Britain accused of ‘filling Robert Mugabe’s coffers’ after lifting EU sanctions

via Britain accused of ‘filling Robert Mugabe’s coffers’ after lifting EU sanctions – Telegraph By David Blair, Aislinn Laing  18 Sep 2013

Britain has been accused of effectively handing President Robert Mugabe hundreds of millions of pounds of extra revenue after agreeing to lift European Union sanctions on diamonds.

All restrictions on the Zimbabwe Mining Development Corporation (ZMDC), a state-owned company which controls one of the world’s biggest diamond fields, will be removed when EU foreign ministers meet next month.

The company will be able to export diamonds to Britain and all EU member states, significantly increasing its revenues.

Large sums raised from Zimbabwe’s diamond sales are unaccounted for every year. In 2012, the country exported diamonds worth £353 million, but only £26 million was paid to the finance ministry in royalties.

What happened to the other £327 million is unclear. Campaigners believe that much of the money entered the pockets of senior figures in the regime or a network of companies controlled by Mr Mugabe’s Zanu-PF party.

“The reality of the situation is the UK government dropped the ball on this,” said Emily Armistead, a researcher on conflict resources from Global Witness, a campaign group. “They seem unwilling to look properly at the evidence which suggests that diamond companies have funded election-rigging.”

The decision to allow ZMDC to sell diamonds to Europe would “effectively” place hundreds of millions of dollars of extra revenue in Mr Mugabe’s hands, she added.

Most of Zimbabwe’s diamonds come from the Marange field, which was discovered in 2006.

At first, the stones were illegally mined by thousands of individuals. In 2008, Mr Mugabe sent about 1,500 troops, backed by helicopter gunships, to clear the area by force. Hundreds died in a military operation code-named “Hakudzokwe”, or “You Shall Never Return”.

Since the onset of formal mining at Marange, diamonds worth £1.25 billion have been stolen, according to a study by Partnership Africa, a Canadian campaign group.

When Zimbabwe’s parliament tried to conduct an inquiry into Marange, its MPs were banned from entering the area for two years.

Nonetheless, Zimbabwe’s diamonds were cleared for export by the Kimberley Process, which is supposed to prevent tainted gems from entering the international market.

Belgium wanted to ensure that Zimbabwe’s diamonds passed through Antwerp, the largest such exchange in the world. Britain has now yielded to this demand.

A Foreign Office spokesman said: “We have agreed to delist ZMDC because we believe it’s important that EU member states should work together and maintain a united position on Zimbabwe.”

The decision might have been helped by Mr Mugabe’s decision to remove Obert Mpofu as mines minister in a cabinet reshuffle after the recent election. Mr Mpofu, a controversial figure, was blamed for many of the abuses.

Britain also wants to ensure that a travel ban and asset freeze, presently imposed on Mr Mugabe and nine of his allies, are renewed by the EU in February. Dropping the sanctions on ZMDC is seen as the quid pro quo.

However, the ban on Mr Mugabe visiting the EU or holding assets in any member state is largely symbolic, whereas the restrictions on ZMDC once deprived his regime of hundreds of millions of dollars.