Though we are generally supportive of the NGOs Global Witness and Partnership Africa Canada (PAC), their calls for the suspension of Zimbabwe from the Kimberley Process (KP) are totally misplaced and will only widen the suffering of the Zimbabwean people, while benefiting no one.

In Zimbabwe, not a single government crony, military official, corrupt miner, or other killer of innocent diamond diggers is using the KP in Harare. All the country’s diamonds from its informal sector are smuggled out – with no exceptions – as we wrote about in last week’s memo.

Also mentioned last week, and what we want to elaborate on this week, is Rio Tinto’s 78 percent-owned Murowa Diamond Mine near Zvishavane in southern Zimbabwe, which is not involved with the government-instigated violence going on in the country’s diamond fields in the Northeast. Diamonds from Murowa (including some of its old inventories) are the only legal – and quite distinguishable – Zimbabwean goods on the market. In fact, Rio Tinto has been, for quite a while, the only legal exporter of rough diamonds from Zimbabwe.

In comparison, there may have been three KP certificates issued from non-Rio Tinto sources. These goods went to Dubai and South Africa. These may have been proper goods from official tenders or government sales. However, whoever exported as such in 2007 ceased doing so in 2008.

Suspending Zimbabwe doesn’t change anything in the chaos of the informal sector – the smuggling will simply continue. These 200 or so mining syndicates couldn’t care less about KP certification; they don’t use the process and will not even notice its closure.

However, in the formal mining sector, some 1,500 people working at Murowa’s three kimberlite pipes and in the nearby community are dependent on the mine. These locals earn money, get food, have access to health care and have decent shelter. Calling for Zimbabwe’s suspension from the KP will automatically lead to the closure of Murowa.

One NGO official said to me “let Rio Tinto simply stockpile the goods.” That is the only option that is NOT open. From a security perspective, no diamond mine in a country where anarchy prevails and where law and order have broken down will risk its staff and workers by sitting on a stockpile. Sooner or later, that leads to hostage-taking, blackmail or an assault on the mine office. The rule in such environments is simple: you fly out the output as frequently as commercially feasible or as required from security considerations.

It may well be that, at some point, at the highest echelons of Rio Tinto the decision will be made to close – irrespective of what the KP leadership will decide. That would be a pity. I know for sure that those immediately in charge are very much aware of the humanitarian imperative not to walk away. They truly care.

In fairness to the NGOs, we realize that there are other considerations. As we wrote last week, governments that use diamond revenue to terrorize their own people shouldn’t be seen as legitimate by the KP system. A country’s military that arbitrarily kills diamond diggers should be reason enough for a country to jeopardize its KP membership status. However, if any of these killers availed themselves of the KP certification mechanism, we would have great sympathy for the call for KP suspension. But each situation ought to be judged on its merits.

Rio Tinto’s Community Involvement

Zimbabwe’s suspension from the KP system will lead to Rio Tinto’s withdrawal and the cessation of its participation and funding of various community activities. Zimbabwe is experiencing one of the harshest AIDS epidemics in the world. Rio Tinto has teamed up with Population Services International (PSI), a non-profit organization based in Washington, D.C., that harnesses private-sector resources to address health problems of low-income and vulnerable populations in developing countries.

As part of its HIV/AIDS program, PSI undertakes education, counseling and testing for organizations and individuals. At Murowa, staff and workers, and their families, are encouraged to join voluntary HIV testing and counseling. Murowa pays for full medical coverage for all employees and their families - in a country where most of the population no longer has access to medicine.

Rio Tinto is also actively assisting local people to develop their own businesses to provide long-term benefits to the community through the injection of skills and money. This enables the kick-start of new businesses that might otherwise never have gotten off the ground – and this helps to generate employment and income for the community that will be there long after the Murowa mine has closed.

To date, the company has facilitated the launch of three community-based business initiatives, each of which currently has a strong service link to the mine but has the potential to service other markets. These new companies include the Murowa Construction Company, a small construction enterprise created by former Murowa mine employees. Murowa provided the construction company with financial and practical support to build a two classroom block at the Murowa Primary School, the oldest and biggest junior school in the area. This was subsequently handed over to the school.

The Murowa Manufacturing Sewing Group is another business venture that has been supported by the mine and was formed to manufacture school uniforms for the region. The company also facilitated the development of a small, family-run nursery, the Guzha nursery, which supplies the trees required to carry out rehabilitation of the land around the mine. This information, and far more, is readily available in a booklet called “Sustainability Report 2007 - Murowa Diamonds: More than Diamonds.”

If a player like Rio Tinto is “forced out” of Zimbabwe because of some ill-advised removal of the country from the KP, the NGOs will spend years trying to collect money to initiate just the kind of activities developed by Rio Tinto. KP suspension will only add to the suffering. Moreover, there are precedents for how to deal with such situations without suspension.

Angola Precedents

NGOs ought to remember that during the pre-KP days, when there were sanctions on Angola’s diamonds, an exception was made for a well-organized mining site where none of the diamonds produced were conflict related. In 2003, when the KP officially became operative, those diamonds from secure non-conflict origins continued to be officially exported.

Why should Zimbabwe be different? There should also be some consistency in the way the KP operates. Venezuela, a producer of diamonds, has “voluntarily withdrawn” from the KP for a period of two years. In fact, all that country’s mining output is smuggled out – but the KP has accepted this Venezuelan defiance (i.e. “slap in the face”) and has not officially revoked Venezuela’s participation.

The international industry, the World Diamond Council and the NGOs should be concerned about the “ease” in which smuggled diamonds secure KP certificates en-route to the cutting centers. Getting to the bottom of this should be a far greater priority than indirectly pushing Rio Tinto out of Zimbabwe. Like I said, it doesn’t make sense to take an action that benefits no one and harms many.

Have a good weekend.