NGOs: Diamond Sector Unlikely to Enrich Liberia

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RAPAPORT… Liberia’s diamond sector is unlikely to greatly enrich its government coffers and could have a negative effect on peace and security in the country, according to a new NGO report on the diamond, rubber and forest sectors in Liberia.

The report, entitled ‘Land Grabbing and Land Reform – Diamonds, Rubber and Forests in the New Liberia,’ estimated that total government revenues would be “enough to cover the costs of regulating and administering the sector, but not much more.”

The country, which is now a member of the Kimberley Process, ended a six-year ban on diamond trading at the end of July 2007 allowing its citizens to once again apply for diamond mining, selling, and broker licenses after the United Nations lifted its sanctions on rough diamond exports.

The report noted that the size of Liberia’s diamond sector remains “an exercise in guesswork” due to the lack of accurate statistics. Data from the pre-war 1980s show annual exports of between 200,000 and 300,000 carats, with a value of approximately $20 million to $30 million. About half of these diamonds were thought to have been smuggled in from Sierra Leone and other parts of West Africa, the report added that a best “guesstimate” would value diamond exports at around $10 million to $15 million per year.

Given that the export tax has been set at a rate commensurate with those of neighboring countries to discourage smuggling, and combined with permit fees and assorted other levies, total government revenues from the diamond sector are likely to come in at around $500,000 to $750,000, the report estimated.

NGO’s, Partnership Canada Africa and the Association of Environmental Lawyers of Liberia (Green Advocates,) which published the report, warned that the country’s artisanal diamond sector needed to be managed properly to avert a potential to negative impact on Liberia’s external image and the internal peace and security of the country.

“Avoiding [these] will require careful management by the Ministry of Lands, Mines, and Energy, and much greater coordination and cooperation with the diamond sector’s civil society stakeholders,” they co-wrote in the report.

The NGOs added that while a great deal of government effort went into becoming Kimberley Process compliant, there was less effort placed upon how best to make diamonds benefit local communities, miners, or the Liberian people as a whole.

“Unfortunately, there exists a widespread misapprehension in Liberia that membership in the Kimberley Process will take care of many of these issues, that the Kimberley Process, approved by the United Nations and supported by the international community, contains within it measures that require the government to reform the diamond sector in ways benefiting the Liberian people,” the report stated.

“Alas, nothing could be further from the truth…. There is nothing in the KPCS requiring governments to improve the lot of diamond miners, to distribute the wealth from diamond mining to local communities, or to use the revenues from diamond mining for anything useful at all,” it added.

The NGOs warned that in order to progress, the Ministry of lands, Mines and Energy needed to extend beyond its focus on compliance and engage with civil society.

Liberia’s government is currently drafting two reforms affecting the mining sector being the land reform process and reform its mining act, both without consulting miners.

“None of the several miners and buyers organizations were, at the time of writing [the report,] even aware of the existence of these two reform processes,” the report stated. “However, while miners may not be represented at the table, they are certainly a presence in the Liberian countryside.”

“Failure to obtain the input of miners will potentially doom any reforms to failure, and could ignite hostility and even violence among alluvial diamond miners in the field,” it added.

You can read the full report now.

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