Monday, March 16, 2009

DRC diamond trade corruption

from Relief web, July 2, 2003:

...

In October 2002, a UN Expert Panel investigating the illegal exploitation of resources in the Democratic Republic of the Congo (DRC) issued a devastating report on the activities of companies engaged in the diamond trade and other resource extraction.1 The report documented systemic and massive corruption in the diamond industry of the DRC, and the flagrant collusion of allied governments, notably Zimbabwe. It detailed the pillage of Congolese diamonds and other natural resources by Rwanda and Uganda. The report described systematic bribery, asset stripping, tax fraud, sanctions busting, embezzlement, extortion, the use of stock options as kickbacks and the diversion of state funds by groups that 'closely resemble criminal organizations'. The report said that in areas controlled by the Congolese government, at least US$5 billion worth of state mining assets had been transferred to foreign companies, with no benefit for the state since 1999. It estimated that the Armée Patriotique Rwandaise had been 'earning' US$320 million a year from commercial operations in eastern Congo. These practices, the report said, had led to, and fueled war, human rights abuse and the end of an almost inconceivable number of human lives. Following a nationwide mortality study, the New York-based International Rescue Committee estimated that between 1998 and 2002, 3.3 million more people had died than would have been the case had the war not occurred.2......

The UN report concluded with three lists. The first contained the names of 29 companies, most registered in Africa. Six were involved in diamond trading and three of these were based in Antwerp. So egregious and so blatant were the transgressions of these companies that the report asked the Security Council to place financial restrictions on them, freezing their assets and suspending their banking facilities. A second list contained the names of 54 individuals the Panel wanted barred from all international travel and placed under financial restrictions. Some were local businessmen, some were arms dealers, some were serving officers in the armed forces of Uganda and Zimbabwe. The Congo's Minister of Planning and Reconstruction was on the list, as was the Chief of Military Intelligence in Uganda and the Speaker of Zimbabwe's parliament....

Oryx Natural Resources stated that the allegations against it were 'completely baseless', and invited the Panel to repeat the allegations in public, outside the protection of the United Nations. Niko Shefer, a former commodities broker who had been jailed in South Africa for fraud, and who once described himself as honorary consul general of Liberia, said he had not been out of southern Africa since 2000. Asked about the Panel's claim that one of his companies had a 50 per cent stake in Thorntree Industries, a joint venture diamond-trading company with the Zimbabwe Defence Forces, Shefer said he never had any equity in Thorntree. Zimbabwean Defence Force Commander General Vitalis Zvinavashe -- recommended for the travel ban -- said that the claims against Zimbabwe and against him were 'meaningless'....

Full report (pdf* format - 96.0 KB)

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