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Comment: Diamond saga reeks of sleaze

ZIMBABWE has scored consistently poorly in surveys that determine the business environment in the country.

Last year the country ranked lowly in the highly acclaimed 2010 Index of Economic Freedom.

 

The Index of Economic Freedom ranks countries according to criteria that assess a country’s economic openness, trade and the efficiency of domestic regulators, freedom from corruption, property rights and the rule of law.

Zimbabwe was ranked 178 out of 179 countries assessed in the report compiled by the Washington-based Heritage Foundation and the Wall Street Journal. The report was released last month.

In 2008, Zimbabwe was in the same position.

Official explanation for Zimbabwe’s dismal performance has always been that Western-imposed sanctions have impacted negatively on the country’s business environment. But this is drawing a red herring across the track.

The Africa Consolidated Resources (ACR) saga puts this point across very sharply.

The London Stock Exchange-listed company secured a claim at the Marange diamond fields in 2005 amidst great optimism.

Only in November last year chief executive officer Andrew Cranswick told the World Gold Conference in Johannesburg: “Zimbabwe is one of those mineral-rich countries that cannot be ignored any longer…There are still some cowboys operating on the ground. However, (President Robert) Mugabe and (Prime Minister Morgan) Tsvangirai recently stood up and said that mineral rights in the country had never been threatened, and that this would be maintained and respected going forward… it is important to note that Zimbabwe is a vector that is moving in the right direction with a delta of years of potential production still in the ground, ready to be discovered and mined.”

But in his address Cranswick was not without a feeling of foreboding. Over and above the threats posed by the “cowboys”, he said: “Zimbabwe is going through an evolutionary process of change that will, unfortunately, not happen overnight, but the country is moving in the right direction. Just like the roads in the country, this journey will also be filled with potholes.”

Indeed the “potholes” have been many and deep; only a year after securing the Marange claim ACR was kicked out by the Zimbabwe Mining Development Corporation (ZMDC) and the military took over during their bloody crackdown on illegal diamond panners. But it also turned out that more than just getting rid of the illegal panners, the soldiers were joined by government officials and police in plundering the gems for their own enrichment.

In September last year after a three-year battle ACR won in the High Court its legal battle against the government. The judgment by Justice Charles Hungwe was viewed as a landmark; it was hoped it would allow the inclusive government to demonstrate to the world its preparedness to abide by the laws of the country and court judgments.

But the government appealed the High Court decision and while the appeal was still before the country’s highest court the Ministry of Mines and Mining Development cancelled ACR’s licence on Monday this week.

Not only was the cancellation illegal because the issue was sub judice but it flew in the face of a Supreme Court judgment by Chief Justice Godfrey Chidyausiku on January 25 that determined that the diamonds the ZMDC had mined from Marange belonged to ACR and should be delivered to the Reserve Bank for safekeeping.

Chief Justice Chidyausiku in that determination averred that the ownership of the diamond fields had not been finalised.

The 129 000 carats of diamonds were delivered to, but later removed from the Reserve Bank on the spurious argument that a letter written by the Registrar of the Supreme Court had meant that the January 25 order had been reversed.

Needless to say three days after the cancellation of the ACR licence Chidyausiku was understandably angry with government over the latest development. He said the removal of the diamonds from the central bank was unlawful and contemptuous of the highest court in the land.

The flip-flops in the ACR saga betray sinister stratagems in the whole process in which the Marange diamonds have been handled.

The recent hearings in the House of Assembly in which the Portfolio Committee on Mines and Energy  interrogated the awarding of tenders to two little-known companies, one of which specialises in collecting scrap metal, raised eyebrows about the probity of those entrusted to manage the process.

The whole process reeks of corruption.

To clean it up the award of licences to Mbada Diamonds and Canadile must be investigated by an independent commission and if it was corruptly done those with dirty hands must be exposed.

In the meantime Justice Hungwe’s judgment in which he validated the ACR claim should be respected. It is vital that the ownership of the diamond fields be finalised in the best interests of the country; and quickly too.

 

 

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