Zimbabwe’s clogged political drain and open diamond pipe | by Patrick Bond and Khadija Sharife

by Jun 18, 2012All Articles

Progress in Zimbabwe won’t begin until the political drain is unclogged in the wake of free and fair elections, and until the pipe leading from one of the world’s largest-ever diamond finds to corrupt military coffers is conclusively blocked. While GDP growth has been rapid on the uptick after economic depths were plumbed in late 2008, capital accumulation remains stymied and capacity utilization in the crucial yet crippled manufacturing sector is a fraction of its former level (in the early 1980s Zimbabwe had the third largest industrial economy in the world, measured as a percentage of GDP). Prior to Independence, economic degeneration and deindustrialization began in the mid-1970s, when per capita GDP fell due to overaccumulation (global, regional and local) and white political extremism. Another ratcheting down of growth prospects accompanied the Economic Structural Adjustment Programme of the 1990s. But, in the wake of rising political contestation in Zimbabwe from around 1998, no African economy suffered such a sustained loss of GDP in a given decade (a 50 percent decline after 2000 including an 18 percent fall in 2008).
Today, three years after South African president Thabo Mbeki negotiated a power-sharing deal – the ‘Global Political Agreement’ (GPA) –between Robert Mugabe’s Zimbabwe African National Union-Patriotic Front (Zanu-PF) and Morgan Tsvangirai’s Movement for Democratic Change (MDC), the ‘dysfunctional’ government of national unity – as both Mugabe and Tsvangirai call it – is under extreme pressure. Just before the deal took effect in February 2009, the local currency collapsed entirely. On the upside, that move ended hyperinflation, petrol shortages and empty shop shelves. The tiny elite is happier, as are the World Bank, International Monetary Fund and African Development Bank (not yet lending, but carefully looking over the state’s shoulder, insisting on debt repayment). Yet without any ability to earn hard currency, what’s a peasant or the unemployed (90 percent of the workforce) to do?
A related problem is that monetary liquidity is drying up, as the majority of financial institutions appear on the verge of bankruptcy. And monetary policy is now set in Washington and Pretoria, since the dollar and South African Rand are now Zimbabwe’s core currencies. The Reserve Bank of Zimbabwe (RBZ) can neither properly bail out the indigenous banks (the foreign-owned colonial-era banks will withstand the crashes) nor stimulate the sickly economy through US Fed-style ‘quantitative easing’. The reason is that its Governor, Gideon Gono, gave the old Zimbabwe dollar a world-record case of ‘monetary gonorrhea’, a corrupting disease transmitted from his overworked RBZ printing press to the economy as a whole. Its cure was painful: the death of the Zimdollar. And still, a $2 billion bill for Gono’s leftover local debt is being negotiated, with another $7 billion in foreign debt remaining, widely acknowledged as unrepayable.[1] In addition, another $1 billion was ostensibly committed by the Zanu(PF) wing of government via a compelled purchase of 51 percent of the shares Implats owns in Zimplats, the largest platinum miner, in a March 2012 deal considered a shakedown of the mining house – yet without state funds to cover the purchase, it appears far less important than as advertised. Prospects for Zanu(PF) repeating this Indigenisation in the banking and other sectors are much lower.
Politically, progress against Mugabe’s dictatorship is terribly fragile. His brutal army is deployed in many hotly-contested peri-urban and rural areas, the security apparatus leadership is continually reappointed by Mugabe notwithstanding Tsvangirai’s opposition (the GPA left the MDC confused on the legality of these appointments), MDC officials are regularly killed or beaten (in early 2012 there were a half-dozen new cases each month), and even harmless NGOs faced banning in the central region, Masvingo. Mugabe reportedly wants an election as soon as possible given his degenerating health: prostate cancer requires regular East Asian treatments. But Tsvangirai vows to hold out until electoral reforms and peace have been established, probably waiting until 2013 notwithstanding the repeated humiliations he faces in the unity government.[2]
Dating to the 1997 rise of oppositional civil society when Tsvangirai led the Zimbabwe Congress of Trade Unions, NewsDay columnist Brian Mangwende counted the insults:
From being almost forced to bungee-jump from a six-storey building without a rope; being tried on accusations of treason; beaten to a pulp right inside a police station where, ordinarily, one would seek sanctuary, for wanting to attend a prayer meeting, to being denied the right to occupy and reside at the traditional Prime Minister’s residence, which was the home of successive Rhodesian prime ministers, including Garfield Todd, Edgar Whitehead, Winston Field, Ian Smith and even Bishop Abel Muzorewa, among others.
He has been defied and scoffed at and ridiculed by almost all Zanu PF ministers who are supposedly under his supervision, without any of them ever getting as much as a spank or reprimand.
He has had most of his MPs and party officials and members routinely arrested and has also been denied permission to hold rallies more times than he cares to remember, not to mention the countless police raids on his Harvest House party headquarters on the most spurious of pretexts. His constant vilification and ridicule in State media, day in and day out is now almost routine. The police have never raided Zanu(PF) offices since independence in 1980.
His choice for Deputy Minister of Agriculture, Roy Bennett, was turned down outright by His Excellency President Robert Mugabe, until Tsvangirai capitulated and nominated someone else, though the Global Political Agreement has no stipulation giving the President discretionary powers of approving another party’s choice, and his line-up for provincial governors has cobwebbed and remained like shadows in the waiting room while senior civil service appointments continue to be filled without him being consulted, as stipulated by the so-called GPA.[3]
Recall that paramilitary violence forced Tsvangirai to retreat from the mid-2008 run-off presidential election after he had decisively won the first round four months earlier – but, claimed Mugabe’s vote-counters, with less than 50 percent. The MDC’s own count was higher than 50 percent, as it came from cellphone photographs of all individual polling stations sent instantaneously to headquarters. But Mbeki had sufficient weight in March 2008 to insist on a run-off, and an upsurge in state violence against the MDC then compelled Tsvangirai’s withdrawal. Forging a unity government required another three months of negotiations (and then nearly five months more before implementation began), with Mbeki getting Zanu(PF) and the MDC to agree to the GPA just before he was overthrown in a Pretoria palace coup.
Then came the constitutional rewrite outreach process, which provided space for 4000 meetings in 2010. But there was widespread civil society opposition to centralized power, and the National Constitutional Assembly – responsible for initiating the debate 15 years ago – remains opposed to the ‘Kariba Draft’[4]. In February 2012, top Zanu(PF) officials proposed another rewrite, but some form of constitutional compromise is expected by mid-year followed by a referendum that is likely to get majority support in the society. Violations of the GPA by Zanu(PF) are numerous, while Zanu(PF) argues that the very slow lifting of ‘smart sanctions’ against 200 nationalist leaders – which the MDC says it supports – is Mugabe’s main grievance about the MDC.
If Zanu(PF) continues wielding the practical power it now exercises so malevolently, Mugabe might then ‘win’ the presidency again through hook or by crook, and – informed rumour has it – soon thereafter pass the presidency to Defense Minister Emmerson Mnangagwa. He is the logical successor following the unsolved August 2011 murder of arch-rival Solomon Mujuru (although as Vice President, Mujuru’s widow Joice remains a major power broker – while speculation continues that Mujuru’s shooting and the burning of his farmhouse south of Harare followed his attempted move into the Marange diamond fields). Constantine Chiwenga and Perence Shiri are the two major military figures with diamond interests and a deeper political agenda, and may ultimately be the internal Zanu(PF) kingmakers. This scenario promises a return to bad habits: outright violence, including widespread murder, ending in poll thievery.
More likely is that ‘The MDC will win and Zanu(PF) will again refuse to concede power,’ as leading commentator John Makumbe forecast in late 2010 at a Bulawayo conference organized by David Moore of the University of Johannesburg and Showers Mawewa of the University of KwaZulu-Natal, entitled ‘Progress in Zimbabwe’.[5] So back they will go into the cul-de-sac of renewed power-sharing talks, and although Jacob Zuma is considered more oriented to democracy than Mbeki, the African National Congress already in late 2011 announced support for Zanu(PF). Perpetually clogged politics, then, offers the context for us to revisit Zimbabwe’s profound debates on land, nationalism and the new Resource Curse of diamonds.
History, land, nationalism and the opposition
Understanding Zimbabwe’s degeneration was the challenge facing that conference, a notable event for convening more leading researchers of Zimbabwe from both inside and outside than any comparable gathering we know of. By all accounts, a central dilemma in an era of Mugabe’s state-sponsored ‘Patriotic History’ – a mirror image of Rhodesia’s racist settler history – is recovery of the liberation tradition from damage done even before Independence in 1980. This task is aided by the recent publication of Wilf Mhanda’s autobiography, Dzino: Memories of a Liberation Fighter; his late 1970s leadership of the Zimbabwe People’s Army offered an alternative liberatory trajectory, one Mugabe violently suppressed two years before signing the Lancaster House compromise deal that maintained intact the repressive state and white-biased property relations. Mugabe’s overarching need, it seems, is control over the telling of history, to remind his subjects there was once a time when Zanu(PF) was indeed a popular force, fish swimming in the sea of the people.
Regurgitation of that memory is what motivates the ‘Talk Left, Walk Right’ project of crony nationalist capitalism which Mugabe and so many other post-colonial despots adopted, as Frantz Fanon predicted a half-century ago in his book The Wretched of the Earth. Today the main legacy of this struggle is ‘securocrat’ control of the state. Remarked Joshua Mpofu, ‘Talking about political parties is like chewing gravel. Military culture never died, and a lot of public institutions are headed by brigadiers and generals.’
Another memory is of a time when indigenous Zimbabweans controlled their land. According to Blessing Karumbidza, whose University of KwaZulu-Natal doctorate describes post-Independence land experiences, there will be ‘a truly restructured and dynamic farming sector IF and only if the support mechanisms and institutional regimes necessary for land and agricultural rationalization are put in place.’ That is still not happening, insists University of Zimbabwe (UZ) geographer Esther Chigumira: ‘Bifurcated land ownership continues, not by race but by class, favouring elites who are politically connected.’ Those nationalists, recalled former war veteran and now UZ sociologist Wilbert Sadomba, emerged from internecine liberation movement feuds, and ‘hijacked that revolution, in connivance with international capital. We war vets are opposed to both Zanu(PF) elites and MDC elites. We see neither being able to take the country forward.’
Added leading liberation-era intellectual Ibbo Mandaza, ‘There was a Zanu that we were part of, the liberation movement, and then there was Mugabe’s Zanu, which is very different. Mugabe is essentially rightwing, notwithstanding the anti-imperialist rhetoric.’ As for his own role, Mandaza confessed, ‘We helped in many respects dress up an essentially rightwing regime in leftist clothing.’ Brian Raftopoulos agreed: ‘This discourse threw off many African scholars, most importantly in the Mamdani debate’ – referring to the great Ugandan political scientist Mahmood Mamdani’s 2008 London Review of Books defense of Mugabe.
Another more recent dispute is whether land reform is working, since rapidly declining agricultural output and food-aid dependence led many to assume that the ‘jambanja’ (havoc) beginning in February 2000 (when Mugabe lost his first election, a constitutional referendum) was simply disastrous. Ben Cousins from the University of the Western Cape praised the Fast-track Resettlement Program’s ‘changing structures of ownership and new agrarian structure,’ concluding, ‘The positives probably outweigh the negatives.’ In the main A1 land programme, he said, ‘About a third of the new farmers are succeeding, a third getting by, and a third getting out.’
The negatives in Cousins’ list include ‘the collapse of Large Scale Commercial Farms which contributed to wide-scale economic decline; the motor force of land reform was the Zanu(PF) power grab; the decline of the rule of law; violence.’ Zimbabwean human rights advocate Elinor Sisulu reminded us of others: ‘food security, environment, HIV-AIDS, and the gender and class dimensions.’ No matter how Zimbabwe needed to end white domination of good farms before 2000, an overall judgment on the land invasions (which sporadically continue because 10 percent of 4000 white farmers hung on), will wait long-term evidence. The spate of new research by those associated with Sam Moyo, Ian Scoones and Cousins does show a few selective sites of success, especially in Masvingo Province near the ancient Great Zimbabwe empire’s capital, but critics argue this is not a typical region. Moyo’s work suggests many more sites of success for new generations of small-scale farmers.
Opposition politics came in for equally harsh critique. ‘In the 1990s the motivation for the MDC was the struggle for social and economic justice – and that’s the crucial unique character of the MDC’s origins,’ said Hopewell Gumbo of the Zimbabwe Coalition on Debt and Development. ‘But the trend to neoliberalism within the MDC means we will not see progress. We need to look for new alliances and new formations.’
The terrain is extremely uneven, for Harare-based urban civic organizer Mike Davies pointed out the profusion of petit-bourgeois suit-and-tie professionals amongst the capital’s NGO cadre: ‘They acquire a self-preserving aspect perhaps more concerned with continuation than function. They became more remote from their members, even elitist, losing their accountability, more concerned with meeting donor aspirations and requirements than serving the needs of their members.’ According to Davies,
opportunistic elements make every effort to preserve their positions, often at some cost to their member organisations and undermining their stated goals. In my opinion, we failed to identify and contain these elements as well as the vehicles that carry them. As a result, the super-NGOs captured the voices of civics and domesticated them for the consumption of an increasingly externalised audience of international donors and Zimbabweans in the diaspora.
Constrained social activism under these circumstances will probably not be unclogged anytime soon, in either political or civil society. One reason for the inability to break through is an unexpected problem: vast amounts of diamonds were discovered in what may be the world’s richest-ever field, in Marange (also called Chiadzwa), but from the standpoint of potential progress, the funds are going down the drain, leaving Zanu(PF)’s generals with vast power.
The new Resource Curse
The central controversies associated with the Marange diamonds relate to a November 2008 massacre of local diggers that left nearly 300 dead, forced labour that included hundreds of children (documented by Human Rights Watch in 2009), displacement of thousands from Marange-area villages, and nontransparent financing that feeds corruption. Though discovered in the late 1990s during a period in which DeBeers held prospecting rights, the diamonds were publicly unveiled in 2006 when an estimated 30,000 illegal miners flocked to Marange, prior to the army’s take-over and expulsion of locals. Although DeBeers left and another South African firm claimed mining rights (still under dispute in the courts), by late 2008 the army had taken control after helicopter gunships were used to kill informal miners. By 2010, with intense contestation within Zanu(PF) ranks over how to divvy up the Marange spoils, the vast outpouring of small, alluvial stones from the area had begun to undermine world markets. Hence debates began in earnest about how to sanitize and control the flow, and end the post-massacre reputation Zimbabwe had as the latest source of ‘blood diamonds’.
Zimbabwe diamonds represent a windfall that, if captured, could finance a significant percentage of reconstruction costs for Zimbabwe’s struggling economy. Finance Minister Tendai Biti’s 2012-13 budget projected that at least 20 percent of the anticipated revenues – $600 million – would come from diamond sales.[6] Biti, who is also secretary general of the MDC, concedes that just a few million dollars of conditional diamond sales from Marange, which were approved by the Kimberley Process (KP) Certification Scheme in prior years, had reached the Treasury. It is understood that billions of dollars in diamond revenues have escaped, mostly from a rapidly-built airstrip, with stones moving out through Dubai, India, Israel and China. The arrest of an Israeli smuggler at Harare airport in March 2012, carrying 1 300 diamonds worth over $2.4 million in his handluggage while wearing a fake South African Airways uniform, provided a hint about the modus operandi.
The main pressure to withhold diamonds from the market comes from competing sources, given the resulting crash in price that would result from unrestricted supply. Botswana is already feeling the adverse impact of oversupply, for example. ‘Zimbabwe really does have the potential to upset the applecart,’ according to Keiron Hodgson of Charles Stanley Securities:
The actual resource base of the Marange fields is still pretty much unknown, but official documentation implies that there’s between 60,000 to 70,000 hectares of resources there – the largest alluvial discovery in history and Zimbabwean officials anticipate that diamond production could generate between $1 billion and $2 billion per annum to an economy that has a GDP of around $7.5 billion so I would understand the urgency to produce diamonds from Zimbabwe, but I don’t think they’re going to go out and produce as many as they can because they are quite price aware. And also there is a need for infrastructure, there is a need for planning of production and levels of corruption and those kinds of aspects that surround the industry in the country needs to be eradicated as well. So I personally expect that you can see 2m to 3m carats per month produced at a peak rate for anything up to 20 years. But I don’t see production anywhere near that in the next two to three years, maybe four or five years even.[7]
KP permission for formal sales was agreed in the Democratic Republic of Congo, home country of current KP chair Mathieu Yamba. [8] That KP Plenary was most influenced by South African business magnate Abbey Chikane (who was involved in having Maguwu arrested and held for five weeks in 2010) and Mark van Bockstael, an architect of the KP system and the Chief Officer of International Affairs at Antwerp World Diamond Centre’s Department of International Affairs and Trade.
Perhaps surprisingly, the move is supported by Biti, who wrote a strongly worded letter to the US government, which supported the KP decision to lift the ban but refuses to remove sanctions on Zimbabwean diamond traders, including Mbada and Marange Resources which have links to Zanu(PF) generals:
I want to place it on record that we as Ministry of Finance, writing on behalf of the government of Zimbabwe, find your measures contrary to the spirit of engagement and harmful to the generality of Zimbabweans. Zimbabwe is a poor fragile economy and therefore, it must be allowed to sell and benefit from its resources. In my budget, there are capital projects of $600 million which are totally dependent on diamond revenues.[9]
The mainly mischievous Zimbabwean Herald claimed that the US State Departmennt – previously considered the most vociferous opponent to Zimbabwe ‘conflict’ stones exports – would reverse its position on condition that African states supported Washington’s bid to hold the KP chair in 2012.[10] While NGOs and human rights organisations scoffed at the possibility, in November 2011 the US did precisely that, after verification from a KP-certification team. Technically, Washington was still within the bounds of the narrow definitional geography, identifying ‘conflict’ stones as those traded by non-government forces, irrespective of the terror-tactics enforced by other KP-certified countries such as Angola and Namibia. Washington cited the compromise as a means of ‘effecting change’. As a result, some (like MDC Senator and business strategist Eddie Cross) estimate that Zimbabwean elites stand to generate as much as $3 billion annually from diamond running.[11]
Mugabe immediately countered that diamond revenues should not be depended upon to meet the budgetary needs of civil servants (who in February 2012 called for a national wage strike), and he argued that MDC Labour Minister Lucia Matibenga and Biti had failed to find ways to finance the civil servant budget, implying they were clutching at straws by anticipating Marange’s revenues might be shared.[12] While the KP’s Working Group did not publicise their decision to green-list Zimbabwe diamonds, the International Diamond Exchange revealed, ‘The approval spread by word of mouth from the miners to possible bidders, mainly Indian and Israeli rough traders and manufacturers.’[13]
The military connection to China
Who, then, is gaining from the Marange diamond find? Mugabe’s security leadership – especially Mnangagwa, Zimbabwe National Army (ZNA) General Constantine Chiwenga (who runs the junta-style Joint Operations Command group which retains most power over the country), and senior ZNA leader Colonel Sedze – allegedly represent the key military personnel involved in the daily management and operations of the most important agent in Marange, Anhui Foreign Economic Construction Co. Ltd. of China.
Anjin is the joint venture between Anhui and the Zimbabwean government, reportedly represented by an opaque entity, Matt Bronze Pvt Ltd. Anjin was the second company to begin diamond mining operations in 2009, with a 10 000 hectare claim, and soon declared output of one million carats. Soon thereafter, Chiwenga was flown to China for emergency medical treatment, but high-level contacts suggest this and other trips were actually designed to acquire other types of assistance, including military deals, further negotiations on a military academy, and arms purchases for the ZNA.
In addition, the Zimbabwe’s Diamond Mining Corporation (DMC) offered 400 000 carats in early February 2012, while Anjin will auction a further 500 000 carats. Two other companies, Marange Resources and Mbada, a South Africa-Zimbabwe join venture, brought to market a further 350 000 carats each. These tenders alone are expected to generate $64 million at $40 per carat.[14]
Mining processes
Anjin deposits in Marange include a location known by panners as ‘Jesi’, connected to the main plant at Chirasika via a wide gravel road. The excavated gravel is ferried in dumpers to the plant where processing and separation of diamonds is carried out. The company, which had a staff of 188 Chinese nationals and 285 Zimbabweans in 2011, currently controls more than 30 000 hectares of prospected diamonds fields, with 25 years of diamond mining forecast.
Anjin utilizes a dual form of administration, we learned. The Chinese manage staff while the Zimbabwean military is tasked with security-related issues. Labour relations between the Chinese and local Zimbabweans are said to be rife with tension due to the ‘importing’ of professionals whose qualifications were described as suspect. These professionals were appointed to technical positions including engineers and geologists, and low salaries paid to such quasi-hires were alleged by our sources to deflate the salaries owed Zimbabwean professionals. Our sources claimed that, when a list of Chinese staff was demanded for verification purposes, ‘the Chinese embarrassingly failed to produce this when Mugabe visited the mine in February.’ Unskilled workers at the mines received $88 per fortnight, while semi-skilled earned $280 per fortnight. Skilled workers were, we were informed, paid close to $1000 per month. (At the time, a local geologist allegedly resigned due to poor remuneration).
Life at these mines is extremely difficult for ordinary workers. Internal minutes of recent meetings between Zimbabwe’s Diamond Mining Corporation (ZDMC) and the National Union of Mines, Quarrying Iron and Steel Workers disclose a regulated system in which miners work for foreign corporations under the direct control of a ‘quasi-military force’ which treats them as loathed prisoners deserving of punishment.[15] According to the minutes, ‘Security guards are being trained under a quasi-military approach as if they are part of a private military arm…Furthermore these security guards are made to perform their duties under a standing order as if they are still part of the army or police force.’[16] Labourers’ contracts do not take into account overtime, transport or housing costs, or night or bush allowances, nor are they protected from being unlawfully dismissed. Employees are pressured to sign short multi-week contracts in addition to the three-month probation contracts.[17]
The trade union claimed that employees were referred to as dogs, and suffered physical and verbal assaults. Their primary source of food was rotten sausages or ‘degrading food such as chicken necks and porridge’ which was making them ‘very ill’. The dormitories have no electricity or ventilation and are, according to a union official, ‘squashed and easily susceptible to the hot weather conditions’. Meanwhile, employees at the diamond sorting plant, exposed to large volumes of dust, were not provided with protective masks. In contrast, the trade union noted that Arab and Indian employees enjoyed food and housing of a far better quality.[18]
Who is responsible?
The trail from Manicaland diamond fields to the fingers of wealthy consumers or the machines of industrial purchasers is roundabout, thanks in part to Marange’s blood-diamonds reputation and in part to the illicit nature of accumulation by Zimbabwe’s military-diamonds complex. An Antonov An-12 light cargo plane has been observed on the 1.2 km runway at Marange’s fields, transportinig rough diamonds to Harare airports including a private military base outside the capital.
Mbada is a joint venture between the ZMDC and South African scrap metal corporation New Reclamation, whose Zimbabwean arm (Grandwell Holdings), is a tax exempt Global Business Category I paper company established in Mauritius. According to the UK’s Daily Mail, five Chinese (Deng Hongyan, Jiang Zhaoyao, Zhang Hui, Zhang Shibin, and Cheng Qins) are silent beneficial partners. The joint venture’s chair is Robert Mhlanga, the former personal helicopter pilot to Mugabe. Grandwell already has a decade of exploiting iron in Zimbabwe – allegedly with no tender contract, renewal or monitoring – via the Zimbabwe Iron and Steel Company (ZISCO), which in 2006 was looted (‘steelgate’) when Mhlanga played a lead broking role, assisted by the Mujurus.
Before his murder, General Solomon Mujuru had claimed ownership to Zimbabwe’s diamonds through another mine, River Ranch, which had been seized in questionable circumstances by Mujuru and Sheik Aujan, who heads a company called Rani Investments based in the tax haven of Dubai. Diamonds are traded by Rani Investments through the company’s Finer Diamonds Trading Company. Although the United Arab Emirates (UAE) banned Marange diamonds, some of which were alleged to have been channelled and sold under River Ranch’s tag. In September 2010, a consignment of diamonds, valued at 4,000 carats was smuggled to Dubai, and then mysteriously returned to the ZMDC and state-owned Minerals Marketing Corporation of Zimbabwe, while another consignment with a clean Dubai KP certificate, was reportedly being held at the Antwerp World Diamond Center.
According to US State Department cables authored by then-Ambassador James McGee and released by WikiLeaks,
High-ranking Zimbabwean government officials and well-connected elites are generating millions of dollars in personal income by hiring teams of diggers. Whether bought first by regime members or not, eventually the diamonds are sold to a mix of Belgians, Israelis, Lebanese (the largest contingent), Russians, and South Africans. Once sold to foreigners, the majority of the diamonds are smuggled to Dubai and sold at the Dubai Multi Commodities Centre Authority, a dedicated economic free-trade zone created in 2002 for the exchange of metals and commodities, most notably gold and diamonds.
Observing that Mujuru and other insiders (including Gono) made several hundreds of thousands of dollars each month from illicit diamond revenue, McGee’s cables also confirm that the two Mujurus and Gono had met the US Ambassador and were long interested in a post-Mugabe era of conciliation with Tsvangirai, who claimed that Mugabe was thoroughly shocked by the betrayal of high-ranking ZANU-PF officials: ‘Mugabe comes to me saying, “Look, our people are running to the Americans”.’ Three days after Zanu PF’s national congress in late 2009, Joice Mujuru secretly met with the US Ambassador ’Charles Ray, and – according to the WikiLeaks cables – confirmed that ZANU’s ‘young blood’ (chiefly referring to herself) was now coming into force, allegedly pleading for the US to help restore Zimbabwe’s economy. According to the cable,
While Mujuru is inculcated with Zanu(PF) ideology, evidenced by her views on sanctions, she and her husband, General Solomon Mujuru, are business people who understand that a friendlier and more stable business environment requires political change. She also would like better relations with the US, which she views as essential for Zimbabwe’s economic growth. The fact that she was impelled to have a clandestine meeting is reflective of the power of Mugabe and hard-liners and the fear they engender.[19]
This relationship, says our source, led key players to privately speculate that, in the event it appeared Tsvangirai would win an election overwhelmingly, the MDC and Mujuru’s faction were planning a coalition government in the post-Mugabe era, one that would have been acceptable to Washington and other Mugabe enemies. A crucial stepping stone is to sanitize the Marange diamonds via KP certification, for the purpose of ensuring both an MDC-led government’s access to a more transparent revenue stream for taxation purposes, and to permit the military-diamond nexus to regularize its exploitation, ownership and control.
The test of KP integrity
In mid-September 2011, the KP sent a team to assess Zimbabwe’s diamond industry. Anjin was allegedly one of the mines scheduled for inspection, part of an agreement negotiated in the DRC by Yamba. The company has invested over $300 million in operations, yet did not until recently have a license to export diamonds.[20] But it did claim to successfully relocate families in the area to a new settlement, complete with tapped water and paved roads. Anjin was confident that it complied with the minimum KP requirements.
The KP monitoring team visited in late 2011 and early 2012: ‘Based on the documents provided and on the findings during the compliance verification visit to the DMC Mine at Marange and the Sorthouse in Harare from 9-10 December 2011 and from 5-7 January 2012, the KP Monitoring Team on Marange concludes that all operations and procedures are deemed fully KPCS compliant on 16 January 2011,’ wrote Bockstael and Chikane. For Bockstael,
Further stalemate would have reduced the KP to a simple trade regulatory regime without any moral or ethical importance or aspect. It would have lost any relevance to the industry… What we know now is that there are two compliant mining operations, Mbada and Marange Resources, and one other, Anjin, that has expressed its readiness to be visited and compliance tested, in the Marange diamond field. These are producing mines… Monitoring is exactly the core business of the KP Monitoring Team. Abbey Chikane and I are very much aware of the heavy responsibility that’s been placed upon us…Let me explain that: the KP is the political process that can propose new benchmarks and that, after all, has always been about human rights.[21]
But other founding members of the KP disagree, including Global Witness, one of the most influential human rights-focused NGOs and author of a major February 2012 report on Marange diamonds. The organization pulled out of the KP in protest in December 2011, charging that Zimbabwe (along with Venezuela and Cote d’Ivoire) violated and undermined the purpose of the KP: ‘Nearly nine years after the Kimberley Process was launched, the sad truth is that most consumers still cannot be sure where their diamonds come from, nor whether they are financing armed violence or abusive regimes.’[22] It became increasingly clear in 2011 that Colonel Sedze, the head of the government’s food relief programme for Manicaland Province, was also the head of security at Anjin. As a source also confirmed, ‘Both the head of the human resource department, his deputy and other senior managers at Anjin are active senior members of the Zimbabwe National Army. The command structure in the administration of Anjin diamonds on the part of Zimbabwe is military in nature.’
Another high-level source claimed:
In January 2011 the president addressed the chiefs’ conference in Kariba and briefed them on the situation in Marange highlighting that the company had not started mining diamonds at Chiadzwa but was busy building houses for resettling people at Arda Transau in Odzi.’ A month later, it was announced that the company held a stockpile of one million carats, awaiting KP certification. According to another source, ‘It is widely speculated that the employees work for the Chinese army. There is no clue as to the volume of diamonds that have been mined by Anjin to date, no public knowledge on where the gems are being stored and no information of whether these diamonds have been sold as yet.
The watchdog
Onto this impossible terrain stepped diamond researcher Farai Maguwu, described by The Economist magazine as a ‘first class’ source. He directs the Mutare-based Centre for Research and Development (CRD) and is also a doctoral student at our University of KwaZulu-Natal Centre for Civil Society in Durban. Says Maguwu, ‘Whilst I can’t commit myself to mentioning names, our observations indicate that some very senior military personnel and well placed politicians are directly involved in the mining operations of Anjin. The involvement of the army in diamond mining in Marange is the saddest thing that has happened to the find of the century.’
In mid-2010, Maguwu was arrested by the State as an ‘enemy’ for five weeks, for endangering national security by holding information pertaining to the Zimbabwean military’s alleged violation human rights at Marange’s diamond mines. Maguwu’s arrest appeared to be contrived, and kept him from attending a TelAviv meeting where he would have testified about Marange blood diamonds. The arrest was catalyzed by a meeting with the KP-appointed monitor, Abbey Chikane, a former South African diamond business magnate, three days before Chikane’s KP Fact Finding Report was released. Maguwu arrived at the Mutare hotel for the meeting, but so did Zimbabwean State intelligence officials. They had been informed about Maguwu’s role by Chikane, whose brother is Frank Chikane, former director-general in the Office of President Thabo Mbeki.
Maguwu believed, and stated publicly, that he had been ‘set up’ by Chikane. Chikane alleged that he received from Maguwu state security documents drafted by the army, and refused to read them because they were obtained illegally. Maguwu argues that Chikane was fishing for these documents at the meeting, as a way of implicating Maguwu for the purpose of imprisoning him.
‘I was arrested on the 3rd of June,’ Maguwu stated, ‘and the conditional sale [of Marange diamonds] was agreed in St Petersburg, on the 14th of July, exactly 2 days after my release from custody.’ Some believe that Maguwu was meant to be ‘out of action’ during the Tel Aviv summit and while the conditional sale was being negotiated, with diamonds inspected by Chikane, and then auctioned. Our attempts to get a response from Chikane did not prove successful, nor did attempts to interview the Kinshasa-based KP specialists. It was precisely the type of meeting that KP monitors were required to consider, in complete secrecy, to assess whether Zimbabwe’s Marange diamonds deserved ‘conflict free’ certification.
For Maguwu, the contact with Chikane was disastrous. ‘I immediately felt insecure and the following morning a truckload full of men in suits pitched up at my home and they were armed to the teeth’ he recalled. ‘They went on to beat my relatives at home and they took one of them into custody and they kept him in the police cells, beating him for about four days.’ Maguwu claimed that Chikane was part of the ‘gravy train…there must be something that is going on behind the scenes between Abbey Chikane and the ZANU PF officials who are plundering Marange diamonds.’
The charges against Maguwu – who later won a Human Rights Watch award for being the leading African rights advocate – would be dropped following intensive media scrutiny drummed up by local and international civil society who were especially concerned about torture and medical maltreatment during the five week imprisonment. But the underlying question remains: Why did Chikane seek to unilaterally approve KP diamonds, jeopardizing his own credibility, and that of the KP system? Why did he endanger arguably Zimbabwe’s most important diamond researcher? Why were there no repercussions from the KP? The answers might be found by tracing control of the world’s richest diamond field to Zimbabwe’s predatory military.
Discrediting the KP
Since the discovery of Marange’s diamonds in 2006, it is abundantly evident that the military has supervised its exploitation. Mass looting by political, corporate and military elites has occurred, accompanied by violent displacement and human rights violations. Companies based in secret jurisdictions such as Mauritius and Hong Kong have been granted ‘due diligence’ approval. And there is still no transparency about volumes extracted, exported and sold. To get such transparency and bring funds into the Treasury, Biti argues, requires KP certification and monitoring, though Maguwu disagrees this can be achieved.
The question posed by the recent Zimbabwe experience is whether the KP system – which today considers less than one per cent of global diamonds to be ‘blood’ minerals – was constructed for the purpose of eliminating corporate and state-sanctioned exploitation, or for normalising and sanitising it? The much-lauded KP is an international initiative created and backed by governments, multinationals, and civil society organisations to diminish the trade in conflict or ‘blood’ diamonds. But the KP’s very definition of blood diamonds excludes the world’s primary agents of ‘conflict’: governments. It also excludes private mining corporations that partner with the governments in developing countries to extract the diamonds.
The question then stands as to whether KP was devised simply to protect the partnership preserving control of the diamond market through ‘single channel’ pipelines, ensuring artificial scarcity, between then-market leaders De Beers and the bulk of the world’s rough diamond producers, primarily in Africa? If so, whether it should not be delegitimized?
By default, the KP’s definition excludes Zimbabwe as a ‘conflict’ agent. This is because, according to the KP, ‘Conflict diamonds means rough diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments’. The KP secretariat did not respond to requests for clarification about the Marange diamonds. One source close to the KP – and active within the system in previous years – was asked whether Chikane may in fact have been part of the ‘gravy train’, and he replied, ‘It was not clear to me whether Chikane turned Farai in because he was scared by what Farai told him (i.e. for his own safety), or whether it was because he had the kind of connections suggested. Chikane is certainly well connected, very wealthy. He should never have been made KP monitor.’
According to Ian Smillie, one of the world’s leading conflict diamond experts and a key KP founder, ‘We don’t know where all the diamonds went that were approved by Abbey Chikane. Chikane was a mistake on several levels. He was closely allied with the Government of South Africa, which had demonstrated a pathological inability to be critical of Zimbabwe’s horrendous human rights abuse in Marange. And he has extensive personal business interests in the Southern African diamond industry that should have disqualified him from the outset.’
Smillie stated that while some in the KP perceived Chikane – a past chair of the KP – as an inspired choice as ‘special monitor’, he was selected only after the KP allowed Zimbabwe to reject one well-qualified candidate (on the basis of his British nationality), and after several other potential candidates claimed, ‘they would not touch the job with a barge pole.’ Smillie also said that had Chikane been afraid, he could have left the country, and used the information while protecting Maguwu. Alternately, ‘having turned him in, he should have resigned’ after witnessing the response of the Zimbabwean government. ‘Disgracefully, he did neither. And equally disgracefully, the Kimberley Process allowed him to muddle on, approving diamond exports without authority and acting as though what he had done to a human rights activist was acceptable.’
Chikane examined only diamonds offered for export by Marange companies, according to Smillie, specifically whether they were ‘mined, as stated, in Marange’. For Smillie, these terms of reference indicate a failure of what the KP was meant to stand for and protect against: ‘It was like checking to see if Tony Soprano was using a crosswalk.’ In his resignation letter, Smillie stated, ‘There is a basic truth: when regulators fail to regulate, the systems they were designed to protect collapse.’
To date, the volume of diamonds exploited at Marange, is not known. The value of Marange’s reserves are estimated to exceed $800 billion, with a DeBeers survey report estimating the yield at more than eight times higher than average diamond fields, with a ratio of more than 1000 carats per hundred tonnes (CPHT). That report, prepared by noted geologist John Ward, contrasts Marange with Rio Tinto’s concession in Zimbabwe’s Midland province, where the yield is only estimated at 120 CPHT. It is true, however, that the quality and size of the diamonds has been a concern. DeBeers left the area in 2006, failing to exploit the fields where it had enjoyed prospecting rights since the early 1990s, and now its Forevermark retailing outlet refuses to handle diamonds from Marange. Zimbabwe Minister of Mines and Mining Development Obert Mpofu, from Zanu(PF), claims DeBeers simply ‘looted’ the better stones:
De Beers were there at Marange for 13 years and they didn’t say they found diamonds in Zimbabwe. It does not take five minutes to find diamonds in Marange, When the government started asking questions, De Beers left. Their withdrawal was so sudden. All the diamonds are not accounted for. They exported not hundreds but thousands of tons of diamonds without Kimberley Process Certification Scheme approval,[23]
Given Zimbabwe’s political situation, analysts in the diamond industry are hesitant to very the country’s ’vast reserves. The diamond newsletter Antwerp Facets recently reported that Zimbabwe’s Marange reserves have recently expanded from 63 000 hectares to an estimated 120 000[24].
Yet despite KP certification, and Biti’s banking on the diamond budget for $600 million in 2012, Zimbabwe continues hemorrhaging diamond revenue. Maguwu’s CRD interpreted the March 2012 smuggling arrest of  Shmuel Kainan Klein, an employee of CAL Airlines of Israel who owns a house in the upmarket suburb of Borrowdale, Harare:
The volume of diamonds Mr Klein was trying to smuggle could not have been obtained from artisanal miners who are now finding it hard to continue their operations in Marange. A recent visit to Marange by civil society groups and the media proved that security in Marange is water tight with hands free security cameras and high perimeter fences around all the mining concessions. Chances of anyone tampering with the security cameras in place are very slim.[25]
Meanwhile, newsletters like Antwerp Facets celebrate the certification of Anjin, Mbada and Pure Diamonds, and KP representative Bockstael confirmed the desire to avoid ‘further stalemate’.[26] Maguwu concludes,
Even if it is reformed, the KP will still be inadequate in addressing the challenges of transparency and accountability. Given that the KP is a UN backed coalition that upholds the principle of state sovereignty, it is not capable to enforce transparency and accountability as this will be seen as interference in internal affairs of participating countries. At the same time other international schemes such as EITI and PWYP are too voluntary in nature such that they can’t enforce transparency and accountability in the short term. There is need to move to a new framework that is enforceable and one that is also flexible so as to get the buy in of governments.[27]
How, in this context of clogged politics and a wide-open diamond pipe – which together are now draining the country of any hope for a democratic and developmental future – might progress emerge? And after a political opening, won’t a new risk prove formidable: a return to the Washington Consensus?
To counter all these negative processes, according to Raftopoulos at the Bulawayo conference, a renewed ‘international labour solidarity discourse is one of the best antidotes to Mugabe’s rhetoric’, especially the ‘exemplary solidarity’ shown in April 2008 when in Durban, transport workers refused to unload three million bullets destined for Mugabe’s army from the Chinese ship An Yue Jiang. The ship was repelled from several other ports in southern Africa, though some sources believe the arms were finally imported via Angola, after the elections. A new surge of such solidarity will be needed if regress again trumps progress in Zimbabwe: if diamond revenues via Dubai, China, India and Israel continue to re-empower the junta; if the KP’s credibility continues waning as blood-diamond monitor and if Washington cuts a deal with Harare generals; if Zanu(PF) again steals an election; or also, in the unlikely case that neoliberalism makes a comeback on the back of multilateral debt obligations repaid through more cleanly-extracted Marange diamonds, while starvation, poverty and inequality worsen. Regardless of these political dynamics, however, Marange has now catapulted Zimbabwe to the status of a leading rough diamond producer, and the diamond industry will never be the same again.
[1] Progressives in civil society writing the National People’s Convention Charter in February 2008 demanded a debt audit before any multilateral or bilateral loans are serviced, and as happened similarly in Ecuador in December 2008, ‘the right of the people of Zimbabwe to refuse repayment of any odious debt accrued by a dictatorial government.’ This position is supported by the local Jubilee chapter, the Zimbabwe Coalition on Debt and Development.
[2] Trivially, but tellingly, one of the authors – Bond – was banned from giving a talk on the world economy in early February 2012 notwithstanding that the invitation came from Finance Minister Tendai Biti, although the following week, the police relented and allowed the lecture.
[3] Mangwende, Brian (2012), ‘Smell the coffee Mr Prime Minister’, NewsDay, 28 February, http://www.newsday.co.zw/article/2012-02-28-smell-the-coffee-mr-prime-minister/
[4] The Kariba Draft constitution was authored by lawyers including Tendai Biti (MDC-T), Welshman Ncube (MDC-M) and Patrick Chinamasa (ZANU-PF) , representatives of the power sharing government in the town of Kariba. It was made available to the public in September 15 2008, signed by ZANU-PF and the two MDC factions, as part of the power-sharing agreement. The National Constitutional Assembly opposed the Kariba Draft on several different bases, including that very little was known about the process of authoring the draft in ‘a clandestine meeting between the principal negotiators of Zimbabwe’s three primary political parties’, citing also that there was the same ‘content’ weakness embedded in the Constitutional Commission proposal (2000 Constitution). More crucially, it facilitates the marginalization of opposition movements, example, the automatic removal of parliamentarians who have been absent for 21 consecutive meetings, which could negatively impact on those forced into hiding for various reasons.
[5] The quotes in the section below, drawn from the Progress conference, were typed verbatim by Bond, were circulated to conference participants, and are available by writing to .
[6] Bell, Alex. ‘Zimbabwe: Finance Minister Banks On Diamond Revenue for 2012 Budget’, Nov 24 2011, SW Radio Africa, http://allafrica.com/stories/201111250158.html
[7] Candy, Geoff. ‘Diamond sector to consolidate in 2012- Kieron Hodgson’, Feb 3., 2012, http://www.mineweb.com/mineweb/view/mineweb/en/page96985?oid=144709&sn=2010+Detail&pid=102055
[8] IDEX Online, ‘Without Fanfare, Zimbabwe Goods Get Final KP Approval, Start Tendering’, Feb 3 2012, http://www.idexonline.com/portal_FullNews.asp?id=36386
[9] Gonda, Violet. ‘Zimbabwe Finance Minister Challenges U.S. Over Marange Diamond Ban’, Jan 16 2012, http://www.voanews.com/zimbabwe/news/Zimbabwes-Finance-Minister–137435998.html
[10] Malaba, Brehznev. ‘Zimbabwe: Nation On Verge of KPCS Breakthrough.’ Nov 1 2011.
[11] Interview, February 2012.
[12] Dube, Gibbs. ‘Zimbabwe Diamonds Can’t Meet All Budget Needs, ZANU-PF Cautions’ Jan 18 2012, , http://www.voanews.com/zimbabwe/news/Zimbabwe-Diamonds-Cannot-Meet-All-Budget-Requirements-Says-ZANU-PF-137594233.html
[13] IDEX Online, ‘Without Fanfare, Zimbabwe Goods Get Final KP Approval, Start Tendering’, Feb 3 2012, http://www.idexonline.com/portal_FullNews.asp?id=36386
[14] IDEX Online, ‘Without Fanfare, Zimbabwe Goods Get Final KP Approval, Start Tendering’, Feb 3 2012, http://www.idexonline.com/portal_FullNews.asp?id=36386
[15] Confidential documents from the trade union.
[16] Ibid
[17] Ibid
[18] Ibid
[19] Wepakati, John, ‘Wikileaks: Mujuru clandestinely met with US Ambassador and pleaded for US help’, Zimbabwe Mail, Sept 3 2011, http://www.thezimbabwemail.com/zimbabwe/8945-wikileaks-mujuru-clandestinely-met-with-u-s-ambassador-and-plead.html
[20] NewsDay Zimbabwe, ‘Anjin Invests $300 Million’, Dec 16 2011, http://www.newsday.co.zw/article/2011-12-16-anjin-china-invests-300m/
[21] Antwerp Facets, ‘Zimbabwe accord seen bolstering relevance of Kimberley Process’, 9 November 2011, http://www.antwerpfacetsonline.be/nc/articles/single-afsr/article/zimbabwe-agreement-seen-bolstering-relevance-of-kimberley-process/
[22] AFP, ‘UN Blood Diamond Group Aims to Salvage Campaign’, 3 February 2012, http://www.google.com/hostednews/afp/article/ALeqM5jBIOJRfKMHbO-lTeWXOC61zSF3dQ?docId=CNG.05a4a8601675ff5d64115a729e41b98e.01
[23] Business Day, ‘DeBeers’ Zimbabwe “looting” files missing’, Business Day, 21 November 2011.
[24] Antwerp Facets, ‘Further 53,000 hectares of diamond deposits added in the Marange area’ Dec 18 2011.
[25] Centre for Research and Development, ‘Diamonds could undermine justice, democracy and development in Zimbabwe’ Mar 26 2012.
[26] Antwerp Facets, ‘Zimbabwe accord seen bolstering relevance of Kimberley Process’ Nov 9 2011.
[27] Interview, March 2012
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