via EU removal of targeted sanctions on ZMDC “meaningless” | SW Radio Africa by Tererai Karimakwenda October 1, 2013
The decision by the EU late last month to remove all targeted sanctions that were still in place against the Zimbabwe Mining Development Corporation (ZMDC), is not likely to change much in terms of the way the country’s diamonds are traded and accounted for, an economic expert has told SW Radio Africa.
As of September 25th, cheaper rough diamonds from Zimbabwe will be allowed into EU member countries, following the ZMDC’s removal from the list of companies that were included when restrictive measures were put in place against Robert Mugabe and his close allies in 2002.
But according to economist John Robertson, the move will not mean much in terms of the transparency and accountability that Zimbabwean human rights activists and ordinary citizens have been demanding. This is because the Chinese appear to have a hold on them in deals already made with the Mugabe regime.
“The diamonds so far appear to have mostly gone to China but it’s impossible to know just what proportion has gone there and what proportion of the gem quality stones have ended up in the Chinese market. And it is very unlikely that the Chinese would want to now relinquish them to any other country,” Robertson said.
He said the delisting of the ZMDC might mean that some European countries can now place direct orders with Mbada diamonds or any of the other Chiadzwa diamond mining companies, but there is no way of knowing whether they will still have to go through Chinese connections to have their orders fulfilled.
According to Robertson, Zimbabwe’s diamond companies have not been properly incorporated in a way that makes where they are and how they function open to scrutiny, audits, taxation or bookkeeping regulations.
Some reports had predicted that lifting the restrictive measures will mean cheap rough diamonds from Zimbabwe would now flood markets in countries like India, which boasts the world’s largest diamond cutting and polishing centre in Surat. This is turn would translate to a price drop.
One report quoted Dinesh Navadia, president of the Surat Diamond Association, as saying: “The big diamond mining companies would be compelled to reduce their rough diamond prices as the cheap Zimbabwe goods have officially entered the market.”
But Robertson was not as optimistic. He said: “I could see no reason why this change would make any difference whatever to the way in which the diamonds are mined and exported. I think the people who are receiving these diamonds currently are going to be very unwilling to see a change that would be to the benefit of European or Indian companies.”
The EU imposed restrictive measures against the ZMDC in 2002, following reports that implicated the company in diverting diamond revenue to prop-up the Mugabe regime and its human rights abuses and oppressive policies.
The measures simply consisted of a travel ban and an assets freeze which have now been lifted, but have been used as propaganda by ZANU PF, who have blamed them for all of Zimbabwe’s economic, political and even environmental problems.