(Rapaport…March 30, 2005) A United Nations expert panel report has said that Liberia’s diamond trade is illegally controlled by a secret monopoly and has recommended that the Security Council-imposed sanctions on Liberian diamond exports should remain in place given that the country still lacks the funds to adequately certify rough diamonds for international sale.
The UN expert panel was appointed to review the sanctions against Liberian diamond exports and submitted its report to the UN Security Council. According to a UN news release on March 29, an atmosphere of secrecy shrouds Liberian government’s mineral pact with the company or secret monopoly of “unknown provenance and with no mining sector experience,” that illegally controls diamond mining. The company’s official name is the West Africa Mining Corporation (WAMCO), with supposed financial backing from the privately owned London International Bank Ltd.
There was no formal or open bidding process and no consultation with the Liberian Monopolies and Contracts Commission over the negotiations with WAMCO, it says, and it discovered in an interview of WAMCO representatives in Liberia’s capital, Monrovia, that WAMCO has had no experience in mining.
“Such an arrangement would create a de facto monopoly over much of Liberia’s diamond-producing regions and would preclude market competition for the purchase of diamonds by dealers from alluvial artisanal miners,” said the report .
The report added that poor security in diamond-producing regions is contributing to illegal mining. It added that foreign buyers have been operating out of hotels and guest-houses, buying diamonds and smuggling them “to neighboring States where goods may be passed off as the domestic production of those countries and obtain Kimberley Process Certificates for international trading”.
The UN Security Council on March 29 discussed the report of the expert panel which also says that the slow rate of funding and technical assistance has hindered the application of the Kimberley Process and therefore the diamond sanctions should remain in place.