Zimbabwe diamond company failing transparency test

The audit scope must have been broadened to include management of risks posed by failure of government and corporates to protect and respect human rights, and in case of violations to provide access to remedy – United Nations Guiding Principles on Business and Human Rights.

Notably, ZCDC has been ordered by the High Court not to arbitrarily displace communities as required by the Section 74 of the Constitution. Pressure on ethical sourcing of diamonds is also coming from the emergence of laboratory or synthetic diamonds which do not carry the burden of human rights violation linked to mining.

ZCDC’s creation was blighted by legal challenges, with companies such as Mbada Diamonds, Anjin and Jinan taking to disputes to the courts. ZCDC has failed to carry out mining activities in the disputed concessions. Consequently, its ability to optimise diamond production for the country’s benefit was affected.

Along the way, it was announced that government is not negotiating with the affected companies to resolve the issue amicably.  Parliament oversight lacked during these negotiations as required by Section 315 (2) (c) of the Constitution.

On 20 April, during a field visit by European Union delegation, ZELA observed that Chinese miners were fencing off claims formerly held by Anjin Investments. It was clear that ZCDC was not involved from the brief that we received from its top management.

The Audit report must have ordinarily been alive to legal risks and the status of disputes between ZCDC and the companies that were forced to close to pave way for the new arrangement – this is a sustainability issue.

For an entity that was established to promote transparency and accountability in the management of Marange diamonds, the Auditor General’s report shows a false start for ZCDC. The audited report is lagging by one year, there is poor corporate governance which has left the company in financial distress after lending $20 million to related companies that are now closed.

This, and the question of rehabilitating mine dumps are a timely reminder to government that as a country we cannot talk of counting the benefits without fully accounting for costs of mining.

In the diamond sector, value addition is not only about cutting and polishing, but embracing the UNGP on business and human rights. Consumers want diamonds that are ethically sourced, and diamonds which deliver sustainable development to communities – in other words, all the areas that ZCDC and government are found wanting.

By Mukasiri Sibanda for The Source

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