West African conflict imperils fragile diamond recovery

West African conflict imperils fragile diamond recovery 
11th March 2011 
Updated 53 minutes ago
Although conflicts in the Middle East and North Africa have dominated world news, there are increasing warnings of a civil war in Côte d’Ivoire, from which media focus has shifted.

Kimberley Process (KP) chairperson Mathieu Yamba reports that the situation in Côte d’Ivoire is a “cause for growing concern”, considering the risk of the re-emergence of conflict diamonds in that country, and an increase in rough diamond smuggling throughout West Africa.

The possibility of diamonds once again being used to finance conflict arises, as the United Nations Operation in Côte d’Ivoire (UNOCI) has warned that President Laurent Gbagbo’s loyal militias may be preparing for civil war.

The ‘Diamonds Without Borders: An Assessment of the Challenges of Implementing and Enforcing the Kimberley Process Certification Scheme’ report states that, although armed conflict between the Forces Nouvelles de Côte d’Ivoire (FN) and the government of Côte d’Ivoire has ceased, de facto division of the country continues, with the FN maintaining effective control of the diamondiferous areas in the north of the country.

The 2010 Kimberley Process Certification Scheme (KPCS) enforcement seminar report to the KPCS plenary was submitted by Partnership Africa Canada and the governments of the US and Canada.

The report states that Ivorian diamond production, which totalled around 300 000 ct/y prior to the conflict (raking in $25-million), is concentrated in the two areas around Séguéla-Bobi-Diarabana (covering about 100 km2) and Tortiya (covering about 30 km2). While pro-duction levels dropped slightly during the first few years of the previous conflict, nine recent reports suggest that diamond mining in Séguéla has not only continued, but has also expanded.

For example, various reports have revealed the exploitation of three new kimberlite pipes in Diarabala, as well as new pits at Dualla and Siana. Production in 2009 may actually have reached pre-embargo levels, although this is debated, the report states.

In the south of the country, the government has no control over the mining of diamonds. Revenue generated through diamond mining does not filter into the country’s central fiscus.

“Ivorian diamonds are subject to United Nations (UN) sanctions. Diamonds were used to fund the FN during the past decade of conflict and insecurity. Given the political climate in the country, following on the elections, UN sanctions remain in place and it is important that they do. Every day there is a higher risk that Côte d’Ivoire could really become [an area of] live conflict again, with the risk that diamonds could be used to fund one side of the conflict,” says Global Witness campaigner Elly Harrowell.

There are also views on the abuse of cocoa production in the country. “The army’s loyalty allows Gbagbo to maintain his stronghold on the Ivorian State, and it needs to be paid. Cocoa taxes have long been a major source of funds for his regime, and there is a danger that money stolen from the sector is being used to fund militias now terrorising parts of the population,” says Global Witness campaigner Daniel Balint-Kurti.

Mounting Concern

Concerns are escalating that diamond smuggling through West Africa will gain impetus.

Before the civil war of 2002 in Côte d’Ivoire, there was a drop in the price of cocoa and the government decided to focus on the mining sector, reveals DiamondFact.org. The website states: “The new interest in diamond mining coincided with the wars in Liberia and Sierra Leone and affected Côte d’Ivoire’s diamond exports, which rose exponentially.”

“The Gbagbo clan has a long tradition of mobilising militias, being very hostile and having armed mobs, which it is at present trying to rally,” UNOCI commissioner Jean-Marie Bouries told the UN News Centre.

UN secretary-general Ban Ki-moon recently called for full compliance with the UN arms embargo placed on Côte d’Ivoire.

There has been excessive use of force against demonstrators in the city of Abidjan and surrounding areas. In February, independent organisation Human Rights Watch voiced its concerns about the clashes between armed forces and militia groups loyal to Gbagbo in the western region.

Institute for debate and analysis on international issues Chatham House’s Africa Programme head Alex Vines states in one of the organisation’s publications, The World Today, that over 300 Ivoirians have been killed and about 20 000 have fled into neighbouring countries to escape the violence.

The situation has been spiralling out of control since the country’s elections in November 2010, with Gbagbo refusing to leave office despite Alassane Ouattara’s UN-certified victory. The election was meant to be a culmination of efforts to reunify the country, which is split as a result of the civil war in 2002 into the government-controlled south and the rebel-held north.

Vines tells Mining Weekly that the situation in Côte d’Ivoire is worrying. “It looks like both sides are preparing for civil war. The recent allegations of Mi-24 gunships being imported make the possibility of war more real. There also seems to be a growing split between the Economic Community of West African States (Ecowas) and the African Union (AU).”

The strain on the economy is also evident and, in December 2010, the World Bank froze its finance to the country, where it was supporting 21 operations with an aid commitment of $841,9-million. Ecowas and the AU have suspended Côte d’Ivoire and imposed sanctions on the country.

On February 25, Ki-moon’s spokesperson said: “These developments mark a disturbing escalation, which draws the country closer to the brink of reigniting civil war.”

The political instability, violence and tension recall a familiar picture of the coups, chaos and ethnic division preceeding the civil war in September 2002, in a country once considered to be the economic powerhouse of Africa. Côte d’Ivoire is the world’s largest producer and exporter of coffee, cocoa beans and palm oil. The country also has other natural and mineral resources, such as petroleum, natural gas, diamonds, manganese, iron-ore, cobalt, bauxite, copper, gold, nickel, tantalum, silica sand, clay and hydropower.

Diamonds have played a role in prolonging insecurity in the country over the past decade. Nongovernmental organisation Global Witness also pointed out in 2007 that cocoa, which makes up 35% of the country’s exports, had contributed significantly to the finances of both the Ivorian government and the FN.

Today, Côte d’Ivoire remains under a UN Security Council (UNSC) Resolution (renewed on October 31, 2007) prohibiting the import and export of diamonds.

The country is a member of the KP but the government, in alignment with the UNSC Resolution, had itself suspended all official exports of rough diamonds to help support its efforts to restore social stability and ensure systems are in place to meet the KP requirements.

Efforts by the government of Côte d’Ivoire to work closely with the KP all seem to have been in vain in light of the country’s current political climate.

Smuggled Ivorian Diamonds
“If smuggled Ivorian diamonds are entering the market, then somebody obviously wants to buy these,” says Harrowell.

Despite a UN embargo on Ivorian conflict diamonds, stones are still mined in northern Côte d’Ivoire, smuggled into international trading centres and sold on to consumers.

“Previous KP reports and UN Group of Experts reports indicate that diamond mining in Côte d’Ivoire continues unabated and note that diamonds may be leaving the country through neighbouring countries, in violation of the UNSC and the KPCS,” says Yamba.

Reports constantly point to the absence of effective border controls, which allows rough diamond trade in Côte d’Ivoire to extend, almost seamlessly, into Burkina Faso and Mali, with concerns that Ivorian diamonds continue to be illegally exported through Guinea and Liberia.

The KP must focus on creating awareness, particularly in trading centres, to remind people of the fact that diamonds should not be leaving the borders of Côte d’Ivoire, says Harrowell.

“The level of diamond production in Côte d’Ivoire has been rising in the past couple of years and produce is smuggled out entirely through its neighbours – be they KP-compliant countries, such as Liberia, Ghana or Guinea, or non-KP countries, such as Mali and Burkina Faso. From here, it enters legitimate trade in some part of the world.

A 2010 UN Group of Experts report states: “Neighbouring States, specifically Burkina Faso, Guinea, Liberia and Mali, are either unable or unwilling to monitor and enforce the embargo on the import of Ivorian rough diamonds. Côte d’Ivoire’s neighbours justify their inability to comply with resolution 1893 (2009) by citing a lack of resources. The Group acknowledges these problems, but notes a lack of political will in most cases.”

“The issue is that not a lot has been done with regard to Ivorian diamonds leaking into the market for the past few years. There are many reasons for this, including the KP not having the capacity to deal with more than one issue at a time. For example, for the past two years, the focus of the KP and the world [regarding diamond mining] has been on Zimbabwe. As a result, the Côte d’Ivoire crisis has been swept under the radar, but the current political climate has brought it into the spotlight,” says Harrowell.

Vines says that the KP will have to be more vigilant about the smuggling of diamonds into the neighbouring KP member countries and nonmember countries alike.

Harrowell points out there are significant challenges in West Africa, particularly with poor internal control and porous borders, and that governments need to do more to stop the flow of diamonds from one country to another. “It all comes down to capacity and political will,” she says.

The ‘Diamonds Without Borders’ report to the KPCS plenary also states that, since diamond smuggling is a cross-border phenomenon, it is clear that cross-border cooper- ation is required both at regional level, between countries with porous borders, and at international level, between exporting and importing countries, which need to take more responsibility for preventing the influx of illicit diamonds into the legitimate diamond supply chain.

Yamba stated in a letter last month: “I have every confidence that the KPCS has the ability and the political will to tackle the challenges facing Côte d’Ivoire diamonds effectively through collective and concerted efforts. It is imperative that the KPCS address this matter constructively and decisively, thereby ensuring that Ivorian diamonds do not infiltrate the legitimate trade as this could be harmful for the diamond industry as whole.”

The World Federation of Diamond Bourses has asked its affiliated bourses to advise their members of this letter, and ensure that its contents are posted on the bourses’ notice boards and websites and accompanied by translations in the various local languages.

Hopes of the Ivorian November elections unifying the country’s north and south regions and subsequently dealing with the issue of conflict diamonds and the smuggling of diamonds into West Africa may have come to nothing.

Harrowell says the solution to the challenge in this country is a political one. “You will not be able to bring Ivorian diamonds into the world legitimately until there is a political solution and the country is no longer divided. Whether Quattara ends up being the leader of Côte d’Ivoire or if an alternative political solution is found, what is needed is political stability and peace.”

Africa has not been a stranger to civil war, in which natural resources, particularly diamonds, have played a significant role in financing conflict.

World Diamond Council chairperson Eli Izhakoff said last year that the incidence of conflict diamonds in the pipeline fell from a high of 4% to less that two-tenths of one per cent.

He added the following by way of warning: “Civil war ended in the countries where they once raged [for example Sierra Leone and Angola], and the diamond industries came to be considered not as generators of violence, but as sources of economic growth. However, as we all know now, the story does not end there. Political unrest, although not necessarily civil war, continues to exist, not only in Africa, but also in Latin America and elsewhere.”

This echoes member of the UN panel of experts on diamonds Noora Jamsheer, who previously said in a media report that, once there was political instability in any diamond-producing country, the issue of diamonds and the profits from their sale always surfaces.

The ‘Diamonds Without Borders’ report also states that a new and worrisome trend in West Africa concerns the linkage between money laundering, drug smuggling and the diamond trade. Examples from West Africa showcasing this new connection were cited during the KPCS Intersessional, in Tel Aviv, last year. Unfortunately, the report states that governments and the diamond industry have not looked at this serious issue extensively to date.