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Zimbabwe's contentious diamonds suck in UN and World Bank
Rodrick Mukumbira, Mineweb
May 14, 2007

Windhoek - What began as a battle to control a diamond mine in southern Zimbabwe has now sucked in the UN and the World Bank, amid allegations of aiding in smuggling diamonds out of the country and funding a company that is allegedly dealing in disputed diamonds. According to press reports, as of last week the UN's legal department had began investigating the UNDP offices in Harare following March complaints by Bubye Minerals, which is entangled in a diamond mine ownership dispute with River Ranch Limited, that the body was funding and allowing its vehicles to be used by the latter to smuggle diamonds out of Zimbabwe. Bubye Minerals claims to have gathered evidence in the form of signed affidavits and other documents showing that its rivals to the Beitbridge-based mine have smuggled diamonds out of Zimbabwe with the assistance of the UNDP. It claims that the smuggling has been made easier by the fact that UN vehicles are not searched at the country's borders.

The UN department was also considering a request by Bubye Minerals to freeze funding to River Ranch, a company owned by retired army general Solomon Mujuru, husband of vice president Joyce Mujuru, while investigations on allegations of illegal smuggling of diamonds by the company are being carried out. River Ranch mine is currently a centre of an ownership wrangle in which its directors are accused of seizing the mine from Bubye Minerals and renaming it. The wife of one of its directors, Tirivanhu Mudariki, a former ruling Zanu PF legislator, is said to be employed by UNDP. UN Assistant Secretary for Legal affairs Larry Johnson has reportedly written a letter confirming the probe despite denials by UNDP local representative, Augustino Zakarias, and River Ranch Limited that the UNDP has facilitated the illegal movement of diamonds using the body's vehicles.

"In this regard you have requested us in your letter dated March 26 2007 to investigate the matter and issue a statement that we are doing so. The UNDP suspends its assistance to River Ranch Limited through Amsco pending our full examination. We have brought your letters to the attention of UNDP and we understand that UNDP together with the International Finance Corporation (IFC) and African Management Services Company (Amsco) are currently examining questions you have raised," Johnson said in the letter quoted by Zimbabwetimes.com. The UNDP has however confirmed that it is funding River Ranch Limited through Amsco, a company formed with the World Bank's private sector arm, the IFC. It says apart from supporting River Ranch Limited, Amsco has also availed assistance to other local companies such as Bindura Nickel Mine and Shearwater, a tourism and leisure company.

Bubye Minerals has complained to World Bank president Paul Wolfowitz after one of River Ranch Limited's directors was quoted by local media as saying his company was receiving financial support from Amsco. Thierry Tanoh, the IFC department director for Sub-Saharan Africa, was quoted in press reports recently saying his organisation would take Bubye Minerals' complaint seriously. "We considered the issues you raised in your letter to president Wolfowitz with the utmost seriousness and we will investigate," Tanoh was quoted as saying in a recent letter to Bubye Minerals. "Amsco has been in operation for almost two decades and has been delivering on its core mandate of capacity building and succession planning for African businesses. As I am sure you will appreciate, Amsco makes every effort to ensure that its client companies abide by local laws and regulations, especially as one of its core goals is the improvement of governance in its client companies."

The weekly newspaper, Financial Gazette reports that last week Bubye Minerals's director Adele Farquhar wrote to Johnson accusing the UN and the West of double standards, for imposing targeted sanctions against President Robert Mugabe and his lieutenants while funding a company "sitting on disputed diamonds". The US, which is the major contributor to the World Bank, has passed punitive legislation that compels its representatives to any world financier to block any financial support to Zimbabwe or to any businesses with links to the ruling Zanu PF officials. At its annual meeting in Jerusalem last week, the World Diamond Council (WDC) singled out Zimbabwe and Venezuela for not meeting Kimberley Process standards on rough diamond trade. Failure to control their local rough diamond trade makes the two countries likely candidates for expulsion from the process. The European Commission, which chairs the WDC, has been investigating River Ranch Limited on smuggling allegations since early this year. It is however, yet to pronounce its findings.

However, when the WDC voiced concern on the movement of diamonds from River Ranch Limited, the company's legal advisor, retired High Court judge George Smith, lashed out at the diamond trade regulatory body accusing it of bias. "We are very perturbed that you have accepted the libellous accusations against our company without first investigating the allegations and contacting us and affording us an opportunity to present our side of the story," Smith was quoted as saying. "Had you done so, we would have been able to prove to you that the accusations against River Ranch are completely false." Smith also said while the company had been producing diamonds at the mine it had not sold any up to date. "You are condemning us on the basis of false rumours without making any attempt to discover the true position. Your actions are very surprising and disturbing," Smith was quoted as saying.

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