Comments of the Patron of the TMF, Thabo Mbeki, at the Antwerp Diamond Gala: Antwerp, Belgium: 13 November, 2017.

Mr Ari Epstein, CEO of the Antwerp World Diamond Centre and other leaders and members of the Centre, our hosts tonight;

Your Excellency Didier Reynders, Belgian Deputy Prime Minister and Minister of Foreign and European Affairs;

Your Excellency Alexander De Croo, Minister for Development Cooperation;

Your Excellency’s Ministers and Ambassadors attending the African Diamond Conference;

Distinguished delegates to the Conference;

Friends, ladies and gentlemen:

 

We meet here at this Diamond Gala this evening within the context of the important African Diamond Conference which starts tomorrow in Brussels.

As all of us know, over two days the Conference will address matters that are of critical importance to the billion Africans.

I am very glad that the very first Session of the Conference will address the theme – “Natural Resource Management”, with the first specific topic being “Leveraging diamonds for economic development”.

Again as all of us know, my Continent, Africa, is involved in a complex and continuing struggle successfully to address its many challenges.

As Africans we are determined to ensure that we should no longer be defined throughout the world as a Continent:

  • mired in endless violent conflict;
  • of entrenched poverty and underdevelopment;
  • of failed governance;
  • depending on everlasting Western aid charitably characterised as ‘development assistance;
  • and as a fragmented Continent, unable to unite to address its shared challenges.

Rather we strive practically to define ourselves as:

  • a Continent free of violent conflict, with ‘the guns having been silenced by 2020’,
  • a Continent with stable democracies as defined in the already ratified African Charter on Democracy, Elections and Governance,
  • a Continent which has addressed the matter of opposition to impunity, ensuring that this is practically addressed through the African Court of Justice whose Protocol is going through the process of ratification,
  • a Continent characterised by a vigorous and sustained pursuit of the goal of the eradication of poverty and underdevelopment throughout Africa, relying on the NEPAD and other related programmes, and,
  • a Continent determined to reform the structures and processes of its central representative organisation, the African Union, to help ensure that we move faster towards achieving the long-agreed goals of African integration and unity.

I am certain that some among us present this evening will have quietly told themselves and their immediate neighbours that what I have just said amounts to nothing more than wishes being father to the thought.

In that regard I admit, immediately, that what I have just said, concerning such matters as ending the violent conflicts among ourselves, establishing the African Court of Justice, implementing a sustained Continental economic development programme, and so on, are both an aspiration and truly programmes which the African Union is actually striving to implement.

What is of the greatest importance in this regard is that you, important actors within the diamond industry, should be aware of both the aspiration shared by the African peoples and the AU programmes to address that African aspiration.

I say this because it will be impossible for our political leadership to achieve the objectives I have mentioned unless you, the diamond industry and related players, become an integral contributor to the achievement of the outcomes I have mentioned.

This is for the very simple reason that the best wishes of our political leaders, and therefore our governments, for a better life for all, will not be realised unless the people experience an actual process of improved material life conditions at the same time as they experience the fact of the acquisition and exercise of rights of free political participation as detailed in our National Constitutions!

It is exactly for this reason that you, guests this evening, participants at the African Diamond Conference, occupy a particular place of great importance in terms of the future of our Continent and its peoples.

I have mentioned some of the major challenges facing the African Continent.

However I would like to emphasise that the struggle to eradicate poverty and underdevelopment stands at the very heart of all these challenges.

This is because it would be impossible to understand the root causes of many of our Continent’s problems such as war and social unrest, conflict over access to political power, and the failure to achieve national and social cohesion, without understanding the place of poverty, underdevelopment and inequality at the very base of these problems.

It was for this reason that earlier I said that one of the central challenges that faces our Continent is the struggle to eradicate poverty and underdevelopment.

And this is exactly what highlights the role of the diamond industry as one of the central drivers of the process towards the achievement of the goal of the elimination of poverty, underdevelopment and inequality and therefore the renaissance of Africa.

This eminent gathering knows much more about diamonds than I do. I will therefore not engage in any unnecessary and ill-advised process of trying to educate you about diamonds.

Rather I will make some remarks concerning what as Africans we expect of the diamond industry.

Those expectations are based on a clear understanding and appreciation of the role the diamond industry is playing on our Continent in terms of wealth and job creation and therefore the building of the possibility to meet our peoples’ demands and needs not only for jobs but also access to adequate nutrition, better health, education, and so on, and therefore a better life.

This is illustrated in the specific cases with which all of us are familiar regarding what is happening in some diamond-producing countries in Africa.

Our expectations are also based on a clear understanding that the mining sector as a whole, including diamond mining, will remain, for a long time, an important part of the African economy.

Accordingly, as Africans we expect of the mining industry, including diamond mining, that it will practically join in a sustained and meaningful partnership with our governments and peoples to achieve the renaissance of our Continent.

In this context I would like to refer to comments I have cited in the past, these being observations that were made by Mark Cutifani, the CEO of the major global mining company, Anglo American, within which resides the giant diamond company, De Beers.

Here is what Mark Cutifani said in 2013:

“We (the mining industry) have to think beyond our historical characterisation and eliminate a conversation that talks to us being an ‘Extractive Industry’. While we may extract products from rocks – we are overwhelmingly a ‘Development Industry’ that creates new social possibilities. We should be the ‘Development Partner’ that supports and catalyses the creation of wealth for all…

“We each have a responsibility to be a leader – to seek a new future and be the first to extend a hand in partnership to those that will develop this brave new world we all want to be part of…

“The job of those who have stewardship of capital is to support society…”

I would like to believe that with owners of capital in the diamond industry acting in a manner that is informed by the understanding suggested by Mark Cutifani, they would readily appreciate the vital importance of the Mining Vision that has been put forward by Africa’s pre-eminent continental organisation, the African Union.

When I spoke at the Mining Indaba in South Africa in January this year I said, among others:

“The International Study Group Report on Africa’s Mineral Regimes said in its 2011 Report entitled “Minerals and Africa’s Development”, that:…

“In Africa, for far too long, it has been taken as given that there are always losers and winners in mineral extraction processes…

“The Africa Mining Vision…seeks to change all this. It advocates for “Transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development”. At the centre of the Vision is a developmental state that integrates the mining sector into broader social and economic developmental processes. This is an attempt not only to address the sector’s isolation from mainstream social and economic activities, but to create win-win outcomes for all stakeholders…

“The Mining Vision visualises:

  • the use of resource rents to develop physical and social infrastructure;
  • the collateral use of the high-rent resource infrastructure to open up other resource potential such as in agriculture;
  • downstream value addition, i.e. beneficiation of the raw materials both for export and domestic manufacture;
  • upstream value-addition by supplying domestically produced capital goods and services to the mining industry; and,
  • technology and product development as mining develops technologies to adapt to local conditions, which process, because it is knowledge-intensive, requires investment in human resource development as well as Research and Development, thus also to create the possibility for the new skills acquired to be used to venture into economic areas outside the resource sector.”

I am suggesting that those of us involved in mining diamonds in Africa should indeed buy into this African Mining Vision and therefore deliberately contribute to the realisation of its objectives.

In that context I am certain that all Africa is happy with the progress that has been made to address the challenge of ‘conflict diamonds’ through the Kimberley Process, with the active involvement of the diamond industry.

In this context it was very encouraging to read last month’s statement by the then Acting President of the World Diamond Council, Stephane Fischler, at the annual meeting of the Council when he said: “Every participant in the diamond supply chain has an obligation to our industry, to global communities, and to citizens, to adhere to only the highest ethical standards and ensure that every diamond is legitimately sourced and conflict free.”

Nevertheless we must also pay serious attention to calls that have been made for continued vigilance in this regard.

For instance a 2011 article by Professor Phillippe Le Billon of the University of British Columbia entitled “Extractive sectors and illicit financial flows…” says:

“Even in the diamond sector, which comes under international monitoring through the Kimberley Process (see below), about 30–50 per cent of the production by value is reported to be exported without proper declaration or valuation (World Bank 2008; Solvit 2009).”

In this same context I would like to take this opportunity to thank the diamond industry for the attention it is paying to the important matter of the resolution of the conflict in the Central African Republic which, of course, is one of the African diamond producing countries whose diamonds should not be used to fuel conflict and must also be subjected to the Kimberly Process.

Last year the media reported that a Government inquiry in Tanzania had found that at least 65 people had been killed and 270 injured at a mining site over a period of ten years. These were artisanal miners who it was said had regularly illegally invaded the concession of a commercial gold mine to conduct their own small-scale hunt for gold.

I mention this to draw attention to the importance of artisanal diamond mining in Africa. Obviously none of us would want any harm to visit these artisanal miners who occupy an important place in the African Mining Vision.

It was therefore very encouraging to read what the President of the World Diamond Council, Andrey Polyakov, said after the meeting of the Council and other Kimberley Process partners in May this year that:

“One of the topics discussed at length was the need for African countries to get maximum benefit from artisanal mining in order to develop their local economies and improve the living conditions of their citizens. Compliance with business and social responsibility standards will be the path forward to making this possible.”

I would like to believe that all of us fully support this sentiment and I therefore encourage everybody concerned to take the necessary action in this regard.

You will recall that earlier I said that the African Mining Vision has as one of its objectives “downstream value addition, i.e. beneficiation of the raw materials both for export and domestic manufacture”, a topic with which I am certain you are very familiar.

As you know, as Africans we insist on this because we see it as being central to the achievement of our goal of the eradication of poverty and underdevelopment and changing the nature of our economic relations with the rest of the world.

It was therefore discouraging to read the assessment made by Maxim Shkadov, President of the International Diamond Manufacturers Association when in his address to the 37th World Diamond Congress last year, he said:

“To the honourable African mining ministers and representatives present here I can only say this: the past decades have proven, time and again, that the various beneficiation models that have required manufacturers to establish cutting plants in your countries have not brought the desired results, for either side.”

However, of great importance, he also said:

“IDMA, I can assure you, would like to enter into dialogue with you, to find and implement business models that will bring your countries the highest possible revenues for your mined diamonds, and at the same time allow for an infrastructure that will ensure profitability for the manufacturers.

“It is not easy, but then, in our business, what is?”

Clearly more work must still be done on this matter of great importance to Africa, the issue of adding value to the raw materials which the Continent produces.

Further, I am certain that all of us are very conscious of the important task the international community has set itself – to combat the scourge of illicit financial flows.

This matter was emphasised by the release of the so-called Panama Papers last year and now by the recent release of the Paradise Papers, with both releases highlighting the role of tax havens which also serve as domiciles for some of these illicit financial flows.

In this regard I am certain that all of us are very familiar with the fact that all existing information states that commodity producing and exporting countries are especially exposed to the phenomenon of illicit financial outflows.

This particular matter has been brought into sharp focus very recently because of the actions which the Government of Tanzania has taken relating to the mining industry in that country.

It seems clear that one of the principal issues raised by the Tanzanian Government is alleged under-invoicing of both gold and diamond exports, which, among others, has resulted in the seizure of a consignment of diamonds as it was about to be exported.

Without going into greater detail with regard to this important episode, suffice it to say that it is obviously of the greatest importance that the diamond industry conducts itself with the greatest integrity so that it serves as a true and reliable partner in pursuit of the goals set in the African Mining Vision.

In January last year The Economist Intelligence Unit published an article about Lebanon headed “Illicit financial flows remain a problem”. Among others it said that Lebanon was “susceptible to charges of being a money-laundering hub, with Lebanese expatriates based in Africa and Latin America establishing financial system outside the formal financial sector.”

The Economist went further to say:

“According to intelligence from the US State Department and the US Treasury Department, diamond brokers and purchasing agents are, for example, alleged to be part of an international network of traders who participate in underground activities, including the trafficking of conflict diamonds, diamond trade fraud and money-laundering. The US is taking a keener interest in some of these activities.”

I have cited these passages from The Economist only to emphasise the point that it certainly is in our interest as Africans that none of our partners in the mining of diamonds should be the subjects of the ‘keener interest’ reported by the magazine, because of their involvement among others in illicit financial flows.

The Cotonou Agreement which governs relations on certain matters between the African, Caribbean and Pacific countries on one hand and the European Union on the other will end in 2020. Accordingly steps are being taken already to negotiate the successor Agreement.

Among others, we have seen some of the challenges that have arisen in the course of the implementation of the Cotonou Agreement. I refer here especially to the Economic Partnership Agreements which entail “removing progressively barriers to trade between (the ACP countries and the EU)”, as the Cotonou Agreement says.

I mention this matter of the impending negotiations to produce a new ACP-EU Agreement because we do not know what that new Agreement will say, especially, in this instance, as regards the products of the mining industry.

It would therefore seem to me that one of the tasks the African diamond industry must set itself is to stay in close contact especially with the African Union to ensure that it is not marginalised with regard to any negotiations which might impact on the industry.

This serves to underline the centrally important point I would like to emphasise as I approach the end of my comments, that, as I have said, the diamond industry should very actively take up the challenge to partner the African governments and communities to ensure the realisation of the African Mining Vision, aiming for win-win outcomes.

Let me close by congratulating Antwerp and the Antwerp World Diamond Centre on the celebration of the Diamond Year, the 570th anniversary of the diamond trade in this city and thank the Centre for organising and hosting this evening’s Antwerp Diamond Gala as well as the African Diamond Conference.

In this context I was especially struck by the information that in the Antwerp City Archives is a 1447 “Ordinance against the falsification of stones”, which, as has been said, underlined the need for honesty and integrity among all those who participate in the world of diamonds.

Thus would the diamond industry, by behaving according to this prescript, continue to be defined as the Development Industry which Mark Cutifani spoke about.

Thank you for your attention.

 

 

 

 

 

 

 

 

 

 

 

 

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