Old Mutual dragged into blood diamonds saga

A British parliamentarian has called on Old Mutual to disengage completely from anything that is linked with blood diamonds in Zimbabwe if it wishes to avoid perceptions of collusion or acquiescence in the continuing repression and human rights violations in the country.

This was said last week by Kate Hoey who chairs the All-Party Group on Zimbabwe during a debate on Zimbabwe’s so-called blood diamonds.

Hoey said she had taken Old Mutual chairman Patrick O’Sullivan and its chief executive of long-term savings Paul Hanratty on why the British listed company was involved in Mbada diamonds, one of the companies in a joint venture with the Zimbabwe Mining Development Corporation in Marange.

A South African scrap metal company New Reclamation Group has a stake in Mbada and Old Mutual had a stake in NRG.

Hoey said the Old Mutual officials had told her that they were representing their shareholders and did not actually make policy.

“We just cannot ignore the fact that a British company is involved in this way,” she said. “…. there is a moral judgment to be made in some of this activity, and as a primary landowner and property manager in Zimbabwe Old Mutual is interwoven within the fabric of society and its investment policy, far from being apolitical or just about business, plays a really important role in the country, and if it wishes to avoid perceptions of collusion or acquiescence in the continuing repression and human rights violations in Zimbabwe, it should disengage completely from anything that is linked with blood diamonds, and I call on it to do so.”

Below is Hoey’s full speech:

Kate Hoey (Vauxhall) (Lab): It is very nice to serve under your chairmanship, Mr. Havard. It is also very nice to follow the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile), one of the vice-chairs of the all-party group on Zimbabwe, of which I am the chair.

I pay tribute to my right hon. Friend the Member for Neath (Mr Hain) for his persistence in securing this debate and for the fact that we are lifting the veil of darkness that sometimes hangs over the whole of the diamond industry generally and particularly in Zimbabwe. He was an outstanding Minister for Africa and I am absolutely delighted that now he is back on the Back Benches he is again able to get more positively engaged in helping Zimbabwe, because his knowledge of southern Africa is absolutely tremendous.

I share most of my right hon. Friend’s analysis—in fact, all of it. I will not go through some of the issues related to individuals involved in the Marange diamond area, but I want to raise some further issues related to that area. Having said that, I am absolutely delighted that over the years the all-party group on Zimbabwe has managed to keep some of these issues about Marange to the forefront. Just a couple of years ago, in June 2010, the then vice-chair of the group, Baroness D’Souza, who is now obviously in charge of the House of Lords, and I wrote to Stéphane Chardon, the EU representative who chaired the Kimberley process Working Group on Monitoring at that time. We expressed our grave concern about the way that human rights abuses and reports of killings in the Marange diamond field were being investigated by the group. We did so because in the many years since the situation in Zimbabwe became really serious the UK Government and other Governments around the world have felt powerless, but through the Kimberley process and through having an EU appointee as chair of the group we had some direct responsibility and control. With many of the points that my right hon. Friend made, we need to look at how the Kimberley process is working and consider whether we can make some effective changes.

I pay tribute to some of the members of the all-party group on Zimbabwe, particularly some of those in the House of Lords, who have continued to probe and ask questions about Zimbabwe. Lord Avebury, Baroness Kinnock and Baroness Boothroyd have been assiduous in keeping pressure on our Government and—indirectly—on the EU, and in ensuring that Government Ministers of whatever party have remained closely engaged with Zimbabwe. I also pay tribute to the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North West Norfolk (Mr Bellingham), who is the current Minister for Africa, for the close personal interest that he has taken in Zimbabwe and indeed in the whole of southern Africa. I am sorry that he is not here for this debate today. When he phoned me yesterday, he was in Malawi, so I know that he is very intent on trying to see what the British Government can do to help the process in southern Africa.

Of course, Zimbabwe is of close interest to British taxpayers. Through our international development programme, we are expected to pick up the bill eventually—it is quite right that we should do so, and I have no problem with it—for rebuilding much of the infrastructure and institutions of the terribly ruined country of Zimbabwe. However, it would be the most appalling irony if the revenue from the massive national windfall of diamonds should end up in the pockets and overseas bank accounts of the very same army officers and ZANU-PF politicians who have wrecked Zimbabwe, especially if they are allowed to use that windfall to buy weapons, tanks and other vehicles to extend their illegal grip on power.

There is no doubt that, as my right hon. Friend has already said, ZANU-PF functionaries and Ministers are effectively running a parallel economy in Zimbabwe. That is clearly chronicled in the excellent report on Zimbabwe by Global Witness and it is something that we just cannot ignore.

I will mention one particular British company that sometimes does not get mentioned in discussions of Zimbabwe, but that has an involvement in the country. That company is Old Mutual. Last year, we met the chairman of Old Mutual, Patrick O’Sullivan, and its chief executive of long-term savings, Paul Hanratty, here in London just before one of the company’s annual general meetings, where some people were turning up to protest against the fact that Old Mutual’s wholly-owned subsidiary, Old Mutual Investment Group (South Africa) or OMIGSA, had invested in a South African company, the New Reclamation Group, which of course the right hon. Member has already referred to. New Reclamation Group has a very poor reputation in Johannesburg. It is in fact, as has been said, more or less a scrap metals merchant. It basically presented a business case to Old Mutual to invest in the Mbada Diamonds company, and that investment was made.

We just cannot ignore the fact that a British company is involved in this way. When we talked to the chairman and chief executive of Old Mutual, of course they made the point that they are representing their shareholders and they cannot actually make policy. However, there is a moral judgment to be made in some of this activity, and as a primary landowner and property manager in Zimbabwe Old Mutual is interwoven within the fabric of society and its investment policy, far from being apolitical or just about business, plays a really important role in the country, and if it wishes to avoid perceptions of collusion or acquiescence in the continuing repression and human rights violations in Zimbabwe, it should disengage completely from anything that is linked with blood diamonds, and I call on it to do so.

I want to talk very briefly about a worry that exists at the moment and that was referred to by my right hon. Friend in his speech. It is a worry about the rumours—in fact, they are not rumours, because we all know that there are discussions on this subject going on within the EU—about whether there could be suspension of some of the sanctions that have been imposed. We need to start from the understanding that we are not involved in a “blame game” about who is right or wrong on whether we should consider suspending sanctions; it is a situation in which everyone wants to do the right thing. Sometimes when we are over here discussing what is happening in Zimbabwe, what may seem to us the right thing may not necessarily be the right thing to the people who are involved in the struggle in Zimbabwe.

There is a strong push, particularly from the Southern African Development Community and South Africa, for a carrot in the form of a vote on the new constitution, probably in an October referendum, as part of the global political agreement—the GPA. That would allow the process to go forward to free and fair elections next year, and I understand that we would then suspend sanctions. The detail may not yet be finalised as to how many would be suspended and whether it would be just sanctions on individuals or also direct sanctions involving, for example, the EU’s funding of industry in Zimbabwe, but they would not be lifted, or rather not suspended—it is important that I use the correct terminology—until such time as there was a free and well-organised referendum on the constitution.

It would be easy for a free and relatively peaceful referendum to take place in the autumn, but those who continue to be able to turn on the tap of violence can do so almost at will, and I worry that once we have suspended the sanctions—should we get a free constitutional process—it will be easy for that tap to be turned on extremely quickly. The violence is still there, whenever ZANU-PF and its apparatchiks want to carry out some atrocity. Just last weekend, they stopped a Movement for Democratic Change rally, so it is clear that they can do huge damage at will, and the money from the illegal diamond sales makes it easier for the violence to be turned on, with the machinery that they have.

SADC and South Africa are absolutely crucial, but I have mixed feelings, and am concerned. Perhaps when discussing the suspension of sanctions we can tie South Africa and SADC into the process, so that if some of the sanctions were suspended, but the GPA were not then fulfilled and violence started again, we could be absolutely certain that South Africa and the other SADC countries would do what they have said they would do if the sanctions were suspended. Disappointingly, the SADC leaders have, time after time, seen their solidarity not with the people of Zimbabwe, not with all those who have bravely and patiently struggled to represent the democratic will of the people, but with the crooks, bullies and corrupt people who are committed to keeping Mugabe in power at any price. If the British Government and the European Union suspend sanctions they will be putting huge trust in SADC, and in South Africa in particular as the guarantor of the safety and rights of the Zimbabwean people, and we must be certain that that trust will be rewarded in full by an unequivocal refusal by South Africa, leading the rest of SADC, to excuse or turn a blind eye to any resurgence of violence.

I do not believe that Mugabe will give up power peacefully, or that he will want what we would call a genuinely free and fair election—even with the best will in the world, I do not think that we can have a really free and fair election as we would see it. We can make next year’s election much better than the last one, but only if South Africa and SADC unequivocally accept that they have an international responsibility, and the quid pro quo of removing the ridiculous idea that the sanctions have caused Zimbabwe’s economic crisis. We all, and even the most extreme member of ZANU-PF, know that that is nonsense, but it has been a potent weapon, used particularly in rural areas where the broadcasting media are still totally in ZANU-PF’s hands, and that has not changed under the GPA. The newspaper media are slightly freer, but the broadcasting media, which are the ones that get into the rural areas, are 100% ZANU-PF dominated. The SADC leaders have too often allowed Mugabe that kind of propaganda victory, by remaining silent on the violence until relatively recently and speaking out only to condemn the targeted measures imposed under the Cotonou agreement.

Many many years ago, when we were young, my right hon. Friend and I joined together in protests about apartheid in South Africa, in what was called the Stop the Seventy Tour, but nothing we did is an excuse for the unleashing of violence and intimidation on Zimbabweans just because Mugabe has a problem with the United Kingdom, the Commonwealth or the United States. Such things are never excusable. I have no expectation that the ZANU-PF hard-liners or the Zimbabwe military will change their ways. They are worried about losing their wealth and their ill-gotten gains.

I hope that we can give enough encouragement to men and women of good will, especially the younger generation who hope for a new Zimbabwe and all the millions of Zimbabweans who have left the country and live around the world. I understand that under the new constitution such people will, importantly, retain their citizenship, and be able to play their part in the new Zimbabwe, and we can help with that. We have to be very careful with the handling of the suspension of sanctions, because some sanctions have worked. It is nonsense to say that they have not—that is why there is such a push to get them lifted—but I accept that there might be some that could be suspended. I absolutely agree with my right hon. Friend, however, that there are some people we cannot possibly take off the lists—indeed, there are one or two we might add.

I want to end by saying that I wish that everyone could read the amazing speech made by one of my Zimbabwean heroes, Roy Bennett, at Rhodes house in Oxford in May. Entitled, “Smoke and Mirrors: another look at politics and ethnicity in Zimbabwe”, it was a wonderful speech, which put into around a dozen pages just what the future for Zimbabwe could be, and how we, as the British Government, can help.

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