw attention to their corporate pursuits and several go out of their way to circumvent the slightest bit of visibility, whether ethical or inopportune. Nonetheless, the ADC does aggressively contribute to highlighting positive reform and we make every effort to feature African intellect within the trade whenever we can.

The ADC is inclined to be favourably disposed to empowerment initiatives, primarily those that usher women and youth into focus. We are admirers of projects such as Young Diamantaires and to a high degree, we stand by the undertakings of non-profit organizations like Women in Mining and the African Diamond Manufacturers Association (ADMA), which is a subsection we recently welcomed to the ADC platform and plan of action. African International Diamond Exchange (AIDEX) has experienced success in unique marketing techniques for rough diamonds to secure investment for exploration, while the Angolan Diamond Exchange (ADE) is working to solve and circumvent humiliation with respect to why the undertaking has failed to be favored with a punctual and eminent launch.

The AIDEX allocation method of selling is specifically designed to position African diamond concession holders to meet their annual production goals. Last, but not least, we also have our sights set on establishing an African Diamond Museum.

What would be the importance of this diamond museum?

Two contrasting examples can be provided. The rationalization to inaugurate an African Diamond Museum can be made for both, South Africa and Botswana, both countries that are known to deliver some of the world's most historic diamonds. In 2022, Botswana uncovered two massive diamonds with 1000+ carats within a month. A 1,098-carat diamond was extracted by Debswana Diamond Company and a 1,174.76-carat diamond was unearthed at the Karowe mine by Lucara Diamond Company. When such uncommon discoveries occur, there should not be any immediate pressure to simultaneously or desperately sell these stones. The unearthing provides grounds or rationale to create an exhibition space where such diamonds contribute to as well as set diamond tourism in motion on the African continent.

I am celebrating my 40th year in the industry and I hope that African diamond-producing nations will pull together to finalize the plans to erect a museum, where the domestic industry can conduct research, collect data, conserve history, interpret the domestic narratives and exhibit some of our most precious stones such as the 'Great Star of Africa'. So many of our significant diamonds exit Africa without residents of diamond-producing nations ever having the opportunity to view them unless a photo or video appears in a press release or foreign publication.

As an example, we look at the frenzy created by De Beers Cullinan Blue, which was extracted from the Kimberley mine in South Africa by Petra Diamonds. This fancy vivid blue, rough diamond was later purchased by the De Beers Group, who brought Sotheby's aboard to market the iconic stone. The diamond was showcased on a worldwide tour which unfortunately did not include a sojourn within the confines of either of our 54 African nations. We would have loved to see any of those aforementioned diamonds in their raw state, given that they possess the potential to launch and contribute to diamond tourism in Africa.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished