Partnership Africa Canada (PAC) recently said in its Diamonds and Human Security Annual Review 2009 report that Angola has weak internal controls of gems produced by artisanal miners or garimpeiros.
PAC said despite a new artisanal diamond law introduced in Angola, the regulations had proved difficult to implement, as it was nothing but a verbatim of the old law, which failed to stem illegal diamond activities.
“The great doubt hanging over this and all other provisions of the code is that the exact same regulations were also written into the old Diamond Law, together with a series of financial and administrative barriers that in practice made it impossible for anyone to ever become legal. Those same barriers are in the new artisanal code,” reads the report.
A Kimberley Process review mission in 2005 observed weakness of Angola’s internal artisanal controls, and recommended that they be fixed.
Despite the recommendation, the new code is said to have done little to improve Angola’s KP compliance, as it outlined no concrete procedures for tracking artisanal production, and no mechanisms for collating, analysing or publishing data on their trade and production.
“Angolan officials say, however, that the government takes its KP responsibilities seriously, and plans to tighten things up during implementation,” reads the report.
More worryingly was PAC’s assertion that large scale commercial garimpo, which produces about 30 percent of Angola’s diamonds by value each year, was illegal under the old regulations, and remained so under the new code.
With the diamond market having suffered greatly from the global economic downturn, the report noted that 25 of the 26 joint venture projects in the prospecting phase had shut down operations. “Many foreign investors who provide capital and expertise for these projects have packed up and left, and at least two companies have had their joint venture agreements officially terminated,” reads the report.
The Angolan military was also quoted as saying that 11 of these “paralysed exploration projects” had had their concessions overrun by garimpeiros, mostly from the DRC, sparking fears of rampant illegal mining and trading of diamonds.
Endiama, however, maintains that all of the projects were being protected.
The report also noted that the expulsion of the garimpeiros had done nothing much to control illegal diamond mining as figures show that informal garimpo diamond production in 2003, before the crackdown began, was 1,231,688 carats and 1,102,198 carats in 2007, recording a decline of 11 percent.
“The expulsion tactic hasn’t worked because miners simply drift back into Angola, their passage facilitated by lax or corrupt border guards, their presence welcomed by corrupt police officials who control garimpo sites, and by government license buying houses that profit so handsomely from informally sourced diamonds,” reads the report.
The report quoted Ministry of Mines’ Paulo Mvika as saying that the new plan was to revoke the licenses of diamond buyers working in the interior, therefore shutting down the buying houses (contuarios) that currently buy up informal production, as these were regarded as harbouring illegal activities.
“With no place to sell, the reasoning goes, there will be no way to finance digging, and thus garimpo will cease. This seems unlikely to work, informal dealers and smuggling networks will simply take up the slack left by the legal contuarios,” reads the report. “Angola’s KP controls, already bad, will only get worse.”
However, Mvika went on to say that the Angolan government was not backtracking on this move, “despite the potentially huge loss in royalty revenue” as artisanal production, by value represented over a quarter of Angolan exports.
“For the tens and perhaps hundreds of thousands of artisanal diggers that remain in Angola, all of them illegal, many of them foreign, this likely means a future of continuing expulsions,” the report noted.
Though the report noted that shutting down informal production comes with a short term cost, but with potential for much larger income later through industrial exploitation, the question remains, whether, Angola will be able to effectively bring to an end illegal mining?
Rather than expending energies on revoking artisanal miners’ licenses the Angolan government should ensure tight control systems are in place to avoid any leakages.
Angola should assemble and electronically collate data on production and sales from miners and contuarios as recommended in PAC’s report.
Mathew Nyaungwa, Rough&Polished from Namibia
