ILLICIT DIAMOND TRADE: FROM ZIMBABWE TO MOZAMBIQUE

S E C R E T SECTION 01 OF 03 MAPUTO 000968

SIPDIS

E.O. 12958: DECL: 08/26/2019
TAGS: PREL PGOV ECON EMIN PREF PHUM SMIG MZ ZI
SUBJECT: ILLICIT DIAMOND TRADE: FROM ZIMBABWE TO MOZAMBIQUE

REF: A. STATE 82807

B. MAPUTO 806

C. MAPUTO 321

D. MAPUTO 91

E. MAPUTO 79

F. MAPUTO 10

Classified By: A/DCM MATTHEW ROTH FOR REASONS 1.5 (b and d)


1. (C) SUMMARY: Poloffs traveled to Manica to investigate
rumors of rampant diamond smuggling from Zimbabwe. Open
borders and corrupt government officials make trafficking in
goods and people easy, and poloffs found evidence of both. In
response to Ref A, Charge met with Minister of Natural
Resources Esperanca Bias on August 27, urging Mozambique to
join the Kimberley Process Certification Scheme (KPCS),and
to secure the Zimbabwean border and Beira Corridor against
the ongoing illicit trade of Zimbabwean diamonds which is
providing foreign exchange to Zimbabwean security forces and
the ZANU-PF party. While Bias appeared unconvinced of the
human rights aspects associated with the illicit trade of
Marange diamonds, she stated that the GRM has already taken
part in a KPCS conference, is looking into the implementation
mechanisms for the KPCS, and would welcome technical
assistance in this regard; however, Bias does not want to
state publicly that Mozambique plans to join the KPCS until
their internal preparatory work is completed. Bias also
pointed out that eight companies recently won the rights to
and have begun exploring for diamonds in Mozambique along the
Zimbabwean border from Gaza to Manica Province, suggesting
that a domestic diamond industry may be possible. Bias ended
the meeting by requesting the details on any USG technical
assistance available to assist with their joining the KPCS.
END SUMMARY.

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POROUS BORDER, RIPE FOR SMUGGLING
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2. (C) During a July visit, Poloffs noted that smuggling is
rampant in Manica province across from Zimbabwe's Manicaland
province. In many places the border is completely open, with
villagers crossing daily for fresh water, and employees of
the USG-funded deminining NGO Halo Trust regularly cross into
the unmined Zimbabwe side--actually a Zimbabwe National Army
banana plantation--for safety reasons as they undertake
demining activities. Several hundred meters into the
Zimbabwe side are sparsely staffed border checks, and
Zimbabwean migrants claim illicit passage can be arranged for
a bribe of less than one dollar. The Manica/Mutare border
also has an official crossing point, and migrants say illegal
entry into Mozambique can be arranged there for a bribe of
about eight dollars. The passage is easy with even the most
circuitous routes through the mountains only taking a couple
of days. Migrants report difficulty returning to Zimbabwe
legally because many of them exited without a passport.

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ZIMBABWEAN MIGRANTS AT THE FRONTIER
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3. (SBU) Zimbabwean migrants are largely in Mozambique for
economic reasons. One NGO leader told poloffs that some
migrants would be hesitant to speak because of widespread
fears Zimbabwean Central Intelligence Organization (CIO)
officers have infiltrated the border area. When pressed, she
admitted the CIO do not pursue migrants, but rather are
collecting information. Poloffs had no trouble finding
migrants who wanted to talk, and of the approximately 100
migrants interviewed by Post, not a single person claimed to
have left Zimbabwe for political reasons. All cited
motivations such as wanting the right to a job, a home, and
to bear children with a stable educational future as primary
reasons for living abroad. Several also said they want to
return home once the economic situation improves. Many
migrants are involved with occasional labor or selling goods
at the large Zimbabwean-run market in Manica town; others
told of working as domestic help. A frequent story was that
employers refuse to pay for work, knowing that the illegal
migrants have no formal recourse. An attempt to interview
local prostitutes in nearby Chimoio town was canceled after
Poloffs learned the Zimbabwean prostitutes had been arrested,
leaving local Mozambican commercial sex workers to operate
without competition.

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DIAMOND TRADERS FROM ABROAD

MAPUTO 00000968 002 OF 003


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4. (S) The Manica border town is host to many large homes
and wealthy expatriates. The region's best restaurant,
locally known as the Piscina, sells Mediterranean and
Middle-Eastern style food, and is a popular hangout for
foreigners. One regular is a Lebanese man who is a
self-proclaimed diamond dealer. He initially introduced
himself to poloffs as Belgian, and made no secret of his
dealings in lumber, charcoal, and stones. He claimed to have
had over 30 years experience in the diamond business, and
said the Zimbabwean stones were special and provenance was
easy to determine when examining rough stones. When asked if
there were any shops that sold diamonds, he gestured up the
hill to his home and said it was a shop (Note:
Geo-coordinates of the house are -18.940412, 32.869570),and
then gestured to other large private homes in the
neighborhood saying they also were diamond shops. When asked
if there were polishing facilities in the region, he said
there were none, but that he owned a firm in Belgium that cut
high quality stones, and that he contracted to firms in India
for lesser quality specimens. This same man is interviewed
in a post-Kimberly inspection report by Mutare-based firm
Center for Research and Development (CRD),and the report
includes an obscured photo of him examining stones.

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ZIMBABWEANS CONFIRM DIAMOND STORIES
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5. (C) A few of the Zimbabwean migrants at the market in
Manica had once worked in the Chiadzwa diamond fields before
those became economically untenable and dangerous. One
former worker, a self-proclaimed artist, said that miners
would sell stones to middlemen, including a "Lebanese guy
with a big house by the Piscina." A large stone would fetch
about ten dollars, and the middlemen would in turn
considerably mark up the prices. This artist did not know
the final destination of the stones, but speculated they left
the country because Mozambique lacks polishing and cutting
facilities and has little domestic market for the stones.

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MOZAMBIQUE A MAJOR TRANSIT POINT
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6. (SBU) A series of reports published by the KPCS
following a mission to the Chiadzwa mines near the border and
a recent Human Rights Watch (HRW) report identify significant
and widespread irregularities at the mine. Both groups
reveal Mozambique -- itself not a member of the KPCS -- is a
key transit point for the stones, and HRW explains in detail
the middleman organizational system poloffs witnessed in
Manica. A report from July 24 by the CRD says panning and
smuggling have escalated following the KPCS visit, and
related trade between Zimbabwe and Mozambique also has
increased. CRD suggests ZNA members constitute the majority
of Zimbabweans tracking into Mozambique, but civilians also
will import stones, presumably working in syndication with
the ZNA. Local Mozambican press has not reported on diamond
smuggling, although various international English-language
reporters have, with a New York Times series being the most
notable.

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CHARGE URGES BIAS TO JOIN KPCS, CRACK DOWN ON SMUGGLING
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7. (C) On August 27, Charge met with Minister of Natural
Resources Esperanca Bias to discuss the problem of Marange
diamonds and their illicit trade down the Beira Corridor.
Bias appeared unconvinced of the human rights aspects
associated with the illicit trade of Marange diamonds, likely
because her ruling FRELIMO party has long-standing historical
friendships with ZANU-PF (reftels). Bias stated that the GRM
has already taken part in a KPCS conference, is looking into
the mechanisms for joining the KPCS process, and would
welcome technical assistance in this regard; however, Bias
does not want to state publicly that Mozambique plans to join
the KPCS, nor does she want extra conditionalities placed on
the technical assistance. Bias explained that joining KP
would be in Mozambique's domestic interests as well, because
eight companies recently won the rights to and have begun
exploring for diamonds in Mozambique along the Zimbabwean
border from Gaza to Manica Province, suggesting that a
domestic diamond industry may be possible. Bias ended the
meeting by requesting information on the "next steps"

MAPUTO 00000968 003 OF 003


required to join the KPCS, and details on any USG technical
assistance in this area.

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COMMENT: MOZAMBIQUE OPEN TO KPCS TECHNICAL ASSISTANCE
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8. (C) Mozambique is not a member of the KPCS. Joining
could reduce overt smuggling, and increase tax revenues
significantly, though it would probably not preclude corrupt
officials from facilitating smuggling operations. Becoming
part of KPCS could help introduce a framework for
prosecutions and provide much-needed training to GRM
officials, including to border security officers who need
help identifying illicit diamonds. While the Minister
provided a somewhat tepid response to joining the KP, her
assistants present in the meeting were able to provide
specifics about the actions already taken by the GRM to do
so. Post requests Washington assistance in identifying the
specific technical assistance which can be offered to the GRM
at this time.
CHAPMAN