Zimbabwe

Zimbabwe diamond cash stash for elections

2012-02-15 16:47

Special Report

Malawi diplomat designate called Mugabe 'idiot' - report
Malawi diplomat designate called Mugabe 'idiot' - report

Diplomatic ties between Lilongwe and Harare are likely to face a blow after President Peter Mutharika appointed a man who once described President Robert Mugabe as an “idiot” to be the new ambassador to Zimbabwe.

Harare - A group monitoring blood diamonds said on Wednesday that mining officials loyal to the authoritarian president are stashing profits from Zimbabwe's diamond fields, and cited fears the money could be used for political violence ahead of proposed elections.

Global Witness said in a report circulated on Wednesday that its investigations show unspecified amounts of diamond earnings are being hidden in the tax-free havens of Mauritius, Hong Kong and the British Virgin Islands.

The mining executives include retired and serving police and military officers, the group said, raising fears the money could be used to finance violence and intimidation.

"If the next election is accompanied by violence there is a real risk that any bloodshed will be funded by diamond revenue," said Nick Donovan, a senior researcher for Global Witness.

The group said diamond money is "desperately needed" to rebuild the shattered economy and should not be used as an "off-budget cash cow" for loyalists of President Robert Mugabe.

Mugabe's party has denied hoarding diamond earnings.

Mugabe has called for elections this year to end a fragile three-year coalition with the former opposition of Prime Minister Morgan Tsvangirai.

The coalition was formed after disputed and violence-plagued elections in 2008. Independent rights groups blamed the violence on the police and military and Mugabe party militants.

Mugabe's mines ministry denies any wrongdoing in diamond fields that have been mired in allegations of corruption, killings and human rights violations.

Rampant abuse

Global Witness last year pulled out of the Kimberley Process, the world diamond control body, saying the body approved Zimbabwe's diamond sales without doing enough to stop abuses in the diamond industry and revenue leaks that went unaccounted for.

The finance ministry, controlled by Tsvangirai's party under the power-sharing agreement, says this year the treasury has been promised $600m from diamonds, seen as way below the potential income.

Government employees have mounted a series of strikes so far this year over pay demands that Tsvangirai's party insists can only be met by improved payments into state coffers from diamond revenues.

Since the military took control of the fields in 2008, using troops and helicopter gunships to remove villagers and small-scale miners, Zimbabweans with diamond interests have bought luxury cars and opulent homes.

Rights groups say at least 200 people died and many others were wounded in operations to seal off the diamond fields.

Since then, Global Witness said on Wednesday, diamond concessions have been allocated to several companies linked to Mugabe's party under "questionable circumstances".

"Secrecy jurisdictions" in tax havens shielded the companies from exposure for corruption, tax avoidance and spending in Zimbabwe outside the national budget, the group said.

The board of the Chinese mining and construction company Anjin in the eastern Marange district included senior police, military and defence ministry officials, the report said.

A close Mugabe ally and former top air force officer was given a 25% stake in one of the largest diamond firms, Mbada Diamonds, that operated in eastern Zimbabwe behind a "complex and opaque company structure" and, like the Chinese company, was not audited to show who benefited from diamond sales.

Global Witness called on the world diamond industry to urgently implement a system of "supply chain due diligence" to assure diamond-buyers that they are not funding human rights abuses.

- SAPA

Read more on:    global witness  |  zimbabwe  |  zimbabwe elections  |  southern africa  |  blood diamonds
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