MOZAMBIQUE'S ROLE IN COMBATING ILLICIT DIAMOND

C O N F I D E N T I A L SECTION 01 OF 03 STATE 082807 SIPDIS E.O. 12958: DECL: 08/10/2024 TAGS: ECON EMIN PREL MZ ZI SUBJECT: MOZAMBIQUE'S ROLE IN COMBATING ILLICIT DIAMOND TRADE FROM ZIMBABWE REF: A. A: 08 STATE 126054 ¶B. B: 09 STATE 018545 ¶C. C: 09 HARARE 00024 Classified By: EEB/ESC DAS Doug Hengel for reasons 1.4 (b and d) ¶1. This is an action request. Please see paragraphs 8 and 9. ¶2. (C) SUMMARY. During the week of June 29, EEB's Special Advisor for Conflict Diamonds (SACD) participated in a Review Mission undertaken by the Kimberley Process (KP) to Zimbabwe. The mandate of the Review Mission was to assess overall compliance by Zimbabwe with the KP, with a particular focus on the Marange mine in eastern Zimbabwe. Since November 2008, there has been widespread reporting of diamond smuggling from Marange. In finding Zimbabwe not in KP compliance, the Review Mission confirmed much of this earlier reporting. Interviewees consistently reported to the Review Mission that non-KP Participant Mozambique, through the border town of Manica, serves as the primary outlet for diamonds smuggled out of Marange. We want to urge Mozambique to join the Kimberley Process and to undertake specific action to curb this illicit diamond trading. END SUMMARY. REVIEW MISSION TEAM: ALLEGATIONS CREDIBLE ¶3. (C) The KP Review Mission confirmed previous reporting from the past several months that the Government of Zimbabwe undertook a brutal effort to "clean up" a rush by tens of thousands of illegal miners in the Marange diamonds fields, located in the Chiadzwa village area of eastern Zimbabwe. Following the crackdown in late 2008, illicit diamond trading activity was brought under the direct control of the Zimbabwean military, with soldiers engaging in mining and perpetrating human rights abuses, including directing forced labor of the local population and committing extra-judicial killings. REFTELS A, B. The KP Review Mission interviewed more than 20 victims of such abuses and observed soldiers overseeing illegal diamond mining activities in the Marange region. The KP Review Mission also interviewed political leaders in the nearby city of Mutare, who confirmed these reports and also indicated significantly increased smuggling activity -- and related vice -- in Mutare, which is less than 20 kilometers from the Mozambique border. ¶4. (C) Since January, Mozambique has been identified as a primary smuggling route for Marange diamonds. REFTELS A, C. Several recent reports from local and international non-governmental organizations also identify Mozambique as the primary outlet for Marange diamonds. One report, from a small but very impressive Zimbabwean NGO, the Center for Research and Development (CRD),includes pictures taken of illegal diamond trading during an investigation undertaken in the border towns of Manica and Chimoio. The diamonds in one photograph closely resemble diamonds observed by the SACD at the Marange mine. Buyers from Sierra Leone, Lebanon, Dubai, Israel, and Belgium were identified by CRD as having taken up residence in the towns, and the Gida Hotel in Manica was specifically named as housing a diamond company that is also registered in Europe. Human Rights Watch (HRW) also mentioned Mozambique in a recent report that received significant publicity. SACD has requested further details from the reporting NGOs. The KP Review Mission found the reports produced by CRD and HRW to be generally accurate. HELP WANTED: MOZAMBIQUE ¶5. (U) Following the initial press reports of human rights abuses and smuggling in the diamond fields, the 75-nation Kimberley Process (KP),the international system that regulates the international rough diamond trade through the Kimberley Process Certification Scheme, took several steps in response. One of the KP's primary responses came through its Working Group on Diamond Experts (WGDE),which issued a technical production footprint of the rough diamonds from the Marange region. This footprint has been distributed throughout the KP system and has been made available at: www.israelidiamond.co.il/UploadedFiles/footpr int- marange-zim-v.1-authorities.pdf; it is designed for use by Customs and other law enforcement authorities to identify STATE 00082807 002 OF 003 Marange diamonds that may be illicitly traded. The KP has also facilitated extensive cooperation among Participants attempting to combat the smuggling of Marange diamonds. ¶6. (U) The KP's efforts, however, can only go so far with respect to non-Participants. For its part, largely as a result of concerns connected to Marange, the KP, through India in its role as Participation Committee Chair, sent a letter in February 2009 inviting Mozambique to consider joining the KP. No response was received. Should it join, Mozambique would not only be able to consider development of a legitimate diamond trading and/or cutting industry -- which could be a feasible option given its proximity to several major producing countries -- but also avail itself of technical assistance directed at combating diamond smuggling. From the U.S. perspective, Mozambique's participation in the KP is desirable, and would enlarge the scope of regional enforcement and coverage directed against smuggling of Marange diamonds. An "interim update," intended to be a precursor to the final report, issued on July 20 by the Review Mission includes a specific recommendation that the KP and individual Participants encourage Mozambique to improve border control and join the KP. ¶7. (SBU) Even if it does not join the KP, Mozambique can clearly do more to combat the smuggling activity underway in Manica and Chimoio. The public knowledge about the trading, and the apparent ease with which CRD obtained access to smugglers makes it likely that Mozambican authorities in principle should be able to track down at least some of this activity. Should they be able to do so, and the Marange smuggling network lose one of its primary outlets, the Mozambican authorities could contribute greatly to the efforts of the KP and others to stop the abuses in Marange. ¶8. (U) Action request. Drawing on the talking points contained in Paragraph 10, Post should urge Mozambique, at an appropriately senior level, to take the necessary steps to join the Kimberley Process and to undertake specific action to curb the illicit diamond trading currently on-going in Manica and Chimoio. Talking Points ¶9. (U) Action Request (cont'd): -- The KP has confirmed through a recent Review Mission that illicit diamond trade in eastern Zimbabwe directly involves members of Zimbabwe security forces, resulting in grave human rights abuses and potentially generating millions of dollars in illegal profits for Robert Mugabe and members of his inner circle. This badly needed foreign exchange is likely used to support Mugabe and his ZANU-PF loyalists, which has resulted in a humanitarian and governance crisis in Zimbabwe of epic proportions. -- Their actions are being encouraged and supported by a willing black market, which appears to be centered in two towns, Manica and Chimoio, in Mozambique and involving nations from around the world eager to reap the profits of lucrative diamond sales. We need Mozambique's assistance to stop this illegal source of revenue for Mugabe and his inner circle and hold accountable those who are participating in this corrupt trade. -- We recognize that Mozambique has many law enforcement priorities to attend to, and appreciate all of the efforts made to address concerns such as narcotics. At the same time, we need greater, focused law enforcement attention from Mozambique to stop this illicit diamond trade from Zimbabwe, both at the border and within the nearby border towns where this trade is centered. -- Mozambique was invited earlier this year to join the KP. We urge Mozambique to consider taking the steps necessary to pursue KP membership as soon as possible. -- Joining the KP would not only bolster Mozambique's ability to take action against the illegal trade currently underway but also provide a number of other benefits, including: * Serving as the necessary step for the development of a legitimate diamond trading and/or cutting industry. Given its proximity to several major producing countries, Mozambique could follow the lead of a country like Mauritius STATE 00082807 003 OF 003 and become an additional center for legitimate diamond trading, cutting, and polishing. * Broadening Mozambique's involvement in and awareness of best practices with respect to mineral resource management and governance. The KP is a unique and important model in addressing the challenges attendant to mineral resources. Although Mozambique does not produce diamonds, the lessons and best practices from the KP may be able to be translated to other mining sectors in Mozambique. * Availing itself of the potential for technical assistance in the areas of security and law enforcement that could improve Mozambique's ability to combat smuggling from Zimbabwe. REPORTING DEADLINE ¶10. (U) Department requests Post to report results to EEB/ESC/IEC Brad Brooks-Rubin and AF/S Phaedra Gwyn as soon as possible. CLINTON