The Financial Times

Please see below a copy of an article from the Financial Times that cites Ingle & Rhode criticising the Kimberley Process over its failure to recognise Zimbabwe's conflict diamonds for what they are:

Zimbabwe diamond auction sparks fresh controversy
By Tony Hawkins in Harare
Published: January 8 2010 02:00

Zimbabwe faced renewed controversy yesterday when it began auctioning diamonds from a notorious field where serious human rights abuses, including the use of child labour, have allegedly claimed hundreds of lives.

The auction covers the output of the Chiadzwa-Marange diamond fields in eastern Zimbabwe. They have been mired in controversy since their discovery in 2006, with a detailed report from Human Rights Watch accusing the army and police of overseeing the production of diamonds and imposing a reign of terror on the workforce.

The study found that soldiers ordered civilians to dig for diamonds at gunpoint, used child labour and raped women. It said that hundreds of civilians were killed in the process. Some of the diamonds were reportedly smuggled into neighbouring Mozambique.

The Kimberley Process, which was established to stamp out the production and sale of "blood diamonds", began an investigation after the Human Rights Watch report. But the organisation continued to give Zimbabwe a clean bill of health for its diamond exports and granted President Robert Mugabe's government a grace period to comply withits standards. Ingle & Rhode, a UK retailer, said allowing Zimbabwe to continue exporting diamonds made a mockery of the process.

The fields are also subject to a commercial dispute involving African Consolidated Resources, a UK company which was given the concession to prospect for and exploit diamonds in the area. But the government then cancelled this concession, accusing ACR of having "improperly pegged and registered on land that had been reserved against prospecting and pegging".

ACR rejected this claim and won a court order, but this has been overruled by the government and is now the subject of an appeal.

In spite of all this, the Zimbabwe authorities sought to suggest that it was business as usual when they began auctioning diamonds from the field.

Mbada Diamonds, a joint-venture between the government-owned Zimbabwe Mining Development Corporation and a South African company, Grandwell, is conducting the sale, which will start with 300,000 carats of diamonds over the next few days. Robert Mhlanga, Mbada's chairman, said the sales were in compliance with the Kimberley Process Certification Scheme.

Mbada says it will treble production from the current level of 600,000 carats per month to 2m by April or May this year.

Because diamond revenues would boost the government's coffers, the reformist wing of Zimbabwe's governing coalition - Morgan Tsvangirai's Movement for Democratic Change - is in a quandary. Aware its human rights credentials are being tarnished, it is anxious to clean up the diamond fields. But the public auction is likely to worsen rather than improve the situation.

Copyright The Financial Times Limited 2010.