November 22, 2002
Commercial exploitation of diamonds in Sierra Leone first started in 1931. By 1969, Sierra Leone had produced an estimated nine million carats, with Kono District accounting for between 65 and 70 percent of the total. For much of the 1960s and 1970s diamonds dominated the economy, accounting for about 70 percent of the country's foreign exchange earnings. In fact, however, the real benefits of this enormous wealth were negligible.
A major problem was rampant smuggling, which kept taxes on diamond exports very low. This is still a problem complicated by a war, which was fueled largely by illegal mining and smuggling. Even before the war, however, diamonds were widely implicated in the corruption of public officials, in widespread environmental damage, in low- level violence and crime in mining areas, and in the creation of a mercenary and parasitic elite, with the industry serving only the needs of this class and their foreign business partners. Siaka Stevens, who became Prime Minister (later President) in 1967, became the embodiment of this elite, making the country's large Lebanese merchant community part of his charmed circle and his partners in criminalizing the diamond industry.
A 2002 policy study funded by the British Department for International Development (DFID), places great emphasis on the 'deleterious' effects of corruption, which its authors fear will erode any gains realized from Sierra Leone's remaining diamond reserves.
Surprisingly, the report does not mention the Lebanese. The study estimates diamond output 'within 4-5 years' at between 750,000 and 1 million carats a year.' 'It is thus possible,' the study suggests, 'that the value of diamond exports will rise from around $50 million in 2002 to as much as $180 million by 2006.' It notes however, that to 're-establish the diamond industry as a benefactor of the country, the issue of corruption must be tackled.' Sierra Leone government officials, who had estimated production levels in 2001 (when security was far less assured and when there was not even a discussion of putting the kimberlite mines back into operation) at $70 million a year, suggest that the study's figures are too conservative if the kimberlite mines are factored in and they place greater emphasis on the need to strengthen the state's institutional capacities.
They say that the death of trained Mines Monitors and Wardens (now reduced to 78 from as high as 108 before the war) is responsible for rampant illicit mining, and by extension smuggling. Even with the new certification system in place, they claim, official exports are only a fraction of what government had projected. The Ministry of Mineral Resources, however has been a neglected institution. In April 2002, it did not have a single official vehicle. Officials, particularly Mines Monitors and Wardens, are poorly paid, and in the absence of strong oversight and security in the mining areas, the incentive for corruption is overwhelming.
Since the beginning of commercial mining in early 1930s, the Sierra Leone diamond industry has amplified, in bold relief, the link between institutional weakness and corruption. The diamonds were discovered in what was then a 'protectorate' an area largely beyond the writ of the colonial government. Minerals were extracted in order to benefit the colonial government and companies doing the mining; few social services were provided in return. In 1956, a colonial inquiry, instituted as a reaction to widespread illicit mining, produced an 'Interim Report on the Alluvial Diamond Mining Scheme.'
It found that in the mining areas the Sierra Leone Selection Trust (SLST,) a British company with a monopoly over the most lucrative diamond areas, was seen by the local people as a racket, principally aimed at robbing the 'natives' of their legitimate resources and enriching foreigners. Anyone engaged in illicit mining and smuggling was seen as a hero, not a crook.
The minerals were not considered a state resource, but the property of the indigenous population and under the control of the Paramount Chief and Tribal Authority. The problem did not go away after independence, and under Siaka Stevens it only got worse. Diamond mining areas were, even before the war, some of the most impoverished in terms of infrastructure and standard of living. John Hirsch, a former US ambassador to Sierra Leone, visited Kono in 1997, and his impression sums up the grim conditions under which miners work.
I saw a Bruegel version of hell, with hundreds of young men moving huge piles of dirt from one open pit to another, looking in the tailings, the remnants of ground other miners had already scoured many times. As in Las Vegas, everyone hoped to strike it rich just one time. When I asked a high- ranking official in Freetown whether this was the best way for a young man to spend his time, he replied that it was better than doing nothing or being a rebel cutting off arms and legs of peasant villagers.
The conditions under which tens of thousands of artisanal miners work have always been harsh, and successive governments in Sierra Leone have been largely neglectful, so the 'high- ranking official's comment about the war and alternative employment is disingenuous. That conditions got immeasurably worse when the RUF captured these areas, comprehensively destroying towns and reducing miners to abject servitude, is beyond dispute. Under the RUF's brutal command, these miners produced from the mid 1990s hundreds of millions of dollars worth of diamonds. This is the context in which the unscrupulous business people exploiting poverty and resentment, have further exploited them and the diamond industry at large.
Past attempts to redress the situation have always been feeble. They have included the restriction of artisanal miners' and agents' licenses to Sierra Leonean nationals and the banning of non-nationals from travelling to actual mining areas. In fact, however, many non-indigenous Sierra Leoneans, particularly Lebanese and Maraka traders from other ECOWAS (Economic Community of West African States) countries, have acquired Sierra Leonean passports which allow them to travel in mining areas and to participate directly in the extraction of the minerals. Because they have external contracts and access to greater resources than indigenous Sierra Leoneans, the Lebanese dominate the diamond industry at all levels. Of the 18 Lebanese holding dealer licenses in 2002, all but 3 were 'non-citizens.
The General Manager of the Government Gold and Diamond Office (GGDO), which values, taxes and certifies diamonds for export, laments the poor performance of indigenous diamond dealers and exporters. The 'overall performance' of indigenous exporters for 2001 was 'only In a situation where banks discriminate against indigenous Sierra eight percent of total exports.' In a situation where banks discriminate against indigenous Sierra Leoneans with respect to loans, poor performance in diamond exporting, which requires substantial capital to start with, is inevitable.
An attempt to ensure that diamonds benefit communities in which they are actually mined is the aim of a campaign mounted by Sierra Leonean civil society organizations led by the Network Movement for Justice and Development (NMJD), and a USAID project managed by Management Systems International (MSI). A Mining Community Development Fund was created by government representing 0.75 per cent of the export value of diamonds.
The money was then distributed among chiefdoms in the mining areas in proportion to the number of mining licenses in that chiefdom. The money is derived from the three per cent export tax on diamonds. By 31 December 2002, a total of US$195,000 had been distributed. Poor judgement, however, ensured that much of the money was mismanaged or embezzled. Government officials wanted chiefdom authorities to design specific projects before the monies were disbursed, but NGOs and MSI, apprehensive about state corruption, insisted that the monies be disbursed to chiefs immediately. Most of the chiefs, however, displaced by the war, had little attachment to their people. Few used the money for the benefit of their chiefdoms; I was told of only one, Lower Bambara, in Panguma, who used the money well_ to build a community centre, with administrative offices.
In Kono, where dislocation was total and where most chiefs have little standing among people returning from refugee camps, much greater care in planning and monitoring is essential. To make matters worse since the disarmament, there has been a huge influx of Lebanese diamond dealers into the district, ready to return to the old ways.
Into this situation has stepped a radical new group called the Movement of Concerned Kono Youths (MOCKY). Appalled by the apathy and destruction that the district has suffered over the years, MOCKY wants all foreigners, especially Lebanese, out of the district. MOCKY's activities, however, have sometime verged on the criminal. Early in 2002, they abducted a Lebanese trader who claimed to be a medical doctor, Shaway Bazzy and held him hostage for a few days. Bazzy was released after allegedly paying a ransom of US$ 1,700.
As part of a more creative approach MSI and USAID have proposed the 'Kono Peace Diamond Project' which aims to bring together NOGs, community leaders in Kono and government into an alliance to ensure fair labour practices, fair diamond prices, training in diamond mining and valuation for Kono residents, a trust fund for development, and a micro-finance project.
This will be an interesting experiment if funding is found, although it will need to be well coordinated with the Ministry of Mineral Resources and other governmental agencies if it is to succeed. There is an instinctive tendency among NGOs and foreign aid agencies to look askance at anything that has to do with government officials, regarding all of them as corrupt. This often leads to conflict, obstruction and then failure.
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