REPORT: Self Assessment of the Diamond Sector in Zimbabwe

HON. MKARATIGWA:

1.                INTRODUCTION:

         The Portfolio Committee on Mines and Mining Development, in collaboration with the Ministry of Mines and Mining Development, diamond producers, the Minerals Marketing Corporation of Zimbabwe (MMCZ) and civil society organizations (CSOs) embarked on a self-assessment of the diamond sector to gauge if the country was compliant with the Kimberly Process Certification Scheme (KPCS).  This initiative emanated from a resolution that was made by the Committee on 26^th  July 2021 to set up a sub-Committee with the sole mandate of conducting an inquiry into the diamond sector, in particular to assess its level of compliance with the KPCS. To this end, the sub-Committee was empowered to spearhead engagements with the Ministry of Mines and Mining Development, CSOs and other stakeholders. 

The sub-Committee held meetings with key stakeholders in the diamond sector whereupon it was established that Zimbabwe was due for an assessment by the KPCS Review Mission however, there were delays due to the COVID-19 pandemic.  A resolution was made on  18^th  August 2021 to jointly conduct a self-assessment of the diamond sector. The inaugural meeting was attended by Members of the Portfolio Committee on Mines and Mining Development; Honourable W. Chitando, the Minister of Mines and Mining Development; Honourable P. Kambamura, the Deputy Minister of Mines and Mining Development, Mr. O. Moyo, the Permanent Secretary for Mines and Mining Development and Mr. T. Muzenda, the General Manager of MMCZ. Officials from the Zimbabwe Consolidated Diamond Company (ZCDC) and CSOs represented by the Zimbabwe Environmental Law Association (ZELA) and the African Alliance for Responsible Mineral Sourcing and Fair Trade (AARMSOFT), were also in attendance.

 The major objective of the self-assessment was to share information and ideas amongst the different stakeholders in the diamond sector in preparation for the actual visit by the KPCS Review Mission.  This self-assessment exercise was conducted from 13th of September to 17^th November 2021. It was the first of its kind for the country and aroused a lot of interest amongst various stakeholders.  There was free exchange of information between the Committee and the stakeholders that participated in the programme.  

2.    COMPOSITION OF THE SELF-ASSESSMENT TEAM

The joint self-assessment team comprised of the following:

	Name	Organisation
1.	Hon. Simbaneuta Mudarikwa	Parliament of Zimbabwe and Team Leader
2.	Hon. Edmond Mkaratigwa	Parliament of Zimbabwe – Chairperson of the PortfolioCommittee on Mines and Mining Development
3.	Hon. Davison Svuure	Parliament of Zimbabwe
4.	Hon. Tafanana Zhou	Parliament of Zimbabwe
5.	Hon. Jasmine Toffa	Parliament of Zimbabwe
6.	Hon. Joel Gabbuza	Parliament of Zimbabwe
7.	Ms. Angeline Gutu	Parliament of Zimbabwe
8.	Ms. Evelyn Masara	Parliament of Zimbabwe
9.	Mr. Masimba Chandavengerwa	Minerals Marketing Corporation of Zimbabwe
10.	Mr. Ezekiel Mafara	Minerals Marketing Corporation of Zimbabwe
11.	Mr. Effort Shoko	Minerals Marketing Corporation of Zimbabwe
12.	Mr. Enoch Moyo	Zimbabwe Consolidated Diamond Company
13.	Mr. Sugar Chagonda	Zimbabwe Consolidated Diamond Company
14.	Mrs. Jacquiline Munyonga	Ministry of Mines and Mining Development
15.	Mr. Arnold Mukombachoto	Ministry of Mines and Mining Development
16.	Ms. Lindsay Dzumbunu	Ministry of Mines and Mining Development
17.	Mr. George Zhara	Ministry of Mines and Mining Development
18.	Mr. ShamisoMtisi	Zimbabwe Environmental Law Association
19.	Mr. Farai Maguwu	Centre for Natural Resources Governance
20.	Ms. SimisoMlevu	Centre for Natural Resources Governance
21.	Mr. Joshua Marufu	African Alliance for Responsible Mineral Sourcing and Fair Trade (AARMSOFT)

3.    METHODOLOGY:

         The self-assessment was guided by the core document used by KPCS Review Missions. In order to gain a full appreciation of the country’s level of compliance with the KPCS, the Sub-Committee held a series of meetings with key stakeholders and conducted visits to diamond producing companies and diamond sorting houses.  The fact-finding visits and meetings included the following:

1. Visits to diamond producers: Anjin Investments Private Limited and ZCDC in Marange as well as RZM Murowa Private Limited in Zvishavane;
2. Visits to the ports of entry and exit in the country which include: Forbes Border Post and

Robert Gabriel Mugabe International Airport;

iii.Visits to the sorting houses, namely that of Anjin at the Robert Gabriel Mugabe International Airport and that of ZCDC at the MMCZ offices in Harare;

• Visit to Aurex, a diamond cutting and polishing centre as well as meeting with the Association of Cutting and Polishing Companies in the country, the Diamond Beneficiation

1. Association of Zimbabwe (DBAZ);
2. Meeting with the Mrs. Mildred Chiri, the Auditor General;
3. Virtual meeting with Alrosa Head Office in Russia; and

• Meetings with communities affected by diamond mining and exploration activities in Marange, Arda Transau, Rimbi community of Chipinge and the Sese Community in Chivi District.

4.    FINDINGS:

Legal and Policy Framework in the Diamond Sector:

The diamond sector in Zimbabwe is regulated by the Mines and Minerals Act [Chapter 21:05], the Precious Stones Trade Act [Chapter 21:06], the Minerals Marketing Corporation of Zimbabwe Act [Chapter 21:04] and Diamond Policy of 2019.  While the Mines and Minerals Act regulates the issuance of licenses for special grants to mine diamonds in Zimbabwe, the MMCZ Act and Precious Stones Trade Act regulate the export, sale, stockpiling, possession and dealing in diamonds. The Diamond Policy of 2019 outlines the investment opportunities and requirements to be observed by diamonds producers who operate in the country.  One of the major loopholes in legal and policy framework is the non-recognition of artisanal and small-scale miners who are largely fuelling the smuggling of diamonds to other countries, particularly through Mozambique. Furthermore, it was noted that the Diamond Policy is not widely known by the public and it was therefore, imperative for the Ministry of Mines and Mining Development to disseminate the policy.  

Import and Export Controls:

         At Forbes Border post and Robert Gabriel Mugabe International Airport, the Committee met with the Zimbabwe Revenue Authority (ZIMRA), Airport Authority of Zimbabwe, Immigration and Security officials.  These were the key findings of the Committee:

         4.2.1At Forbes Border Post, ZIMRA officials were trained on the KPCS requirements but the other agencies such as Immigration Department had not gone through the same.  Secondly, border officials highlighted that they were not trained to identify the features of a diamond.  To address this gap, MMCZ indicated that it intends to post some of its officials at the border posts.  

         4.2.2 There were no scanners to detect diamonds and other precious minerals at both Forbes Border Post and Robert Gabriel Mugabe International Airport.  The Committee was informed by the Airport Authority that there were plans to purchase the appropriate scanners in the year 2022. 

         4.2.3Forbes Border Post had not recorded any official export of diamonds to other countries. All the diamonds were being exported through the Robert Gabriel Mugabe International Airport.

         4.2.4 Officials at Forbes Border Post were not aware of the features of an export certificate used in the trading of diamonds.  The customs officials requested MMCZ to supply them with a copy, so that officials would not be caught off-guard in the event that diamonds are exported or imported through that Border. 

         4.2.5 The security personnel at the Forbes Border Post indicated that they had not recorded any incidents of diamonds being smuggled from that gateway.  

         4.2.6Zimra officials at Robert Gabriel Mugabe International Airport requested KPCS officials to train them on how to identify tampering of diamond seals.  

         4.2.7The authorities at Robert Gabriel Mugabe International Airport highlighted that the facility and infrastructure was being upgraded including the security system to curb the smuggling of diamonds and other precious metals.  

Diamond Production Statistics:

         There are four diamond mining companies in Zimbabwe, namely Alrosa Private Limited, ZCDC, RZM Murowa Private Limited and Anjin Investments Private Limited.  Officials from Alrosa Private Limited indicated that the company had not yet begun production and was still in the exploration stage.  Conversely, ZCDC and Murowa diamonds were actively involved in the mining of diamonds during the Committee’s visit. ZCDC indicated that it was in the process of ramping up its production and this would be achieved through exploration in the Marange area.   

         For the year 2020, ZCDC produced 1 375 455 carats of diamonds.  For 2021, production was on the increase during the first half of the year, with production levels yielding 1 410 570 carats of diamonds.  By  30^th  November 2021, ZCDC had produced 3 691 731 carats.  

The Committee learnt that RZM Murowa located in Zvishavane has the capacity to produce 600 000 carats a year and 80 percent of the diamonds are of gem quality.  The sorting of Murowa’s diamonds is done in Harare and 10 percent of the diamonds are sold locally to cutters and polishers while they were being traded with Antwerp. 

Anjin was embarking on a re-building exercise after its operations were disrupted in February 2016. The company resumed on-site operations in 2020 and for the period January to December 2020, it produced a total of 724, 497.92 carats.  For 2021, the company did not produce anything and was focused more on exploration activities.  However, at peak, the company has a capacity to produce 7 million carats per year. 

Security Systems at the Mining Sites and Sorting Houses:

Anjin Investments Private Limited:

     Anjin Investments Private Limited operated between the period 2010 and 2015 and then resumed on-site operations in 2019. The company found most of its equipment and security system vandalised and therefore, was in the process of re-building its operations.  Its security system comprises of CCTVs, boundary fences, sniffer dogs, private security company and the police. The Committee was informed that the company had experienced 3 attempts of diamonds theft which were reported to the police. As part of efforts to strengthen its security, the company intends to migrate to an integrated security system in 2022 which entails off-site access to information by the MMCZ and the Ministry of Mines and Mining Development.  Anjin and ZCDC security personnel meet on a regular basis to share intelligence information.

ZCDC:

ZCDC upgraded its security system and put in place an integrated system with on-line access by the Ministry of Mines and Mining Development and its Head Office in Harare.  The company’s security system comprises of CCTVs, drones, reaction teams, private security companies and boundary fences. The company also has a tip off anonymous but it is restricted to internal personnel. The major security threats for both Anjin and ZCDC were the villagers who reside near their concessions but an intelligence team has been established which works with the community to address this challenge. In the process there has been increased flow of information from the community members to the companies on illegal mining activities.   Another risk raised by ZCDC was that of penalties charged for the illegal possession and mining of diamonds.  This was not deterrent enough for would be offenders.  This needs to be addressed through policy reforms, particularly amending the Precious Stones Trade Act.

RZM Murowa Private Limited:

RZM Murowa is mainly involved in kimberlitic diamond mining located deep in the earth hence there are no incidents of security breaches by artisanal and small-scale miners.  The security architecture at Murowa mainly comprises of boundary fences, CCTV and private security companies.   

Exploration Work by Mining Companies:

Anjin, ZCDC and Murowa diamonds registered their intentions to increase their production capacities, hence, they were actively involved in exploration work.  Both Anjin and ZCDC were conducting exploration in the Marange area, whilst Murowa was engaging in exploration activities in the Sese communal lands in Masvingo Province. Alrosa has not yet begun production but was actively involved in exploration work in the Chipinge and Bubi Districts, at the time of the Committee’s visit. 

Artisanal Mining of Diamonds:

The Marange Community informed the Committee that smuggling of diamonds was a common occurrence in the area.  It was highlighted that panners usually operated at night and the diamonds were allegedly smuggled through the Mozambican corridor.  Civil society members indicated that this was orchestrated by a well-known syndicate operating in Mutare and the police was called upon to act to apprehend the syndicate. The situation was compounded by the fact that the Zimbabwean law does not recognize artisanal mining of diamonds. 

Auditor General’s 2019 Findings on the Diamond Sector:

The Committee held a meeting with Mrs. Mildred Chiri, the Auditor General, wherein she highlighted that her role was to ensure that Government departments, parastatals and agencies adhere to the public finance principles as enshrined in the Constitution and other laws of the country.  The parastatals in the diamond industry that were recently audited by the Auditor General include the MMCZ and ZCDC.  Both MMCZ and ZCDC indicated that they would attend to any issues that may be highlighted by the Auditor General, so as to ensure that the companies and country remains compliant with the KPCS. 

Community Concerns in the Diamond Sector:

Community in Marange and Arda Transau:

The major issues that were raised by communities in Marange and Arda Transau include the following:

1. There were no written agreements or contracts on the relocation program. As a result, communities could not hold the companies accountable for unpaid compensation.
2. The community at Arda Transau stated that they did not have title deeds for their houses which makes them insecure about the future. The Ministry of Local Government and Public Works was called upon to address this issue. There were also complaints that some of the houses had already developed cracks and needed repair.  Furthermore, the community had no access to clean water and electricity.  A call was made for more land to be acquired to depopulate the community at Arda Transau.

• At Chirasika, in Arda Transau, concern was raised over the shortage of classroom blocks, toilets, teachers’ accommodation and water storage tanks. The community also highlighted the need for a vocational training centre for skills development particularly for the youth.  

1. ZCDC and Anjin were accused of shirking corporate social responsibility programs. The communities had to beg the companies to implement corporate social responsibility activities.
2. There was a perception that the companies chose to associate themselves with a few members of the community, such as the Chief and Headman and exclude the rest of the community.
3. There were complaints that the USD$ 5 million that was given to the Community Share Ownership Trust (CSOT) was eroded by inflation hence it did not achieve its intended objectives. A call was made for an audit to be conducted to ensure that all the monies that were disbursed through the CSOT could be accounted for.  

• Community members located in the mining concessions of Chiadzwa expressed concern on change of chieftainship in the event that they are relocated to Arda Transau. A call was made for dialogue between the two traditional leaders, Chief Marange and Chief Zimunya before more people were relocated.  
• There were allegations raised that members of the security services deployed in Marange were involved in corrupt activities, whereupon they take bribes to facilitate illegal panning of diamonds during the night.

1. ZCDC and Anjin were called upon to hold monthly meetings with the community living near their concessions to discuss any security and human rights issues.
2. ZCDC offered the community a concession as a strategy to empower the locals and reduce incidents of illegal mining activity in the area. The concession would be mined by ZCDC on behalf of the community starting in 2022.  The community welcomed this initiative.
3. During the visit it was gathered from community members that the level of human rights abuses and violations by state and private security agents had significantly gone down. The situation was considered normal, compared to previous years where reports of beatings and other forms of abuses were reportedly rampant. However, some community members were of the view that the area was still a protected area and in some cases, people were searched or asked for identification by the police or military personnel which restricts freedom of movement in the area.

Community in Sese Communal Lands:

Murowa Diamonds has been conducting exploration of diamonds in the Sese Communal lands for the past 3 years and a total of US$2,5 million was invested in the project.  The Committee was informed that the company had not yet discovered an economic kimberlitic pipe in the area.  The exploration activities were being conducted at various sites including; a sporting field of St Simon Zhara Primary School, at a farm of a local villager and in other places in the Sese area.  However, there was tension between the community in Sese and the diamond company over its exploration activities, particularly at Danhamombe High School.  This had led to several court battles and holding of intergovernmental meetings to try and resolve this conflict. The bone of contention was that the Sese Community wants the mining company to relocate its camping site from the High School in order to pave way for the construction of boarding school facilities.  The mining company was also being accused of disrupting learning activities at the school due to noise pollution from the drilling rigs.  However, Murowa Diamonds informed the Committee that not all the community members were against the presence of the company in the area and most of the allegations levelled against the company were not true.  

The company noted that extensive consultations had been done before exploration began and acknowledged that it might have left out a few key opinion leaders during the process. Some members of the local community refuted this assertion and told the Committee that they were never consulted on the exploration activities of Murowa diamonds.  The community went on to allege that the presence of the miner had created new challenges for them such as water shortages, environmental degradation, disruption of farming projects, loss of cattle due to poisoning due to operations of the company.  Additionally, the miner was accused of failure to engage in any corporate social responsibility activities in the area.  Despite the claim that community members were never engaged, the Committee noted that a total of 15 meetings had been held between all the key stakeholders to try and address these challenges.  

Rimbi Community in Chipinge District:

The Rimbi Community is based in Chipinge and in the early part of 2021; Alrosa Private Limited began exploration in their area.  The community expressed concern that Alrosa did not comply with the country’s laws, particularly on community engagement before exploration started.  Members of the Community informed the Committee that local government authorities were also not consulted on the exploration work by Alrosa.  Only a few people were consulted yet the exploration activities were affecting more than 10 villages.  The Rimbi community expressed their wish to be involved in the process from the beginning, in line with Part 19(3) of the Mines and Minerals Act, according to which “the Secretary shall send written notification of the issue of a special grant to every occupier or, if there is no occupier, owner of land falling within the area covered by the special grant”. Alrosa Head Office in Russia, represented by Mr. Peter Karachiev indicated that his company subscribes to best international practices in the sourcing of diamonds such as the System of Warranties which observes human rights, labour rights and anti-corruption. In turn once mining operations begin in Zimbabwe, these principles and practices which are applied in the entire Alrosa Group will also be applied in Zimbabwe.

Diamond Cutting and Polishing Industry:

The Committee held a meeting with the Diamond Beneficiation Association of Zimbabwe where they outlined the following key issues:

1. The cutting and polishing industry in Zimbabwe was still in its infancy stage. There were less than 20 operators in the country but there was potential for the industry to grow into a multi-million industry in the next few years.
2. The diamond cutters and polishers have control over the manner in which rough diamonds were handled once they were purchased from the diamond producers such as Murowa Diamonds and ZCDC. The controls included filing of records on rough diamonds purchased by the cutters and polishers.  Furthermore, periodic audits were conducted by MMCZ to ensure that all rough diamonds can be accounted for.  

• The premises of the cutters and polishers were secured by a boundary wall, CCTVs and private security companies to reduce any incidences of leakages.

5.                OUTCOMES OF THE SELF-ASSESSMENT PROGRAMME:

There were some positive outcomes that emerged as a result of the self-assessment program:

5.1      Zimbabwe was endorsed to become the vice-Chair of KPCS International for 2021 and will assume Chairmanship in 2023.  This is partly attributed to the self-assessment program where Zimbabwe showed its willingness and commitment to adhere to international standards in the production and trading of diamonds.

5.2      The Self-Assessment Program brought together Government officials and CSOs in the diamond sector that for a long time had an acrimonious relationship.

5.3      Some of the diamond companies that include Murowa Diamonds and ZCDC began addressing some of the concerns that were raised by communities during the factfinding visits by the Committee.

6.                COMMITTEE OBSERVATIONS:

6.1      Most of the government agencies that were visited, including custom officials were generally conversant with the KPCS requirements nevertheless, regular trainings were necessary particularly for new recruits. 

6.2      The diamond producers in the country Anjin, ZCDC and Murowa Diamonds showed commitment towards compliance with the requirements of the KPCS as demonstrated by the security systems at the mines and sorting houses. However, it is important for the companies to ensure availability of documentation on request during such visits.

6.3      Diamond producers that include Anjin, ZCDC and Murowa Diamonds expressed their willingness to address challenges raised by local communities in the short-term whilst others would be addressed in the long term.

6.4      There were too many community-based organizations in Marange and it was clear that they were not always speaking with one voice, hence making it difficult for mining companies to address all the challenges facing the communities.

6.5      There is a policy gap on how to address the challenge posed by artisanal diamond miners who are contributing to the smuggling of diamonds out of the country.

6.6      The approach by ZCDC to initiate a self-assessment on its human rights impact on communities through the Initiative on Responsible Mineral Assurance (IRMA), was viewed as a positive step towards promoting responsible sourcing. 

7.    COMMITTEE RECOMMENDATIONS:

7.1      The Ministry of Mines and Mining Development should review the Diamond Policy and submit a bill amending the Precious Stones Trade Act by 31 August 2022, particularly to integrate artisanal and small-scale miners in order to curb the illegal smuggling of diamonds in areas such as Marange. Alternatively, stiffer penalties can be introduced to curb diamond leakages.

7.2      The Ministry of Finance and Economic Development should provide financial resources to ZIMRA for purchasing modern equipment such as scanners for detection of diamonds and other minerals at the country’s ports of entry and exit by 31 July 2022.

7.3      The Ministry of Mines and Mining Development should ensure that all mining companies develop guidelines on Responsible Sourcing Standards and community engagement, so as to reduce tension between producers and communities by 31 October 2022. To this end, companies are urged to closely work with civil society organisations. 

8.                     CONCLUSION:

          The self-assessment program achieved its intended objective, that is gauging whether Zimbabwe’s diamond sector was still compliant with the KPCS requirements.   Generally, the country’s level of compliance with KPCS requirements was good.  However, more work should be done towards addressing the gaps identified during the self-assessment.  To this end, the stakeholders acknowledged the need to constantly work together as a team, in light of the fact that Zimbabwe would be assuming chairmanship of the KPCS in 2023.  This will enable the policymakers to get accurate and timely information of activities in the diamond sector so that where necessary, corrective action can be taken.

As we speak the KPCS team has jetted into the country. They came in during the weekend and hit the ground running.  They are carrying out their own assessment. I must say, from the information that we get when they carry out an exercise of this nature, their visits to other countries comprise of six, if not less than ten countries but we have about 18 countries that have visited Zimbabwe to carry out this noble exercise which will guarantee that Zimbabwe continues to exploit existing and future diamond markets.  Thank you Madam Speaker Ma’am.

*HON. NYABANI: Thank you Madam Speaker Ma’am.  Let me say a few words on the tour that we had when assessing the diamonds.  It is very true that the Committee went around the companies involved in diamond mining.  As we were touring, it is true that we saw they were very strict on the control of the movement of diamonds.  They do not have the equipment.  If we look at Forbes Border post, you find that there are only two ways, the entrance and the exit points but as you go further, there is no security and there are no drones which can move around.  There might not be diamonds which went in and out through Forbes Border Post but we can say maybe there were diamonds which found their way out of the country.  When we looked at the border, there was no security there and some people living at the border do not have knowledge about diamonds.  These people should be taught on what diamonds are like and there should be machines that are able to detect diamonds in case of smuggling out of the country.

We also looked at the companies there that are working in those areas and we found out that they can do whatever they want without the input of the locals.  Those companies go about looking for places where diamonds are found without the knowledge of the local people. It looks like our minerals are just being grabbed by those companies and the locals are not benefiting.  If they mine without informing the locals, it means that our local people will not benefit through our social corporate responsibility. 

As Government, we want investment.  What we mean by investment is that they must leave some infrastructure so that locals will benefit from the mining activities in their communities after the mining companies are gone.  In this country, there are a lot of diamonds to the extent that if companies do the proper things, our country will also benefit.   The locals and the mining companies must work together so that locals are given rights to mine gold. Our people must be also allowed to mine on a small scale basis and get permits to sell their diamonds to the Government.  It was also discovered that those diamonds are sold in Harare.  There must also be auctions nearby mining places so that these areas will develop and money will circulate. 

In conclusion Madam Speaker, we found that the country is mining diamonds legally, that is why it was appointed to be the Vice Chairperson of Kimberly which means that in the future, it will end up chairing.  This means that Zimbabwe is mining their diamonds lawfully. With these few words, I want to thank you.

REPORT: Self Assessment of the Diamond Sector in Zimbabwe