Group Urges KP to Investigate CAR

140 95 Rapaport News

RAPAPORT… Zimbabwe has been on the Kimberley Process’ (KP) agenda for nearly two years, but International Crisis Group warned that the Central African Republic (CAR) requires immediate attention, too. According to the group’s December report, CAR’s President François Bozizé tightly controls his country’s diamond industry and keeps profits from rough sales while the country’s citizens live in ever-greater poverty.

Since Bozizé came into power in 2003, almost all of the country’s industrial mining companies have left and many of the local miners have lost their jobs, causing a spike in infant malnutrition. Licenses remain very expensive and an existing 12 percent tax on diamond exports, the highest in the region, encourages smuggling and fosters illicit trading networks. In addition, disenfranchised groups, most notably the Union of Democratic Forces for Unity and the Convention of Patriots for Justice and Peace, prey on miners and traders and sell stones on the black market.

Ned Dalby, International Crisis Group’s Central Africa analyst, stated, “Miners enduring poverty and a parasitic state are quick to join rebel groups. Meanwhile, unchecked criminal networks enable fighters to profit from mining and selling diamonds illegally and continue to prey on civilians.”

International Crisis Group recommended immediate action by the KP Certification Scheme (KPCS), suggesting that the global monitor send a compliance team to CAR to investigate rebel activity and advise the industry on how to ensure exporting companies do not trade diamonds mined or sold by rebel groups. The group also recommended that CAR’s government transfer the power to award mining contracts from the president to the Mines Ministry, so that contracts can be made public and subject to Parliamentary review.

In order to stop diamonds from funding armed conflict, International Crisis Group urged the government to compile a public blacklist of individuals who are either in rebel groups or have links to them and prohibit them from mining, trading and exporting rough diamonds. Furthermore, to develop the mining sector and discourage illegal activity, the group asked CAR to reduce artisanal mining license fees and allow miners to pay in several installments.

KP Approves Zimbabwe Proposal

Zimbabwe moved one step closer to legally exporting goods from its Marange mine after all members of the Kimberley Process (KP) approved a proposal to allow these exports submitted by its 2010 chair, Israel. The new amendment raised the veto conditions on the KP’s Working Group for Monitoring (WGM) so that any three members, rather than two, can submit a report if Zimbabwe breaches the Joint Work Plan (JWP) designed to ensure its Marange operations comply with KP requirements. The amendment also allows exports from the two operating mines at Marange – those operated by Mbada Diamonds and the Zimbabwe Mining & Development Corporation (ZMDC), the latter of which is sanctioned by the U.S. government.

The role of the KP monitor for Marange will also change in that shipments will no longer require supervision. Instead, the monitor will solely oversee compliance at the mines.

China Pledges to Help Angola Diversify Trade

During a mid-January visit to Luanada, Angola, Chinese Vice Minister of Commerce Zhong Shan stated that China would reduce tariffs on diamonds and other goods imported from Angola. Zhong made the pledge during his meeting with Angola’s Minister of Trade, Maria Idalina Valente, to explore expanding trade and economic ties with Angola, its largest trading partner in Africa.

According to the Xinhua news agency, the Chinese official said crude oil was almost the sole product from Angola to end up in Chinese markets, despite the fact that trade volume between the two countries totaled almost $25 billion in 2010. To encourage Angolan businessmen to export more products to China, he added, as of January 1, 2011, the Chinese government reduced or waived tariffs on Angolan exports to the country.

Zhong said China and Angola have made substantial cooperative progress in the fields of energy, basic infrastructures and agriculture and the Chinese government has encouraged Chinese enterprises to invest in Angola.
Valente said her country is also interested in learning about China’s development experiences in setting up Special Economic Zones (SEZs) and zones for processing exports.

—Additional reporting provided by Acquire Media.

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