Former British minister calls for sanctions on Anjin

A former British Minister for Africa Peter Hain this week called on the European Union to impose sanctions on Anjin, a joint venture diamond mining company in Marange in which a Chinese and a Zimbabwean company have a stake.

Anjin already says it is now the biggest diamond mining company in the world, a position that was occupied by the Anglo-American company De Beers for years.

Hain said the EU should not lift sanctions Zimbabwe African National Union-leaders as was being proposed. He was speaking during a debate on Zimbabwe’s blood diamonds in the British parliament.

“To do that less than a year before Zimbabwe’s next election could be very damaging. Are EU and UK officials really suggesting removing an asset freeze on someone like Didymus Mutasa, the former State Security Minister, who is accused by the EU of being “involved in murders in Manicaland”, or lifting the EU travel ban on our old friend Brigadier Charles Tarumbwa, who is accused by the EU of being “directly involved in the terror campaign waged before and during the elections” and of being in charge of a “torture base in Makoni West, Mutasa Central in 2007/2008?,” Hain asked.

“Instead of suspending sanctions at the behest of ZANU-PF, Monday’s EU Foreign Ministers’ meeting and the British Government should argue for Sam Pa, Anjin and Sino Zimbabwe Development to be placed on the EU’s targeted sanctions list and for the Zimbabwe Minerals Development Corporation to remain on the list. That should remain the case at least until the election—probably less than 12 months away—has passed off peacefully.”

Below is Hain’s full speech:

Mr Peter Hain (Neath) (Lab): May I welcome you to the Chair, Mr Havard? It is a delight to speak under your guidance, as a fellow south Wales valleys Member of Parliament. I immediately pay tribute to my hon. Friend the Member for Vauxhall (Kate Hoey); in her chairmanship of the all-party group on Zimbabwe, she has provided inspirational leadership for a long time.

In December 2000, the United Nations General Assembly adopted resolution A/RES/55/56, supporting the creation of an international certification scheme for rough diamonds. That led to the Kimberley process, a mechanism for negotiations, and the international treaty banning blood diamonds, established under UN Security Council resolution 1459 in January 2003. I put a great deal of effort into achieving that when I was British Minister for Africa, because illegally traded blood diamonds were paying for arms, which fuelled conflicts in Angola and the Democratic Republic of the Congo, and in Sierra Leone, where those very arms were used against British troops by terrorists. Now we are seeing a different kind of blood diamond from Marange in Zimbabwe, and it is high time that the Kimberley process and the World Diamond Council stopped turning a blind eye to serious abuse with an anti-democratic, violent purpose.

The history of Zimbabwe has been punctuated with violence. Cecil Rhodes’s exercise of colonial power in southern Africa was built on a monopoly of violence. Until it was swept away by the liberation war, which I supported as a British anti-apartheid leader at the time, Ian Smith’s racist Rhodesian regime used violence against opponents demanding democracy. Robert Mugabe’s ZANU, first elected in a landslide victory in 1980, betrayed the freedom struggle that it once led with distinction, by systematically using violence as a political strategy to maintain power and the privileges of an increasingly corrupt mafia surrounding him. Killings, torture and beatings of ZANU-PF opponents and massive human rights abuses accompanied the elections of 2000, 2002 and 2008. Mugabe’s regime specialised in stealing those elections by violence.

My fear is that Zimbabwe’s forthcoming election, due by June next year, might be no different despite the Government of national unity, who have given some relief to their beleaguered, suffering nation. In that Government, the Movement for Democratic Change has been given the Ministries of Finance, Education and Health, among others. ZANU-PF retained the Ministry of Defence, the Ministry of Mines and the Office of the President, the home of Zimbabwe’s feared secret police—the Central Intelligence Organisation or CIO. Since the MDC took control of the Ministry of Finance and clipped the wings of the Reserve bank, the security mafia loyal to President Mugabe has been on a hunt for sources of off-budget finance. It has now found those sources, thanks to an accident of geology and the failures of the international community.

In 2006, diamonds were found in the Marange fields in eastern Zimbabwe. The area holds one of the world’s richest deposits of alluvial diamonds. The gems lie close to the surface of the ground, making them easy to collect by hand. During 2008, the military deployed soldiers and helicopter gunships during the clearance of thousands of small-scale miners from the Marange diamond fields, killing and wounding many people in the process. Nearly every soldier in Marange is involved in one way or another in illegal mining. Soldiers have formed syndicates of diamond panners, whom they protect and escort.

Many of the diamonds are smuggled to the town of Vila de Manica, in Mozambique, only 12 miles from the Zimbabwe border. It is crawling with illegal dealers from countries such as Lebanon, Sierra Leone, Guinea, the Democratic Republic of the Congo, Nigeria and Israel, most living in smart houses, bristling with barbed wire and CCTV cameras, and guarded by armed men, admitting they do so with the help of army syndicates and senior ZANU-PF politicians.

Global Witness deserves our thanks for its impressive report, “Financing a Parallel Government?”, which has unearthed devastating evidence on Zimbabwe’s blood diamond trade. In Zimbabwe, mineral rights are vested not in the state, but with the President. Robert Mugabe has granted a series of mining concessions. One was to Canadile, a company that has since collapsed amid allegations of corruption, including against Obert Mpofu, the ZANU-PF Minister of Mines. Mpofu is a man on a £1,200 monthly salary, who is now rich enough to spend over £13 million buying a bank. Another was to Mbada Diamonds. Its chief executive officer, Robert Mhlanga, a Mugabe crony, is developing a £20-million mansion in Ballito, KwaZulu-Natal. Behind Mbada Diamonds and up to its neck in its shady start-up, is a South African scrap metal company, New Reclamation, and its former chief executive officer, South African business man, David Kassell.

South African business interests were heavily involved in mining diamonds in Marange or profiting from their irregular sale, in what the South African Broadcasting Company last October reported as a “blatant disregard for the rule of law and continued plundering of the diamond fields in Eastern Zimbabwe. New evidence suggests that South African firms have muscled in, and are mining there illegally.”

In 2011, 25% of the shares of Mbada were transferred to a mysterious network of shell companies based in Mauritius, Hong Kong and the British Virgin Islands. Those companies are connected to Robert Mhlanga, a retired air vice-marshal in the Zimbabwean air force. The use of secrecy jurisdictions and tax havens should raise a red flag for any legitimate businesses trading with Mbada. They should be asking the question, who are the real beneficial owners of Mbada? We have seen with Libya’s Colonel Gaddafi how banks, lawyers and businesses colluded in illicit financial outflows of national wealth. I fear that that is being repeated in Zimbabwe.

A third mining concession was to Sino Zimbabwe Development and a fourth to Anjin Investments. Sino Zimbabwe Development purports to be a joint venture between the state-owned Zimbabwe minerals development corporation and an investor, Sam Pa—a businessman from the Queensway syndicate, a network of companies based in Hong Kong, Singapore and Angola. Sam Pa and the Queensway syndicate were the subject of a recent feature in The Economist , which raised two issues in particular. First, the Queensway syndicate’s amoral deal in Guinea. Just one month after security forces massacred 150 protestors in a stadium, the syndicate signed a multi-billion dollar deal with the Guinea junta—effectively providing a financial lifeline to that pariah regime. Secondly, The Economist alleged that the syndicate was buying Angolan oil ridiculously cheaply and selling it on at market prices to Chinese oil companies—suggesting the Angolan people may have been cheated out of billions of dollars.

In Zimbabwe, several sources suggest that Sam Pa gave the secret police—the CIO—a large sum of money, which one CIO document places at $100 million, and over 200 Nissan pick-up trucks. In return for that apparent assistance, Sino Zimbabwe Development was granted opportunities in Zimbabwe’s diamond and cotton sectors. Sino Zimbabwe Development was set up and registered in Zimbabwe and Singapore. The Singaporean company is in turn part-owned by Strong Achieve Holdings, a company registered in the British Virgin Islands and controlled by someone believed to be a member of the Zimbabwean secret police. That, again, illustrates the highly disreputable role of the British Virgin Islands in facilitating such murky dealings. Sino Zimbabwe Development is ostensibly a legitimate business. Yet its three Zimbabwean directors, Gift Kallisto Machengete, Masimba Ignatius Kamba and Pritchard Zhou are all believed to be members of the CIO, and the firm is in reality a front company for the Zimbabwean secret police.

Anjin Investments purports to be a joint venture between a previously unknown Zimbabwean firm, Matt Bronze, and a Chinese construction company. In reality, Anjin’s company secretary is Brigadier Charles Tarumbwa, who is also the Judge Advocate General at Zimbabwe’s Ministry of Defence, and is on the EU sanctions list for orchestrating violence. Anjin’s executive board includes Martin Rushwaya, the permanent secretary of the Ministry of Defence, and serving and retired military and police officers. Anjin claims to be the biggest diamond mining company in the world and has been described by informed observers as having the potential to be the next De Beers. In reality, Anjin is a front for the Zimbabwean military; nor does that shadowy activity involve only diamonds.

On 27 June, the Russian business newspaper Kommersant reported that Zimbabwean officials had approached Russian companies with a prospective platinum deal in exchange for attack helicopters. A Russian joint venture, named by Kommersant as involved in the deal, is called Russ Zim and Rushchrome. The deal is ostensibly with the parastatal Zimbabwe Minerals Development Corporation. However, Anjin’s Brigadier Charles Tarumbwa is company secretary of the Russian joint venture, and the chairman of its executive board is Martin Rushwaya, the permanent secretary at the Ministry of Defence, who is on the board of Anjin. Again, the planned deal seems to have been cooked up by the Zimbabwean military-industrial complex.

Why is that important? First, the Zimbabwean military and secret police are known for their uncompromising support for ZANU-PF. It has even been alleged that money from Sam Pa has been allocated towards a CIO smear campaign against MDC Prime Minister Tsvangirai, called Operation Spiderweb. If the secret police have access to off-budget sources of funding, they can set and finance their own agenda, in flagrant breach of democratic and civilian control of the security forces budget.

Secondly, Zimbabwe desperately needs tax revenues. Life expectancy at birth in Zimbabwe is 47 for a man and 50 for a woman. The Government are slowly rebuilding the education and health infrastructure after the devastation wrought by years of misrule and the hyper-inflation of 2008. Out of a budget of US $4 billion, the MDC Finance Minister Tendai Biti was promised US $600 million in diamond revenues by the Ministry of Mines and Mining Development. Yet he recently stated that Anjin had not paid one cent to the Zimbabwean Treasury, adding that Anjin’s failure to remit diamond proceeds to the consolidated revenue fund was in breach of the constitution. Anjin claims that it paid some money to the ZANU-PF-controlled Zimbabwe Minerals Development Corporation. Yet none of that has yet reached the Finance Ministry’s consolidated revenue fund. Diamond revenues are being siphoned off when Zimbabwe needs teachers and nurses, not attack helicopters and secret police thugs.

Thirdly, there is a risk that any money given by Sam Pa, Anjin and Sino Zimbabwe Development to the security forces will fund human rights abuses in the run-up to next year’s election. Let us remember that, to cling on to power in the 2008 election, soldiers, ZANU supporters, secret policemen and so-called war veterans—a pseudonym for Mugabe’s thugs—killed 200 people, tortured and assaulted 5,000 and forced 36,000 more to flee their homes.

What can the British Government do? I urge them to engage with the Southern African Development Community facilitators to push security sector reform and democratic and civilian control of budgets up the agenda in forthcoming negotiations. In the long term, much more must be done to regulate the diamond industry properly. I feel strongly that the Kimberley process certification scheme, which is designed to stop the trade in blood diamonds, has failed to deliver on the original objectives that we designed for it during my time as a Foreign Office Minister between 2000 and 2002. It has three weaknesses that have not been addressed. It does not cover polished gems—only rough diamonds. It applies only to crimes committed by rebel groups, not to human rights abuses committed by Governments such as Zimbabwe’s. It does not enforce its own rules properly: the scheme is found wanting when confronted with problems in Venezuela, Côte d’Ivoire and Zimbabwe.

The Kimberley process report on Anjin praises the modern security procedures of the company, makes small recommendations to reduce the risk of theft and smuggling and thanks the Minister of Mines for his co-operation, yet not once does it ask who owns Anjin. That is wilful blindness, and it has led member states, including the UK, acting through the EU, to authorise exports of Anjin diamonds.

Let us be clear: Zimbabwean military-controlled blood diamonds are now sold in the EU and almost certainly in the UK, appearing on wedding rings all over the place. It is time for jewellery companies to stop hiding behind the facade of the Kimberley process and to take responsibility for their own supply chains. Each company must ask, “Where do my diamonds come from, under what conditions are they mined and traded, and who benefits from their sale?” That system, known in the jargon as supply chain due diligence, was first developed for the trade in conflict minerals sourced from the Democratic Republic of the Congo. It should be adapted for the trade in diamonds and other gems, so that those resources can play a constructive role in the development of other countries at risk, such as Zimbabwe, Afghanistan and Burma.

I urge the British Government to commission the OECD, which has played an important role in working out the details of such a scheme for the trade in gold, tin, tungsten and tantalum, to examine how it could be applied to precious stones such as diamonds. I hope that the Minister will tell us something about that.

The European Union has placed many individuals and entities on restrictive measures: travel bans and asset freezes. One such entity is the Zimbabwe Minerals Development Corporation and its subsidiaries and joint ventures. Bizarrely, Anjin is not on the sanctions list, despite there being a more compelling case for its inclusion than for the inclusion of other mining firms that are sanctioned by virtue of their association with the Zimbabwe Minerals Development Corporation. Recently, the Zimbabwean Deputy Minister of Mines stated in Parliament that

“Anjin is owned by the Chinese and the Government of Zimbabwe where ZMDC owns 10% and Zimbabwe Defence Industries owns a 40% shareholding”.

Given that both Zimbabwe Defence Industries, which is wholly owned by the Ministry of Defence, and the ZMDC are already on sanctions lists, it seems to me that Anjin should be listed as well, not least on the grounds that it is a subsidiary of listed entities.

Even stranger, in my view, is the news that at its Foreign Ministers Council on Monday the EU proposes to remove or suspend some or all targeted sanctions. To do that less than a year before Zimbabwe’s next election could be very damaging. Are EU and UK officials really suggesting removing an asset freeze on someone like Didymus Mutasa, the former State Security Minister, who is accused by the EU of being “involved in murders in Manicaland”, or lifting the EU travel ban on our old friend Brigadier Charles Tarumbwa, who is accused by the EU of being “directly involved in the terror campaign waged before and during the elections” and of being in charge of a “torture base in Makoni West, Mutasa Central in 2007/2008”?

Instead of suspending sanctions at the behest of ZANU-PF, Monday’s EU Foreign Ministers’ meeting and the British Government should argue for Sam Pa, Anjin and Sino Zimbabwe Development to be placed on the EU’s targeted sanctions list and for the Zimbabwe Minerals Development Corporation to remain on the list. That should remain the case at least until the election—probably less than 12 months away—has passed off peacefully.

If the intention is to wave a carrot and not just a stick, by all means suspend sanctions against some of those lower down the ZANU-PF command list, or examine the more calibrated strategy that is recommended by the International Crisis Group and that is being considered by southern African countries. We must ensure that substantive sanctions, such as asset freezes on Anjin and Sam Pa, are imposed so that the security forces cannot build a war chest before the election.

If off-budget financing of the security forces is not addressed immediately, regardless of what happens to Robert Mugabe, Zimbabwe could soon be ruled by a free-floating securocrat elite: unaccountable, unelectable and unstoppable. More than enough damage has been done already to the wonderful people of Zimbabwe, as a once-prosperous country has been reduced to penury. Let us ensure that we do not perpetuate the terrible damage that has been done by premature suspensions of highly targeted sanctions, especially on those who are responsible for the Marange blood diamonds, when the imperative is to impose more not less.

The World Diamond Council and Governments with a substantial diamond trade must act to block blood diamonds from Marange, or the whole diamond trade could well find itself tarnished and targeted by boycotts and protesters, just as was threatened until it acted in 2000. I hope that hon. Members will consider these matters and that the Government will take forward the policies that I have recommended for targeted sanctions.

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