Donald M. Payne – Testimony Before the Trade Subcommittee

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Statement of the Honorable Donald M. Payne, M.C., New Jersey

Testimony Before the Subcommittee on Trade

of the House Committee on Ways and Means

Hearing on Trade in African Diamonds

September 13, 2000

Good morning.

Thank you Mr. Chairman for allowing me to present my testimony today before this Committee. As the Ranking Member of the Subcommittee on Africa of the Committee on International Relations, the issue of conflict diamonds is one that I have been concerned with for many years now. The Subcommittee on Africa held a hearing entitled, “Africa’s Diamonds — Precious, Perilous Too?” on May 9th of this year. At that hearing, we heard from a number of witnesses including Mr. Nchakna Moloi, Special Advisor to the Minister for Minerals and Energy of the Republic of South Africa, and Ms. Gooch, Director from Global Witness. We extended an invitation to the representative from De Beers but they declined our offer to participate.

I wanted to participate in this hearing for a couple of reasons but mainly to bring attention to the issue of dirty or conflict diamonds. I am very concerned, however, that the legitimate markets of Botswana, South Africa, and Namibia that depend almost excessively on the diamond revenues to sustain their local economies, do not experience backlash from the boycott of illegitimate diamonds of Sierra Leone, Angola and the Democratic Republic of the Congo.

As you already know, the Revolutionary United Front, a brutal rebel army, has committed egregious violations of human rights by maiming, injuring and killings many of the innocent men, women and children living in Sierra Leone. The RUF receives its revenues from neighboring countries but the commodity driving the war comes from diamonds within the country. The rich-diamond areas of Kailahun, Kenema and Bo are controlled by the RUF and the so-called West Side Boys. Similar to Angola, I am pleased that the United Nations passed a resolution [5 July 2000] banning the sale and exportation diamonds from being bought from Angola’s UNITA’s, Sierra Leone’s RUF and hopefully one will be introduced that condemns Zimbabwean soldiers excavation into Mbuji Mayi. Let me say that I agree with the reports that getting control of diamond mining areas only ends the conflict; it is not a catalyst for real democratic change. That requires a great deal more.

Mining is the most important economic sector in several African countries, and it is vital to the economies of many others. For example, the minerals sector accounted for 10% of South Africa’s gross domestic product and 51% of its export earnings. Several African countries have made substantial changes to their mining laws to attract private-sector investment.

Botswana is one country that has done just that. On a recent visit in July to Gaborone, Botswana, I had an opportunity to tour the main operating diamond facility in the heart of downtown. At independence in 1966, this patch of the Kalahari Desert in Southern Africa was one of the world’s poorest countries. Botswana, nearly as big as Texas, had 2 paved roads, one public secondary school and life expectancy for its people of 40 years . Now it is one of the few real democracies in African –richer than Russia in per capita income and boasting to have the second-fastest economy in the world. Diamond mining was and still is the primary driver of its boom and former President Sir Ketumile Masire and now President Festes Mogae — told me during my visit– in order for Botswana to survive long term, we need to diversity our economy from being overly dependent on our mineral revenue. He said that he understood that nations in which a single mineral dominates production have proven especially vulnerable to cyclical drops in world prices.

According to a recent survey by the Mineral commodity, 25% of African cobalt, the main substance in diamonds, is imported to the United States. With the passage of the Growth and Opportunity Act this year, the U.S. will be importing and trading more with our African partners. The diamond regime needs a major overhaul so it does not effect our industry and the industry of the countries I previously mentioned. At the Subcommittee hearing Eli Haas, President of the Diamond Dealers Club, said that “while there is discussion of the development of a technology to come up with identifying marks or fingerprints to determine particular countries of origin of diamonds, no such technology is currently available.” I find it hard to believe that the Central Selling Organization (CSO) of De Beers, an organization that Botswana supplied over $2.05 billion to last year and whom South Africa supplies over $850 million can not develop the technology to mark the origins of the diamonds. New Diamond fingerprinting technology is being developed in consultation with the Royal Canadian Mounted Police (RCMP). The RCMP state that the potential difficulties in applying the technology are reduced, however, by the fact that the bulk of the rough diamond trade is centralized in only two organizations and two locations, the HRD in Antwerp and De Beer’s CSO in London.

In conclusion, I would like to submit for the record the testimony of Ian Smillie from Partnership Africa Canada. I agree that there needs to be oversight from rebel groups acquiring diamonds fields to fuel their home grown wars and also we need oversight from the proliferation of diamond revenues to pay international security firms such as Executive Outcomes and Sandline, mercenaries groups operating in Africa. This is short-term. In the long-term, the international community must establish:

„h A permanent Independent International Standards Commission should be created under the United Nations in order to establish and monitor codes to regulate the global diamond industry and.

„h A more effective auditing system is desperately needed. Presently, the CSO audits itself.

Thank you once again Mr. Chairman for allowing me to testify before this Committee today.

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