On 12 January 2000 the Canadian non governmental organisation, Partnership Africa Canada (PAC), released a study suggesting, in the words of a US Newswire statement, 'that the brutal seven year war in Sierra Leone has been fueled largely by greed and corruption in the international diamond industry.'
According to PAC's Newswire statement, the authors 'conclude that the largest motivating factor in the war [in Sierra Leone] has been the quest for diamonds by warlords and gangsters, neighboring states and a wide variety of international companies willing to go to almost any length -- including the provision of arms and mercenary armies -- to get at the diamonds.'
The three authors say they talked with 'illicit miners, smugglers, government officials, law enforcement agencies, representatives of De Beers and other international mining firms.' However, the report alleges a web of connections between mining companies and security companies and, although reference is made to Sandline International, no contact was made with any representatives of the company.
A summary of the report has been posted to the Internet at http://www.web.net/pac/pacnet-l/msg00009.html. The full report is available by contacting PAC at mhfoss@web.net.
On 19 January Michael Grunberg wrote to Bernard Taylor, the Executive Director of Partnership Africa Canada, to point out the various illogical and inaccurate statements made in the report concerning DiamondWorks and the supposed extent of its relationship with Sandline and with Executive Outcomes. A copy of the letter to Mr Taylor is reproduced below for information.
Mr Bernard Taylor
Dear Mr Taylor
Thank you for sending me a copy of the report sponsored by Partnership Africa Canada entitled 'The Heart of the Matter: Sierra Leone, Diamonds and Human Security'.
I have now had a chance to read the document and, in particular, the references to DiamondWorks and the company's alleged relationships with private military companies. To be frank, I find it hard to reconcile the statement made in the preface to the report that 'the Sierra Leone Working Group .... concluded that diamonds were central to the conflict in Sierra Leone, and that a highly criminalized war economy had developed a momentum of its own' with the intimation that diamond mining companies somehow contribute to this instability.
The report recommends more effective control of the diamond sector, both in Sierra Leone and worldwide. Companies like DiamondWorks would have no argument with this and would indeed support such a move. However, by associating the mining juniors the report refers to with the continuing conflict in Sierra Leone the authors imply that such companies have something to gain from an unstable environment and that they are partly to blame for the problems that continue to beset this country.
The Globe and Mail headlined its article on the report: 'Canadian mining companies accused of fuelling war' and, as far as DiamondWorks is concerned, this cannot be further from the truth.
Could the report's authors please explain to me what benefits DiamondWorks, as a quoted public company, derives from the perpetuation of war in Sierra Leone?
Perhaps I can help them frame any response with the following information:
1 In 1996 and early 1997 DiamondWorks (DMW) invested millions of Dollars in preparing the kimberlite pipes at Kono in the Koidu district for a bulk sampling programme. Plant and equipment was shipped into Sierra Leone, a DMS (dense media separation) plant was built, roads were repaired, local people were employed and trained, infrastructure was developed, community programmes were introduced and there was a great sense of excitement that the economy in Kono was about to be revived on the back of this substantial international investment.
2 In the Spring of 1997, one day before the bulk sampling and mining programme was to commence a coup took place which halted all operations.
3 The expatriate (and many local) mining personnel of every other mining company operating in the area sought protection at the Lifeguard secured DMW mining compound - the only professionally managed facility of its kind in the area. DMW subsequently paid extortionate rates to the only operating helicopter company to extract the company's own personnel and those of the other operators. Incidentally, to this day not one of these companies has reimbursed DMW for its share of these costs.
The result of the 1997 coup was the closure of the mine at Koidu and, from the day DiamondWorks commenced its business in Sierra Leone to today, not one single carat has been mined by DMW from the Koidu kimberlite pipes - not one! If the peace brought about with the help of Executive Outcomes in 1996 had been maintained then not only would DMW now be producing diamonds but it would be employing hundreds of Sierra Leoneans, paying royalties and taxes to the national treasury and making a profit from its operations in this country.
In another example of the damage that can be caused by civil war, in Angola, DiamondWorks' Yetwene mine was attacked by bandits in late 1998. This attack resulted in loss of life, the abduction of a number of employees, who are still missing today - over one year later, closure of the mine for a considerable period of time and huge financial costs. In addition, investor confidence was severely affected. No benefits whatsoever.
So my question is a simply one: Why is it perceived by the report's authors to be in the interests of Canadian juniors such as DiamondWorks to fuel or encourage instability in the countries in which they operate? DMW's management would have to be insane to support such a corporate doctrine.
The report specifically criticises DiamondWorks because of its links with private military companies like Executive Outcomes and Sandline International - two private military companies who have provided services to the legitimate government of Sierra Leone at various times since 1995. The view being that such links, however tenuous and indirect as listed in the report, are inappropriate. Why is this so? Perhaps I can ask the report's authors some questions:
1 In the absence of international intervention in 1995 would it have been preferable for the RUF to have been allowed to take control of the country rather than to have contracted with Executive Outcomes to prevent this from happening?
2 Are human rights atrocities on any scale, let alone the horrendous level seen in Sierra Leone following the 1997 coup, preferable to the employment of external private sector intervention to bring bloody conflicts to an end?
3 If a country cannot afford to pay cash for the services of its contractors is it not entitled to sell assets to raise the necessary funds? Is this not what a private sector entity does when it is experiencing cashflow problems?
4 If the indigenous population of a country like Sierra Leone - the very people who will be able to go through life with both hands as opposed to having them chopped off with a blunt axe by rebels - want a company like Executive Outcomes to maintain the peace then who should blame them in the absence of any other help?
So what is wrong with any relationship between an ethical mining company and an ethical security provider? Why is it wrong for a director of a mining company to introduce a security company to help solve a particular problem? In some first world countries, the link is significantly stronger than this with commercial entities sponsoring community policing operations in areas with high crime rates. So who is to say what is and is not acceptable?
It is only in times of peace and stability that there is a willingness to invest and exploit the potential of indigenous national assets. Profits from mining activities are taxed and the taxes flow into the national treasury. Up until the early 1990s, for example, the Sierra Rutile titanium oxide mine in the south of Sierra Leone was the largest single foreign currency earner and taxpayer in the nation. This mine has not operated since 1994. Why? War.
Companies like DiamondWorks do not want to be the cause of unrest, they want to contribute to the solution. The establishment in the last decade of extensive diamond recovery operations in northern Canada has not in any way undermined the social fabric in that part of the world so why should it be accused of doing so elsewhere?
It is, in fact, some of the illicit mining operators which play a key role in the perpetuation of conflicts in diamond rich parts of the world. A rebel leader knows only too well that a manpower intensive mining operation in a diamond rich area can yield substantial revenues which he can use to finance his personal ambitions (and inflate his Swiss bank account). Diamond mining companies strive to generate profits for shareholders and growth; not to fuel bloody conflicts.
As I have said before to the various authors, publishers and sponsors of other reports on this and similar subjects, it is a great shame that no-one bothered to contact me to talk about this issue during the research stage. Having been a director of DiamondWorks and also an adviser to two private military companies I believe I am in a unique position to talk on Sierra Leone, its security and diamond industry. It is a pity it is post-publication that I am writing to you on the subject.
Perhaps you can see your way to appending a copy of this note to the end of the electronic record of the report?
Yours, etc
Partnership Africa Canada
323 Chapel Street
Ottawa
Ontario K1N 7Z2
Canada