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… conflict diamonds situation in Sierra Leone. Perhaps I, as someone who has been closely involved there and elsewhere in Africa, may make some comments. For the benefit of your readers that don't know me, my company Diamond Counsellor International is valuer for the State stakeholders in the diamond industry in Angola, for the Government of Namibia and for the Government of Guinea.
We were advisers and valuers to the Government of Botswana from 1970 to 1982 and to Argyle from 1980 to 1993. We were involved in reorganising the diamond marketing structure in Sierra Leone in 1992 and provide the Government with valuation services from then until the outbreak of the war. I am still on the Board of the Government Gold and Diamond Office (GGDO) in Sierra Leone.
There are laws, systems and structures in place in Sierra Leone for meeting your objectives of "creating a legitimate, efficient and competitive diamond market". These are not working because of the war. The best solution to the marketing problems you describe is to develop what is there in the light of present circumstances.

The law provides for a marketing system shaped like a pyramid with the diggers at the bottom, financiers and dealers in the middle, exporters above them and the GGDO at the apex. Government revenue is gained through licensing all participants and charging a tax on exports, which is collected by the GGDO on the basis of current market value. A key factor in this is that some of the exporters should be major international companies with the funds, expertise and outlets to enable them to compete by paying high prices.
It is also important that the exporters be allowed to pay for their purchases with US dollars. It is absolutely essential that the export tax is not set too high, as this is the main cost factor in the equation. The main problem with this system in the past has been that smuggling became endemic in the days when the unofficial exchange rate was far higher than the official and due to widespread corruption.
The present circumstances provide the Government with a chance of getting to grips with such smuggling: efficient security, properly rewarded, can result in smugglers being caught and their diamonds confiscated. This in turn will put up the cost of smuggling significantly. Furthermore the international diamond community has a chance to help by the better policing of diamond imports. If only goods certified by the GGDO are acceptable internationally, this too will discourage smuggling.

Diamond mining in Sierra Leone is mainly a subsistence activity. Diggers are working with simple methods to exploit very low grade deposits. Diamonds have been mined there for 70 years: nearly all the best deposits, mineable industrially, have gone. It is a gamble too. Many small mines do not deliver a profit.
Generally speaking it is only where a digger has the good fortune to find a decent sized reasonable quality stone that he wins. In these circumstances there is not much scope for the Government to raise revenue from the digging and the export duty must be kept low. However, the industry provides considerable employment and the earnings from diamonds used to be the life blood of the country with significant funds coming from them directly into the grass roots of the economy to enable people to pay for the necessities of life.
It is arguable that these financial inputs did far more good, even when they came from smuggling, than taxes raised by Government that were squandered.

It is wrong to think that diamonds are normally sold cheaply within Sierra Leone. I can assure you that after 70 years in the business there are many Sierra Leoneans, who know the prices and the market well. I am afraid that I don't believe that your efforts to establish something at the village level will work. Plans for cooperatives to grow and market produce have not generally succeeded.
Existing free market socio economic systems already in place can be reactivated to better effect. However, as you say, why not give it a try as part of a wider plan. On the subject of conflict diamonds in general may I comment that this will soon be yesterday's issue, as MPLA are winning the war in Angola and a peace settlement is in place in Sierra Leone. There now needs to be a new emphasis on how diamonds can be used to help these countries solve their problems and develop. This needs to be stressed by people like yourself with a platform in the media to ensure we don't all suffer from the fur syndrome.
Former Intelligence officer's death reveals secret UK-rebel arms deal
Dec. 2000   Mazal U'Bracha

Recent article in Britain's The Sunday Times concerning British-based Lifeguard company & its dealings with S.Leone's Revolutionary United Front (RUF). Friends of former S.African military intelligence

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officer Johan Van Zyl requested inquiry into his mysterious death in car accident between Pretoria & Johannesburg. Apparently Van Zyl had information about arms supplied by British companies to rebel soldiers in Sierra Leone.
A few months before the crash, Van Zyl has been fired from his job as a freelance soldier managing British diamond mining interests in Sierra Leone. Angry at his treatment, he threatened to lift the lid on secret he claimed would 'blow the operation out of the water'.

According to Van Zyl, Lifeguard, a company contracted to protect the diamond mines, had supplied tens of thousands of pounds worth of weapons to RUF rebels in Sierra Leone. The weapons were said to incl mortar bombs, rocket propelled grenades, anti personnel and anti-tank mines and ammunition for Kalashnikovs. The weapons were allegedly part of deal struck with rebels to allow British firm to continue diamond mining undisturbed.
Lifeguard's sister company, Sandline, apparently had helped break UN embargo on supply of weapons to Nigerian forces waging war on the RUF rebels. The two companies are located in the same suite of offices in west London. Apparently, a British govt inquiry concluded that Sandline was only in technical violation of UN sanctions.

Customs officers & parliament have decided to reexamine Van Zyl's allegations, which were meticulously logged in a book. Included in the description of dealings between Lifeguard & Sandline, was 1998 confrontation with Sandline executive after he was dismissed. He told the executive he intended to make public what he knew; response was, "I'm surprised at you Johan." After that Van Zyl feared for his life and told his friends he was "a dead man".
In July 1997, Van Zyl was apparently in contact with a former British intelligence officer, Rupert Bowen, Branch Energy executive stationed in Namibia. Branch Energy had hired Lifeguard to protect its mines from rebel attack. At that time weapons were allegedly supplied to the rebels. Bowen may be one of the few people who can shed light on the matter, although he recently left Branch Energy to join Canadian-based Global Explorations Corporation and was unreachable for comment.

A former chief executive for Sandline, Tim Spicer, who left the company only a few months ago, insisted no weapons were handed voluntarily to the rebels, though he said it was possible that munitions intended for use by Lifeguard, had been captured.

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