CEEC PRESENTS RECOMMENDATIONS ON KIMBERLEY PROCESS

C O N F I D E N T I A L KINSHASA 001149

SIPDIS

PASS TO USTR; STATE FOR AF/EPS (KWALZ)

E.O. 12958: DECL: 07/14/2015
TAGS: ECON EMIN EINV CG
SUBJECT: CEEC PRESENTS RECOMMENDATIONS ON KIMBERLEY PROCESS

Classified By: EconOff W. Brafman for reasons 1.4 b/d.


1. (U) Summary. July 8, the Centre d'Evaluation,
d'Expertise et de Certification (CEEC),the DRC's mining
regulatory body, met with various embassies in Kinshasa to
present recommendations on Kimberley Process implementation.
Victor Kasongo, the CEO of CEEC, outlined the difficulties of
implementation in the DRC and in the region. Subsequently,
CEEC management and technical advisors presented their
recommendations for the DRC, derived from a Kimberley process
review visit conducted October 2004. The paramount
recommendation was a feasibility study to measure the costs
of implementation recommendations. The GDRC demonstrates
some willingness to comply with the Kimberley Process, but it
has made little progress in implementation at crucial mining
stages. End summary.


2. (U) Kasongo presented an overview of artisanal mining,
citing smuggling, unauthorized mining, environmental
problems, insufficient regulatory framework, and weak
financial institutions as barriers to Kimberley
implementation in the DRC. He said other significant
obstacles are limited geological data and poor technical,
management and marketing skills.


3. (U) To improve Kimberley implementation, Kasongo
suggested strong border control and better communication with
remote diamond areas in the DRC. He also recommended
establishing a regional database to share customs information
and establish formal communication among Central and Southern
African diamond producers. Restructuring the alluvial diamond
industry, through land registration and improved licensing,
infrastructure building, and the establishment of a Diamond
Marketing Board would also improve Kimberley implementation.
He emphasized the necessity of creating a transparent
industry in which bankers and investors are willing to
invest. Finally, Kasongo called on the international
community to report its diamond imports to confirm DRC's
export figures.


4. (U) The CEEC management and technical team also
presented its recommendations for DRC's diamond industry. In
response to a request from the EU, the team ranked the need
for a feasibility study to measure the costs of all
implementation recommendations as paramount. However, the EU
requested a more detailed implementation proposal, including
a budget, before it can fund CEEC's efforts. The team also
recommended that the GDRC increase communication between the
Minister of Mines and CEEC, improve identification and
licensing, open 8 provincial Service d'Assistance et
d'Encadrement du Small Scale Mining (SAESSCAM) offices,
certify documents of origin, and enhance government capacity.
Three regulatory bodies, the Administrator of Mines,
SAESSCAM and the CEEC, monitor diamond mining and trading.


5. (C) The CEEC is showing some willingness to comply with
the Kimberley Process, though it is unclear whether or not
real progress has occurred at crucial stages in the mining
process. The fact that artisanal mining in isolated areas
dominates the DRC diamond industry makes regulation
difficult, particularly given the DRC's infrastructure
problems. It is often difficult for regulators to access the
mines because adequate roads and security are lacking. For
example, in Kisangani it remains easy to purchase diamonds
illegally. A MONUC contact told Econoff that one could
purchase a liter water bottle full of diamonds from a digger
for USD 100. Problems with unauthorized mining persist as
well. One American mining concession near Tshikapa has been
forcibly taken over by an unauthorized company and FARDC
forces reportedly guard it.


6. (C) Comment: Because the DRC's diamond reserves are so
significant, government regulatory officials operate under
the belief that the DRC is unlikely to be expelled from the
Kimberley Process. As a result, the DRC has implemented few
recommended measures since the October 2004 Kimberley Process
review, particularly in the phases from digging through sale
to the comptoirs. The international community must continue
to apply pressure to reform the DRC diamond sector. End
Comment.
MEECE